Document:

ex10-33.htm

EXHIBIT 10.33

 

EMPLOYMENT AGREEMENT

 

AGREEMENT made as of the 11th day of July, 2011, by and between APPLIED DNA SCIENCES, INC., a Delaware corporation (the “Company”), and KURT H. JENSEN (“Executive”).

 

1.                  Employment. Executive shall continue to be employed by the Company as a senior executive, which employment will be subject to and governed by this Agreement.

 

1.1           Duties and Responsibilities. Initially, Executive will continue to serve as the Company’s Chief Financial Officer. Executive’s position may be changed at any time by the Chief Executive Officer (the “CEO”) of the Company or the Board of Directors of the Company to include or to consist solely of Chief Financial Officer, Executive Vice President or Chief Operating Officer of the Company. Executive will have such authority, duties and responsibilities as are customarily associated with his position(s) and as may be determined from time to time by the CEO, consistent with Executive’s position(s), the Company’s by-laws and applicable law. Executive will report directly to and be subject to the control and direction of the CEO. Executive will observe and adhere to all applicable written Company policies and procedures in effect from time to time, including, without limitation, policies on business ethics and conduct, and policies on the use of inside information and insider trading.

 

1.2           Term. Unless sooner terminated pursuant to Section 3, the term of this Agreement (the “Term”) will begin July 1, 2011 and end June 30, 2014. Thereafter, the Term will automatically be renewed for successive one-year periods unless either party provides written notice of non-renewal to the other at least 90 days before the end of the then-current Term.

 

1.3           Full Time. Executive shall devote all of his business time and attention to the performance of his duties and responsibilities under this Agreement. Executive will not render services to others for compensation or, without the written consent of the Board (which should not be unreasonably withheld), serve on the board of directors or other governing body of another for profit entity. Executive may engage in personal, charitable and passive investment activities, so long as such activities do not conflict or interfere with his ability to perform the duties and responsibilities of his employment under this Agreement.

 

1.4           Location of Employment. Executive’s principal place of employment will be at the Company’s principal offices, currently located in Stony Brook, New York. The Company will not relocate the Executive’s office beyond a 75 mile radius of the then current location without Executive’s consent. Notwithstanding the foregoing, Executive acknowledges that he will have to engage in business travel in connection with the performance of his duties and in accordance with the needs of the Company.

 

  

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2.                  Compensation.

 

2.1           Base Salary. The Company will pay base salary (“Base Salary”) to Executive, in accordance with its regular payroll practices, at an initial annual rate of $225,000. The Board and/or the Compensation Committee of the Board (the “Compensation Committee”) will review Executive’s Base Salary annually. The Board or the Compensation Committee, acting in its discretion, may increase (but may not decrease) the annual rate of Executive’s Base Salary. If, for any calendar quarter beginning after the date hereof, the Company has revenues in excess of $1 million, then, effective as of the first day of the next succeeding quarter, Executive’s annual rate of Base Salary will be increased to $250,000.

 

2.2           Annual Bonus Opportunity. The Board or Compensation Committee may award an annual bonus to the Executive in such amount and upon such terms and conditions as the Board or the Compensation Committee, acting in its discretion, determines (provided that the Executive will not be treated less favorably with respect to annual bonuses than other similarly situated executives of the Company). The bonus for any fiscal year will be payable to the Executive as soon as practicable after the end of the year, but in no event later than the 15th day of the third calendar month following such fiscal year.

 

2.3           Initial Equity Awards. On the date of this Agreement, the Company has granted to Executive options to purchase 10 million shares of the Company’s common stock, with an exercise price per share equal to the closing price per share on the date hereof, which options shall vest at the rate of 25% on the grant date and 37.5% on each of the next two anniversaries of the grant date, subject to Executive’s continuous employment through the applicable vesting date, provided, however, that (a) no portion of the vested option will be exercisable prior to the execution of this Agreement by Executive, and (b) if the Company’s revenues for any fiscal quarter beginning after the date hereof are at least $1 million more than the Company’s revenues for the immediately preceding fiscal quarter, then vesting of the next 37.5% installment will accelerate (such that, if the $1 million increase is met in at least two quarters before the second anniversary of the option grant date, all of the options will have become fully vested as of the end of the second quarter for which the $1 million increase is met).

 

2.4           Annual Equity Awards. Executive will be eligible for additional equity awards under and in accordance with the Company’s equity incentive plan as in effect from time to time.

 

2.5           Employee Benefits. Executive will be eligible to participate in such retirement, welfare and other employee benefit and fringe benefit plans, arrangements, programs and perquisites as are provided by the Company from time to time to or for the benefit of the Company’s other executives, on comparable terms and conditions. Executive shall be entitled to five weeks of vacation time during each calendar year of his employment, subject to the Company’s vacation policies and procedures. Executive will be entitled to carry over unused vacation for any year and will be entitled to payment for any accrued and unused vacation.

 

  

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2.6           Reimbursement of Business Expenses. Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities of his employment under this Agreement, and the Company will promptly reimburse him for all expenses that are so incurred upon presentation of appropriate vouchers or receipts, subject to the Company’s expense reimbursement policies applicable to senior executives generally as in effect from time to time. Executive will be entitled to first class travel on flights that are scheduled to exceed three hours. The Company will pay or reimburse Executive for the cost of computer, phone and other equipment and services reasonably required in order to enable Executive to conduct business from his home outside of regular business hours.

 

3.                  Termination of Employment Before End of Term.

 

3.1           Termination by Company for Cause. The Company may terminate Executive’s employment before the end of the Term for Cause if Executive: (a) is convicted of or pleads nolo contendre to a felony, (b) commits fraud or a material act or omission involving dishonesty affecting the assets, business or reputation of the Company or any of its subsidiaries or affiliates, (c) willfully fails or refuses to carry out the material responsibilities of his employment, as reasonably determined by the Board, (d) engages in gross negligence, willful misconduct or a pattern of behavior that has had or is reasonably likely to have a significant adverse effect on the Company or the ability of Executive to perform the duties and responsibilities of his employment, or (e) willfully engages in any act or omission that is in material violation of Company policy, including, without limitation, Company policy on business ethics and conduct, and Company policy on the use of inside information and insider trading; provided, however, that, if the conduct giving rise to termination for Cause is curable without material harm to the business or assets of the Company, the Executive will be afforded an opportunity to effect such a cure within 30 days after notice of termination and thereby avoid a termination for Cause based upon such conduct.

 

3.2           Resignation by Executive. Executive may terminate his employment before the end of the Term, subject to at least 60 days’ prior written notice to the Company. Upon receipt of such notice, the Company may relieve Executive of some or all of his duties and/or set an earlier termination date.

 

3.3           Termination by Company without Cause. Company may terminate Executive’s employment without Cause before the end of the Term, subject to 60 days prior written notice to Executive. Following such notice, the Company may relieve Executive of some or all of his duties, provided that Company continues to pay Executive through the end of the notice period. For the purposes hereof, the termination of this Agreement at the expiration of the initial Term or the expiration of either of the first two renewal Terms (if any) due to non-renewal by Company pursuant to Section 1.2 will be deemed to be a termination of Executive’s employment by Company without Cause.

 

  

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3.4           Termination Due to Disability or Death. Company may terminate Executive’s employment before the end of the Term due to “Disability” if Executive is unable to substantially perform the customary duties and responsibilities of his employment for at least 120 consecutive calendar days or 150 or more calendar days during any 365 calendar day period by reason of physical or mental illness,  injury, impairment or incapacity. No minimum notice is required for a termination due to Executive’s Disability. If Executive dies before the end of the Term, his employment will terminate on the date of his death.

 

3.5           Termination by Executive for Good Reason. Executive may terminate his employment for Good Reason at any time, subject to applicable notice and cure conditions described below. For this purpose, the term “Good Reason” means any of the following: (a) a material adverse change by Company of Executive’s status or position(s) as in effect from time to time pursuant to Section 1.1, including, without limitation, a material diminution the duties, responsibilities or authority associated with such position(s), or the assignment to him of duties or responsibilities that are materially inconsistent with such position(s); (b) a reduction by the Company of Executive’s annual Base Salary or failure to pay same ; (c) a breach by the Company of any of its material obligations under this Agreement; (d) relocation of Executive without Executive’s consent beyond a 75 mile radius of Executive’s then principal place of employment in violation of this Agreement; or (e) in connection with a Change in Control, the failure or refusal by the successor or acquiring company to expressly assume the obligations of Company under this Agreement. As a condition to terminating his employment for Good Reason, Executive must, within 60 days after the occurrence of the event or condition giving rise to such termination, provide written notice to the Company (or the successor or acquiring company) of his desire to terminate for Good Reason, specifying the nature of the act or omission that Executive deems to constitute Good Reason. The Company shall have 30 days after receipt of such notice to review and, if required, correct the situation (and thus prevent Executive’s termination for Good Reason).

 

3.6           Definition of Change in Control.  For the purposes hereof, a “Change in Control” will be deemed to have occurred if and when, after the date of this Agreement,

 

(a)           any person, as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), other than (1) the Company, (2) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, (3) James A. Hayward, or (4) any entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing 30 percent or more of the combined voting power of the Company’s then outstanding voting securities;

 

  

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(b)           during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (a), (c) or (d) of this subsection) whose election by the Board or nomination for election by the company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;

 

(c)           there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (1) a merger or consolidation which results in the directors of the Company immediately prior to such merger or consolidation continuing to constitute at least a majority of the board of directors of the Company, the surviving entity or any parent thereof or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than persons described in any of parts (1) – (4) of subsection (a) above) is or becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

 

(d)           the complete liquidation or dissolution of the Company or the sale or other disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or a majority of the Company’s assets, income or revenue to an entity, at least 70% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

4.                  Payments and Benefits Upon Termination of Employment.

 

4.1           Termination of Employment by Company without Cause or by Executive for Good Reason. Except as provided in Section 4.4 (relating to the effect of a Change in Control), if Executive’s employment is terminated by Company without Cause pursuant to Section 3.3 or by Executive for Good Reason pursuant to Section 3.5, then, subject to Section 5, Executive shall receive the following payments and benefits:

 

(a)           a single cash payment equal to the sum of (1) the unpaid amount, if any, of Base Salary previously earned by Executive through the date of his termination, and (2) the unpaid amount, if any, of the annual bonus earned by Executive for the preceding year;

 

(b)           payment of any business and other expenses described in Sections 2.7 and 2.8 that were previously incurred but not reimbursed and are otherwise eligible for reimbursement;

 

(c)           any payments or benefits payable to Executive or his covered spouse, or a dependent or beneficiary of Executive, under and in accordance with the provisions of any employee benefit plan;

 

  

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(d)           a cash payment equal to the product of (1) the greater of (A) the annual bonus award (if any) that would have been earned by Executive for the fiscal year in which his employment terminates if his employment had continued through the end of such year, and (B) the annual bonus earned by Executive for the preceding year, multiplied by (2) a fraction, the numerator of which is the number of days elapsed from the beginning of that fiscal year until the date his employment terminates, and the denominator of which is 365 (“Pro Rata Bonus”), which payment will be made when the bonus for such year would otherwise have been paid;

 

(e)           an amount of severance equal to 1.5 times the sum of (1) Executive’s annual rate of Base Salary in effect at the time his employment terminates, plus (2) the annual bonus, if any, earned by Executive for the year preceding the year of termination, or, if greater, the target bonus, if any, for the year of termination, which amount shall be payable ratably over a period of 18 months following such termination of employment as if it were salary payable in accordance with the Company’s normal payroll practices, provided, however, that the initial installment will begin on the 60th day following the date on which Executive’s employment terminates and will include the payments that would otherwise have been made during such 60-day period;

 

(f)           any vested stock options and stock appreciation rights held by Executive at the time of his termination of employment will remain exercisable by the Executive or his beneficiary, as the case may be, for a period of at least three years following the termination of his employment (but in no event later than the stated expiration date of such option or stock appreciation right; and

 

(g)           if the Executive and/or his covered spouse or dependents elect COBRA continuation coverage as a result of the termination of Executive’s employment, then the Company will pay the full amount of the COBRA premium for such coverage for a period of up to 18 months following the termination of Executive’s employment, it being understood that Executive may be taxable on the value of such coverage in order to enable the Company to avoid any penalty or additional tax that may otherwise be incurred by reason of the provision of such subsidized COBRA coverage.

 

4.2           Termination Due to Disability or Death. If Executive’s employment is terminated pursuant to Section 3.4 by reason of his death or Disability, then, subject to Section 5, Executive (or, as applicable, his spouse, covered dependents and/or beneficiaries) shall receive the payments and benefits describe in Sections 4.1(a) – (d) and 4.1(g), and any vested stock options held by Executive at the time of his termination of employment will remain exercisable by the Executive or his beneficiary, as the case may be, for a period of at least three years following the termination of his employment (but in no event later than the stated expiration date of the option, as such date may be extended without causing the option to become subject to Section 409A of the Code).

 

4.3           Termination by Company for Cause or Resignation by Executive. If Company terminates Executive’s employment for Cause pursuant to Section 3.1 or if Executive resigns his employment pursuant to Section 3.2 (other than a resignation for Good Reason pursuant to Section 3.5), Executive shall not be entitled to any payments or benefits except for those described in section 4.1 (a)-(c).

 

  

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4.4           Effect of Change in Control.

 

(a)           Vesting of Certain Equity Awards. If a Change in Control occurs, then immediately prior to such Change in Control, Executive will become fully vested in any then outstanding unvested stock options, restricted stock or other equity incentive awards for shares of Company stock, unless and except to the extent that they are assumed by or otherwise converted into economically equivalent stock options, restricted stock or other equity incentive awards with respect to shares of stock of the acquiring company, the surviving company or any of its or their affiliates.

 

(b)           Termination of Employment in Connection with Change in Control. If Executive’s employment is terminated by Company without Cause or by Executive for Good Reason within two years after a Change in Control or within 6 months prior to a Change in Control, then (1) the factor used for calculating the severance amount under Section 4.1(e) will be 2.0 (instead of 1.5); (2) the amount of severance payable to Executive pursuant to Section 4.1(e), as modified by (1) above (or, as the case may be, the amount remaining to be paid to Executive at the time of a Change in Control occurring within 6 months after the termination of Executive’s employment, together with the increase resulting from the application of (1) above) will be payable to Executive in a single sum cash payment on the 60th day following his termination of employment (or, if Executive’s employment terminated before the Change in Control, on the later of the date of the Change in Control or the date which is 60 days after the date Executive’s employment terminated); and (3) any stock options and stock appreciation rights that are outstanding at the time of such termination of employment will remain exercisable for at least three years following the date on which the Change in Control occurs or, if later, the date Executive’s employment terminates (but in no event later than the stated expiration date of such option or stock appreciation right).

 

5.                  Release of Claims; Restoration of Payments; Section 280G.

 

5.1           Release.  Notwithstanding anything to the contrary contained herein, as conditions to the Company’s being obligated to make the separation payments and provide the benefits described in Sections 4.1(d) – 4.1(g) (and, by extension, Section 4.2)), (a) within 60 days after the date of Executive’s termination, the Company must have received from Executive an executed valid general release of claims substantially in the form attached hereto as Exhibit A, that is no longer subject to revocation,  and (b) on or before Executive’s termination date, the Executive shall have (1) turned over all Company property in his possession or control to the Company, and (2) resigned from the Board of the Company and the board of directors or comparable body of every subsidiary or other Affiliate of the Company, and every committee thereof. Executive shall not be entitled to receive such severance payment and benefits if the conditions described in the preceding sentence are not timely satisfied.

 

  

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5.2           Restoration of Payments. Executive’s right to receive any separation payments and benefits pursuant to this Agreement shall be subject to his compliance with the restrictive covenants referenced or set forth in Section 6 and repayment pursuant to this Section. If Executive violates or is in breach of any said restrictive covenants, then (a) Executive shall not be entitled to any further separation payments and benefits under this Agreement, (b) Executive shall be obligated to immediately return to the Company any separation payments and the value of any separation benefits previously received hereunder, and (c) Executive shall have no further rights or entitlements under this Agreement. This Section shall not in any manner supersede or limit any other right the Company may have to enforce or seek legal or equitable relief with respect to a violation or breach by Executive of any of said restrictive covenants.

 

5.3           Section 280G.

 

(a)           General. If any payment or benefit received or to be received by Executive in connection with or contingent on a change in ownership or control of the Company, within the meaning of Section 280G of the Code, whether or not in connection with Executive’s termination of employment, and whether or not pursuant to this Agreement (such payments or benefits being referred to as the “Total Payments”) will be subject to an excise tax as provided for in Section 4999 of the Code (the “Excise Tax”), then Executive will be entitled to receive either (a) the full amount of the Total Payments, or (b) a portion of the Total Payments having a value equal to one dollar less than three times Executive’s “base amount” (as such term is defined in Section 280G(b)(3)(A) of the Code), whichever of clauses (a) and (b), after taking into account applicable federal, state, and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest portion of the Total Payments. For purposes of determining the after-tax amounts in (a) and (b) above, Executive will be deemed to pay federal, state and local income tax at the highest marginal rates, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes. If there is a reduction of the Total Payments pursuant to the foregoing, then, unless the parties agree otherwise, such reduction will occur in the following order: (A) any cash severance payable under this Agreement; (B) any other cash amount payable to Executive; (C) any benefit valued as a “parachute payment;” and (D) acceleration of vesting of any equity awards.

 

(b)           Determinations. All determinations under this subsection must be made by a nationally recognized accounting firm, which must not be the auditor of the acquiror in the transaction constituting a change in ownership or control of the Company, selected by the Company (the “Auditor”), and the Company will pay all costs and expenses of the Auditor. The Company will cooperate in good faith in making such determinations and in providing the necessary information for this purpose.

 

  

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6.                  Restrictive Covenants.

 

6.1           Nondisclosure of Confidential Information; Inventions.

 

(a)           The Company possesses valuable business and technical information, know-how and trade secrets (whether written or oral) related to its and its subsidiaries’ current, future and proposed products, including, but not limited to, research, developments, improvements, methods, procedures, discoveries, patents, patent applications, inventions, processes, formulas, technology, designs, models, drawings, product plans, products, services, customers, customer lists, strategies, studies, business plans, forecasts, markets, techniques, engineering, testing systems, hardware configuration information, computer software and programs (including source code and related documentation), test and/or experimental data and results, laboratory notebooks, marketing, finances or other business information (herein collectively referred to as “Confidential Information”).  Confidential Information shall include any and all information relating to the Company, and its subsidiaries, affiliates, clients, customers, investors, and joint venture and strategic partners.

 

(b)           The Executive is an employee of the Company and as such the Company has and will disclose Confidential Information to the Executive.  The Executive shall not communicate the Company’s Confidential Information to any third party without the prior written consent of the Company, and the Executive shall use his best efforts to prevent inadvertent disclosure of the Company’s Confidential Information to any third party.  The Executive hereby acknowledges that he is aware that United States securities laws prohibits any person who has received from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. The obligation of this Section 6.1(b) shall terminate with respect to any particular portion of the Company’s Confidential Information when the Executive can document that the information is part of the public domain other than as a result of the Executive’s or another person’s breach of duty to maintain confidentiality.

 

(c)           In the event that the Executive is requested or required (by oral question or request for information or documents and legal proceedings, interrogatories, subpoena, civil investigative demand or similar process) to disclose Confidential Information of the Company, or if the Executive is advised by his legal counsel that it is legally required to disclose the Confidential Information, it is agreed that the Executive (i) will provide the Company prompt notice of any request or requirement, (ii) will provide the Company full and complete cooperation to seek an appropriate order or remedy, (iii) will cooperate with the Company in obtaining reliable assurances that confidential treatment will be accorded to the disclosure of Confidential Information, and (iv) will, if disclosure of said Confidential Information is required, disclose only that portion of the Confidential Information which is legally required to be disclosed.

 

(d)           The Executive will make full and prompt disclosure to the Company of all inventions, creations, improvements, discoveries, trade secrets, secret processes, technology, know-how, methods, developments, software, and works of authorship or other creative works, whether patentable or not, which are created, made, conceived or reduced to practice by him or under his direction or jointly with others during his employment by the Company, whether or not during normal working hours or on the premises of the Company (herein collectively referred to as “Developments”).

 

  

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(e)           The Executive agrees to assign and does hereby assign to the Company (or any person or entity designated by the Company) all his right, title and interest in and to all Developments and all related patents, patent applications, copyrights and copyright applications.  However, this Section 6.1(f) shall not apply to Developments that do not relate to the present or planned business or research and development of the Company and which are made and conceived by the Executive not during normal working hours, not on the Company premises and not using the Company’s tools, devices, equipment or Confidential Information.

 

(f)           The Executive agrees to cooperate fully with the Company and to take such further actions as may be necessary or desirable, both during and after his employment with the Company, with respect to the procurement, maintenance and enforcement of copyrights, patents and other intellectual property rights (both in the United States and foreign countries) relating to Developments.  The Executive shall sign all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights, and powers of attorney, which the Company may deem necessary or desirable in order to protect its rights and interests in any Development.  The Executive further agrees that if the Company is unable, after reasonable effort, to secure the signature of the Executive on any such papers, any executive officer of the Company shall be entitled to execute any such papers as the agent and the attorney-in-fact of the Executive, and the Executive hereby irrevocably designates and appoints each executive officer of the Company as his/her agent and attorney-in-fact to execute any such papers on his/her behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Development, under the conditions described in this sentence.

 

(g)           Nothing herein shall be construed as giving the Executive any right in or to the Confidential Information or Developments or granting the Executive any license under any intellectual property rights.

 

6.2           Duty to Return Company Documents and Property.  Upon the termination of Executive’s employment with the Company for any reason, Executive shall immediately return and deliver to the Company any and all papers, books, records, documents, memoranda and manuals, e-mail, electronic or magnetic recordings or data, including all copies thereof, belonging to the Company or any of its subsidiaries or relating to the business of the Company or any of its subsidiaries, in Executive’s possession, whether prepared by Executive or others. If at any time after the termination of employment, Executive determines that he has any trade secrets or other Confidential Information belonging to the Company or any of its subsidiaries in his possession or control, Executive shall immediately return to the Company all such trade secrets and other confidential information, including all copies and portions thereof.

 

  

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6.3           Non-Solicitation. During the period of Executive’s employment or other service with the Company and for 18 months thereafter, Executive shall not, without the prior written consent of the Company, directly or indirectly: (a) solicit, request, advise, entice, persuade, induce, offer to employ, or hire any employee, consultant, or independent contractor employed by or working on behalf of the Company or any of its subsidiaries at any time during the one-year period prior to the Executive’s termination of employment with the Company to leave the Company or any of its subsidiaries or to engage in any activity which, were it done by the Executive, would violate the terms of this Agreement; (b) or solicit, request, advise, entice, persuade or induce any individual or entity, including but not limited to any customer, supplier, vendor, investor, equity or financing source, or other contracting party of the Company or any of its subsidiaries, to terminate, reduce or refrain from continuing or renewing their present or prospective contractual or business relationship with the Company or any of its subsidiaries. Upon request, Executive will execute a standard form of Company non-solicitation agreement, as in effect from time to time for executives generally, which shall apply in addition to and not in lieu of the covenants contained in this Agreement (it being understood that, in the event of any inconsistency, the provisions of this Agreement shall govern).

 

6.4           Non-Competition Restrictions. During the period of Executive’s employment or other service with the Company and for 18 months thereafter, Executive shall not, directly or indirectly, without the prior written consent of the Company, engage in, become financially interested in, be employed by, render any consultation or business advice with respect to, or have any connection with, any business engaged in the research, development, testing, design, manufacture, sale, lease, marketing, utilization or exploitation of any products or services which are designed for the same purpose as, are similar to, or are otherwise competitive with, products or services of the Company or any of its subsidiaries, in any geographic area where, during the period of his employment with the Company or any subsidiary or at the time of the termination of his employment or other service with the Company and its subsidiaries, as the case may be, the business of the Company or any of its subsidiaries was being conducted or was proposed to be conducted in any manner whatsoever; provided, however, that Executive’s mere purchase or holding, for investment purposes, of securities representing less than 5% of the outstanding value or voting interest of a publicly traded company shall not be deemed to be a violation of the provisions of this paragraph.

 

6.5           Reformation. Executive acknowledges that the Company and its subsidiaries conduct their business on a world-wide basis, that their sales and marketing prospects are for continued expansion into world markets and that, therefore, the territorial and time limitations set forth in Section 6.4 are reasonable and properly required for the adequate protection of the business of the Company and its subsidiaries. If a court concludes that any time period and/or the geographic area specified in Section 6.4 is unenforceable, then the time period will be reduced by the number of months, or the geographic area will be reduced by the elimination of the overbroad portion, or both, as the case may be, so that the restrictions may be enforced in the geographic area and for the time to the fullest extent permitted by law.

 

  

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6.6           Remedies. It is intended that, in view of the nature of the Company’s business, the restrictions contained in Sections 6.1 through 6.4 (including, without limitation, the restrictions that are specifically incorporated herein by reference), are considered reasonable and necessary to protect the Company’s legitimate business interests and that any violation of these restrictions would result in irreparable injury to the Company.  In the event of a breach or a threatened breach by Executive of any restrictive covenant contained herein, the Company shall be entitled to a temporary restraining order and injunctive relief restraining Executive from the commission of any breach, and to recover the Company’s attorneys’ fees, costs and expenses related to the breach or threatened breach. Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for any breach or threatened breach, including, without limitation, the restoration and other remedies specified in this Agreement and/or the recovery of money damages, attorneys’ fees, and costs.  These covenants and restrictions shall each be construed as independent of any other provisions in the Agreement, and the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants and restrictions.

 

6.7           Severability.  Should a court determine that any paragraph or sentence, or any portion of a paragraph or sentence of this Section 6 is invalid, unenforceable, or void, this determination shall not have the effect of invalidating or validating the remainder of the paragraph, sentence or any other provision of this Section 6.  Further, it is intended that the court should construe this Section 6 by limiting and reducing it only to the extent necessary to be enforceable under then applicable law.

 

7.                  Recoupment Upon Certain Restatement of Financial Statements. If the Company is required to restate all or a portion of its financial statement(s) for any period following the date of this agreement, and if the Board or the Compensation Committee determines that such restatement is attributable in whole or in significant part to fraud, negligence, or intentional misconduct on the part of Executive or known to Executive, then, subject to applicable law, the Board or the Compensation Committee, acting in its discretion, may require Executive to reimburse the Company for the amount of any incentive compensation paid to him, cause the cancellation of outstanding equity compensation awards, and seek reimbursement of any gains otherwise realized by him in respect of the exercise or settlement of any such awards if and to the extent that (a) the amount of such incentive compensation was or will be based upon the achievement of certain financial results that were subsequently reduced due to such restatement, and (b) the amount of the incentive compensation that was, would have been or would be paid or provided to Executive if the financial results had been properly reported would have been lower than the amount actually paid or provided.

 

8.                  Assignment. The services and duties to be performed by Executive hereunder are personal and may not be assigned.  This Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns and Executive and his heirs and representatives. Company may assign this Agreement to a successor in interest, provided that any such assignee affirmatively adopts and agrees to fulfill all obligations to Executive hereunder.

 

  

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9.                  Legal Fees to Enforce Rights after a Change in Control.  If, following a Change in Control, the Company fails to comply with any of its obligations under this Agreement or the Company takes any action to declare this Agreement void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from Executive (or Executive’s beneficiary) the payments and benefits intended to be provided, then Executive (or Executive’s beneficiary, as the case may be) shall be entitled to select and retain counsel at the expense of the Company to represent Executive (or Executive’s beneficiary) in connection with the good faith initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company or any successor thereto in any jurisdiction.

 

10.                  No Impediment to Agreement.  Executive covenants that, except as otherwise specifically disclosed herein, he is not, as of the date hereof, aware of any circumstance or condition (legal, health or otherwise), which, in any such case, would constitute an impediment to, or restriction upon, his ability to enter into this Agreement and to perform the duties and responsibilities of his employment hereunder.

 

11.                  Arbitration. Except as otherwise specifically provided herein (relating to the Company’s right to obtain injunctive or other equitable relief from a court) or enforcement rights by Executive after a Change of Control, any claim or controversy arising out of or relating to this Agreement or the breach hereof shall be resolved exclusively by arbitration. Any such arbitration will be administered in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association (“AAA”), in the metropolitan area of New York before an experienced employment law arbitrator licensed to practice law in that jurisdiction who has been selected in accordance with such Rules. Each party may be represented by counsel of its or his own choosing and at its or his own expense; provided, however, that attorneys’ fees and costs may be awarded to a prevailing party in the discretion of the arbitrator. The arbitrator’s award will be enforceable, and a judgment may be entered thereon, in a federal or state court of competent jurisdiction in the state where the arbitration was held.  The decision of the arbitrator will be final and binding.

 

12.                  Governing Law. This Agreement shall be governed by the laws of the State of New York, excluding its conflict of law rules.

 

13.                  Indemnification; D&O Insurance. To the extent permitted by its Certificate of Incorporation and By-laws and subject to applicable law, the Company will indemnify, defend and hold Executive harmless from and against any claim, liability or expense (including reasonable attorneys’ fees) made against or incurred by him as a result of his employment with the Company or any subsidiary or other affiliate of the Company, including service as an officer or director of the Company or any subsidiary or other affiliate of the Company. The Company shall cover Executive under directors and officers liability insurance both during and, while potential liability exists, after the Term, in the same amount and to the same extent as the Company covers its other officers and directors.

 

  

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14.                  Withholding. All payments made by Company to or for the benefit of Executive in connection with his employment shall be subject to applicable tax withholding.

 

15.                  Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.

 

16.                  Section 409A.

 

16.1           Parties’ Intent. The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement will be interpreted to be in compliance therewith. To the extent any of the payments or benefits required under this Agreement are, or in the opinion of counsel to the Company or Executive, could be interpreted in the future to create, a nonqualified deferred compensation plan that does not meet the requirements of Code Section 409A(a)(2), (3) and (4), the Company and Executive hereby agree to execute any and all amendments to this Agreement or otherwise reform this Agreement as deemed necessary by either of such counsel and reasonably acceptable to the other, and prepared by counsel to the Company, to either cause such payments or benefits not to be a nonqualified deferred compensation plan or to meet the requirement of Code Section 409A. In amending or reforming this Agreement for Code Section 409A purposes, the parties maintain, to the maximum extent practicable, the original intent and economic benefit of this Agreement without subjecting Executive to additional tax or interest; provided further, however, the Company will not be obligated to pay any additional material amount to Executive as a result of such amendment.

 

16.2           Delayed Distribution to Key Employees. If the Company determines in accordance with Code Sections 409A and 416(i), that Executive is a “Specified Employee” (within the meaning of Code Section 409A) of the Company on the date his employment with the Company terminates and, the parties agree that a delay in severance pay and benefits provided under this Agreement is necessary for compliance with Code Section 409A(a)(2)(B)(i), then any severance payments and any continuation of benefits or reimbursement of benefit costs provided under this Agreement, and not otherwise exempt from Code Section 409A (for example, pursuant to the “short-term deferral” or “separation pay” exemptions”), will be delayed until the earlier of (i) the first day of the seventh (7th) calendar month commencing after Executive’s termination of employment, or (ii) Executive’s death, consistent with and to the extent necessary to meet the requirements of Code Section 409A (the “409A Delay Period”). In such event, any such severance payments and the cost of any such continuation of benefits provided under this Agreement that would otherwise be due and payable to Executive during the 409A Delay Period will be paid to Executive in a lump sum cash amount at the end of the 409A Delay Period.

 

  

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16.3           Separation from Service. A termination of employment will not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits following or upon a termination of employment (to the extent such payments or benefits are subject to Code Section 409A) unless such termination also constitutes a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment,” “separation from service” or like terms mean Separation from Service.

 

16.4           Separate Payments. Each payment required under this Agreement will be considered a separate payment for purposes of determining the applicability of or exemption from Section 409A. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period will be within the sole discretion of the Company.

 

16.5           Reimbursements. To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (i) all expenses or other reimbursements hereunder will be made no later than the time frame set forth in this Agreement, but in any event, on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (ii) any right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year will in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

 

17.                  Counterparts.  This Agreement may be executed in separate counterparts, each of which will be an original and all of which taken together shall constitute one and the same agreement, and any party hereto may execute this Agreement by signing any such counterpart.

 

18.                  Amendment or Waiver.  No provision of this Agreement may be modified, amended, waived or terminated except by an instrument in writing signed by the parties to this Agreement.  No course of dealing between the parties will modify, amend, waive or terminate any provision of this Agreement or any rights or obligations of any party under or by reason of this Agreement.  No delay on the part of the Company in exercising any right hereunder shall operate as a waiver of such right.  No waiver, express or implied, by a party of any right or any breach by the other party shall constitute a waiver of any other right of such party or breach by such other party.

 

19.                  Notices.  Any notice given to a party shall be in writing and shall be deemed to have been given when delivered personally or sent by certified or registered mail, postage prepaid, return receipt requested, or express mail to the recipient at his or its last known address.

 

  

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20.                  Entire Agreement.  This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior and/or contemporaneous understandings, agreements or representations, written or oral, relating to the subject matter hereof and Executive’s compensation for employment with the Company.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

 

	 	APPLIED DNA SCIENCES, INC.
	 	 	 
	 	By: 	  /s/ James A. Hayward
	 	 	 
	 	/s/ Kurt H. Jensen
	 	 
	 	Kurt H. Jensen

 

  

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EXHIBIT A

FORM OF RELEASE

 

In consideration of the premises and the payments and benefits to be made or provided by Applied DNA Sciences, Inc. (the Company”) to Kurt H. Jensen (the “Executive”) under this Release and the provisions of Section 4 of the Employment Agreement between the parties to which this Exhibit is attached (the “Employment Agreement”) relating to the termination of Executive’s employment with the Company, the Executive, for the Executive and for the executors and administrators of the Executive’s estate, and the Executive’s heirs, successors and assigns, hereby releases and forever discharges the Company and its officers, directors, employees, agents and stockholders from any and all claims, actions, causes of action, suits, sums of money, debts, dues, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, demands or damages of any nature whatsoever or by reason of any matter, cause or thing regardless of whether known or unknown at present, which against the Company or any of its officers, directors, employees, agents or stockholders Executive ever had, now has or may have arising out of or relating to any transaction, dealing, relationship, conduct, act or omission, or any other matters or things occurring or existing at any time prior to and including the date of this Release (collectively defined herein as “Claims”). This Release includes, but is not limited to, all Claims the Executive might have under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§2000e, et. seq.; 42 U.S.C. §§1981, et. seq.; the Americans with Disabilities Act, 29 U.S.C. §§2000e, et. seq.; the Age Discrimination in Employment Act; the Older Workers Benefits Protection Act; the federal Family and Medical Leave Act; Section 451 et. seq.; similar Connecticut laws, the New York State Executive Law, and any and all statutory and common law causes of action for defamation; slander; slander per se; defamation per se; false light; tortious interference with prospective business relationships; assault; sexual assault; battery; sexual harassment; sexual discrimination; hostile work environment; discrimination; retaliation; workers’ compensation retaliation; wrongful termination; intentional infliction of emotional distress; breach of a duty or obligation of any kind or description, including any implied covenant of good faith and fair dealing; and for breach of contract or any tort whatsoever, as well as any expenses or attorney’s fees associated with such Claims. The parties acknowledge that this Release does not either affect the rights and responsibilities of the Equal Employment Opportunity Commission to enforce the Age Discrimination in Employment Act, or justify interfering with the protected right of an employee to file a charge or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission under the Age Discrimination in Employment Act. In the event the Equal Employment Opportunity Commission commences a proceeding against the Company in which Executive is a named party, the Executive agrees to waive and forego any monetary claims which may be alleged by the Equal Employment Opportunity Commission to be owed to Executive. Notwithstanding the foregoing, nothing in the provisions of this Release shall act as a release by the Executive of any Claims against the Company with respect to (i) any amounts or benefits to which the Executive may become entitled to receive under the Employment Agreement after the date hereof, including the right to indemnity referenced therein, (ii) the Executive’s rights under and in accordance with the terms of any employee benefit plan in which Executive participates, and (iii) any Claims arising with respect to acts, events or occurrences taking place after the date of this Release.

 

  

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The Company has advised the Executive in writing to consult with an attorney prior to executing this Release. By executing this Release, the Executive acknowledges that (a) the Executive has been provided an opportunity to consult with an attorney or other advisor of the Executive’s choice regarding the terms of this Release, (b) Executive has been given twenty-one (21) days (or, if required by applicable law, 45 days) in which to consider whether the Executive wishes to enter into this Release, (c) Executive has elected to enter into this Agreement knowingly and voluntarily, (d) Executive’s waiver of rights or claims is in exchange for the good and valuable consideration herein; and (e) if Executive does so within fewer than twenty-one (21) days (or, if required by applicable law, 45 days) from receipt of this Release, Executive has knowingly and voluntarily waived the remaining time. This Release will become effective, enforceable and irrevocable on the eighth day after the date on which it is executed by the Executive (the “Effective Date”). During the seven-day period prior to the Effective Date, the Executive may revoke this Release by delivering a written notice of revocation to the Company.

 

 

18ex10-6.htm

Exhibit 10.6

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

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ALAN R. KAHN, derivatively, on behalf of 

VALUE LINE, INC.,

 

Plaintiff,

 

v.

 

JEAN BERNHARD BUTTNER, EDGAR A. 

BUTTNER, JANET EAKMAN, DAVID T. 

HENIGSON, HOWARD A. BRECHER, 

EDWARD J. SHANAHAN, HERBERT 

PARDES, MARION N. RUTH, and ARNOLD 

BERNHARD & CO., INC.,

 

Defendants,

 

and

 

VALUE LINE, INC.,

 

Nominal Defendant.

	
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Present:  Hon. Bernard Fried, J.S.C.

 

Index No. 650320/2008

 

STIPULATION OF SETTLEMENT

 

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The Stipulation of Settlement, dated as of September 30, 2011 (the “Stipulation”), is made and entered into by and among the Settling Parties (as defined below) in full and final settlement of the claims asserted in the above-captioned consolidated actions, subject to the approval of the Supreme Court of the State of New York (“Court”).

 

RECITALS

 

WHEREAS,

 

A.           On August 14, 2008, a shareholder derivative lawsuit, entitled Kahn v. Buttner, et al., Index. No. 650320/2008 (the “First Derivative Action”), was filed in this Court on behalf of nominal defendant Value Line, Inc. (“Value Line” or the “Company”) against certain Directors or former Directors of Value Line, Jean Bernhard Buttner (“Buttner”), Edgar A. Buttner (“E_Buttner”), David T. Henigson (“Henigson”), Howard A. Brecher (“Brecher”), Edward J. Shanahan (“Shanahan”), Janet Eakman (“Eakman”), Herbert Pardes (“Pardes”), and Marion N. Ruth (“Ruth”).  The complaint in the First Derivative Action alleged claims for breach of fiduciary duty and unjust enrichment in connection with what were alleged to be improper brokerage commissions charged by Value Line Securities, Inc. (“VLS”), a broker-dealer wholly owned by Value Line.  No relief was sought against Value Line, which was named as a nominal defendant.

 

  

  

  

 

B.           On November 4, 2009, the United States Securities and Exchange Commission, (the “SEC”), the SEC accepted Offers of Settlement submitted by Value Line, VLS, Buttner and Henigson, and issued an Order (the “SEC Order”) in the proceeding styled as In the Matter of Value Line, Inc. et al., Administrative Proceeding  File No. 3-13675.

 

C.           On November 9, 2009, a second shareholder derivative lawsuit, entitled Morrison v. Buttner, et al., Index No. 650658/2009 (the “Second Derivative Action”), was filed in this Court on behalf of nominal defendant Value Line against Buttner, Henigson, Brecher, and Arnold Bernhard & Co., Inc. (“AB&Co.”).  The complaint in the Second Derivative Action alleged claims for (i) breach of fiduciary duty and unjust enrichment in connection with what were alleged to be brokerage commissions charged by VLS that were not fair and reasonable, and (ii) an accounting concerning the allocation of expenses between AB&Co. and Value Line.  No relief was sought against Value Line, which was named as a nominal defendant.

 

D.           On November 10, 2009, Plaintiff Larry Morrison in the Second Derivative Action served his First Request for Production of Documents (the “Initial Document Request”), which sought the production of numerous categories of documents from Value Line and the other defendants.

 

  

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E.           On January 8, 2010, the Court issued an Order granting the unopposed motion of Plaintiffs Alan R. Kahn and Larry Morrison (“Plaintiffs”) for appointment of lead counsel and consolidation of the derivative actions under the caption Alan R. Kahn, derivatively, on behalf of Value Line, Inc., et al. v. Jean Bernhard Buttner, et al., Supreme Court, New York County, Index. No. 650320/2008 (the “Consolidated Action”).

 

F.           On March 16, 2010, Plaintiffs filed a Verified Amended Shareholder Derivative Complaint (the “Complaint”), derivatively on behalf of Value Line, against Buttner, Henigson, Brecher, E_Buttner, Eakman, Shanahan, Ruth, Pardes, and AB&Co.  No relief is sought against Value Line, which is named as a nominal defendant.  The Complaint alleged claims for breach of fiduciary duty arising from: (1) what were alleged to be brokerage commissions charged by VLS that were not fair and reasonable; (2) allegedly allowing vendors to overcharge Value Line for advertising; and (3) allegedly receiving excessive compensation.  In addition, the Complaint sought an accounting concerning the allocation of expenses between AB&Co. and Value Line.

 

G.           On April 20, 2010, Plaintiffs served Plaintiffs’ First Request for the Production of Documents to all defendants including nominal defendant Value Line, Inc. (“Plaintiffs’ First Document Request”), which sought the production of numerous categories of documents from Value Line and the other defendants.

 

H.           On May 10, 2010, defendants began their production of documents responsive to Plaintiffs’ request.

 

I.           On August 20, 2010, defendants Pardes, Shanahan and Ruth filed a motion to dismiss the Complaint.  On that same day, defendant Eakman also filed a motion to dismiss the Complaint.  (Pardes, Shanahan, Ruth and Eakman are hereafter collectively referred to as the “Former Defendants”).

 

  

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J.           On August 20, 2010, defendants Buttner, Henigson, Brecher, E_Buttner and AB&Co. filed their Answer to the Complaint, and nominal defendant Value Line filed its Answer to the Complaint.

 

K.           On September 8, 2010, the Court approved a stipulation dismissing the action against Eakman, without prejudice.

 

L.           On September 13, 2010, the Court entered a Preliminary Conference Order setting dates for discovery, the filing of the note of issue and any motions for summary judgment.

 

M.           On September 27, 2010, the Court entered a Stipulation and Order for the Production and Exchange of Confidential Information relating to confidential or proprietary documents produced by the parties or others in the course of discovery.

 

N.           On September 28, 2010, the Court approved a stipulation dismissing the action against defendants Pardes, Shanahan and Ruth, without prejudice.

 

O.           On September 30, 2010, defendants Pardes, Shanahan and Ruth served their Responses and Objections to Plaintiffs’ First Request for Production of Documents and produced thousands of pages of documents in response to Plaintiffs’ First Document Request.

 

P.           On October 6, 2010, defendants Buttner, Henigson, Brecher, E_Buttner, AB&Co. and nominal defendant Value Line served their Responses and Objections to Plaintiffs’ First Request for the Production of Documents.  In sum, defendants produced nearly 300,000 pages of documents to Plaintiffs.

 

  

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Q.           On January 13, 2011, the Court entered an Order of Reference to Alternative Dispute Resolution, referring the parties to the Alternative Dispute Resolution (“ADR”) Program of the Commercial Division and staying all proceedings during the ADR process.

 

R.           Following mediation pursuant to the ADR program, Value Line, defendants Buttner, E_Buttner, Henigson, Brecher and AB&Co. (hereinafter the “Defendants”) and the Plaintiffs agreed to resolve all claims that were or could have been asserted in the Complaint.

 

S.           Defendants have denied and continue to deny each and all of the claims and contentions alleged by the Plaintiffs in the Complaint.  Defendants expressly have denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts, or omissions alleged, or that could have been alleged, in the Complaint, and deny and continue to deny that they caused Value Line to suffer any damage or harm to its reputation or otherwise engaged in conduct that constituted a breach of their fiduciary duties.  Defendants have maintained and continue to maintain that at all material times they acted in good faith and in a manner they believed to be in the best interests of Value Line and its shareholders.

 

T.           Nonetheless, Defendants have concluded that further conduct of the Consolidated Action would be protracted and expensive, and that it is desirable that the Consolidated Action be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.  Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as the Consolidated Action.  Defendants have, therefore, determined that it is desirable that the Consolidated Action be settled in the manner and upon the terms and conditions set forth in the Stipulation.  There has been no adverse determination by any court against any of the Defendants on the merits of the claims asserted by the Plaintiffs.

 

  

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U.           Plaintiffs believe that the claims asserted in the Complaint have merit.  However, Counsel for the Plaintiffs recognize and acknowledge the expense and length of continued proceedings necessary to prove their allegations and to prosecute the Consolidated Action against the Defendants through trial and through appeals.  Counsel for Plaintiffs also have taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Consolidated Action, as well as the difficulties and delays inherent in such litigation.  Counsel for Plaintiffs also are mindful of the inherent problems of proof and possible defenses to the violations asserted in the Consolidated Action.

 

V.           Counsel for the Plaintiffs believe that the settlement set forth in the Stipulation confers substantial benefits upon Value Line and its Shareholders (as hereinafter defined) and is in the best interest of the Plaintiffs and Value Line and its Shareholders.

 

W.           Value Line and Value Line’s outside counsel, Echtman & Etkind, LLP, have also determined that the settlement set forth in the Stipulation is in the best interests of the Company and its shareholders.

 

NOW, THEREFORE, it is hereby stipulated and agreed, by and among Plaintiffs, nominal defendant Value Line, and each of the other Defendants, by and through their respective counsel or attorneys of record, that, subject to the approval of this Court, the Consolidated Action and the Released Claims (as defined below) shall be finally and fully compromised, settled and released, and the Consolidated Action shall be dismissed with prejudice, upon and subject to the terms and conditions of the Stipulation.

 

  

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DEFINITIONS

 

In addition to the terms defined above, the following terms, as used in the Stipulation, shall have the meanings specified below:

 

                Section 1.1    “Defendants” are the defendants who have not been previously dismissed from the Consolidated Action.  Those defendants are Value Line, Buttner, Henigson, Brecher, E_Buttner, and AB&Co.

 

        Section 1.2    “Effective Date” means the first date by which all of the events and conditions specified in Section 6.1 of the Stipulation have been met and have occurred.

 

Section 1.3     “Escrow Agent” means an escrow agent jointly selected by Plaintiffs and the Defendants and approved by the Court.

 

Section 1.4    “Final Court Approval” means: (a) the date of final affirmance of the Judgment (as defined below) on an appeal from the Judgment, the expiration of the time for a petition for a writ of certiorari to review the Judgment and, if certiorari be granted, the date of final affirmance of the Judgment following review pursuant to that grant; or (b) the later of the date of final dismissal of any appeal from the Judgment, including the expiration of the time for filing a petition for a writ of certiorari therefrom, or the final dismissal of any proceeding on certiorari to review the Judgment, without material modification to the Judgment; or (c) if no appeal is filed, the expiration date of the time for the filing or noticing of any appeal from the Judgment approving the Stipulation substantially in the form of Exhibit “A” hereto; i.e., thirty (30) days after entry of the Judgment, or such longer time to appeal after the entry of the Judgment as allowed by order of the Court.  An appeal or petition for a writ of certiorari pertaining solely to any plan of allocation or application for attorneys’ fees, costs or expenses, shall not in any way delay or preclude the Judgment from becoming final.

 

Section 1.5     “Former Defendants” means Pardes, Shanahan, Ruth and Eakman.

 

  

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Section 1.6     “Judgment” means the proposed Order and Final Judgment in the form attached hereto as Exhibit “A.”

 

Section 1.7     “Notice” is defined as the notice referred to in Section 2.4 that the Court, in its discretion, may direct to be given to Value Line’s shareholders.

 

Section 1.8    “Person” means an individual, corporation, partnership, limited partnership, association, joint stock company, estate, legal representative, trust, unincorporated association, government or any political subdivision or agency thereof, and any business or legal entity and their spouses, heirs, any members of his/her family, predecessors, successors, representatives, or assignees.

 

Section 1.9     “Released Claims” means “Released Claims against Defendants and Former Defendants” and/or “Released Claims against Plaintiffs.”

 

Section 1.10   “Released Claims against Defendants and Former Defendants” shall mean and include any and all claims whatsoever, causes of action, demands, rights, suits, or liabilities, whatsoever, whether the claims are individual or otherwise in nature, based on federal, state, local, statutory or common law or any other law, rule or regulation, both known claims or unknown claims, including but not limited to claims for negligence, gross negligence, professional negligence, breach of duty of care or breach of duty of loyalty or breach of the duty of candor, fraud, breach of fiduciary duty, mismanagement, corporate waste, malpractice, breach of contract, negligent misrepresentation, violations of any state statutes, or federal statutes, rules or regulations, and any “Unknown Claims” (as defined below), arising from the beginning of the world to the date of the execution of this Settlement Agreement, including, but not limited to, Unknown Claims arising out of or relating to the allegations, matters and transactions in the Complaint, whether direct or derivative, that have been or that could have been asserted in the Consolidated Action, or arising out of or relating to the SEC Order, in this or any other forum by Value Line or any of its current shareholders or their lawyers against the Released Persons.  The Released Claims against Defendants and Former Defendants does not include claims arising from or relating to the restructuring of Eulav Securities, Inc. that was described and disclosed in the Form 8-K filed by Value Line with the SEC on December 27, 2010.

 

  

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Section 1.11   “Released Claims against Plaintiffs” means any and all claims, rights or causes of action or liabilities whatsoever, whether based on federal, state, local, statutory or common law or any other law, rule or regulation, including both known claims and Unknown Claims, arising out of or relating to the allegations, matters and transactions in the Complaint that have been or could have been asserted in the Consolidated Action, or arising out of or relating to the SEC Order, in this or any forum by the Defendants or any of their successors and assigns against any of the Plaintiffs or their attorneys regarding this lawsuit.

 

Section 1.12  “Released Persons” means each of the Defendants, Former Defendants, and Value Line.  “Released Persons” also includes the Defendants’, Former Defendants’ and Value Line’s respective past or present directors, officers, employees, partners, members, principals, agents, underwriters, insurers, co-insurers, reinsurers, controlling shareholders, attorneys, accountants or auditors, banks or investment banks, associates, personal or legal representatives, estates, predecessors, successors, parents, subsidiaries, divisions, assigns, spouses, heirs, related or affiliated entities, any entity in which Value Line or any of the Released Persons has a controlling interest, any members of his/her family, or any trust of which any of the Defendants or Former Defendants is the settlor or which is for the benefit of any of the Defendants or Former Defendants or their families.

 

  

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Section 1.13  “Releasing Parties” means any of the parties releasing claims pursuant to Sections 1.09 – 1.11, including each of the (a) Plaintiffs, (b) shareholders of Value Line or their lawyers, (c) Defendants and/or (d) each of their successors and/or assigns.

 

Section 1.14   “Scheduling Order” means the Scheduling Order determined by the Court.

 

Section 1.15   “Settlement Amount” means the aggregate sum of two million nine hundred thousand dollars ($2,900,000.00) being paid by or on behalf of Defendants in order to settle all claims known or unknown that could have been asserted in this Consolidated Action.  The $2,900,000 Settlement Amount includes (a) the Plaintiffs’ legal fees, (b) the Escrow Agent’s fees, professional fees, and expenses, (c) the transfer agent’s, if any, fees and expenses, (d) all other expenses of Plaintiffs and any other expenses associated with the enforcement of the settlement, and (e) all costs set forth in Section 2.4, including the cost for filing the Form 8K notice.  The Settlement Amount is not being paid by or on behalf of Value Line.

 

Section 1.16   “Settling Parties” means, collectively, the Defendants and the Plaintiffs on behalf of themselves and derivatively on behalf of Value Line.

 

Section 1.17  “Shareholder(s)” means any record or beneficial holder(s) of shares of Value Line, Inc. common stock on the day the Court approves the Stipulation, except for Defendants and any members of their immediate families.  “Immediate families” shall mean the following individuals: for each of the Defendants, his/her parents, spouse, children, and any other relatives who are financially supported.

 

  

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Section 1.18   “Unknown Claims” means any claims that any of the Releasing Parties do not know or suspect to exist, which, if known by him, her, or it, might affect, or might have affected his, hers, or its settlement with and release of the Released Persons.  With respect to the Released Claims, to the fullest extent permitted by law, the Parties stipulate and agree that upon Final Court Approval of the Settlement the Releasing Parties shall be deemed to have, and by operation of the Judgment shall have expressly waived and relinquished the provisions, rights, and benefits of Section 1542 of the California Civil Code, and of any law, regulation or provision of any code of civil procedure of any other jurisdiction within or outside of the United States which is similar, comparable, or equivalent to Section 1542 of the California Civil Code, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

The Releasing Parties may hereafter discover facts in addition to or different from those which any of them now knows or believes to be true with respect to the subject matter of the Released Claims, but the Releasing Parties, upon Final Court Approval, shall be deemed to have, and by operation of the Judgment shall have fully, finally and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, reckless, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts.

 

Section 1.19   “Value Line” means nominal defendant Value Line, Inc., a New York corporation, and all of its predecessors, successors, and all present and former parents, subsidiaries, divisions, and related or affiliated entities.

 

  

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SETTLEMENT CONSIDERATION

 

Section 2.1    Within fifteen (15) business days of Final Court Approval, AB&Co., as agent for all of the defendants, shall pay the Settlement Amount into an interest bearing account maintained by the Escrow Agent, subject to Court oversight.  The Settlement Amount, together with any accrued interest, shall constitute the “Settlement Fund.”   Payment as set forth herein will constitute satisfaction of all financial obligations of the Stipulation.

 

Section 2.2     The Escrow Agent shall invest the Settlement Fund in instruments backed by the full faith and credit of the United States Government or fully insured by the United States Government or the FDIC and shall reinvest the proceeds of these instruments as they mature in the same types of instruments at their then current market rates.

 

Section 2.3     The Settling Parties and the Escrow Agent agree to treat the  Settlement Fund as being at all times a “qualified settlement fund” within the meaning of Treas. Reg. §1.468B-1.  The Escrow Agent shall timely make such elections as necessary or advisable to carry out the provisions of this Section 2.3, including the “relation-back election” (as defined in Treas. Reg. §1.468B-1) back to the earliest permitted date.  Such elections shall be made in compliance with the procedures and requirements contained in such regulations.  It shall be the responsibility of the Escrow Agent to prepare properly and timely deliver the necessary documentation for signature by all necessary parties, and thereafter to cause the appropriate filing to occur.

 

  

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For the purpose of §468B of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, the “administrator” shall be the Escrow Agent.  The Escrow Agent shall satisfy the administrative requirements imposed by Treas. Reg. §1.468B-2 by, e.g., and be responsible for properly (i) obtaining a taxpayer identification number, (ii) satisfying any information reporting or withholding requirements imposed on disbursements from the Settlement Fund, and (iii) timely and properly filing applicable federal, state and local tax returns necessary or advisable with respect to the Settlement Fund (including, without limitation, the returns described in Treas. Reg. §1.468B-2(k)) and properly paying any taxes reported thereon out of the Settlement Fund.  Such returns (as well as the election described in this Section 2.3) shall be consistent with this Section 2.3 and in all events shall reflect that all Taxes as defined in subsection (b) below (including any estimated Taxes, interest or penalties) on the income earned by the Settlement Fund shall be paid out of the Settlement Fund.

 

All (i) taxes (including any estimated taxes, interest or penalties) arising with respect to the income earned by the Settlement Fund, including, without limitation, any taxes or tax detriments that may be imposed upon the Defendants or their counsel with respect to any income earned by the Settlement Fund for any period during which the Settlement Fund does not qualify as a “qualified settlement fund” for federal or state income tax purposes (collectively, “Taxes”), and all (ii) expenses and costs incurred in connection with the operation and implementation of this Section 2.3, including, without limitation, expenses of tax attorneys and/or accountants and the fees and costs, if any, of the Escrow Agent and mailing and disbursement costs and expenses relating to filing (or failing to file) the returns described in this Section 2.3 (collectively, “Tax Expenses”), shall be paid out of the Settlement Fund; in all events neither the Defendants, nor the Former Defendants, nor their counsel shall have any liability or responsibility for any Taxes or the Tax Expenses or for any taxes (including estimated taxes, interest or penalties) payable by any person who receives any payment out of the Settlement Fund.  Further, Taxes and Tax Expenses shall be treated as, and considered to be part of the Settlement Fund and shall timely be paid by the Escrow Agent out of the Settlement Fund without prior order from the Court and the Escrow Agent shall be obligated (notwithstanding anything herein to the contrary) to withhold from distribution to Value Line shareholders who receive distributions from the Settlement Fund any funds necessary to pay such amounts, including the establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts that may be required to be withheld under Treas. Reg. §1.468B-2(1)(2)); neither the Defendants nor their counsel are responsible therefor, nor shall they have any liability therefor.  The Settling Parties agree to cooperate with the Escrow Agent, each other, and their tax attorneys and accountants to the extent necessary to carry out the provisions of this Section 2.3.

 

  

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The Escrow Agent and/or transfer agent must follow the tax opinion of Value Line’s tax counsel.

 

Section 2.4     All funds held by the Escrow Agent shall be deemed and considered to be in custodia legis, and shall remain subject to the jurisdiction of the Court.  All amounts in the Settlement Fund, after deducting any Taxes, any Tax Expense, any expenses of the Escrow Agent including his fees in performing his duties hereunder, and all expenses in connection with this Settlement and any award by the Court of attorneys’ fees and expenses to Plaintiffs’ Counsel, shall be distributed to all Shareholders.  Notwithstanding the foregoing, any unclaimed amount remaining in the Settlement Fund reverts back to the Defendants on or before December 31, 2012.   In addition, if the Court directs one or more of the parties to give Notice to Value Line’s shareholders of this Settlement, then the parties agree that all costs, fees, and expenses relating to the Notice will be deducted from the Settlement Fund.  If the Notice is in the form of a Form 8K, the costs for Edgarizing, preparing and printing the Notice will be deducted from the Settlement Fund.

 

  

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Section 2.5     AB&Co. agrees: (i) at each of the next five (5) meetings of the shareholders of Value Line, it will vote its shares of Value Line to elect to the Value Line Board of Directors a new, independent non-management director (who need not be in addition to the number of directors currently serving) who qualifies as an “audit committee financial expert” within the meaning of the applicable rules promulgated by the SEC pursuant to Section 407 of the Sarbanes-Oxley Act of 2002; and (ii) to request that the Value Line Board of Directors appoint an “audit committee financial expert” within the meaning of the applicable rules promulgated by the SEC pursuant to Section 407 of the Sarbanes-Oxley Act of 2002 to serve on the Value Line Audit Committee who need not be the same individual throughout the time period or the same new non-management director.

 

Section 2.6     The individual Plaintiffs, Alan R. Kahn and Larry Morrison, agree that they will not sue AB&Co. and its affiliates and/or Value Line and its affiliates or any of those entities’ respective past, present or future directors, officers or employees in a class action or derivative action in Plaintiffs’ capacity as shareholders of Value Line, provided, however, that Plaintiffs may sue to enforce the terms of this settlement if approved by the Court.  

 

SCEHDULING ORDER, SETTLEMENT HEARING

 

Section 3.1     As promptly as practicable following execution of the Stipulation, Plaintiffs’ Counsel shall file a motion for entry of a scheduling order that is agreed to by both parties and will, among other things, schedule a final hearing on the Settlement.

 

In addition, if the Court, in its discretion, directs that Notice should be given to Value Line’s shareholders, then a Notice will be jointly drafted for dissemination to Value Line’s shareholders.  As noted, the parties agree that all costs, fees, and expenses relating to the Notice, including the costs for distribution and/or publication of the Notice will be deducted from the Settlement Fund.

 

  

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RELEASE OF CLAIMS

 

Section 4.1     Upon the Effective Date, the Plaintiffs, and all other Value Line Shareholders, and Value Line shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever released, relinquished, and discharged all Released Claims against the Released Persons and their lawyers.  Nothing herein, however, shall preclude any Settling Party from enforcing the terms of the Stipulation.

 

Section 4.2     Upon the Effective Date, the Defendants shall be deemed to have, and by operation of the Judgment shall have, fully, finally and forever released, relinquished, and discharged the Plaintiffs and their counsel, each only in his or its capacity as such, from all Released Claims against Plaintiffs.  Nothing herein, however, shall prelude any Settling Party from enforcing the terms of the Stipulation.

 

ATTORNEY’S FEES, COSTS, AND EXPENSES

 

Section 5.1     The parties agree that the amount of attorneys’ fees and expenses awarded from the Settlement Fund shall be reasonable.  Plaintiffs’ Counsel may submit an application to the Court (the “Fee and Expense Application”) for distributions to them from the Settlement Fund for an award of attorneys’ fees and expenses of up to one-third (33-1/3%) of the Settlement Fund.  Plaintiffs and their counsel shall be reimbursed solely out of the Settlement Fund.  The Defendants shall not be liable for any costs, fees, or expenses of any of the Plaintiffs’ attorneys, experts, advisors agents or representatives.  All such costs, fees and expenses as approved by the Court shall be paid out of the Settlement Fund within five business days of the later of (a) the Effective Date or (b) the entry of the order awarding such fees and expenses (the “Final Fee Award”).  In the event that the Final Fee Award  is reversed or modified following payment of fees and expenses to Plaintiffs’ Counsel pursuant to Court order, Plaintiffs’ Counsel shall within five (5) business days from receiving notice from Defendants’ counsel or from a court of appropriate jurisdiction, refund to the Settlement Fund, out of the fees and expenses previously paid to them from the Settlement Fund plus interest thereon at the same rate as earned on the Settlement Fund, an amount consistent with such reversal or modification.  Each such counsel’s law firm, as a condition of receiving such fees and expenses, on behalf of itself and each partner, member or shareholder of it, agrees that the law firm and its partners, shareholders or members are subject to the jurisdiction of the Court for the purpose of enforcing the provisions of this paragraph.

 

  

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Section 5.2     The procedure for and the allowance or disallowance by the Court of the Fee and Expense Application, and any other fair and reasonable fees requested, are not part of the settlement set forth in this Stipulation, and are to be considered by the Court separately from the Court’s consideration of the fairness, reasonableness, and adequacy of the settlement.  Notwithstanding the foregoing, all such fees and expenses that are awarded will be deducted from and come out of the Settlement Fund, it being understood that Defendants will not pay more than $2,900,000 to settle this Consolidated Action, which amount includes all costs, fees, and other expenses related to and/or are set forth in the terms of this Stipulation.  Any order or proceedings relating to the Fee and Expense Application, or any appeal from any order relating thereto or reversal or modification thereof, shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Judgment approving the Stipulation and the settlement of the Consolidated Action set forth therein.

 

  

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Section 5.3     Except for the obligation of Defendants to pay the Settlement Amount, none of the Defendants shall have any responsibility for, or liability with respect to, any payment to Plaintiffs’ Counsel or any other counsel or Person who receives payment from the Settlement Fund, nor with respect to the allocation among Plaintiffs’ Counsel or any other Person who may assert some claim thereto, of any award of fees and expenses that the Court may make in the Consolidated Action.

 

CONDITIONS

 

Section 6.1     The Effective Date of the Stipulation shall be conditioned on and subject to the occurrence of all of the following events:

 

(a) The Court has entered the Judgment, or a Judgment substantially in the form of Exhibit “A” hereto;

 

(b) That Judgment has become Final and Non-Appealable;

 

(c) The Consolidated Action has been dismissed with prejudice; and

 

(d) The Judgment for all fees, expenses, and the Settlement Fund monies relating to this case shall not exceed $2,900,000.

 

In the event that the Stipulation is not approved by the Court or the settlement set forth in the Stipulation is terminated or fails to become effective in accordance with its terms, the then the Stipulation shall be canceled and terminated and the Settling Parties shall be restored to their respective positions in the Consolidated Action prior to execution of the Stipulation.  In such event, the terms and provisions of the Stipulation shall have no further force and effect and shall not be used in this Consolidated Action or in any other proceeding for any adverse purpose or inference, and any Judgment or order entered by the Court in accordance with the terms of the Stipulation shall be treated as vacated, nunc pro tunc.

 

  

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MISCELLANEOUS PROVISIONS

 

Section 7.1     The Settling Parties agree to cooperate to the extent necessary to effectuate and implement all terms and conditions of the Stipulation.  The Stipulation shall be construed and interpreted to effectuate the intent of the Settling Parties, which is to provide, though the Stipulation, for a complete resolution of the Released Claims with respect to each of the Released Persons and/or Settling Parties.

 

Section 7.2    Neither the Stipulation (whether or not it becomes final) nor the Judgment, nor any and all negotiations, documents, and discussions associated with them, as well as any other matters pertaining thereto, shall be deemed or construed to be an admission by Defendants or evidence of any violation of any statute or law or of any liability or wrongdoing whatsoever or of the truth of any of the claims or allegations contained in the Complaint or any other pleading filed by Plaintiffs and evidence thereof shall not be discoverable or used directly or indirectly, in any way, whether in the Consolidated Action or in any other action or proceeding.  The Defendants may file the Stipulation or the Judgment in any action.

 

Section 7.3     The Stipulation may be amended or modified only by a written instrument signed by or on behalf of all Settling Parties or their respective successors-in-interest.

 

  

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Section 7.4     The Stipulation and Exhibit attached thereto constitutes the entire agreement among the parties hereto and no representations, warranties or inducements have been made to any party concerning the Stipulation or its Exhibit other than the representations, warranties and covenants contained and memorialized in such documents.  Except as otherwise provided therein, each party shall bear its own costs.  The escrow costs and all other fees and expenses relating to payments to Plaintiffs and to the distribution of moneys and taxes shall be part of the $2.9 million Settlement Fund and shall be paid from the Settlement Fund provided the stipulation is approved by the Judgment described in Section 6.1 hereof.

 

Section 7.5     Each counsel or other Person executing the Stipulation or its Exhibit on behalf of any party hereto warrants that such person has the full authority to do so.

 

Section 7.6     The Stipulation may be executed in one or more counterparts.  All executed counterparts and each of them shall be deemed to be one and the same instrument. A complete set of original executed counterparts shall be filed with the Court.

 

Section 7.7      The Stipulation shall be binding upon, and inure to the benefit of, the successors and assigns of the parties hereto.

 

Section 7.8     The Court shall retain jurisdiction with respect to implementation and enforcement of the terms of the Stipulation, and all parties hereto submit to the jurisdiction of the Court for purposes of implementing and enforcing the settlement embodied in the Stipulation.

 

Section 7.9     The Stipulation and the Exhibit hereto shall be considered to have been negotiated, executed and delivered, and to be wholly performed, in the State of New York, and the rights and obligations of the parties to the Stipulation shall be construed and enforced in accordance with, and governed by, the internal laws of the State of New York without giving effect to that State’s choice of law principles.

 

  

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Section 7.10   The Stipulation shall not be construed more strictly against one party than another merely by virtue of the fact that it, or any part of it, may have been prepared by counsel for one of the parties, it being recognized that it is the result of arm’s length negotiations between the parties and all parties have been represented by counsel and have contributed substantially and materially to the preparation of the Stipulation.

 

STIPULATED AND AGREED:

	/s/ Jeffrey S. Abraham	 	/s/ Tab K. Rosenfeld
	
Jeffrey S. Abraham

	 	
Tab K. Rosenfeld

	
Philip T. Taylor

	 	
ROSENFELD & KAPLAN LLP

	
ABRAHAM, FRUCHTER & TWERSKY, LLP

	 	
535 Fifth Avenue, Suite 1006

	

One Penn Plaza, Suite 2805

	 	
New York, New York 10017

	

New York, New York 10119

	 	
Tel: 212-682-1400

	

Tel: 212-279-5050

	 	  
	
 

	 	
Attorneys for Defendants Jean Bernhard

	  	 	
Buttner, David T. Henigson, Edgar A. Buttner,

	  	 	
Howard A. Brecher and Arnold Bernhard & Co., Inc.

	/s/ Harold B. Obstfeld	 	/s/ David Etkind
	
Harold B. Obstfeld

	 	
David Etkind

	
HAROLD B. OBSTFELD, P.C.

	 	
ECHTMAN & ETKIND, LLP

	
100 Park Avenue, 20th Floor

	 	
12 Marlette Place

	
New York, New York 10017

	 	
White Plains, New York 10605

	
Tel: 212-696-1212

	 	
Tel: 212-757-2310

	  	 	  
	/s/ James S. Notis	 	
Attorneys for Nominal Defendant Value Line, Inc.

	
James S. Notis

	 	
 

	
GARDY & NOTIS, LLP

	 	  
	
560 Sylvan Avenue

	 	  
	
Englewood Cliffs, New Jersey 07632

	 	  
	
Tel: 201-567-7377

	 	  
	  	 	  
	
Attorneys for Plaintiffs

	 	  

 

 

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