EXHIBIT 99.2
SEPARATION
AGREEMENT
This Separation Agreement (this
“Agreement”), dated as of this 9th day of December,
2005 (the “Effective Date”), by and between Memry
Corporation, a Delaware corporation (the “Company”),
and James G. Binch (“Binch”).
W I T N E S S E T H
:
WHEREAS , the Company and Binch are currently parties to
an Employment Agreement, dated September 8, 2004, pursuant to
which Mr. Binch is currently employed as the Company’s
President and Chief Executive Officer; and
WHEREAS , Binch wishes to retire as President and Chief
Executive Officer of the Company effective immediately, and as an
employee of the Company effective as of the close of business on
January 19, 2006 (the “Termination Date”), and the
Company desires to accept such resignations as of such dates;
and
WHEREAS , the Company and Binch have determined to
(i) agree upon the benefits to be received by, and the
obligations of Mr. Binch to be performed, subsequent to the
Termination Date, (ii) to resolve any and all disputed matters
between them, and (iii) with the exception of the continuing
obligations of Binch and the Company to each other under this
Agreement and the Employment Agreement, as the same may be modified
by this Agreement, release all claims pursuant to the Memry Release
and the Binch Release (each as defined herein).
NOW, THEREFORE
, in consideration of the foregoing
and in consideration of the mutual covenants, agreements and
releases contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which the parties
hereto hereby acknowledge, the Company and Binch hereby agree as
follows:
1. Resignation of Binch
.
(a) Binch hereby resigns as the
President and Chief Executive Officer of the Company, and as an
officer and director of any and all subsidiaries of the Company in
which he serves in such capacities, effective immediately, and the
Company hereby accepts such resignations. Mr. Binch shall
serve as a director of the Company from the date hereof until the
Company’s upcoming Annual Meeting of Shareholders, currently
scheduled for January 19, 2006 (the “Annual
Meeting”). Mr. Binch agrees not to stand for election to
the Company’s Board of Directors at the Annual
Meeting.
(b) Binch hereby resigns as an
employee of the Company effective upon the close of business on
January 19, 2006, and the Company hereby accepts such
resignation effective as of such date. During the period from the
date hereof through the Termination Date, Binch shall perform such
services of an executive nature as are reasonably requested by the
Company’s interim Chief Executive Officer or the
Company’s Board of Directors, and shall perform such services
from his home or such other location as is mutually agreed by
the
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parties. During the period
commencing on the date hereof and continuing through the
Termination Date, Mr. Binch shall continue to receive the
compensation and benefits currently being provided to him pursuant
to Sections 3(a), 3(d), 3(e), 3(f) and 3(g) of his Employment
Agreement in accordance with its currently existing terms,
including without limitation, entitlement to matching contributions
on compensation reduction deferrals made through the Termination
Date.
(c) Binch shall remove all of his
personal effects from his office on or prior to the Termination
Date, and he and the Company’s interim Chief Executive
Officer shall cooperate on the time and procedures for
Mr. Binch to remove the same. Schedule A hereto
contains a list of Mr. Binch’s personal property in his
office. On the Termination Date, Mr. Binch shall deliver to
the Company the personal property in his possession belonging to
the Company (a list of which is annexed hereto as Schedule B
). Also on the Termination Date, the Company shall quitclaim to
Binch the Company’s personal property listed on Schedule
C and in Binch’s possession; provided, however, that
prior to the Termination Date Binch shall deliver such personal
property to the Company so that the Company can remove any Company
intellectual property imbedded in such personal property and any
links to the Company’s computer system.
(d) Binch and the Company agree to
work together in good faith prior to the Termination Date to
resolve all other matters not covered herein and typically handled
by the Company at the end of an employee’s employment,
including, without limitation, return of all keys and company
identification, repayment of advances made by the Company to Binch,
payments to Binch of Company expenses paid for by him and payment
of accrued vacation, if applicable, pursuant to normal Company
policy, and like matters.
2. Purchase of Stock Options
.
(a) Binch agrees and understands
that, subsequent to the date hereof, he will not be eligible to
receive, and will not receive, any additional stock option or other
equity grants.
(b) On the Termination Date, Binch
agrees to sell to the Company, and the Company agrees to purchase
from Binch, all of Binch’s qualified and non-qualified stock
options and other incentive rights, a complete list of which is
annexed hereto as Schedule D (the “Stock
Options”), in return for a cash amount of $100,000. Binch
shall deliver the documents evidencing the Stock Options to the
Company on the Termination Date. Binch agrees not to sell, transfer
or otherwise convey, or to take any other action to dispose of any
interest in, or to exercise, any of such Stock Options between the
date hereof and the Termination Date.
(c) Binch hereby represents and
warrants to the Company that, on both the date hereof and the
Termination Date, Binch is and will be the record and beneficial
owner of the Stock Options, free and clear of all liens, claims,
encumbrances, options, pledges, restrictions on transfer, and
security interests (other than those created by the instruments
evidencing the Stock Options and the plans pursuant to which they
were issued) (“Liens”), and upon consummation of the
transactions contemplated hereby, Binch will transfer good and
valid title to the Stock Options to the Company, free and clear of
all Liens.
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3. Post-Termination Compensation
and Benefits . As a general matter, Binch and the Company agree
that, in order to determine the rights and obligations of Binch
vis a vis the Company and the Company vis a
vis Binch, Binch’s retirement shall be treated as if
his employment with the Company was terminated by the Company
without cause pursuant to Section 9(e) of the Employment
Agreement subject, however, to the following provisions of this
Section 3:
(a) In lieu of the bi-weekly
payments referred to in clause (1) of Section 9(e) of the
Employment Agreement for a two-year period, Binch shall be entitled
to receive an aggregate amount of $500,000, payable in equal
bi-weekly installment payments to be made at such time as the
Company pays its employees generally, with the first installment to
be paid on the first date on which the Company pays its employees
subsequent to January 19, 2005, and the last installment to be
paid on the last date on or prior to March 15, 2007, on which
the Company pays its employees;
(b) In lieu of the payments
described in clause (2) of Section 9(e) of the Employment
Agreement, the Company shall pay to Binch, on the Termination Date,
a lump sum payment of $89,281.
(c) In lieu of any payments
described in clause (3) of Section 9(e) of the Employment
Agreement, the Company shall pay to Binch the payments contemplated
by Section 3(e) of the Employment Agreement in the manner
heretofore paid for each of the four quarters of calendar year 2006
and, in addition, shall make a one time payment of $30,000 to Binch
on March 15, 2007.
(d) Binch and his spouse shall be
entitled to the health and life insurance continuation benefits
provided in Section 4(a) and 4(b) of the Employment Agreement,
such benefits and payments to be made on a basis consistent with a
termination without cause.
(e) No modifications shall be made
to any options or other equity grants currently owned by Binch,
whether pursuant to Section 3(c) of the Employment Agreement
or otherwise.
(f) The term of Binch’s
covenant not to compete pursuant to Section 5(a) of the
Employment Agreement shall be reduced from 24 months to a period
extending from the Date of Termination to March 15, 2007. The
parties expressly agree and understand that the length of time that
Binch’s restrictions not to solicit pursuant to
Section 5(b) of the Employment Agreement and not to disclose
information pursuant to Section 6 of the Employment Agreement,
as well as Binch’s obligations under Section 8 of the
Employment Agreement, shall not be modified or affected in any way
by virtue of this Section 3(e). Binch also agrees, subsequent
to the Termination Date, to provide reasonable assistance to the
Company at the Company’s request with respect to the
prosecution of the Company’s litigation against Kentucky Oil,
N.V. and related parties, including the defense of all
counterclaims arising out of the same.
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(g) For purposes of clarification,
the parties agree that Binch’s Period of Employment under the
Employment Agreement will not be terminated for any reason prior to
the Termination Date.
(h) All amounts payable under this
Agreement shall be subject to applicable withholding requirements
under federal and state law.
4. Non-Disparagement
.
(a) Binch agrees that he will not
make any statements or claims, initiate any proceedings or take any
actions either directly or indirectly, or through third parties,
which demean, detract, criticize or otherwise cast the Company
and/or any of its subsidiaries (collectively, the “Company
Related Entities”) or any of their respective officers and
directors in an unfavorable light in the eyes of their customers,
suppliers, employees, consultants or any other persons, or which
could adversely affect the morale of any employee of a Company
Related Entity, or which interfere with a Company Related
Entity’s contractual relationships with its customers,
suppliers, employees or consultants, or which otherwise disparage
or defame the goodwill or reputation of a Company Related Entity or
any of its officers, directors or employees.
(b) The Company, on behalf of itself
and each of the Company Related Entities, agrees that neither it
nor any of its officers or directors, employees or agents will make
any statements or claims, initiate any proceedings or take any
actions either directly or indirectly, or through third parties,
which demean, detract, criticize or otherwise cast Binch in an
unfavorable light in the eyes of any other persons, or which
otherwise disparage or defame the reputation of Binch. The Company
shall provide a mutually agreed-upon employer reference upon
request.
(c) The Company and Binch agree and
acknowledge that they have agreed to the text of the press release
annexed hereto as Schedule E . Upon the execution and
delivery hereof, the Company shall disseminate the press release in
accord with the Company’s usual procedures.
5. Successors and Assigns .
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, assigns, heirs
and representatives.
6. Counterparts . This
Agreement may be executed in any number of counterparts, each of
which shall constitute an original but both of which, when taken
together, shall constitute one and the same instrument.
7. Severability . In the
event any one or more of the provisions contained in this Agreement
shall be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or
impaired thereby.
8. Section 409A . The
parties agree that this Agreement and the rights granted to Binch
hereunder are intended to meet the requirements of, and otherwise
comply with, Section 409A of the Internal Revenue Code of
1986, as amended, as implemented pursuant to IRS
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Notice 2005-1, dated January 10, 2005 and
the regulations proposed to be promulgated thereunder by the
Department of the Treasury on September 29, 2005 (the
“409A Requirements”). Accordingly, the parties agree
that during the period ending on December 31, 2006 (or such
later date as set forth by the Internal Revenue Service for good
faith compliance with guidance relating to Section 409A of the
Code), the parties agree that they shall negotiate in good faith to
revise any provisions of this Agreement that might otherwise fail
to meet the 409A Requirements; provided, however, that nothing
contained in this Section 9 shall be deemed to require the
Company to incur any material compensation expense in excess of
that which would be incurred by it in the absence of this
Section 9. The parties agree that they sha
