Document:

Exhibit
10.3

 

Memorandum of Terms of
Agreement

 

1.             In September
2009, Whitney Information Network, Inc. (now known as and referred to herein as
“Tigrent”), WIN CR II Trust, and their respective affiliates, successors and
assigns and Russell W. Whitney, on the one hand, and M. Barry Strudwick (“Strudwick”),
Susan Weiss and Carl Weiss, on the other hand (Strudwick and Susan and Carl
Weiss are collectively referred to herein as the “Strudwick Parties”), reached
a global settlement (the “Settlement”). 
On September 17, 2009, the Settlement was entered on the record in the
United States District Court for the Eastern District of New York, case number
06-6569, and was approved by the Court in an Order entered on November 10,
2009.  Terms that are capitalized herein
and not otherwise defined herein shall be given the meaning ascribed to them in
the Memorandum of Terms of Settlement executed by respective counsel for the
parties.

 

2.             Pursuant to the
terms of the Settlement, Tigrent agreed, among other things, to provide a
series of payments to the Strudwick Parties under two promissory notes, and to
provide certain collateral, including Tigrent’s interest in real property known
as Tranquility Bay in Lee County, Florida.

 

3.             Payments were
due pursuant to both promissory notes on July 15, 2010.  On July 13, 2010, Tigrent advised the
Strudwick Parties that it would not be making the payments due on July 15,
2010.  On July 15, 2010, Tigrent in fact
failed to make the payments.  On July 16,
2010, the Strudwick Parties issued a notice of default for failure to comply
with the Settlement.

 

4.             On July 30,
2010, Tigrent made a partial payment of $50,000 in exchange for the Strudwick
Parties agreement to forbear from taking any enforcement action with respect to
the Settlement until August 13, 2010. 
Since then, the parties have engaged in additional discussions and
negotiations concerning continued forbearance, future payments, and transfer of
collateral.

 

5.             In
consideration of the mutual promises contained herein, Tigrent and the
Strudwick Parties agree as follows:

 

A.            On or before Friday, October
6, 2010, Tigrent shall execute a quitclaim deed (the “Deed”) transferring
Tranquility Bay in Lee County, Florida to Tranquility Bay Pine Island , LLC, a
Florida limited liability company of the Strudwick Parties.

 

B.            Within 14 days of its
execution, Tigrent shall record the Deed in the land records of Lee County,
Florida.  Tigrent shall be responsible
for all costs, fees, and expenses arising from or related to the Deed’s
recording.

 

C.            Upon the Deed’s recording,
Tigrent shall receive a credit of $300,000 as if a payment was made on the date
of recording toward the installments due and next coming due under the First
Note and Second Notes under the terms of the Settlement.

 

 

D.            The Strudwick Parties agree
to continue their forbearance from taking any enforcement action with respect
Tigrent’s failure to make payments pursuant to the Settlement and the related
promissory notes until February 15, 2011.

 

E.             Tigrent shall indemnify,
defend and hold harmless the Strudwick Parties and Tranquility Bay Pine Island,
LLC, against any and all claims brought against the Strudwick Parties or
Tranquility Bay Pine Island, LLC by Gulf Gateway Enterprises, LLC, Dunlap
Enterprises, LLC, Drevid, LLC, or any of their respective members, successors,
and assigns, to the extent any such claims arise from or are related in any way
to the Tranquility Bay property, the Deed, or this Agreement.  This indemnification shall include the
Strudwick Parties attorneys’ fees arising from any such claims, and Tigrent
agrees to pay such attorneys’ fees as incurred.

 

F.             Tigrent agrees that by the
Strudwick Parties entering into this agreement and their continuing forbearance
of taking enforcement action with respect to the payment defaults under the
Settlement, the Strudwick Parties are not waiving any rights, including their
right to enforce the Settlement.

 

G.            Nothing in this Agreement
modifies or in any way supersedes the Settlement or any portion thereof.

 

H.            Within 14 days of the
parties signing this Agreement, Tigrent shall pay the Strudwick Parties’
reasonable attorneys fees arising from or related to the payment defaults under
the Settlement, including but not limited to fees incurred in negotiations
related to the payment defaults, drafting of pleadings to enforce the
Settlement, and drafting of this Agreement.

 

 

	
  /s/
  James E. May

  	
   

  	
  /s/ M. Barry Srudwick

  
	
   

  	
   

  	
  M. Barry Strudwick

  
	
  By:
  

  	
  James
  E. May

  	
   

  	
  Date: 

  	
  September 29, 2010

  
	
  on
  behalf of Tigrent Inc.

  	
   

  	
   

  
	
  Date:

  	
  10/6/10

  	
   

  	
   

  

 

 

	
  /s/ Susan Weiss

  	
   

  	
  /s/ Carl Weiss

  
	
  Susan Weis

  	
   

  	
  Carl Weiss

  
	
  Date:

  	
  10/7/10

  	
   

  	
  Date:

  	
  10/7/10Exhibit 10.1

 

July 28,
2010

 

Ms. Sally
Washlow

1214
N. Oak Park Avenue

Oak Park, Illinois  60302

 

Dear
Sally:

 

This
letter is to confirm the terms of your employment with Cobra Electronics
Corporation (the “Company”).

 

1.             During the term of your employment by the Company pursuant to this
agreement, you shall be employed as Senior Vice President, Marketing and Sales
of the Company and shall have the normal duties, responsibilities and attendant
authorities of that position, including, but not limited to, primary authority
and supervisory responsibility for all marketing and sales functions and all
other tasks as may be assigned from time to time by the Chief Executive Officer
of the Company.  You shall report to the
Chief Executive Officer of the Company.

 

2.             The term of your employment by the Company pursuant to this agreement
shall begin on August 1, 2010.  Such
employment shall be on an at-will basis which you or the Company can terminate
at any time by delivery of written notice to the other party.

 

3.             During your employment by the Company pursuant to this agreement, you
shall receive a regular salary at the rate per period hereinafter set forth,
payable every two weeks.  Your regular
annual salary shall be $220,000, subject to annual review and adjustment by the
Compensation Committee of the Company’s Board of Directors for each calendar
year (an “Annual Period”), including such review and any such adjustment for
the Annual Period beginning January 1, 2011 (the “2011 Annual Period”),
but in no event shall your annual salary for any subsequent Annual Period be
less than your annual salary for the prior Annual Period.

 

4.             In addition to your regular annual salary, you shall also be eligible to
receive for each Annual Period commencing with the 2011 Annual Period, a bonus
of up to 35% of your regular annual salary. 
Your bonus for each Annual Period shall be based on such criteria as
shall be determined by the Compensation Committee of the Company’s Board of
Directors for each Annual Period, which may include Company performance,
individual performance and/or such other criteria as the Compensation Committee
of the Company’s Board of Directors shall determine.  Your bonus for the Annual Period ending December 31,
2010 shall be determined pursuant to the Company’s 2010 Executive Incentive
Plan, as amended.  Except as provided
elsewhere herein, you shall only be entitled to receive a bonus with respect to
an Annual Period if you are employed by the Company through, and on the last
day of, the Annual Period.

 

Any
bonus payable to you pursuant to this Section 4 for an Annual Period shall
be paid to you by the Company on or before March 15th of the calendar year
immediately following the end of the applicable Annual Period.

 

 

5.             You also shall receive $10,000 each Annual Period to be used for
perquisites of your choice, payable in monthly payments of $833.33, while you
are employed by the Company, in lieu of any other allowances.  Each monthly payment shall be paid to you by
the Company during the month to which the payment pertains.

 

6.             In the event a Change of Control (as defined below) occurs, any stock
option previously issued to you that is not then, or to the extent not then,
exercisable, shall immediately become exercisable in full.

 

For
the purpose of this agreement, a Change of Control shall be deemed to have
occurred if:  (i) any person,
including a group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, acquires the beneficial ownership
of, and the right to vote, shares having at least 50 percent of the aggregate
voting power of the class or classes of capital stock of the Company having the
ordinary and sufficient voting power (not depending upon the happening of a
contingency) to elect at least a majority of the directors of the board of
directors of the Company, or (ii) as the result of any tender or exchange
offer, substantial purchase of the Company’s equity securities, merger,
consolidation, sale of assets or contested election, or any combination of the
foregoing transactions, the persons who were directors of the Company
immediately prior to such transaction or transactions shall not constitute a
majority of the board of directors (or the board of directors of any successor
to or assign of the Company) immediately after the next meeting of stockholders
of the Company (or such successor or assign) following such transaction, or (iii) there
is consummated a reorganization, merger or consolidation of the Company or sale
or other disposition of all or substantially all of the assets of the Company
(a “Corporate Transaction”), excluding any Corporate Transaction pursuant to
which (A) all or substantially all of the individuals or entities who are
the beneficial owners, respectively, of the outstanding voting securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 50% of the combined voting power of the outstanding
securities entitled to vote generally in the election of directors of the
corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
indirectly) in substantially the same proportions relative to each other as
their ownership, immediately prior to such Corporate Transaction, of the
outstanding voting securities, (B) no person (other than the Company, any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company) will beneficially own, directly
or indirectly, 50% or more of the combined voting power of the outstanding
securities of the corporation resulting from such Corporate Transaction
entitled to vote generally in the election of directors, and (C) the
persons who were directors of the Company immediately prior to such Corporate
Transaction will constitute at least a majority of the board of directors of
the corporation resulting from such Corporate Transaction.

 

7.             During your employment hereunder, you shall be entitled to participate in
such employee benefits including, but not limited to, life, short and long term
disability and health insurance and other medical benefits as the Company makes
available to individuals employed by the Company at the Senior Vice President
level.

 

8.             You shall be reimbursed for all of your reasonable and necessary business
expenses incurred in performing your duties for the Company.  In order for any such reimbursement to be 

 

 

made, the expense must be
incurred while you are employed by the Company, and you must complete and
submit such standard forms for reimbursement in accordance with any procedures
established by the Company.  In no event
will the Company make any such reimbursement later than the last day of the
calendar year following the calendar year in which you incur the expense.  Your right to reimbursement is not subject to
liquidation or exchange for any other benefit, and the amount of expenses
eligible for reimbursement in a calendar year will not affect the amount of
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
subsequent calendar year.

 

9.             You shall be entitled to a benefit from the Company pursuant and subject
to the terms and conditions of (including but not limited to the vesting
provisions of) the COBRA Electronics Corporation 2002 Deferred Compensation
Plan for Select Executives, as amended from time to time, or any similar plan
which the Company adopts for this purpose; provided, however, that for purposes
of any such plan, your years of service shall be the number of your completed
years of employment during the period commencing on May 14, 2007 and
ending on the date your employment with the Company terminates.

 

10.          (a)  Involuntary Termination other than for Cause.  (1)  Separation pay.  In the event your employment hereunder with
the Company is involuntarily terminated by the Company for reasons other than
for “Cause” (as defined below), the Company shall continue to make biweekly
payments to you after your termination of employment on the same dates on which
your regular biweekly salary would have continued to be paid to you if your
employment had not terminated in an amount equal to your regular biweekly
salary (described in Section 3) (“Continued Salary Payments”) until the
Company has made 26 such payments to you. 
Such payments shall commence on the first regular payday immediately
after the day of your termination of employment.

 

(2)           Other benefits.  In the event that paragraph (a)(1) of
this Section 10 applies, the Company shall also (i) pay the cost of
any continued health and dental coverage properly elected by you under the
Company’s group health and dental plans pursuant to the Consolidated Budget
Reconciliation Act of 1984 (“COBRA coverage”) for the period during which the
Company is making Continued Salary Payments, (ii) pay to you a pro-rata
portion of any bonus described in Section 4 of this agreement for the
Annual Period during which your termination of employment occurs that is based
on Company performance (determined based on the number of days during such
Annual Period during which you are employed by the Company plus the number of
days in the biweekly periods during such Annual Period for which the Company is
making Continued Salary Payments) in accordance with the payment timing
provisions of Section 4, and (iii) pay for an executive outplacement
program of your choice, subject to similar terms and conditions as the Company’s
other executive outplacement program (including a maximum fee of 15% of your
total compensation and monthly reports from the outplacement firm of your
active job search); provided, that only reasonable outplacement services
incurred by you and directly related to the termination of your employment with
the Company shall be reimbursed and, provided further, that such expenses must
be incurred no later than the end of the first calendar year following the
calendar year of your termination of employment.

 

In
the event that paragraph (a)(1) of this Section 10 applies, all
vested stock options granted to you by the Company which are not incentive
stock options shall, subject to the terms hereof and the agreements evidencing
such grants, (i) continue to become exercisable pursuant to the terms
thereof and (ii) remain exercisable until the last day in the final
biweekly period for which the Company is making Continued Salary Payments as if
you had remained employed by the 

 

 

Company
until such date, provided, however, that no option may be exercised beyond the
earlier of the latest date upon which the option could have been exercised
under its original terms or the tenth anniversary of the original date of grant
of the option.

 

Except
as otherwise provided herein, all of your remaining benefits shall immediately
end upon your termination of employment.

 

(b) 
Involuntary termination for Cause. 
In the event your employment hereunder with the Company is terminated by
the Company for Cause, you shall be entitled to salary through and including
the effective date of your termination of employment and all other benefits
provided for hereunder shall immediately cease. 
All of your remaining benefits, including the continued vesting and
exercisability of stock options, shall immediately end upon your termination of
employment.

 

For
purposes of this agreement, “Cause” shall mean embezzlement, misappropriation,
theft or other criminal conduct, of which you are convicted, related to the
property or assets of the Company or your willful refusal to perform or
substantial disregard of your duties assigned to you by the Chief Executive
Officer of the Company, unless you have reasonable and just cause for such
refusal to perform or disregard of your duties or unless you commence immediate
corrective actions within 15 days after the Chief Executive Officer gives you
written notice of his objection to your refusal to perform or disregard of your
duties.

 

(c)  Termination for
Good Reason.  (1)  Separation
pay.  In the event you terminate your
employment with the Company due to a “Material Negative Change” (as defined
below), the Company shall continue to make Continued Salary Payments until the
Company has made 26 such payments to you. 
Such payments shall commence on the first regular payday immediately
after the day of your termination of employment.

 

(2)           Other benefits.  In the event that paragraph (c)(1) of
this Section 10 applies, the Company shall also (i) pay the cost of
any properly elected COBRA coverage, (ii) pay to you a pro-rata portion of
any bonus described in Section 4 of this agreement for the Annual Period
during which your termination of employment occurs that is based on Company
performance (determined based on the number of days during such Annual Period
during which you are employed by the Company plus the number of days in the
biweekly periods during such Annual Period for which the Company is making
Continued Salary Payments) in accordance with the payment timing provisions of Section 4,
and (iii) pay for an executive outplacement program of your choice,
subject to similar terms and conditions as the Company’s other executive
outplacement program (including a maximum fee of 15% of your total compensation
and monthly reports from the outplacement firm of your active job search);
provided, that only reasonable outplacement services incurred by you and
directly related to the termination of your employment with the Company shall
be reimbursed and, provided further, that such expenses must be incurred no
later than the end of the first calendar year following the calendar year of
your termination of employment.

 

In
the event that paragraph (c)(1) of this Section 10 applies, all
vested stock options granted to you by the Company which are not incentive
stock options shall, subject to the terms hereof and the agreements evidencing
such grants, (i) continue to become exercisable pursuant to the terms
thereof and (ii) remain exercisable until the last day in the final
biweekly period for which the Company is making Continued Salary Payments as if
you had remained employed by the Company until such date, provided, however,
that no option may be exercised beyond the earlier of the latest date upon
which the option could have been exercised under its original terms or the
tenth anniversary of the original date of grant of the option.

 

 

Except
as otherwise provided herein, all of your remaining benefits shall immediately
end upon your termination of employment.

 

For
purposes of this agreement, “Material Negative Change” shall mean the
occurrence, without your consent, of one or more of the following:

 

(A)          There is a
material diminution in your authority, duties or responsibilities as an officer
of the Company.

 

(B)          There is a
material change in the geographic location at which you must perform your
services to the Company.

 

(C)          There is a
material breach by the Company of the terms of this agreement or other
agreement pursuant to which you provide services to the Company.

 

Notwithstanding
the foregoing, no Material Negative Change shall occur unless (w) you
provide written notice to the Company of the existence of the Material Negative
Change within 90 days of the initial existence of such change; (x) the
Company does not remedy the Material Negative Change within 30 days of the
Company’s receipt of such written notice; (y) as a result of the Material
Negative Change not being remedied, you terminate your employment with the
Company after such 30-day period and not later than twelve months after the
initial existence of one or more of the events giving rise to the Material
Negative Change; and (z) your termination is not after the occurrence of
an event constituting Cause.

 

(d) 
Voluntary termination.  If you
terminate your employment with the Company for any reason other than due to a
Material Negative Change, you shall be entitled to salary through and including
the effective date of your termination of employment, and all other benefits
provided for hereunder shall immediately cease. 
All of your remaining benefits shall immediately end upon your
termination of employment; provided, however, that with respect to any
outstanding Company stock options previously granted to you, such Company stock
options shall continue to be governed by the terms of the agreements evidencing
the grant of any Company stock options.

 

(e) 
Termination for disability or death. 
If at any time while you are employed hereunder by the Company you die
or are determined in good faith by the Board of Directors of the Company to be
disabled, the Company may immediately terminate this agreement and your
employment.  Any termination of your
employment due to your death or disability will be with the same consequences
as if it were for Cause; provided, however, that with respect to any
outstanding Company stock options previously granted to you, such Company stock
options shall continue to be governed by the terms of the agreements evidencing
the grant of any Company stock options. 
For the purpose of this agreement, you shall be deemed to be disabled if
you are physically or mentally unable to perform your duties for a period of
180 consecutive days.

 

(f) 
Miscellaneous.  After the payment
of any applicable amounts described in Section 10 and under the Cobra
Electronics Corporation 2002 Deferred Compensation Plan for Select Executives
(subject to the terms and conditions thereof), you shall have no further rights
to any payments or benefits from the Company. 
Amounts payable to you pursuant to Section 10 are in lieu of, and
not in addition to, benefits provided to eligible participants under the Cobra
Electronics Corporation Severance Pay Plan. 
For the avoidance of doubt, no amounts shall be payable to you under
such plan.

 

11.          For a one-year period following your voluntary termination of employment
or your termination by the Company for Cause and during any period during which
you are receiving Continued Salary Payments from the Company pursuant to Section 10
above, you shall not for 

 

 

the benefit of yourself or any
business or other entity solicit, directly or indirectly, any of the Company’s
employees, or solicit, directly or indirectly, any of the customers of the
Company for products which are currently marketed or which have been announced
by the Company.  In addition, at no time
following any termination of your employment for any reason shall you disclose
or in any way use the confidential and proprietary information obtained during
the course of your employment with the Company, including, but not limited to,
the Company’s financial and product information and information relating to the
Company’s customer and supplier relations.

 

12.          If, at any time of enforcement of any provisions of Section 11 of
this agreement, a court holds that the restrictions stated therein are
unreasonable under the circumstances then existing, you agree that the maximum
period, scope, or geographical area reasonable under such circumstances will be
substituted for the stated period, scope or area.

 

13.          You acknowledge that the services to be rendered by you hereunder are
unique and personal.  Accordingly, you
may not assign any of your rights or delegate any of your duties or obligations
under this agreement.  The Company may
assign its rights, duties or obligations under this agreement to a purchaser or
transferee of all, or substantially all, of the assets of the Company.

 

14.          The waiver by either party of a breach by the other party of any
provision of this agreement shall not be valid unless in a writing signed by
the non-breaching party, and any valid waiver shall not operate or be construed
as a waiver of any subsequent breach.

 

15.          This agreement embodies the entire agreement and understanding of the
parties hereto with respect to the matters described herein and supersedes any
and all prior and/or contemporaneous agreements and understandings, oral or
written, between the parties.

 

16.          This agreement shall be, in all respects, construed in accordance with
and governed by the laws of the State of Illinois.

 

17.          IRC §409A.

 

(a)           Notwithstanding
any provision of this agreement to the contrary, this Agreement is intended to
comply with the provision of IRC §409A and shall be interpreted and construed
accordingly.  All payments made under
this agreement are intended to be exempt from IRC §409A to the maximum extent
possible, under either the separation pay exemption pursuant to Treasury regulation
§1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury
regulation §1.409A-1(b)(4) , and for this purpose, each payment shall be
deemed a separate payment. 
Notwithstanding any other provision of this agreement to the contrary,
if you are a “specified employee,” within the meaning of IRC §409A, at the time
of your termination of employment, no amount that is subject to IRC §409A and
that becomes payable by reason of such termination of employment shall be paid
to you before the earlier of (i) the expiration of the six-month period
measured from the date of your termination of employment, and (ii) the
date of your death.

 

(c)           Solely for
purposes of determining the timing of any compensatory payments that are
measured by reference to your termination of employment, such termination of
employment will be deemed to occur on the date of your “separation from service”
within the meaning of IRC 

 

 

§409A
and regulations promulgated thereunder, and for this purpose all references to “termination,
“ “termination of employment” or like terms shall mean “separation from
service.”

 

(d)           The Company
shall have the sole discretion and authority to, and may in its sole
discretion, amend this agreement, unilaterally and at any time, to satisfy any
requirements thereof or guidance provided by the U.S. Treasury Department to
the extent applicable to this agreement, provided that no such amendment shall
result in the loss of benefits or reduction of any payment amount to you under
this agreement.

 

 

If
you are in agreement with the foregoing, please sign this agreement in the
appropriate place below and return it to me as soon as possible.

 

 

	
  Best
  regards,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/James
  Bazet

  	
   

  	
   

  
	
  James
  Bazet

  	
   

  	
   

  
	
  Chairman
  and Chief Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed
  and Accepted on the 28th day of July, 2010:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Sally Washlow

  	
   

  	
   

  
	
  Sally
  Washlow

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