NET2PHONE INC
ILAN SLASKY SEPARATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>b317204_ex10-2.txt
<DESCRIPTION>ILAN SLASKY SEPARATION AGREEMENT
<TEXT>
<PAGE>
                                                                    Exhibit 10.2

                              SEPARATION AGREEMENT

      The following sets forth the terms of a Separation Agreement between Ilan
Slasky ("IS") and Net2Phone, Inc. ("N2P") and is intended to be binding on the
parties hereto ("Separation Agreement").

1.       Resignation: IS hereby resigns as the Chief Financial Officer of N2P
         and as an officer and/or director of the Net2Phone Charitable
         Foundation (the "Foundation") and/or of any other subsidiary or
         affiliate of N2P, effective January 4, 2002 ("Resignation Date").

2.       Consulting Services: IS will provide consulting services to N2P, and/or
         as directed by N2P, to Adir Technologies, Inc. ("Adir"), for a four
         year period commencing on the Resignation Date. N2P will reimburse IS
         for direct, out-of-pocket expenses incurred by IS relating to any
         overnight travel requested by N2P or Adir.

3.       Waiver: Other than with respect to his rights under this Separation
         Agreement, IS waives all claims, and releases and forever discharges
         and covenants not to sue or proceed on the basis of any claims, against
         N2P, and its subsidiaries and affiliates, including Adir, arising from
         his employment, including rights arising under his employment agreement
         with N2P. Other than with respect to its rights under this Separation
         Agreement, N2P and its subsidiaries and affiliates, including Adir,
         waive all claims and release and forever discharge and covenant not to
         sue or proceed on the basis of any claims, against IS arising from his
         employment, including any of its rights arising under his employment
         agreement with N2P.

4.       Non-Compete: IS acknowledges that (i) N2P, its subsidiaries and
         affiliates, including Adir (for purposes of paragraphs 4, 5 and 6,
         "N2P") are currently engaged in the Internet telephony business, (ii)
         his work for N2P has provided him with access to trade secrets of and
         confidential information concerning N2P, and (iii) the agreements and
         covenants contained in this Separation Agreement are essential to
         protect the business and goodwill of N2P. Accordingly, IS covenants and
         agrees that during the Restricted Period (defined below), IS shall not
         (1) be employed in any capacity by, or consult with or engage or
         participate in any fashion in the Internet telephony business (a
         "Competitive Business") on his own behalf or on behalf of any person or
         entity, and IS shall not acquire a financial interest in any
         Competitive Business (except for publicly traded equity interests that
         do not exceed five percent (5%) in the aggregate of all classes of
         equity of any such Competitive Business) or (2) directly or indirectly
         solicit or encourage any employee of N2P or any of its subsidiaries or
         affiliates to leave the employment of N2P. For purposes hereof, the
         "Restricted Period" shall be the two year period commencing on the
         Resignation Date.

5.       Confidential Information: During the term of this Separation Agreement
         and at all times thereafter, IS agrees that he will not divulge to
         anyone (other than N2P or any persons employed or designated by N2P)
         any knowledge or information of a confidential or proprietary nature
         relating to the business of N2P or any of its subsidiaries or
         affiliates, including, without limitation, all trade secrets (unless
         readily ascertainable from public or published information or trade
         sources) and confidential commercial information, and IS further agrees
         not to disclose, publish or make use of any such knowledge or
         information without the consent of N2P.

6.       Enforcement: IS acknowledges and agrees that N2P will have no adequate
         remedy at law, and could be irreparably harmed, if IS breaches or
         threatens to breach any of the provisions of paragraphs 4 and 5 of this
         Separation Agreement. IS agrees that N2P shall be entitled to equitable
         and/or injunctive relief to prevent any breach or threatened breach of
         paragraphs 4 and 5, and to specific performance of each of the terms of
         this paragraph in addition to any other legal or equitable remedies
         that N2P may have. IS further agrees that he shall not, in any equity
         proceeding relating to the enforcement of the terms of paragraphs 4 and
         5, raise the defense that N2P has an adequate remedy at law.

<PAGE>

7.       Stock Option Repricing: As of the date hereof, IS has an Option to
         purchase 200,000 shares of N2P common stock that was to be priced at
         $3.50 per share in connection with a repricing program recently
         approved by the Board of Directors of N2P, and an Option to purchase
         approximately 72,000 shares at $3.33 per share (collectively the
         "Existing Options"). Within 30 days of the date this Agreement is fully
         executed (the exact day during such 30-day period to be determined by
         N2P in its sole discretion), N2P will (a) grant to IS an Option to
         purchase an additional 28,000 shares of common stock at $0.01 per
         share, or such greater or lesser number of shares as is necessary for
         the total of IS's shares subject to stock options to be equal to
         300,000 (the "New Option"), and (b) reprice the Existing Options to
         $0.01 per share, and upon such event, the Existing Option and New
         Option shall be fully vested and exercisable as of such date and the
         parties hereto mutually agree that such Options with respect to such
         300,000 shares shall be automatically exercised as of such date for
         shares of N2P, and IS covenants and agrees to limit the per day sale of
         the shares resulting from the exercise of the Existing Options and New
         Options to the greater of (a) 30,000 shares and (b) 20% of the average
         trading volume of N2P shares for the preceding five days.
         Notwithstanding the foregoing limitations, IS will be permitted to sell
         such shares resulting from the exercise of such Options in a block
         trade with a single buyer.

8.       Severance: N2P shall continue to pay to IS his base salary of $225,000
         in effect on the Resignation Date, and (ii) the 25% annual bonus amount
         in effect for IS on the Resignation Date, for a period of two years
         following the Resignation Date. Such amount shall be paid in 26 equal
         installments of $10,817.30 annually, less any applicable withholding,
         in a manner consistent with the payroll practice of N2P. If N2P fails
         to pay 3 or more installments per year when due, all of the remaining
         amounts to which IS is entitled pursuant to this paragraph 8 shall
         become immediately due and payable.

9.       Loan Forgiveness: IS has the following loans outstanding to N2P: (a) a
         loan from N2P with an initial principal amount of $298,438 (the "IPO
         Loan"), and (b) a $1.2 million line of credit from N2P with respect to
         which IS borrowed the entire amount (the "N2P Line of Credit") (the
         loans set forth above, and all accrued interest on such loans, the
         "Debt"). The Debt will be forgiven ratably in four equal installments
         upon the completion of each the first four years of the consulting
         period described in paragraph 2 hereof. Such Debt forgiveness and
         waiver shall be accelerated upon change in control of N2P (as defined
         in N2P's 1999 Stock Option and Incentive Plan) occurring after the date
         of this Separation Agreement.

10.      Charitable Contribution. The Foundation shall contribute an aggregate
         of $100,000 to eligible charities, as defined by the Foundation,
         designated by IS, as follows: for the year commencing March 1, 2001 and
         ending February 28, 2002 ("Year 1"), the Foundation shall match the
         donations made by IS as requested by IS to a maximum of $50,000; and
         for the years commencing March 1, 2002 and March 1, 2003, the
         Foundation shall match and/or make such additional donations to
         eligible charities as requested by IS, the aggregate of which shall not
         exceed $100,000 less any contributions made by the Foundation during
         Year 1.

11.      Insurance: For a 2-year period commencing on the Resignation Date, N2P
         will continue to provide IS and his dependents, at its sole cost, with
         the medical, dental, disability and life insurance coverage, or
         equivalent coverage, as was provided immediately prior to the
         Resignation Date.

12.      Car Allowance: For a 2-year period commencing on the Resignation Date,
         N2P will continue to provide IS with an auto allowance for one (1) auto
         consistent with the allowance provided to him immediately prior to the
         Resignation Date.

13.      Company Property: At the completion of the term of consulting period
         described in paragraph 2 hereof, IS shall return all property of N2P
         and Adir; provided, however, that IS will be permitted to keep the
         personal computer, monitor, printer and PDA provided to him by N2P.

14.      Disclosure: The parties mutually agree not to disclose the terms and
         conditions of this Separation Agreement, except that N2P shall have the
         right to make such disclosures as reasonably required by law in the
         opinion of its legal counsel. Notwithstanding the foregoing, IS and N2P
         may disclose such terms to their respective legal and financial
         advisors and IS may disclose such terms to his immediate family
         members.

15.      Miscellaneous: Effective upon the Resignation Date, N2P will release IS
         from his status as an SEC reporting person. Notwithstanding the
         foregoing, IS remains fully and solely responsible for compliance with
         all requirements of all Federal and State securities laws in connection
         with the disposition of his shares of N2P and will indemnify N2P from
         any liabilities arising out of his disposition of any of such shares in
         violation of any of such laws. N2P agrees to provide IS all rights of
         indemnification and all officer's insurance coverage in affect,
         relating to the period of time IS served as an officer of N2P, to the
         fullest extent permitted by law and by its Certificate of Incorporation
         and By-laws, as in effect on the Resignation Date.

16.      Entire Agreement/Amendment: This Separation Agreement contains the
         entire understanding of the parties with respect to the subject matter
         hereof and, except as specifically provided herein (including, without
         limitation IS's rights to Options pursuant to paragraph 7 hereof),
         cancels and supersedes any and all other agreements between the parties
         with respect to the subject matter hereof, including, without
         limitation any employment agreement between IS and N2P. Any amendment
         or modification of this Separation Agreement shall not be binding
         unless in writing and signed by the parties hereto.

<PAGE>

17.      Successors and Assigns: This Separation Agreement shall be binding upon
         and shall inure to the benefit of N2P, its successors, affiliates and
         any person or other entity that succeeds to all or substantially all of
         the business, assets or property of N2P. To the extent not otherwise
         provided by application of law, N2P will require any successor (whether
         direct or indirect, by purchase, merger, consolidation, transfer or
         otherwise) to all or substantially all of the business, assets or
         property of N2P, to expressly assume and agree to perform the
         obligations of N2P under this Separation Agreement in the same manner
         and to the same extent that N2P is required to perform hereunder. As
         used in this Separation Agreement, "N2P" shall mean N2P as hereinbefore
         defined and any successor to its business, assets or property as
         aforesaid which executes and delivers an agreement provided for in this
         paragraph 17 or which otherwise becomes bound by all the terms and
         provisions of this Separation Agreement by operation of law. Except as
         provided by the foregoing provisions of this paragraph 17, any
         assignment of this Separation Agreement, or any part hereof, by N2P
         shall not relieve N2P of its obligations under paragraphs 7 through 10.

         This Separation Agreement and all rights of IS hereunder shall inure to
         the benefit of and be enforceable by the IS's personal or legal
         representatives, executors, administrators, successors, heirs,
         distributees, devisees and legatees. If IS should die while any amounts
         are due and payable to IS hereunder, all such amounts, unless otherwise
         provided herein, shall be paid to IS's designated beneficiary or, if
         there is no such designated beneficiary, to the legal representatives
         of IS's estate. This Separation Agreement is personal in nature and the
         obligations of IS hereunder are not be assignable to any person.

18.      Severability/No Waiver: In the event that any provision of this
         Separation Agreement is determined to be invalid or unenforceable, the
         remaining terms and conditions of this Separation Agreement shall be
         unaffected and shall remain in full force and effect, and any such
         determination of invalidity or unenforceability shall not affect the
         validity or enforceability of any other provision of this Separation
         Agreement. The failure of a party to insist upon strict adherence to
         any term of this Separation Agreement or any occasion shall not be
         considered a waiver of such party's rights or deprive such party of the
         right thereafter to insist upon strict adherence to that term or any
         other term of this Separation Agreement.

19.      Notices: All notices which may be necessary or proper for either N2P or
         IS to give to the other shall be in writing and shall be delivered by
         hand or sent by registered or certified mail, return receipt requested,
         or by overnight courier, to IS at:

                                    Ilan Slasky

         with a copy to:

                                    Joel I. Krasnow, Esq.
                                    Dewey Ballantine LLP
                                    1301 Avenue of the Americas
                                    New York, New York 10019

         ; and, shall be sent in the manner described above to the Secretary of
         N2P at its principal executives offices at:

                                    520 Broad Street
                                    Newark New Jersey  07102

         with a copy to:            General Counsel


         Any party may by like notice to the other party change the address at
         which he or they are to receive notices hereunder.

20.      Governing Law: This Separation Agreement shall be governed by and
         enforceable in accordance with the laws of the State of New Jersey,
         without giving effect to the principles of conflict of laws thereof and
         the resolution of any dispute relating to this Separation Agreement
         shall be venued within the State of New Jersey.

21.      Counterparts: This Separation Agreement may be signed in counterparts,
         each of which shall be an original, with the same effect as if the
         signatures thereto and hereto were upon the same instrument.

<PAGE>

        IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
to the Separation Agreement between Ilan Slasky and Net2Phone, Inc. on this 22th
day of January 2002.


WITNESS OR ATTEST:                        Ilan Slasky:


     s/ Glenn Williams                         s/ Ilan Slasky
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WITNESS OR ATTEST:                        Net2Phone, Inc.


     s/ Glenn Williams                    By: s/ Stephen M. Greenberg
------------------------------            ------------------------------




WITNESS OR ATTEST:                        Solely with respect to paragraph 3
                                          hereof, Adir Technologies, Inc.


     s/ Glenn Williams                    By: s/ David Greenblatt
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