Document:

exhibit_10-2.htm

Exhibit 10.2

 

SEPARATION AGREEMENT AND RELEASE

magicJack Vocaltec Ltd. (the “Company”) and Timothy McDonald (“Employee”) have agreed that Employee’s employment will terminate effective as of 5pm EST on June 5, 2015 (the “Separation Date”).  Employee will receive severance in accordance with the terms of his Employment Agreement between the Company and Employee dated December 13, 2013 (the “Employment Agreement”).  Employee will also receive additional compensation in connection with his separation of employment to which he would not otherwise be entitled under the Employment Agreement.

In exchange for the good and valuable consideration set forth below, the sufficiency and receipt of which is hereby acknowledged, and in compliance with the terms of Section 7.A. of the Employment Agreement, Employee and the Company hereby agree as follows:

	
1.

	
Employment Agreement.  Employee and the Company acknowledge and agree that (a) the Employment Agreement is hereby terminated subject to survival of the provisions of Section 8 thereof as set forth therein, and (b) termination of the Employment Agreement shall be considered a termination by the Company without “Cause” as such term is defined in the Employment Agreement.

	
2.

	
Releases.

(a)               Employee agrees that by executing this Separation Agreement and Release (“Release”) he does hereby, for himself, his heirs, executors, administrators, representatives, successors and assigns, release and forever discharge the Company and its attorneys, present and former employees, agents, present and former officers, directors, parents, subsidiaries, divisions, and all affiliated or related companies, predecessors, successors, assigns or representatives, and all persons acting for, by, through, under or in concert with any of them (collectively, “Released Parties”), of and from any and all claims, demands, causes of action, suits, debts, accounts, claims for attorney’s fees, interest, expenses and costs, damages, judgments, and executions of any nature whatsoever, which Employee, his heirs, executors, administrators, representatives, successors, or assigns, had or now has, from the beginning of time to the date hereof, against the Company and the Released Parties, whether known or unknown, whether based in contract or tort, or on Title VII of the Civil Rights Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, including the Older Workers’ Benefit Protection Act, the Family Medical Leave Act, or any other federal or state statute, common law, rule or regulation.  Employee acknowledges that by signing this Release, Employee is waiving his rights to bring any claim of any sort related to his employment or resignation of employment with the Company.  Notwithstanding the foregoing, the Company acknowledges and agrees that the foregoing release does not apply to any of the Company’s obligations under this Release or any of the Company’s remaining severance obligations to Employee arising from the Company’s termination of the Employment Agreement.

(b)               Company agrees that, by executing this Release,  Company does hereby, for itself, its wholly owned subsidiaries and their respective successors and assigns, release and forever discharge Employee of and from any and all claims, demands, causes of action, suits, debts, accounts, claims for attorney’s fees, interest, expenses and costs, damages, judgments, and executions of any nature whatsoever, which Company, its wholly owned subsidiaries or their respective successors or assigns, had or now have, from the beginning of time to the date hereof, against Employee, whether known or unknown, whether based in contract or tort, or any federal or state statute, common law, rule or regulation.  Notwithstanding the foregoing, Employee acknowledges and agrees that the foregoing release does not apply to any of Employee’s obligations under this Release or any of the Employee’s obligations under the Employment Agreement which survive its termination.

 

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3.

	
Consideration. In consideration for executing this Release, and assuming that prior to the Separation Date, Employee has returned all of the Company’s property, including but not limited to any items containing the Company’s confidential information and trade secrets, the Company agrees to pay Employee a total sum of $500,000.00 in accordance with the provisions of Section 7.A. of the Employment Agreement (the “Severance Fund”). The Company shall pay the Severance Fund in a lump sum no later than three (3) business days after the Company’s receipt of a Confirmation of Acceptance attached to the ADEA Rider to this Release as Attachment A. Payment of the Severance Fund will be subject to applicable tax withholdings by the Company. Employee acknowledges the Severance Fund is separation pay, and not earned wages or compensation.  Employee further acknowledges and understands that no other compensation or expenses are otherwise owed to him.

 

	
4.

	
Insurance Benefits. Beginning on the day after the Separation Date, Employee shall be entitled to participate in COBRA benefits as provided under Federal law. Employee shall be responsible for the full cost of any such continued coverage under COBRA, provided that the Company will reimburse Employee for COBRA costs paid by Employee during the twelve (12) month period following the Separation Date.  Employee shall submit his request for reimbursement to the Company’s Controller within 30 (thirty) days after each monthly payment for his COBRA benefits.  Company shall issue reimbursement to Employee within 30 (thirty) days of receipt of Employee’s reimbursement request.

	
5.

	
Equity.  Employee is party to a Stock Option Agreement (the “Option Agreement”) and a Restricted Stock Agreement (the “RSA”) with the Company each dated December 13, 2013.  Employee acknowledges and agrees that (a) Employee’s option to purchase shares under the Option Agreement is vested as to 185,544 of the covered shares listed in the Option Agreement (the “Vested Options”), and (b) Employee owns 24,410 of the Company’s shares issued under the Restricted Stock Agreement (the “Restricted Shares”).  The Company agrees that all of the Restricted Shares shall become vested and no longer subject to the restrictions under the terms of the RSA immediately upon Employee’s execution of this Release.  Employee acknowledges and agrees that he has no other right or interest in any equity securities of the Company other than the Vested Options and the Restricted Shares.

 

	
6.

	

Attorneys’ Fees. In the event any action is brought to enforce any provision of this Release, the prevailing party shall be entitled to reasonable attorney fees and costs from the other party.  The term “prevailing party” shall mean the party that recovers an award from a judgment and/or any other court-ordered relief.

 

	
7.

	
Confidentiality of Agreement. In further consideration of the covenants, agreements, and payments, Employee agrees not to disclose, divulge or discuss, either directly or indirectly, the terms or existence of this Release unless such disclosure is required by legal process, or by reason of Employee seeking to enforce the terms of this Release, except that Employee may disclose this Agreement to his spouse and/or attorney or tax advisor.  If such limited disclosures are made, Employee agrees to convey the confidentiality requirements set forth herein, and any breach by Employee’s spouse, tax advisor or attorney of these confidentiality obligations shall be considered a breach by Employee.

  

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8.

	
No Oral Modification.  This Agreement may not be changed, modified or amended except by a written amendment signed by Employee and an authorized officer of the Company. This Agreement reflects the entire agreement of the parties, and supersedes any prior oral or written agreements related to the same subject matter, except that this Agreement does not extinguish any of Employee’s or Company’s obligations under the Employment Agreement, the Option Agreement or the RSA that survive their respective terminations.

	
9.

	
No Negative Remarks.  Employee covenants that he shall not engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks which are disparaging, deleterious or damaging to the integrity, reputation or goodwill of the Released Parties.  Company covenants that neither it nor any of its wholly owned subsidiaries will engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks which are disparaging, deleterious or damaging to the integrity, reputation or goodwill of Employee.

	
10.

	
Confidential Information. Employee represents and warrants that he has not, directly or indirectly (i) disclosed, used, or allowed to be used any of the Company’s confidential information or trade secrets, or (ii) retained or copied any of the Company’s confidential information, data or documents, including but not limited to employee lists, manuals, customer lists or information, and sales, technical or financial data.  Employee further represents and warrants that, at anytime in the future, he will not disclose or use in any way confidential information or trade secrets which were learned by or disclosed to him at any time during the course of his employment with the Company.

	
11.

	
Severability.  If any provision of this Agreement is held invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions shall in no way be affected or impaired thereby.

	
12.

	
Governing Law and Forum Selection. This Agreement shall be interpreted in accordance with the substantive laws of the State of New Jersey, without regard to any conflict of laws provisions.  Any action brought to enforce any provision of this Agreement shall be brought in the federal or state courts of New Jersey.

	
13.

	
Voluntary. Employee acknowledges that he has entered into this Release freely and voluntarily.

  

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I HAVE READ AND UNDERSTAND AND AGREE TO BE BOUND BY THE ABOVE RELEASE.  I HAVE BEEN ADVISED TO SEEK THE ADVICE OF AN ATTORNEY OF MY CHOOSING.  I HAVE SIGNED THIS RELEASE FREELY AND VOLUNTARILY.

 

	Dated:___________________   	 	
______________________________

Timothy McDonald

	 
	 	 	 	 
	Dated:___________________   	 	
______________________________

Gerald T. Vento

Chief Executive Officer

magicJack VocalTec Ltd.

	 

 

  

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ADEA RIDER

By the terms of this Rider, Employee acknowledges that he/she is waiving rights granted to employees over the age of 40 under the provisions of the Age Discrimination in Employment Act (“ADEA”).  Employee has a period of forty-five (45) days to consider signing this document.  If he enters this Agreement, he may revoke his agreement at any time within a period of seven (7) days following execution by tendering written notice of his revocation within that seven (7) day period to the Company’s Chief Executive Officer.  If he does not revoke his agreement, Employee agrees to deliver the Confirmation of Acceptance (Exhibit A) to the Company’s Chief Executive Officer immediately after the expiration of the seven (7) day reconsideration period.

By this document, the Company has advised Employee to consult with an attorney of his/her choice before signing this Release.

I HAVE READ AND UNDERSTAND AND AGREE TO BE BOUND BY THE ABOVE RELEASE.  I HAVE BEEN ADVISED TO SEEK THE ADVICE OF AN ATTORNEY OF MY CHOOSING.  I HAVE SIGNED THIS RELEASE FREELY AND VOLUNTARILY.

Dated:___________________

______________________________

Timothy McDonald

  

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SEVERANCE AGREEMENT AND RELEASE

EXHIBIT “A”

CONFIRMATION OF ACCEPTANCE

 

I, Timothy McDonald, acknowledge that at least seven (7) days have passed since I signed the Severance Agreement and Release between the Company and me on June 5, 2015, and I have been afforded this seven day period to reconsider my decision to enter the Severance Agreement and Release.  I confirm that I still wish to enter this Severance Agreement and Release.  I have not and do not intend to revoke my Severance Agreement and Release, including the waiver and release of my rights under the Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq., and affirm that I remain bound by all terms of the Severance Agreement and Release.

Dated:___________________

 

______________________________

Timothy McDonald

 

Page 6 of 6exhibit_10-3.htm

Exhibit 10.3

 

Independent Contractor Agreement

For Consulting Services

 

This Independent Contractor Agreement (the “Agreement”) is made and entered into as of June 6, 2015 (the “Effective Date”) by and between magicJack Vocaltec Ltd., a company formed under the laws of the State of Israel, and all of its direct and indirect subsidiaries (collectively, the “Company”), and Timothy McDonald (the “Contractor”).

 

WITNESSETH:

 

WHEREAS, the Company desires to retain the Contractor to perform certain professional consulting services specified herein; and

 

WHEREAS, Contractor represents he has expertise in the services required by the Company and desires to be engaged in the capacity of independent contractor in accordance with the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

	
  

	
1.

	
Scope of Services

 

a.           Contractor agrees to perform personally the consulting services (the “Consulting Services”) which may be requested by the Company from time to time.

 

b.           Contractor shall maintain sole control and discretion as to when the Consulting Services are performed.  In performing the Consulting Services, the Contractor represents and warrants to Company that Contractor shall (1) use diligent efforts and professional skills and judgment; and (2) perform the Services in accordance with recognized standards of the applicable industry and profession.

c.           The Contractor shall communicate with the Company, either in person at the Company’s offices or such other locations as agreed to by the Company, or via the telephone or e-mail, regarding the status of the Consulting Services at least weekly and more often as reasonably requested by the Company from time to time.

d.           The Company will not provide the Contractor with an office or any other space from which to conduct the Consulting Services, and Contractor shall have the sole control and discretion as to where to perform the Consulting Services.

e.           The Contractor agrees to supply, at his or her own expense, any and all tools, equipment or materials necessary for the successful completion of the Consulting Services.

 

f.           Contractor represents and warrants to Company, that (1) Contractor has, and will maintain throughout the term hereof, full right, power, and authority to enter into and perform its obligations under this Agreement without conflict with the rights of or obligations to any other party, or in violation of any applicable law or regulation; and (2) none of the Consulting Services provided to Company shall contain any confidential information of any third party.

 

  

  

  

 

	
  

	
2.

	
Consideration

 

a.           In consideration of the Consulting Services performed by the Contractor, the Company agrees to pay Contractor a fee of Twenty Thousand Dollars ($20,000.00) per month (the “Monthly Fee”) for the Consulting Services, with such fees to be pro-rated for any partial month during which Consulting Services are provided hereunder

 

b.           The Company shall pay the Monthly Fee to Contractor in arrears on the last day of each calendar month.  Contractor shall provide the Company with an invoice for each installment of the Monthly Fee.

 

c.           The Company agrees to reimburse Contractor for Contractor’s reasonable travel expenses incurred by Contractor for travel requested by the Company provided that such expenses are pre-approved in writing by the Company.  Contractor shall be responsible for all other costs and expenses associated with performance of the Consulting Services.

 

d.           The Company shall have no obligation to make any payment pursuant to this Agreement unless Contractor is in compliance with all its covenants, agreements and warranties hereunder.

 

3.      Term.  The Contractor shall commence providing services on the Effective Date and shall continue until this Agreement is terminated by either party in accordance with this Section 3 (the “Term”).  Either party may terminate this Agreement with or without cause on ten (10) days’ prior written notice provided to the other.

 

4.    Independent Contractor Status

 

a.           It is understood and agreed that Contractor will act solely as an independent contractor hereunder and shall conduct his operations as an independent contractor, and nothing in this Agreement shall be construed to render Contractor an employee of the Company.  The Company shall have no right to control or direct the details, manner or means by which Contractor accomplishes the results of the Consulting Services.

 

b.           Contractor understands and recognizes that it is not an agent of the Company and has no authority to and shall not bind, represent or speak for the Company for any purpose whatsoever.

 

c.           The Company will record payments to Contractor on, and provide to Contractor, an Internal Revenue Service Form 1099, and the Company will not withhold any federal, state or local employment taxes on Contractor's behalf.  Contractor agrees to pay all such taxes in a timely manner and as prescribed by law.

 

  

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d.           Contractor will not be considered an employee for purposes of any Company employment policy or any employment benefit plan, and Contractor will not be entitled to any benefits under any such policy or benefit plan.

 

5.      Nondisclosure and Use of Confidential Information.  Contractor acknowledges and agrees that it entered into with the Company and is bound by a certain Non-Disclosure and Confidentiality Agreement executed by Contractor and the Company (the “Confidentiality Agreement”). Contractor further acknowledges and agrees that the Confidentiality Agreement applies to all Confidential Information (as defined therein) provided by the Company to Contractor regardless of the date of disclosure and that the termination of this Agreement, for any reason, shall not effect Contractor’s obligations under the Confidentiality Agreement.

 

6.      Other Work By Contractor.  During the Term, the Contractor shall be free to provide professional consulting services to entities or individuals other than the Company.

 

7.      No Conflicting Agreements.  The Contractor hereby represents and warrants that the Contractor has no commitments or obligations inconsistent with this Agreement.  The Contractor hereby agrees to indemnify and hold the Company harmless against any loss, damage, liability or expense arising from any claim based upon circumstances alleged to be inconsistent with such representation and warranty.    During the period during which the Contractor’s services are engaged by the Company, the Contractor will not enter into any Agreement (oral or written), which may be in conflict with this Agreement.

 

8.      Transfer and Assignment; Subcontracting.  This Agreement may not be assigned or transferred by Contractor.  Should such an assignment or transfer occur, this Agreement shall become null and void at the discretion of the Company upon written notice by the Company to Contractor. Contractor acknowledges that the Company is relying on the personal skill and expertise of Contractor in performing the Consulting Services.

 

9.      Return of Property.  At any time upon the Company’s request and, in any event, within five (5) calendar days of the date this Agreement terminates and regardless of the reason for the termination, return to the Company all Company property in Contractor’s possession or under Contractor’s control, in any form, including, but not limited to, products, materials, memoranda, notes, notebooks, records, reports, documents, computer hardware, software, and Confidential Information (regardless of how it is maintained) and any copies thereof.

 

10.    Remedies for Breach.  Contractor acknowledges that the restrictions contained in this agreement are reasonable and necessary to protect the legitimate interests of the Company, and are not unduly burdensome to Contractor.  Without limiting the Company’s rights to pursue any other legal and equitable remedies available to it for any breach or threatened breach (including the recovery or damages) by Contractor of the covenants, agreements and warranties contained herein, Contractor acknowledges that a breach of said covenants, agreements and warranties would cause a loss to the Company that could not reasonably or adequately be compensated in damages in any action at law, that remedies other than injunctive relief could not fully compensate the Company for a breach of said covenants, agreements and warranties and that accordingly, the Company shall be entitled to injunctive relief to prevent any breach or continuing or threatened breaches of Contractor’s covenants, agreements and warranties as set forth herein. It is the intention of the parties hereto that if, in any action before any Court empowered to enforce this Agreement, any term, restriction, covenant, agreement or promise is found to be unenforceable, then such term, restriction, covenant, agreement or promise shall be deemed modified to the extent necessary to make it enforceable by such Court.

 

  

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11.    Waiver.  Waiver by the Company of a breach of any provision of this Agreement or failure to enforce any such provision shall not operate or be construed as a waiver of any subsequent breach of any such provision or of the Company's right to enforce any such provision.  No act or omission of the Company shall constitute a waiver of any of its rights hereunder except for a written waiver signed by the Company's President.

 

12.    Governing Law and Jury Waiver.  This Agreement shall be deemed to have been made in the State of Florida, shall take effect as an instrument under seal within the State of Florida, and the validity, interpretation and performance of this Agreement shall be governed by, and construed in accordance with, the internal law of the State of Florida, without giving effect to conflict of law principles.  Both parties further acknowledge that the last act necessary to render this Agreement enforceable is its execution by the Company in the State of Florida, and that the Agreement thereafter shall be maintained in the State of Florida.  Both parties agree that any action, demand, claim or counterclaim relating to the terms and provisions of this Agreement, or to its breach, shall be commenced in the State of Florida in a court of competent jurisdiction.  Both parties further acknowledge that venue shall exclusively lie in the State of Florida. BOTH PARTIES FURTHER AGREE THAT ANY SUCH ACTION, DEMAND, CLAIM OR COUNTERCLAIM SHALL BE RESOLVED BY A JUDGE ALONE, AND BOTH PARTIES HEREBY WAIVE AND FOREVER RENOUNCE THE RIGHT TO A TRIAL BEFORE A CIVIL JURY.

 

13.    Certification by Contractor.  Contractor certifies that all information and data provided by Contractor to the Company in order to obtain this Agreement or in response to the Company requests for information and data are accurate, complete and current as of the date of execution of this Agreement.

 

14.    Effect on Existing Agreements.  This Agreement shall have no effect on the enforceability of (a) the surviving terms of the Employment Agreement by and between the Company and Contractor dated December 13, 2013, or (b) the Separation Agreement and Release between the Company and Contractor dated June 5, 2015, each of which shall remain in full force and effect notwithstanding, and not modified by, any provision of this Agreement.

15.    Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, including counterparts delivered by electronic signature or PDF, each of which shall be treated as an original.

16.    Headings.  All section headings herein are inserted for convenience only and shall not modify or affect the construction or interpretation of any provisions of this Agreement.

 

  

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17.    Notices.  All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party's address set forth below or to another address as a party may designate by notice hereunder, and shall be either (i) delivered by hand, (ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight courier or (iv) sent by registered or certified mail, return receipt requested, postage prepaid.

 

	

All notices to the Company shall be sent to: 

 

magicJack Vocaltec Ltd.

222 Lakeview Avenue, Suite 1600  

West Palm Beach, Florida 33401  

Attention: CEO

	
All notices to Contractor shall be sent to:

 

Timothy McDonald

191 Mine Mount Road

Bernardsville, NJ 07924

 

18.    Severability.  If any portion or provision of this Agreement shall to any extent be declared unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

 

19.    Modifications.  No modification of this contract shall be binding upon the parties hereto, unless such is in writing and duly signed by the respective parties hereto.  This Agreement shall take effect when signed by both parties.

 

IN WITNESS WHEREOF, the respective parties have caused this Agreement to be executed as of the date first above written.

 

magicJack Vocaltec Ltd

 

	
By: __________________________________  

Name: Gerald T. Vento   

Title: CEO

	 __________________________________ 

 Timothy McDonald

 

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