Exhibit 10.37
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT AND RELEASE (this "Agreement") is entered into
as of the 12th day of March, 1998 (the "Effective Date") by and among ELECTRIC
FUEL CORPORATION, a Delaware corporation ("EFC"); ELECTRIC FUEL LIMITED, an
Israeli company ("EFL" and together with EFC, the "Company"), and ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, Israel I.D. Number 836454 ("Korall").
WHEREAS, the Company and Korall entered into an Employment Agreement (the
"Employment Agreement") on December 15, 1993, and have maintained an employer-
employee relationship from such date until the present; and
WHEREAS, the Company and Korall now desire to terminate the Employment
Agreement, and the employer-employee relationship; and
WHEREAS, the Company and Korall also desire to enter into a written
agreement in order to establish their respective rights, duties, and
obligations, resolve all claims and differences that may currently exist, or
that in the future may arise and generally release the Company and Korall from
any claims or other matters that may not be specifically set forth hereinafter.
NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as
follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT
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1.1 The Employment Agreement and the employment relationship shall
terminate, cease and be of no further force and effect as of January 31, 1998
(the "Termination Date"). Any provisions contained in the Employment Agreement
which relate to the manner, method, timing, notification of, or necessity to
establish cause for termination, are considered to have been complied with
and/or waived.
1.2 Korall undertakes to cooperate with the Company in order to pass on
his responsibilities to other employees of the Company in an orderly fashion,
and to provide to the Company all information he may have of relevance to the
Company's on-going activities.
1.3 Korall acknowledges, confirms and undertakes that, subject to the
payment of the amounts due to him under Sections 2 and 3 below, he has no claims
against the Company with regard to the Employment Agreement or his employment
relationship with the Company or the method of termination of his employment.
2. SALARY
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Korall acknowledges that he has received all the Base Salary (as defined in
Section 3(a) of the Employment Agreement) owing to him for the period ending on
the Termination Date.
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3. SOCIAL BENEFITS
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3.1 MANAGER'S INSURANCE AND EDUCATION FUND (KEREN HISHTALMUT)
(A) ASSIGNMENT MANAGER'S INSURANCE. Within twenty-one (21) days of
Effective Date, the Company shall assign to Korall the rights to the Managers'
Insurance Policy established for Korall pursuant to Section 4(a) of the
Employment Agreement (the "Manager's Insurance Policy"). Within three (3) days
of the Effective Date, the Company shall execute all forms and letters required
on its behalf to be executed in connection with such assignment.
(B) ASSIGNMENT OF EDUCATION FUND. Within twenty-one (21) days of
Effective Date, the Company shall assign to Korall the rights to receive any
amounts held in the Education Fund established for Korall pursuant to Section
4(b) of the Employment Agreement (the "Education Fund"). Within three (3) days
of the Effective Date, the Company shall execute all forms and letters required
on its behalf to be executed in connection with such assignment.
(C) CALCULATION OF UNPAID MANAGERS INSURANCE PREMIUMS. The parties
hereby acknowledge that there is some confusion with respect to the crediting to
Korall's policy of the entire amount of money contributed by the Company to the
Managers' Insurance Policy during the period of time on or about the
establishment of such policy. The Company agrees to use good faith efforts to
determine, within thirty (30) days of the Effective Date, whether additional
premiums are owed and if so to pay the amount of all unpaid premiums to the fund
within seven (7) days of reaching a determination with respect to the amount of
premium owed.
(D) NO FURTHER OBLIGATION. The Company shall make contributions on
behalf of Korall to the Managers' Insurance Policy or the Education Fund with
respect to the Base Salary paid to Korall pursuant to Section 2 above for the
period ending on the Termination Date. Without derogating from Section 3.1(c)
above, the Company shall have no additional obligations to make any
contributions to the Managers' Insurance Policy or the Education Fund.
3.2 SEVERANCE PAY
(A) The parties acknowledge that Korall, for his employment by the
Company through the Termination Date, is entitled by law to severance pay (the
"Severance Pay Amount") in the amount of the NIS equivalent $63,605 (calculated
on the basis of 6.75 years of work and a final monthly salary of $9,423). Within
three (3) days of the final determination under Section 3.1(c) above, the
Company shall pay to Korall the difference between the Severance Pay Amount and
the amount of the portion of the Managers' Insurance Policy earmarked for
severance pay.
(B) In addition, as severance payment ("ma'anak ▇▇▇▇▇▇"), the Company
shall pay to Korall twenty-four (24) equal monthly payment of the NIS equivalent
of $5,000 (five thousand US Dollars). These payments shall be made on the 10th
of each calendar month or the first Israeli business day thereafter, commencing
on April 10, 1998, until March 10, 2000.
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3.3 VACATION. Within three (3) days of the Effective Date, the Company
shall pay to Korall an amount of the NIS equivalent of $1,487 (one thousand four
hundred eighty seven US Dollars), which constitutes the conversion into cash
payments of all vacation days accumulated by Korall pursuant to Section 4(c) of
the Employment Agreement for his employment through the Termination Date.
3.4 SICK LEAVE. Within three (3) days of the Effective Date, the Company
shall pay to Korall an amount of the NIS equivalent of $14,352 (fourteen
thousand three hundred fifty two US Dollars), which constitutes the conversion
into cash payments of all sick days accumulated by Korall pursuant to Section
4(d) of the Employment Agreement for his employment through the Termination
Date.
3.5 EDUCATION FUND DIFFERENTIALS. Within three (3) days of the Effective
Date, the Company shall pay to Korall an amount of the NIS equivalent of $10,558
ten thousand five hundred fifty eight US Dollars), which constitutes the
payments of Education Fund differentials payable to Korall pursuant to Section
4(b) of the Employment Agreement for his employment through the Termination
Date.
3.6 FAILURE TO MAKE TIMELY PAYMENT. Failure by the Company to make
payment of any of the amounts due pursuant to Sections 3.2 through 3.5 within
four (4) days of the Effective Date, or to make any other payment within thirty
(30) days of the due date for such payment, shall be deemed a fundamental
breach of this Agreement.
4. KORALL'S SHARE AND SHARE OPTIONS
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4.1 OUTSTANDING WARRANTS AND OPTIONS. The parties hereby agree:
(A) to extend until February 28, 2000, the exercise period of the
90,000 options to purchase securities of EFC at an exercise price of $5.75 per
share held by Korall; and
(B) that any options to purchase securities of EFC held by Korall
which are not exercised by February 28, 2000, shall expire, terminate and be of
no further force and effect; and
(C) that Korall will be entitled to utilize such mechanisms
(including notice and manner of payment) as the Company generally makes
available to its senior employees in connection with the exercise of all such
options.
4.2 RESTRICTIONS ON TRANSFER OF SECURITIES. Korall shall not sell, assign,
transfer, pledge, hypothecate, mortgage or dispose of, by gift or otherwise, or
in any way encumber (each a "Transfer") all or any of the securities of EFC
owned by him (the "Securities") without the prior written approval of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, if then a director of the Company, or, if not, of the then Chairman of
the Board of the Company, which approval shall not be unreasonably withheld.
Notwithstanding the preceding sentence, Korall may, without such written
approval:
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(A) sell any number of shares of EFC necessary to finance the
repayment of the principal of $104,504 (one hundred four thousand five hundred
four US Dollars) and interest of $42,882 (forty-two thousand eight hundred
eighty two US Dollars) due under the Non-Recourse Promissory Note, dated January
3, 1993, between EFC and Korall (the "Note"), provided, however, that the
proceeds of such sale, net of any applicable taxes, commissions and fees, are
transferred directly to EFC, and further provided that the above calculation of
interest is acknowledged to be through January 3, 1998, the maturity date of the
Note, and such Note shall, bear interest in accordance with its terms on all
unpaid balances until it is paid in full; and
(B) in addition to the sale of shares contemplated under (a) above,
commencing immediately, sell up to 50,000 shares of EFC per calendar quarter at
a price per share of no less than $0.125 below the closing price of such shares
on the last day of trading immediately preceding the sale of such shares; and
(C) if the Note shall not have been repaid in full by March 1, 1999,
the Company shall be entitled to set off the unpaid balances against any amounts
owed by the Company to Korall or any party affiliated with Korall.
4.3 ESCROW. Within three (3) days of the Effective Date, Korall shall
give irrevocable instructions to his broker that the broker shall take all
instructions regarding the disposition of Korall's shares in EFC solely from
Adv. ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Trustee"). The Trustee shall undertake not to transfer
the Securities other than in accordance with the terms of this Agreement. If
Korall instructs the Trustee to sell any Securities, the Trustee shall withhold
from the proceeds of such sale the amount necessary to pay any taxes, fees and
commissions applicable to such sale. The remaining proceeds of such sale shall
be transferred to EFC to repay the Note. The proceeds of any sale remaining
after the payment of all applicable taxes and the repayment of the Note in full,
shall be transferred to Korall or his designee. The fees of the Trustee shall be
shared equally by Korall and the Company.
5. COVENANTS OF KORALL
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5.1 RETURN OF PERSONAL PROPERTY. Korall shall, within five (5) days from
the Effective Date, return to the Company all personal property in his
possession or under his control, if any, which is owned by the Company.
6. BREACH
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6.1 BREACH BY KORALL. In the event of a breach by Korall of any of the
terms of this Agreement, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to enforce
the specific performance of this Agreement by Korall and to enjoin Korall from
any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. If the Company prevails in a proceeding for damages or injunctive relief,
Korall agrees that the Company, in addition to other relief, shall be entitled
to reasonable attorney fees, costs, and the expenses of litigation incurred by
the Company in securing the relief granted by the Court. If Korall prevails in
such proceedings, he shall be entitled to reasonable attorney fees, costs and
expenses of litigation. Any payments due and owing to
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Korall, as called for in this Agreement, shall be terminated immediately and
shall no longer be due and owing to Korall, upon his violation of any of the
terms of this Agreement as confirmed by the Arbitrator described in Section 10.9
below.
6.2 BREACH BY COMPANY. In the event of a breach by the Company of the
terms of this Agreement, Korall shall be entitled to institute legal and/or
equitable proceedings to obtain damages and/or injunctive relief for any such
breach and shall be entitled to recover interest at the legal rate on past due
amounts. If Korall prevails in a proceeding for damages or injunctive relief,
the Company agrees that Korall, in addition to other relief, shall be entitled
to reasonable attorney fees, costs, and the expenses of litigation incurred by
Korall in securing the relief granted by the Court. If the Company prevails in
such proceedings, it shall be entitled to reasonable attorney fees, costs and
expenses of litigation. Any payments due and owing to the Company, as called for
in this Agreement, shall be terminated immediately and shall no longer be due
and owing to the Company, upon the Company's violation of any of the terms of
this Agreement. If the Arbitrator determines that a breach by the Company was
made in bad faith, then all the amounts payable by the Company to Korall or any
entity controlled by him shall be immediately due and payable.
7. GENERAL RELEASE
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7.1 Except with respect to breaches of this Agreement, each party, on its
or his own behalf and on behalf of its or his heirs, executors, administrators,
successors and assigns, hereby releases, discharges, and acquits the other
party, its officers, directors and employees, and its and their successors and
assigns, of and from any and all past, present, and future claims, counter-
claims, demands, actions, causes of action, liabilities, damages, costs, loss of
services, expenses, compensation, third-party actions, suits at law or in
equity, of every nature and description, including but not limited to, any
claims that have been or might have been asserted as a result of the
establishment or termination of the employer-employee relationship, hereinafter
collectively referred to as claims. It is the intention of the parties hereto to
effect a full and final general release and this Agreement is intended to cover,
and does cover, not only now known injuries, losses, and damages, but any future
injuries, losses, and damages not now known or anticipated, but which may later
develop or be discovered, including all the effects and consequences thereof.
7.2 Korall does hereby declare that he does understand, covenant and agree
that he will not make any claims or demands, or file any legal proceedings
against the Company, its officers, directors, employees or shareholders, as a
party to any claim, demand or legal proceedings nor shall Korall proceed against
any other party, person, firm, or corporation on the claims described above
except as is necessary in order to enforce the terms and conditions of this
Agreement.
7.3 The filing of any claim, demand, or any and all other legal
proceedings by Korall, against the Company or its officers, directors, employees
or shareholders, shall be deemed to be a material breach of the terms of this
Agreement. Such breach shall, immediately, terminate the Company's duty to pay
any further sums to Korall and shall also bind Korall to repay any and all sums
paid to him under this Agreement. Additionally, Korall shall indemnify and hold
harmless the Company
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from any and all judgments, costs, expenses, or attorney fees whatsoever arising
on account of the filing of any such claim, demand or other legal proceedings by
Korall.
7.4 It is further understood and agreed that the acceptance of the
consideration more fully described above is in full accord and satisfaction of
any obligations, claims and/or disputes that Korall may have with the Company.
8. RESERVED
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9. NOTICE
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For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by registered mail, postage
prepaid, addressed to the respective addresses set forth below or last given by
each party to the other, except that notice of change of address shall be
effective only upon receipt.
The initial addresses of the parties for purposes of this Agreement shall
be as follows:
The Company: Electric Fuel Corporation
c/o Electric Fuel Limited
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Electric Fuel Limited
5 Kiryat Mada Street
Har Hotzvim Science Park
P.O. Box 23073
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Fax: (▇▇▇-▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Rechov ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Tel: (▇▇▇-▇) ▇▇▇-▇▇▇▇
10. MISCELLANEOUS
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10.1 WAIVER. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Korall and the Company. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver or similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
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10.2 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Israel,
without giving effect to the rules respecting conflict of law. The parties
irrevocably submit to the exclusive jurisdiction of the courts of Jerusalem,
Israel, in respect to any dispute or matter arising out of or connected with
this Agreement.
10.3 "NIS EQUIVALENT". The phrase "NIS equivalent" as used herein shall
mean the equivalent in New Israeli Shekels of a U.S. dollar amount calculated at
the representative rate of exchange last published prior to the time of payment.
10.4 SET-OFFS. The Company shall be entitled to set-off any amounts owed
to it by Korall or any entity controlled by Korall from any amounts that it owes
to Korall or any entity controlled by Korall hereunder or under any other
agreement. Korall shall be entitled to set-off any amounts owed to him by the
Company from any amounts that it owes to the Company hereunder or under any
other agreement.
10.5 ENTIRE AGREEMENT. This Agreement, and the Consulting Agreement with
▇▇▇▇▇▇ Ltd., dated the date hereof, constitute the entire agreement between the
parties hereto and supersede all prior agreements, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof. No agreement or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made
either party which are not expressly set forth in this Agreement.
10.6 SUCCESSORS AND ASSIGNEES.
(A) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns, and the Company shall
require such successor or assign to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place. The
term "successors and assigns" as used herein shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement) whether by operation of law or otherwise.
(B) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by Korall, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Korall's legal
personal representative.
10.7 SURVIVAL. The provisions of Section 5.4 of this Agreement shall
survive the rescission or termination, for any reason, of this Agreement.
10.8 SECTION HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way effect the meaning or
interpretation of this Agreement.
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10.9 ARBITRATION. The parties agree that any dispute arising under or in
connection with this Agreement shall be referred as expeditiously as possible,
without delay, to arbitration in accordance with Israel's Arbitration law, 1968.
Korall shall select Ha'Rav ▇▇▇▇▇▇▇▇ as an arbitrator. The Company shall either
agree to have Ha'Rav ▇▇▇▇▇▇▇▇ serve as a sole arbitrator, or shall select
another rabbi as its own arbitrator, and such rabbi, together with Ha'Rav
▇▇▇▇▇▇▇▇, shall select a third rabbi, and the matter will be heard by a panel
consisting of the three arbitrators. The arbitrator(s) will not be bound by
rules of procedure or substantive law. During the pendancy of the arbitration,
the Company shall pay amounts owed to Korall into an escrow account to be
maintained by ▇▇▇▇▇ ▇▇▇▇▇ & Co.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and Korall has executed this Agreement as of the day
and year first above written.
ELECTRIC FUEL CORPORATION ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: ___________________________ ___________________________
NAME: ___________________________
TITLE: ___________________________
ELECTRIC FUEL LIMITED
By: ___________________________
NAME: ___________________________
TITLE: ___________________________