Exhibit 10.2
TERMINATION AND SETTLEMENT AGREEMENT
TERMINATION AND SETTLEMENT AGREEMENT made as of the 10th day of September
2002 (the "Effective Date"), by and between TTR Technologies, Ltd, a company
organized under the laws of Israel, with offices at 0 Xxxxxxxx Xxxxxx, Xxxx Xxxx
Industrial Zone, Israel (the "Company") and Xxxxxxx Xxxxxxx residing in Bet
Shemesh, Israel ("GT").
WHEREAS, GT currently serves as the Company's Vice President of Business
Development under that certain employment agreement between the Company and GT,
entered into as of September 1, 1996 (as thereafter amended), (hereinafter, the
"Employment Agreement");
WHEREAS, the Company and GT desire to terminate GT's employment under the
Employment Agreement, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the terms and conditions hereafter set
forth the adequacy and sufficiency of which are hereby acknowledged, the parties
agree hereafter as follows:
1. Resignation of Position by GT. Subject to the terms and conditions set
forth herein, by his execution of this Agreement, GT hereby resigns from his
position as the Company's Vice President of Business Development
The parties acknowledge and agree that GT's signature to this Agreement
shall serve as adequate and complete legal notice of his resignation as an
employee.
2. Company Property. Except as otherwise herein provided, on or before the
Effective Date, GT shall return to the Company all Company property then in his
possession.
3. Financial Terms Relating to Termination of Employment. Subject to the
terms and conditions set forth herein and in consideration of the resignations
and releases contained herein, the Company hereby agrees as follows
(collectively, the "Settlement Amount"):
(a) Upon execution and delivery by GT of this Agreement, the Company
shall remit to GT any outstanding salary due and payable through the
Effective Date under Section 2.1(iii) (termination by Employee) of the
Employment Agreement, less deductions and withholdings under Israeli law
customarily made by TTR Ltd. and/or required by law, and, by his signature
below, GT hereby waives any claim to any other payments (other than
salary) due under the Employment Agreement;
(b) Upon execution and delivery by GT of this Agreement, the Company
releases to GT all amounts accumulated in GT's current Bituach Menahalim
and Keren Histalmut policies, and the Company shall take all reasonably
necessary actions to cooperate with GT in transferring or redeeming GT's
current Bituach Menhalim and Keren Hishtalmut policies, in accordance with
such policies terms and conditions and applicable law. BY HIS SIGNATURE
BELOW, GT AGREES THAT THE TRANSFER TO HIM OF SUCH POLICIES IS BEING MADE
IN FULL SATISFACTION OF ALL CLAIMS BY GT AGAINST THE COMPANY, AND GT
HEREBY WAIVES ANY RIGHTS HE MAY HAVE UNDER APPLICABLE LAW OR THE
EMPLOYMENT AGREEMENT TO ANY
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ADDITIONAL AMOUNTS THAT THE COMPANY MAY BE REQUIRED TO PAY, INCLUDING,
WITHOUT LIMITATION, SEVERANCE PAY UNDER ISRAELI LAW OR FURTHER PAYMENTS
INTO SUCH POLICIES, AND FURTHER AGREES THAT HE SHALL HAVE NO RIGHT OR
REMEDY AGAINST THE COMPANY OR ITS AFFILIATES FOR ANY SUCH SHORTFALL
PAYMENTS OR;
(c) The Company shall have an opportunity (at its own expense) to
make a back-up or copy of the database personal laptop currently used by
GT, except for GT's files of a personal nature; and
(d) TTR Ltd. shall sell to GT the automobile currently used by him
and in his possession in consideration of the payment of the current
market value of the automobile, as well as interest at per annum rate
equal to the market rate currently in effect for a transaction of this
type, in one balloon payment on September 10, 2005. TTR Ltd. forthwith
take all actions and execute instruments necessary or desirable to
transfer to GT title to such automobile.
All taxes, withholdings and deductions payable or due in respect of
GT's receipt of the Settlement Amount, or any component thereof, if any,
will be borne by GT. Notwithstanding the foregoing, Companies will deduct
from payments made under the Settlement Amount amounts required to be
withheld in respect of deductions and withholdings under Israeli, law
customarily made by the Company and/or required by law.
GT acknowledges and agrees that the Settlement Amount is being made
in full and final release by GT of any and all claims, rights or remedies
that he may have under the Employment Agreement or otherwise available
under law.
4. Continuation of Stock Options. The Company represents that the board of
directors of TTR Technologies, Inc. ("TTR Inc.") has provided that the employee
stock options heretofore granted by TTR Inc. to GT shall, notwithstanding any
agreement to the contrary between TTR Inc. and GT, continue to be exercisable
through the duration of the original grant of such options and, upon execution
and delivery by GT of this Agreement, shall vest and become immediately
exercisable, on the terms and conditions applicable to such grants, including,
without limitation, the exercise price thereof, in accordance with each of TTR
Inc.'s 1996 and 2000 equity incentive plans and agreements thereunder.
5. Continuing Obligations of GT. Notwithstanding anything else contained
herein, GT hereby acknowledges and agrees that the provisions of Sections 7 and
8 of the Employment Agreement (Confidentiality and Non-compete) shall continue
in full force and effect after the Effective Date of this Agreement, in
accordance with their terms and for the duration specified therein, provided,
that, notwithstanding the provisions thereof, such provisions shall be
understood solely to restrict, in accordance with their terms, GT from (i)
accepting employment with Midbar Ltd., Sunncomm Inc., Settec Inc. and
Macrovision and (ii) competing with the Company in the area of audio CD copy
protection. Except as otherwise specifically provided, nothing contained in this
Agreement shall be construed or interpreted as a waiver by the Companies or any
of its affiliates or subsidiaries of any right or remedy available under
Sections 7 and 8 of the Employment Agreement in the event of a breach occurring
after the Effective Date of this Agreement.
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6. Indemnification
TTR Inc. agrees to hold harmless and indemnify GT as, and in the manner,
permitted by Section 145 of the Delaware Corporation Law, to the extent (and
only to such extent) that the Companies' directors and officers insurance or
such other insurance as the Companies may have in effect at the time of a
Proceeding (as defined herein) does not provide coverage, or to the extent (and
only to such extent) that Damages (as defined herein) exceed such insurance
policy coverage limits, for the reasonable costs of defense and any and all
losses, claims, damages, liabilities or expenses, including, without limitation,
reasonable attorneys' fees, judgments, fines, excise taxes or penalties, witness
fees, amounts paid in settlement and other expenses incurred in connection with
any Proceeding (the "Damages"), relating to any completed, actual, pending or
threatened action, suit, claim or proceeding, whether civil, criminal,
administrative or investigative (including an action by or in the right of
either of the Company or any of its affiliates) and whether formal or informal
(each a "Proceeding"), in which GT is, was or becomes involved by reason of the
fact that GT was an employee, officer or agent of the Company whether the basis
of such proceeding is an alleged action (or inaction) by GT in an official
capacity as an employee, officer or agent or in any other capacity while serving
as an employee, officer or agent; provided, that, the above indemnification
shall not apply with respect to the civil actions entitled (i) Strum et all v.
Xxxx X. Xxxxxxx et all and (ii) Xxxxxxxxx v. Xxxx X. Xxxxxxx, et all, pending in
the United States District for the Southern District of New York in which MDT is
a named defendant, and with respect to any other action of a substantially
similar nature filed brought by or in the name of a shareholder of TTR Inc. in
which GT is named as a defendant and provided, further, the maximum amount in
the aggregate for this indemnification shall not exceed $25,000, it being
understood that, with respect to the agreement between TTR Inc. and TTR Ltd. and
Xxxx X. Xxxxxxx ("MDT") dated as of the date hereof with respect to the
termination and settlement of MDT's association with TTR Inc. and TTR Ltd. (the
"MDT Agreement"), any amount specified in Section 5 of the MDT Agreement
[Indemnification] and not applied to MDT's indemnification as provided in the
MDT Agreement, may, with MDT's consent, be applied to GT's indemnification
hereunder, it being, further understood that the indemnification for MDT under
the MDT Agreement and GT hereunder shall not exceed, in the aggregate for both
MDT and GT, $50,000.
7. Releases.
7.1 In consideration of the promises, covenants and releases contained
herein, the adequacy of which is hereby acknowledged, GT (on his behalf and on
behalf of each of his respective agents, attorneys, heirs, successors,
executors, personal representatives and assigns) does hereby absolutely and
unconditionally waive, release and forever discharge the Company, its respective
affiliates and subsidiaries, its respective past, present and future officers,
directors, shareholders, employees, agents, attorneys, successors and assigns
(hereinafter, the "Company Released Parties"), from any claims, demands,
obligations, liabilities, rights, causes of action and damages, whether
liquidated or unliquidated, absolute or contingent, known or unknown, from the
beginning of time to the Effective Date of this Agreement, or that arise under
the Employment Agreement or that arise under any body of labor or contract law,
including any claims under Israeli labor laws and regulations, or any claim for
wrongful termination, or claims with respect to any other payment required under
Israeli law. Notwithstanding the foregoing, the rights and obligations set forth
in this Agreement shall remain in full force and effect; nothing hereunder shall
be construed to release any rights accrued to GT to continue or redeem any
employee welfare benefit plan (including without limitation Betuach Menahalim
and Keren Hishtalmut) during his employment; nothing hereunder shall be
construed so as to waive any rights GT has as a shareholder or a holder of
options.
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7.2 In consideration of the promises, covenants and releases contained
herein, the adequacy of which is hereby acknowledged, each of the Company (on
its behalf and on behalf of its affiliates and subsidiaries and each of their
respective, past, present and future officers, directors, employees, attorneys,
agents, successors, executors, and assigns) does hereby absolutely and
unconditionally waive, release and forever discharge GT (and his agents,
attorneys, heirs, successors, executors, personal representatives and assigns ),
from any claims, demands, obligations, liabilities, rights, causes of action and
damages, whether liquidated or unliquidated, absolute or contingent, known or
unknown, from the beginning of time to the Effective Date of this Agreement, or
that arise under any body of labor or contract law, provided, that, that this
release shall not apply to any derivative claim or suit by a shareholder of the
Company or TTR Inc. Additionally, The foregoing release shall not be construed
as a waiver of future claims by the Company or its affiliates arising from GT's
conduct after the Effective Date of this Agreement with respect to his
obligations to the Company under the confidentiality and non-competition
provisions contained in the Employment Agreement and any undertakings of GT
pursuant to this Agreement.
8. Non-Disparagement. GT (on behalf of his heirs and personal
representatives), agrees not to make disparaging remarks concerning the Company
or their respective businesses or any of their respective employees,
consultants, stockholders, directors, affiliates, subsidiaries or
representatives. Each of TTR Ltd. and TTR Inc. agrees not to make disparaging
remarks concerning. Nothing herein shall be interpreted as affecting either of
the parties' obligations to comply with the specific terms of any valid and
effective subpoena, oral questions, interrogatories, requests for information,
civil investigative demand or order issued by a court of competent jurisdiction
or by a governmental body.
9. Certain Representations of TTR Inc. With respect to the two actions
filed in the Southern District of New York and pending therein as of the
Effective Date and with respect to any other action of a similar nature filed in
the future wherein GT is covered under the Companies' Directors And Officers
Liability Insurance policy (the "Affected Actions"), TTR Inc. hereby represents
to GT that it will refrain from taking any action that may interfere with the
provision to GT of such coverage by the insurance carrier.
10. Reasonable Attorney's Fees. Upon the execution hereof, TTR Ltd. shall
reimburse GT the amount of $2,500 for legal fees paid by him in connection with
the negotiation and execution of this Agreement.
11. Reliance. The parties acknowledge and agree that in the execution of
this Agreement, neither has relied upon any representation by any party or
attorney, except as expressly stated or referred to herein.
12. Headings. Section and subsection headings are not to be considered
part of this Agreement and are included solely for convenience and are not
intended to be full or accurate descriptions of the content thereof.
13. Successors and Assigns. Except as otherwise provided in this
Agreement, all the terms and provisions of this Agreement shall be upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors and assigns.
14. Non-Assignment. By his signature below, GT represents and warrants
that he has not assigned or otherwise conveyed to any third party any claim
against any of the
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Companies.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes any prior or contemporaneous understanding or agreement or letters,
written or verbal, among the parties with respect to the subject matter hereof
other than as expressly referenced herein. No supplement, modification or waiver
or termination of this Agreement or any provision hereof shall be binding unless
executed in writing by the parties to be bound thereby.
17. Governing Law, Jurisdiction and Forum. This Agreement, its validity,
construction and effect shall be governed by and construed under the laws of
Israel without reference to the principles of conflict of laws. The parties
hereby irrevocably consent to the jurisdiction of the courts of Israel venued in
Tel Aviv, for all actions, disputes, controversies, differences or questions
arising out of or relating to this Agreement.
18. Representation. Each of GT and the Company, acknowledges that they
have had the opportunity to consult with legal counsel respecting this
Agreement. Each person executing this Agreement on behalf of a corporation
hereby represents and warrants that he has been authorized to do so by all
necessary corporate action.
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IN WITNESS WHEREOF, each of the parties has set forth its/ his signature
as of the date first written above.
TTR Technologies, Ltd.
By: /s/ Xxx Xxxxx /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
Title: Director
TTR Technologies, Inc. hereby agrees to each of the Provisions in this Agreement
relating to it.
TTR Technologies, Inc.
By: /s/ Xxxxxx X. Xxxxx
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Title: Chief Executive Officer
