TERMINATION AND SETTLEMENT AGREEMENT
TERMINATION AND SETTLEMENT AGREEMENT made as of the 3rd day of October,
2003 (the "Effective Date"), by and between TTR Technologies, a Delaware
corporation, with offices at 1091 Boston Post Road, Rye, New York, ("TTR" or the
"Company"), and Xxxxxx X. Xxxxx residing at 00 Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxx
Xxxx ("XXXXX"); and
WHEREAS, XXXXX currently serves as TTR's Chief Executive Officer and
President under that certain executive employment agreement between TTR and
XXXXX, entered into as of May 2, 2002 (hereinafter, the "Employment Agreement")
and concurrently serves as a Director on the Board of Directors of TTR; and
WHEREAS, the Company and XXXXX desire to terminate XXXXX'x employment under
the Employment Agreement and his service on the Company's Board of Directors,
all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the terms and conditions hereafter set
forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. RESIGNATION OF POSITIONS BY XXXXX. Subject to the terms and conditions
set forth herein (including, without limitation, the payment by TTR of the
Settlement Amount), by his execution of this Agreement, XXXXX hereby resigns,
effective as of the Effective Date, from his positions as TTR's Chief Executive
Officer, President, and as a director of TTR, and from any and all other offices
he has held at the Company and/or any of its affiliates and subsidiaries
including, without limitation, directorships and executive management positions.
The parties acknowledge and agree that XXXXX'x signature to this Agreement
shall serve as adequate and complete legal notice of his resignation as a
director, officer, employee, and member of management, of the Board of Directors
of the Company and to all applicable affiliates and subsidiaries.
The parties acknowledge and agree that the Company's signature to this
Agreement shall serve as its acceptance of XXXXX'x resignation from these
capacities, and of its responsibility to provide timely notification of such
resignation to the Company's Board of Directors, to the Company's affiliates and
subsidiaries, and to all authorities to whom such resignation must be reported
by law. XXXXX agrees to execute any reasonably necessary document to facilitate
and effect any notification of his resignation of positions with the Company.
2. COMPANY PROPERTY. Except as otherwise provided herein, upon or
immediately prior to his signature hereto, XXXXX shall return to the Company all
TTR property then in XXXXX'x possession.
3. TERMS RELATING TO TERMINATION OF EMPLOYMENT. (I) Subject to the terms
and conditions set forth herein and in consideration of the resignations and
releases contained herein, the Company hereby agrees to transfer or afford to
Xxxxx the following (collectively, the items referenced in sub paragraphs (a),
(b), (c) and (d) are referred to as the "Settlement Amount"):
(a) upon execution and delivery by XXXXX of this Agreement and in
further consideration of the waiver of claims under the Employment
Agreement, TTR shall remit
by wire transfer to a bank account designated in writing by XXXXX the
amount of seventy-eight thousand dollars ($78,000), together with salary
payments due and payable under the Employment Agreement through the
Effective Date, LESS, in each case, deductions and withholdings under
applicable law customarily made by the Company and/or required by law, and,
by his signature below, XXXXX hereby waives any claim to any other payments
(other than salary) due under the Employment Agreement;
(b) as set-off of certain amounts owed to XXXXX and in consideration
of the waiver by XXXXX of amounts claimed under the Employment Agreement,
TTR agrees that the unpaid balance of the original signing bonus of
$100,000 (the "Sign-Up Bonus") advanced to XXXXX under the Employment
Agreement (par.4 (b) (i)) is no longer due and payable by XXXXX;
(c) XXXXX shall be authorized to retain (i) the computer (personal
laptop) that he has been using as an employee of TTR, provided that XXXXX
delivers to TTR a copy of all files and databases on that laptop, other
than XXXXX'x files of a personal nature, (ii) the cellular telephone that
he has been using as an employee of TTR, provided appropriate arrangements
are made with the communication carrier for the continued use of the
cellular phone at XXXXX'x sole expense; and (iii) the file cabinets
(without their contents) that he has been using as an employee of TTR,
provided that the relocation of such cabinets shall be at XXXXX'x sole
expense and liability; and
(d) TTR agrees to continue providing to XXXXX, at its sole expense,
continued health care coverage, as currently provided under the current
Oxford Plan through October 31, 2003, in addition to the Company's
obligation under law to continue XXXXX'x coverage under COBRA or applicable
laws at XXXXX'x expense to the extent required by law.
XXXXX acknowledges and agrees that the Settlement Amount is being made in
full and final release by XXXXX of any and all claims, rights or remedies that
he may have under the Employment Agreement or otherwise available to him under
law consistent with the release set forth in paragraph 6.1 below.
All taxes, withholdings and deductions payable or due in respect of XXXXX'x
receipt of the Settlement Amount, or any component thereof, including, without
limitation, the Sign-Up Bonus, will be borne by XXXXX. Notwithstanding the
foregoing, the Company will deduct from payments made under the Settlement
Amount amounts required to be withheld in respect of deductions and withholdings
under applicable law customarily made by TTR and/or required by law.
(ii) WAIVER BY XXXXX OF CLAIMS TO ESOPS. By his execution of this
Agreement, XXXXX waives any and all rights to the employee stock options
previously issued to him by the Company under the Company's 2000 Equity
Incentive Plan, including, without limitation, the employee stock options issued
on or about May 2002 for the purchase of 550,000 shares of the Company's common
stock, par value $0.001 per share, and any other options grant made subsequent
thereto.
4. CONTINUING OBLIGATIONS OF XXXXX. Notwithstanding anything else
contained herein, XXXXX hereby acknowledges and agrees that the provisions of
Article 8 of the Employment Agreement (Confidentiality and Non-Competition) and
Article 9 (Cooperation Following Termination) 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. Nothing contained in this
Agreement shall be construed or interpreted as a waiver by the Company or any
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of its affiliates or subsidiaries of any right or remedy available under such
sections of the Employment Agreement in the event of a breach occurring after
the Effective Date of this Agreement.
5. INDEMNIFICATION
TTR agrees to hold harmless and indemnify XXXXX, his agents, attorneys,
heirs, successors, executors, personal representatives and assigns as, and in
the manner permitted by Section 145 of the Delaware General Corporation Law, to
the extent (and only to such extent) that the Company' directors and officers
insurance or such other insurance as the Company may have in effect at the time
of a Proceeding (as defined herein) does not provide coverage, or to the extent
(and only such extent) that the Damages (as defined herein) exceed such
insurance policy coverage limits, for any and all losses, claims, demands,
obligations, damages, rights, causes of action, liabilities or expenses,
including, without limitation, reasonable attorneys' fees, judgments, fines,
excise taxes or penalties, witness fees, amounts paid in settlement and other
expenses, whether liquidated or unliquidated, absolute or contingent, known or
unknown 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 the Company) and whether formal or informal (each a
"Proceeding"), in which XXXXX is, was or becomes involved by reason of the fact
that XXXXX was a director, officer, employee, trustee or agent of either of the
Company or any of its affiliates or that, being or having been such a director,
officer, employee, trustee or agent, XXXXX is or was serving at the request of
the Company as a director, officer, employee, trustee or agent of another
corporation or of a partnership, company, corporation, joint venture, trust or
other enterprise, whether the basis of such proceeding is an alleged action (or
inaction) by XXXXX in an official capacity as a director, officer, employee,
trustee or agent or in any other capacity while serving as a director, officer,
employee, trustee or agent.
TTR hereby covenants and agrees to maintain in force, at the Company's sole
cost and expense, an officers and directors liability insurance policy providing
no less favorable coverage to XXXXX as to the other directors and officers. Such
coverage shall be maintained by TTR for as long as XXXXX may be subject to any
possible claim or threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, by reason of XXXXX'x employment by,
association with or affiliation with TTR as described in this section.
6. RELEASES.
6.1 In consideration of the promises, covenants and releases contained
herein, the adequacy of which is hereby acknowledged, XXXXX (on his behalf and
on behalf of each of his agents, attorneys, heirs, successors, executors,
personal representatives and assigns) does hereby absolutely and unconditionally
waive, release and forever discharge each of the Company, its affiliates and
subsidiaries, their 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, or any claim
for wrongful termination, or claims with respect to any other payment required
under law or by virtue of his position as an officer, director, and/or employee
of TTR and its affiliates and subsidiaries. Notwithstanding the foregoing, the
rights and obligations set forth in this Agreement shall remain in full force
and effect; no release hereunder shall be construed to release any rights under
this
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Agreement or any applicable insurance policy, including any officer and director
liability insurance coverage or any errors and omissions coverage; no release
hereunder shall waive any indemnification rights applicable to XXXXX as a former
officer and Director of the Company or shall be construed to waive any rights
XXXXX has as a shareholder.
6.2 In consideration of the promises, covenants and releases contained
herein, the adequacy of which is hereby acknowledged, TTR (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 XXXXX (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; PROVIDED, however,
that the foregoing release shall not be construed as a waiver of future claims
by Company arising from XXXXX'x conduct after the Effective Date of this
Agreement with respect to his obligations to Company under the confidentiality
provisions contained in the Employment Agreement and any undertakings of XXXXX
pursuant to this Agreement.
7. NON-DISPARAGEMENT. XXXXX (on behalf of his heirs and personal
representatives), agrees not to make disparaging remarks concerning the Company
or its subsidiaries and affiliates or their respective businesses or any of
their respective employees, consultants, stockholders, directors, affiliates,
subsidiaries or representatives. The Company agrees not to make disparaging
remarks concerning XXXXX. Nothing contained 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.
8. CERTAIN REPRESENTATIONS OF TTR. TTR hereby represents to XXXXX that it
will refrain from taking any action that may interfere with the provision to
XXXXX of insurance coverage by the insurance carrier under the Company's
directors and officers liability insurance policy.
9. PRESS RELEASE. On or immediately following the Effective Date, TTR
shall issue a press release in the form attached hereto relating to XXXXX'x
resignation. The Company intends to also file with the Securities and Exchange
Commission an appropriate special report on Form 8-K.
10. 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.
11. 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.
12. 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.
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13. NON-ASSIGNMENT. By their respective signatures below, each of the
Company and XXXXX represents and warrants that prior to the Effective Date it
has not assigned or otherwise conveyed to any third party any claim against any
of, respectively, XXXXX or the Company.
14. 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.
15. 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.
16. GOVERNING LAW, JURISDICTION AND FORUM. Except as otherwise expressly
provided herein, this Agreement, its validity, construction and effect shall be
governed by and construed under the laws of the State of New York without
reference to its conflict of laws principles. The parties hereby irrevocably
consent to the jurisdiction of the courts of New York County, State of New York
or the United States District Court for the Southern District of New York for
all actions, disputes, controversies, differences or questions arising out of or
relating to this Agreement. Each of the Company and XXXXX agree that in any
litigation involving the subject matter of this Agreement they waive the right
to a trial by Jury.
17. ATTORNEYS' FEES. The prevailing party shall be entitled to the payment
or reimbursement in full of any reasonable attorneys' fees and out of pocket
expenses incurred by it in connection with any claim, defense, cause of action,
right or remedy exercised in connection with this Agreement.
18. SEVERABILITY. If any provision or provisions of this Agreement shall
be held invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby.
19. REPRESENTATION. Each of XXXXX and TTR 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, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------
XXXXXX XXXXX
Title: Chief Operating Officer
/s/ Xxxxxx X. Xxxxx
----------------------------
XXXXXX X. XXXXX
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