Document:

<PAGE>

                                                                    EXHIBIT 10.2

                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE

     This Settlement Agreement and Mutual Release (this "Agreement"), dated as
of this 28th day of January 2002 (the "Effective Date"), by and between Memry
Corporation, a Delaware corporation (the "Company"), and Robert J. Thatcher
("Thatcher").

                              W I T N E S S E T H :

     WHEREAS, on May 22, 2001, Thatcher's employment with the Company as its
President and Chief Operating Officer terminated; and

     WHEREAS, the Company had previously loaned Thatcher $200,000, which loan is
evidenced by a $200,000 Promissory Note issued by Thatcher to the Company and
dated August 25, 2000 (the "Note"), which Note is secured by a Statutory Form
Mortgage Deed from Thatcher to the Company of even date (the "Mortgage"); and

     WHEREAS, without any admission of liability to each other, the Company and
Thatcher have determined to (i) resolve all disputed matters between them and
(ii) with the exception of the continuing obligations of (A) Thatcher and the
Company to each other under this Agreement and (B) of Thatcher to the Company
under the Note, Mortgage and Sections 4 through 7 of the Employment Agreement by
and between the Company and Thatcher, dated January 1, 2000 (the "Employment
Agreement") (each as modified herein), release all claims pursuant to the Memry
Release and the Thatcher 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 Thatcher hereby agree as
follows:

     1.   Payments/Benefits.
          -----------------

          (a) $90,000 of the amount payable to the Company under the Note shall
     be forgiven as of January 28, 2002. Thatcher shall pay the remaining
     $110,000 of the amount payable under the Note on the earlier of (1) the
     third anniversary of the Effective Date and (2) the date on which the
     property described in the Note is sold or fee ownership is otherwise
     transferred. These modifications shall be reflected in an Amended and
     Restated Secured Promissory Note in the form attached hereto as Exhibit D
     executed by Thatcher and an Amended and Restated Statutory Form Mortgage
     Deed in the form attached hereto as Exhibit E executed by Thatcher and by
     Jayne M. Thatcher, both of which shall be executed and delivered to the
     Company contemporaneously with the execution of this Agreement. In
     addition, the Company agrees that it will permit Thatcher to refinance the
     existing third party note and mortgage on the property and to subordinate
     its mortgage to the mortgage securing the note resulting from such
     refinancing, so long as such refinancing is in an amount no greater than
     the outstanding balance of the existing third party note and first
     mortgage.

<PAGE>

          (b) The Company shall transfer ownership to Thatcher of the laptop
     computer and palm pilot currently in Thatcher's possession. The Company
     agrees to transfer ownership to Thatcher of the cell phone currently in
     Thatcher's possession. In addition, the Company agrees, if Thatcher brings
     that laptop computer to the Company's offices at a mutually convenient
     time, to permit its information technology consultant, at no cost to
     Thatcher, to remove or change to a password selected by Thatcher, the
     password presently installed in that laptop computer.

          (c) The Company shall pay to Thatcher a lump sum payment of $25,000 on
     the later of (1) January 28, 2002; or (2) the eighth day following the
     Effective Date; provided, that Thatcher has not revoked the Thatcher
                     --------
     Release (defined in Section 3) in accordance with Section 5 thereof.

          (d) As soon as practicable following the Effective Date, the Company
     shall grant Thatcher a fully-vested nonqualified stock option to acquire
     75,000 shares of the Company's common stock at a per share exercise price
     equal to the closing price of a share of the Company's common stock on the
     trading date immediately preceding the Effective Date. Such option shall be
     issued pursuant to the form of Option Agreement attached hereto as Exhibit
     C and Thatcher acknowledges that, due to statutory requirements, such
     option may not be issued under the Company's employee stock incentive
     plans. It is understood by the parties that the Company's offer and sale of
     common stock to Thatcher upon the exercise of these stock options will not
     be registered under the Securities Act of 1933 as amended, nor will
     Thatcher's reoffer and resale of such common stock be so registered.

          (e) Thatcher shall be entitled to (i) continued base salary payments
     (at the annual base salary rate of $205,140.00) through November 22, 2002,
     such amounts to be paid to Thatcher as and when they would otherwise be due
     absent the termination of Thatcher's employment and (ii) a payment of
     $50,891.00 on or about September 27, 2002. With respect to the amount
     specified in clause (ii) above, the Company may elect to pay up to
     one-third of such amount by delivering to Thatcher shares of the Company's
     common stock having an equivalent value (determined based on the last
     reported trade price on the day three business days prior to the date on
     which said payment would otherwise be due).

          (f) Sections 4 through 7 of the Employment Agreement shall remain in
     full force and effect; provided, however, that the Company shall not elect
                            --------  -------
     to extend the noncompetition restrictions as permitted under Section
     4(a)(ii) of the Employment Agreement.

          (g) For purposes of clarification, Thatcher acknowledges and agrees
     that, pursuant to this Agreement, he has relinquished all of his rights
     under Section 8 of the Employment Agreement, including, without limitation,
     any right to enhanced severance in the event of a Change in Control (as
     defined in the Employment Agreement).

          (h) All amounts payable under this Agreement shall be subject to
     applicable withholding requirements under federal and state law and to
     Section 3 hereof. Otherwise,

<PAGE>

     all amounts payable hereunder to Thatcher shall be payable without any
     right of set-off (including, without limitation, on the basis of any
     alleged breach by Thatcher of the covenants hereof or in the Employment
     Agreement) or claim to mitigation of damages.

     2.   Non-Disparagement.
          -----------------

          (a) Thatcher 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) Each of the Company Related Entities agrees that neither it nor
     any of its officers 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 Thatcher
     in an unfavorable light in the eyes of any other persons, or which
     otherwise disparage or defame the reputation of Thatcher. The Company shall
     provide a mutually agreed-upon employer reference upon request.

     3. Releases. This Agreement is subject to the execution and effectiveness
        --------
of the releases attached hereto as Exhibits A (the "Memry Release") and B (the
"Thatcher Release"), which are being executed and delivered simultaneously with
the execution and delivery hereof, and obligations of the Company set forth
herein shall not be enforceable if Thatcher revokes the Thatcher Release
pursuant to Section 5 thereof.

     4. 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.

     5. 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.

     6. 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.

     7. Miscellaneous.
        -------------

          (a) This Agreement, and any releases or other documents executed and
     delivered in connection with any of the foregoing, may only be modified,
     terminated or waived by a writing signed by the party against whom
     enforcement of such modification,

<PAGE>

     termination or waiver is sought. Any such waiver shall be limited to the
     specific matter or item waived.

          (b) Any delay or omission in the enforcement of any right or remedy
     arising under this Agreement and any releases or other documents executed
     and delivered in connection with any of the foregoing, shall not be deemed
     a waiver of such right or remedy.

          (c) This Agreement shall be governed by and construed in accordance
     with the laws of the State of Connecticut without regard to principles of
     conflict of laws thereunder. Any claim or dispute between the parties
     arising out of or in connection with this Agreement or any alleged breach
     hereof shall be finally settled by arbitration under the Employment
     Arbitration Rules of the American Arbitration Association (provided that
     notwithstanding any such Rules to the contrary, the reasonable attorneys
     fees of the prevailing party shall be paid by the other party), and
     judgment upon the award rendered by the Arbitrator may be rendered in any
     court having jurisdiction over it. There shall be one arbitrator of any
     such arbitration. The arbitration shall be held in Fairfield County,
     Connecticut. The parties shall endeavor to agree on the selection of an
     arbitrator, but if no agreement has been reached within ten (10) days of
     one party's request for an arbitration, the arbitrator shall be selected by
     the American Arbitration Association. The foregoing provisions of this
     Section 7(c) shall not preclude an action in court by either party for
     injunctive relief, nor shall it be construed to limit or restrict in any
     manner the Company's rights and remedies under Sections 4 through 7 of the
     Employment Agreement.

          (d) This Agreement, the Note, the Mortgage, and the Employment
     Agreement, together with any other document executed in connection with
     this Agreement, constitutes the entire agreement of the parties hereto with
     respect to the subject matter hereof and thereof and supersedes all oral
     statements, conversations and correspondence and is intended by the parties
     hereto to be the final expression of their agreement on all terms and
     conditions set forth herein and therein.

          (e) The statements contained in the Recital section of this Agreement
     are stipulated by the parties to be true and correct.

          (f) All exhibits hereto shall be a part of this Agreement.

          (g) This Agreement shall not be enforced against and shall not be
     binding upon any party to this Agreement unless and until this Agreement
     has been signed by all parties to this Agreement.

          (h) If at any time after the Effective Date any further action is
     necessary or desirable to carry out the purposes of this Agreement, each
     party hereto will take such further action (including the execution and
     delivery of such further instruments and documents) as the other party may
     reasonably request, all at the sole cost and expense of the requesting
     party.

<PAGE>

          (i) Section headings in this Agreement are included for convenience
     only and are not to be used to construe or interpret this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first written above.

WITNESS:                                     MEMRY CORPORATION

/s/ Robert P. Belcher                        By: /s/ James G. Binch
-----------------------------------------       --------------------------------
                                                 James G. Binch
                                                 Chief Executive Officer

/s/ Richard Sokolowski
-----------------------------------------

/s/ Paul V. Hutchins                          /s/ Robert J. Thatcher
-----------------------------------------    -----------------------------------
Paul V. Hutchins                                 Robert J. Thatcher

/s/ Richard R. Kavanauch
-----------------------------------------
Richard R. Kavanauch

<PAGE>

                   [ACKNOWLEDGEMENTS TO SETTLEMENT AGREEMENT]

                                 ACKNOWLEDGMENTS

STATE OF CONNECTICUT)
                    )       ss: Bethel, Connecticut
COUNTY OF FAIRFIELD )

          On this the 28th day of January, 2002, before me, the undersigned
officer, personally appeared James G. Binch, who acknowledged himself to be the
Chief Executive Officer of Memry Corporation, a Delaware corporation (the
"Corporation"), and that he as such Chief Executive Officer, being authorized to
do so, executed the foregoing instrument for the purposes therein contained, by
signing the name of the Company by himself as its Chief Executive Officer.

     In witness whereof, I have hereunto set my hand.

                                         /s/   Mary C.A. Davis
                                         ---------------------------------------
                                         Notary Public/Commissioner
                                            of the Superior Court

                                         My Commission Expires: 3/21/2005

STATE OF CONNECTICUT)
                    )       ss: Ridgefield, Connecticut
COUNTY OF FAIRFIELD )

     On this 28 day of January, 2002, before me, the undersigned officer,
personally appeared Robert J. Thatcher, known to me (or satisfactorily proven)
to be the person whose name is subscribed to the within instrument and
acknowledged that he has executed the same for the purposes therein contained
and acknowledged the same to be his free act and deed.

     In witness whereof, I have hereunto set my hand.

                                         /s/ Victor A. Anderson Sr.
                                         ---------------------------------------
                                         Notary Public/Commissioner
                                            of the Superior Court

                                         My Commission Expires:  August 31, 2002

<PAGE>

                       EXHIBITS A-E INTENTIONALLY OMITTED<PAGE>

                                                                    EXHIBIT 10.3

                              AMENDED AND RESTATED
                             SECURED PROMISSORY NOTE

$110,000                                                 Brookfield, Connecticut
                                                                January 28, 2002

     FOR VALUE RECEIVED, the undersigned, Robert J. Thatcher, with his principal
residence at 76 Old Trolley Road, Ridgefield, Connecticut (the "Borrower"),
hereby promises to pay to the order of Memry Corporation, a Delaware
corporation, with an office at 3 Berkshire Boulevard, Bethel, CT 06801 (the
"Holder"), the principal sum of One Hundred Ten Thousand Dollars ($110,000) in
lawful money of the United States of America and in immediately available funds.
The principal amount of this Promissory Note (this "Note") shall be payable
pursuant to the terms of Section 1 hereof. The payment of this Note shall be
secured by an Amended and Restated Statutory Form Mortgage Deed (the
"Mortgage"), in the form attached hereto as Exhibit A, made against the
principal residence of the Borrower and his wife in the Town of Ridgefield,
County of Fairfield, State of Connecticut, and used as the Borrower's principal
residence (the "Mortgaged Premises").

     This Note amends and restates that certain Promissory Note in the original
principal amount of $200,000 dated August 25, 2000 (the "Original Note") made by
Borrower to Holder, secured by a mortgage of the same date (the "Original
Mortgage") recorded on or about that date in the Town of Ridgefield, County of
Fairfield, State of Connecticut (which Original Mortgage is being amended and
reinstated simultaneously herewith by the Mortgage).

     Notwithstanding anything to the contrary contained herein, in no event
shall the amount payable by the Borrower as interest or other charges on this
Note exceed the highest lawful rate permissible under any law applicable hereto.

     This Note has been duly authorized and issued pursuant to a Settlement
Agreement and Mutual Release, dated as of January 28, 2002 (as the same may be
amended or otherwise modified from time to time, the "Agreement"), between the
Holder and the Borrower.

     Capitalized terms used in this Note which are not otherwise defined in this
Note shall have the meanings ascribed to such terms in the Agreement.

     If any payment under this Note shall be specified to be made on a day which
is not a business day, it shall be made on the next succeeding day which is a
business day. For purposes of this Note, a "business day" shall mean any day
other than Saturday, Sunday or other day in which banks are authorized to close
in the State of Connecticut.

     1. Payment of Principal on Note. The principal sum hereof shall be payable
        ----------------------------
in one installment of $110,000 being due and payable on the earlier of (a)
January 28, 2005 and (b) a date on which fee title to the Mortgaged Premises
vests or will vest in anyone other than the Borrower (and his spouse). Payment
of principal is to be made to the Holder at its office address designated above
or at such other place as the Holder shall have notified the Borrower in
writing.

<PAGE>

     2. Interest. The aggregate outstanding principal balance hereof shall not
        --------
bear interest, however the Borrower acknowledges that for Federal income tax
purposes, interest may be imputed to him under the Internal Revenue Code of
1986, as amended, or corresponding provisions of future or comparable state and
local laws.

     3. Events of Default. The existence of any of the following conditions
        -----------------
shall constitute an event of default hereunder (an "Event of Default"):

          (a) The Borrower breaches any material term of the Agreement; or

          (b) The Borrower fails to pay when due any principal of this Note; or

          (c) The Borrower breaches any of the conditions contained in this Note
or the Mortgage, including, without limitation, assigning or transferring this
Note in violation of Section 7 below, allowing fee title to the Mortgaged
Premises to vest in anyone other than the Borrower (and his spouse), or leasing
the Mortgaged Premises for a term greater than one year; or

          (d) If the Borrower:

               (i) shall commence any case or proceeding under any bankruptcy,
insolvency or other similar law or seek reorganization, arrangement,
readjustment of its debts, dissolution, liquidation, winding-up, composition or
any other relief under any bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or any other similar
act or law, of any jurisdiction, domestic or foreign, now or hereafter existing;
or

               (ii) shall admit the material allegations of any petition or
pleading in connection with any such case or proceeding; or

               (iii) makes an application for, or consents or acquiesces to, the
appointment of a receiver, conservator, trustee or similar officer for the
Borrower or for all or a substantial part of the Borrower's property; or

               (iv) makes a general assignment for the benefit of the Borrower's
creditors; or

               (v) is unable or admits in writing its inability to generally pay
the Borrower's debts as they mature; or

          (e) The (i) commencement of any case or proceeding against the
Borrower under any bankruptcy, insolvency, or other similar law or seeking
reorganization, arrangement, readjustment of its debts, liquidation,
dissolution, winding-up, composition or any other relief under any bankruptcy,
insolvency, reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or any other similar act or law of any jurisdiction,
domestic or foreign, now or hereafter existing, (ii) appointment of a receiver,
trustee or similar officer for the Borrower or for all or a substantial part of
the Borrower's property, or (iii) issuance of a warrant of attachment, execution
or similar process against any substantial part of the property of the Borrower,
and such case, proceeding, receiver, trustee, officer, warrant, execution or
process shall not be dismissed, bonded or discharged, as applicable, within
sixty (60) days of the commencement, appointment or issuance thereof.

<PAGE>

     4. Rights and Remedies. In the event that one or more Events of Default
        -------------------
shall have occurred and be continuing, the Holder may at its option by written
notice to the Borrower declare the principal of and the accrued and unpaid
interest on this Note to be immediately due and payable, and thereupon the same
shall become so due and payable, without presentment, demand, protest, notice of
acceptance or reliance, notice of non-payment, notice of dishonor, notice of
protest or further notice, all of which are hereby waived by the Borrower. No
course of dealing or delay on the part of the Holder of this Note in exercising
any right shall operate as a waiver thereof or otherwise prejudice the right of
the Holder. Subject as aforesaid, no remedy conferred hereby shall be exclusive
of any other remedy referred to herein or now or hereafter available at law, in
equity, by statute, other agreement or instrument, or otherwise.

     5. Lost Documents. Upon receipt by the Borrower of (i) evidence reasonably
        --------------
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
(ii) in the case of loss, theft or destruction, indemnification satisfactory to
the Borrower, and (iii) in the case of mutilation, surrender and cancellation of
this Note, the Borrower will cancel this Note on its books and make and deliver
in its place a new note in the then unpaid principal amount of this Note, of
like tenor to this Note, dated and bearing interest from the date next following
the date through which interest has been paid on the unpaid principal amount of
this Note.

     6. Costs and Expenses. Upon the occurrence of any Event of Default, the
        ------------------
Borrower shall pay all reasonable costs and expenses incurred by the Holder
(including, without limitation, court costs and reasonable attorneys' fees) in
preserving, protecting, maintaining or enforcing its rights and remedies
hereunder, including, without limitation, all costs and expenses of collection.

     7. Assignment. This Note may not be sold, offered for sale, pledged,
        ----------
hypothecated or otherwise encumbered, transferred or disposed of by the Holder
without the prior written consent of the Borrower. The Borrower shall not assign
or otherwise transfer any or all of its obligations hereunder without the prior
written consent of the Holder.

     8. Cancellation. After the principal balance of this Note has been
        ------------
satisfied, the Holder shall surrender this Note to the Borrower for
cancellation.

     9. Miscellaneous.
        -------------

          (a) Parties in Interest. All covenants, agreements and undertakings in
              -------------------
this Note by and on behalf of the Borrower and the Holder hereof shall, subject
to the provisions of Section 7 hereof, bind and inure to the benefit of the
parties hereto and their respective permitted successors and assigns, whether so
expressed or not.

          (b) Notices. All notices, requests, communications, consents and
              -------
demands shall be made in writing and shall be (i) sent by registered or
certified mail, first class, postage prepaid, return receipt requested or (ii)
delivered by hand, facsimile transmission or messenger to the Borrower or to the
Holder hereof, as the case may be, at its respective address set forth at the
beginning of this Note, or at such other respective address as it may furnish in
writing to the other. All such notices, requests, communications, consents and
demands shall be deemed given, if mailed, three business days after mailing, and
if personally delivered, the day so delivered.

<PAGE>

          (c) Governing Law. This Note shall be governed by, and construed and
              -------------
interpreted in accordance with, the laws of the State of Connecticut, without
regard to its rules pertaining to conflicts of laws thereunder.

          (d) Submission To Jurisdiction. Each of the Borrower and the Holder
              --------------------------
hereby irrevocably and unconditionally submits in any legal action or proceeding
relating to this Note, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of any state or
federal court sitting in Connecticut; consents that any such action or
proceeding may be brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; agrees that service of process in any
such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it, at its respective address set forth at the beginning of
this Note or at such other address of which the other party shall have been
notified pursuant thereto; and agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.

          (e) WAIVERS OF JURY TRIAL. EACH OF THE BORROWER AND THE HOLDER HEREBY
              ---------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS NOTE AND FOR ANY COUNTERCLAIM THEREIN.

          (f) Borrower Certifications. The Borrower hereby certifies and
              -----------------------
covenants to Holder that:

               (i) the Borrower reasonably expects to be entitled to, and will,
itemize deductions for each year that the loan evidenced by this Note is
outstanding, and

               (ii) the proceeds of the loan evidenced by this Note will be used
only to purchase the new principal residence of the Borrower described above,
and for no other purpose.

The Borrower acknowledges and agrees that the Holder is relying on these
certifications and covenants in calculating certain tax liabilities and
withholdings, and that the Borrower shall indemnify the Holder and hold the
Holder harmless against any damages assessed against or suffered by the Holder
resulting from a breach by the Borrower of any of the above certifications or
covenants, and that such indemnification shall include payment of all damages,
costs and expenses incurred by the Holder, including, without limitation, court
costs and reasonable attorneys' fees.

                  [Remainder of Page Intentionally Left Blank]

<PAGE>

     IN WITNESS WHEREOF, Borrower has executed this instrument as of the date
first written above.

                                                       /s/ Robert J. Thatcher
                                                     ---------------------------
                                                     Robert J. Thatcher

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]