Separation Agreement and Release
This Separation Agreement and Release entered into this 28th
day of September, 1999, is made by and between Inso
Corporation (Inso Corporation, and all of its subsidiaries and
affiliates, shall be collectively referred to herein as "the
Company") and Xxxxxx X Xxxx-Xxxxxx ("the Executive"), and
constitutes the parties' agreement with respect to the
termination of the Executive's employment with the Company.
1. The Executive voluntarily resigns as an officer of the
Company effective April 1, 1999, ("the Resignation Date")
and as an employee of the Company on April 1, 2001 ("the
Termination Date") except as described in paragraph 2.
2. During the period between the Resignation Date and the
Termination Date ("the Interim Period"), the Executive
shall perform any special assignments reasonably
requested by the Chief Executive Officer or the Chief
Operating Officer at reasonable times and places mutually
agreeable to the parties. It is the intention of the
parties that such special assignments would not
unreasonably interfere with any future employment the
Executive may undertake with an employer other than the
Company. Between April 1, 1999 and April 1, 2001, the
Executive or his or her estate shall be paid at an
annualized rate of $258,000 - his base salary as in
effect on April 1, 1999 - (reduced by any amounts
received under any disability insurance program, or other
income replacement program available through the Company)
in accordance with the Company's normal and customary pay
practices for executive employees, subject to all
applicable federal and state income, payroll, and other
applicable tax withholding ("Base Salary").
Additionally, the Executive shall be reimbursed for
reasonable expenses, as determined by the Company,
related to the services requested by the Chief Executive
Officer or the Chief Operating Officer during the Interim
Period. The Executive shall also be reimbursed for other
reasonable parking and telephone expenses, as determined
by the Company, during the Interim Period.
3. Between April 1, 1999 and April 1, 2001 and subject to
the exceptions noted below, Executive and his family
shall be entitled to continue his or their participation
in the Company's medical, dental, and vision care benefit
plans to the same extent, and under the same conditions,
that he may be a participant in such plans on April 1,
1999 regardless of the intervening death of Executive;
provided however, such participation shall cease on the
earlier of: (a) April 1, 2001, and (b) the last day of
the month in which he or she may be covered by any plan,
program or arrangement, sponsored by another employer
offering substantially equivalent coverage. Additionally,
from April 1, 1999 to April 1, 2001, the Executive shall
be entitled to continue his or her participation in the
Company's 401K plan (including employer match).
4. On April 1, 2001, Executive shall be eligible to continue
medical, dental, and vision care benefits under the
provisions of COBRA, and he will be notified of his COBRA
rights at that time.
5. Executive's participation in Company benefit plans,
programs, and arrangements not enumerated in paragraph 3
above shall be governed by their terms. Executive's
entitlement to further vacation, sick leave and other
paid time off shall cease on the Resignation Date. Earned
but unused vacation shall be paid to him with the next
regular payroll cycle following the Resignation Date.
6. Between April 1, 1999 and April 1, 2001, previously
granted, but unexercised stock options held by Executive
for the purchase of stock of the Company and restricted
shares shall continue to vest, and shall be subject to
rules regarding exercise, as if the Executive were still
an active employee of the Company, and all rights of an
option holder which may arise on a change of control of
the Company shall continue to accrue to the Executive
during such time period.
7. On December 16, 1997, the Company lent the Executive
$479,997.25 (the "Principal Amount") pursuant to a Secured
Promissory Note (the "Share Loan"), which Loan Amount the
Executive used to purchased 46,829 shares of the Company's
common stock (the "Purchased Shares") at a price per share
of $10.25. Currently, the market value of the Purchased
Shares is less than the sum of the Principal Amount plus
accrued interest. It is the intention of the parties, and
the parties hereby agree, that the Share Loan remain
outstanding, and payment of interest deferred, until as
late as the maturity date of December 16, 2002 ("Maturity
Date"), notwithstanding the expiration of this Agreement,
so that the Executive may delay in repaying the Share Loan
until such such time prior to the Maturity Date - if ever
- that the market value of the Purchased Shares equals or
exceeds the sum of the Principal Amount plus accrued
interest. Further, in order to mitigate the potential
economic impact to the Executive arising from the Share
Loan, the parties agree that, should the closing price per
share of the Company's common stock never average the sum
of (1) $10.25 and (2) the Per-Share Adjusted Accrued
Interest (collectively, "the Put Price Per Share") for at
least thirty (30) consecutive calendar days prior to the
Maturity Date, then on the Maturity Date the Company shall
pay to the Executive an amount equal to the difference
between (a) the Principal Amount plus accrued interest;
and (b) the product of the closing price per share of the
Company's common stock on the Maturity Date and 46,829.
For example, if the highest the Put Share Price ever
averages for at least thirty (30) consecutive calendar
days prior to the Maturity Date is $8.00 per share, the
closing price per share of the Company's common stock on
the Maturity Date is $7.00 per share, and the sum of the
Principal Amount plus interest on the Maturity Date equals
$627,803, then on the Maturity Date the Company would pay
the Executive $300,000 (i.e., $627,803 - $327,803). "Per-
Share Adjusted Accrued Interest" shall mean the quotient
of (1) the cumulative interest then due pursuant to the
Share Loan, less a pro-forma income tax benefit of 31.6%,
and (2) 46,829.
8. The Company shall reimburse the executive for reasonable
legal fees incurred by the Executive in connection with
this Agreement, up to $12,500.
9. Anything contained in paragraphs 15 and 16
notwithstanding, the Company and Executive shall continue
to be bound by the Non-Disclosure Agreement executed by
Executive on October 4, 1996, which Agreement is
incorporated herein by reference.
10. Beginning on the date of this Agreement and continuing
through the date that is two (2) years after the
Termination Date, the Executive will not attempt to hire
or hire, or attempt to solicit or solicit, any employee of
the Company, or assist in such hiring by anyone else, to
work as an employee or independent contractor, with, or
otherwise provide services to, any business directly or
indirectly competitive with the Company's business.
Notwithstanding the foregoing, the Executive will not be
considered to be in violation of this Agreement if he
complies with a request to provide a written or oral
reference for someone seeking employment where this
conduct would otherwise be considered to violate the
provisions of this paragraph.
11. Beginning on the date of this Agreement and continuing
through the date that is two (2) years after the
Termination Date, absent the Company's prior written
approval, the Executive shall not provide services, either
as a contractor, employee or otherwise, for any of the
following companies or their parents, subsidiaries or
affiliates: (a) Vignette, (b) Broadvision, (c) Interwoven,
(d) ExpressRoom, (e) FutureTense, (f) Xxxxxxx, (g)
NetObjects, (h) Dreamweaver, (i) Documentum; (j)
Interleaf, or (k) any division or operating unit of Oracle
engaged in direct or indirect competition with the
Company. Executive agrees and understands that if he is
to breach of any Provision of Paragraphs 10 or 11 of this
Agreement, in addition to all other remedies available to
the Company in law and in equity, the Company shall be
entitled to: (a) discontinue any of its obligations under
this Agreement; and (b) obtain a Court Order enforcing the
provision(s) which Executive has breached.
12. From and after the date of this Agreement, the Executive
shall continue to be entitled to indemnification as an
"Officer" of the Company in accordance with Article V of
the Company's By-laws as in effect as of the date of this
Agreement notwithstanding any subsequent amendment to such
By-laws. The term "Officer" shall have the meaning set
forth in Article V of the Company's By-laws.
13. Executive agrees to return to the Company prior to the
Resignation Date all Company
property including, but not limited to, vendor, supplier,
and any other business or mailing
lists, reports, files, memoranda, records and software,
credit cards, desk or file keys, computer access codes or
disks, and Company manuals. Executive further agrees that
he will not retain any copies, duplicates, reproductions or
excerpts of such property. Notwithstanding this paragraph,
the Executive may retain his laptop computer.
14. Executive acknowledges that the Company will include a copy
of this Agreement as an exhibit to its Form 10-Q for the
fiscal quarter ending October 31, 1999. Until such time as
the Company includes a copy of this Agreement as an exhibit
to its Form 10-Q, the Executive and Company represent and
agree that they and their agents and representatives shall
keep completely and strictly confidential the terms of this
Agreement and any settlement negotiations that occurred in
connection with this Agreement, except that (1) the
Executive may disclose said information to his legal
advisors, financial advisors and spouse (including the
spouse's legal counsel) providing that the Executive
informs these persons of the confidentiality restriction
and they agree to be bound by it; (2) the parties may
disclose said information if agreed in writing by
authorized agents of both parties; (3) as required by law;
(4) in order to rebut any material misstatement by the
other party. In the event that either party seeks to
disclose the confidential information pursuant to (3) or
(4) above, that party will give the other party at least
ten (10) days advance written notice to provide an
opportunity to contest disclosure. Notwithstanding the
foregoing, Executive may inform third parties of his
obligations under paragraph 10 without violating this
paragraph 14.
15. In exchange for the consideration provided in this
Agreement, to which Executive acknowledges and agrees he is
not otherwise entitled, Executive for himself and on behalf
of his heirs, executors, administrators and assigns, hereby
remises, releases and fully discharges the Company and, to
the extent applicable, its present, former, and future
parent companies, subsidiaries and affiliates, and the
officers, directors, employees, agents, successors and
assigns of each of them ("the Released Parties") of and
from any and all claims, rights and causes of action of all
nature known, unknown, past, present, now foreseeable or
unforeseeable, which he has or may have, in any way arising
out of, connected with or related to Executive's employment
with any of the Released Parties, the termination thereof
or based upon information made known to Executive during
employment with any of the Released Parties. This Release
shall include, but not be limited to, any claims, damages,
rights and causes of action for wrongful discharge, breach
of contract, discrimination or retaliation under any
federal, state or local laws, rules, orders or regulations
including but not limited to, the Age Discrimination in
Employment Act, Title VII the Civil Rights Act of 1964, 42
U.S.C. Sec. 200 et. seq., the Massachusetts Civil Rights Act,
M.G.L.c. 12 Sec. 11H and 11I, the Massachusetts Fair Employment
Practices Act, M.G.L.c. 151b, Sec. 1 et. seq., the Americans
with Disabilities Act, 29 U.S.C. Sec. 12101 et. seq., and the
Massachusetts Equal Rights Act, c.93, Sec. 102. This Release
shall also include, but not be limited to, all claims,
rights and causes of action for costs, attorney's fees,
bounties, or percentage of awards or settlements which
Executive may assert against or which may be asserted
against the Company by others on Executive's behalf, or
against any of the Released Parties. Executive and the
Company intend and agree that this Release is to be a broad
Release to apply to any relief or cause of action, to the
extent permitted by law, no matter what it is called, and
shall include, but not be limited to, claims, rights or
causes of action for wages, benefits, bonuses, fines, back
pay, share of awards, compensatory damages, and punitive
damages; however, nothing in this Release shall be
construed to bar claims for alleged breaches of this
Agreement.
16. The Company, on its behalf, and to the extent applicable,
on behalf of its present, former and future parent
companies, subsidiaries and affiliates, and officers,
directors, agents, successors and assigns of each of them
hereby remises, releases, and fully discharges Executive of
and from all claims, demands, causes of action, damages and
expenses, of any and every nature whatsoever, known or
unknown by the Company, past or present as a result of
actions, omissions or events occurring through the date of
this Agreement in connection with his employment with the
Company; however, nothing in this Release shall be
construed to bar claims for alleged breaches of this
Agreement.
17. Executive will not disparage or discuss the Company or its
agents, officers, servants or employees in a derogatory
manner. Executive will at all times state, if asked, that
the Company was and is a reputable company during his or
her employment with the Company and that he or she was
proud to have been associated with it. The Company will not
disparage or discuss the Executive in a derogatory manner
and will at all times state if asked, that the Executive
conducted himself or herself honorably and is a reputable
person.
18. The Executive herein represents that he has not filed any
complaints, charges or claims for relief against the
Released Parties with any local, state, or federal court or
administrative agency which currently are outstanding.
19. The payment by the Company of the consideration referred to
herein is not, and shall not be deemed, an admission of
responsibility or liability by any of the Released Parties.
20. Executive acknowledges that he has been given twenty-one
(21) days to consider this Agreement and has been advised
to consult with, and has in fact consulted with, an
attorney before signing.
21. This Agreement shall become effective on the eighth (8th)
day following the date on which it is signed by Executive.
Executive may revoke this Agreement in the seven-day period
following the date on which the Executive signs the
Agreement by submitting a written revocation to the
Company. Any payments due under this Agreement shall not be
paid until the Effective Date of this Agreement, except as
otherwise agreed.
22. Executive acknowledges that:
-He was advised to consult with an attorney to review
this Agreement prior to signing it, did consult with
an attorney, and was given a chance to refuse to
sign this Agreement.
-He has read and understands this Agreement and
understands fully its final and binding effect.
-None of the Released Parties had made any
statements, promises or representations not set forth in this
Agreement, and Executive has not relied
on any such statements, promises or representations.
-He has voluntarily signed this Agreement with the
knowledge and understanding and full intention of releasing the
Released Parties as set forth above.
23. This Agreement is binding upon and shall inure to the benefits
of the parties hereto and their respective assigns, successors,
heirs and personal representatives; provided however that the Executive
may not assign any rights or duties it may have hereunder without prior
written consent of the Company.
24. If any provision of this Agreement is judicially
determined to be invalid or unenforceable as
written, then such provision shall, if possible, be
modified and reformed to the degree
necessary to render it valid and enforceable. Any such
invalidity or unenforceability of any
provision shall have no effect on the remainder of this
Agreement which shall remain in full
force and effect. The parties agree that each Party and
the attorney(s) for each Party to this Agreement have
negotiated, prepared, and reviewed this Agreement and,
accordingly, the normal rule of construction (to the
effect that any ambiguities are to be resolved against the
drafting Party) will not be employed in any interpretation
of this Agreement.
25. This Agreement is to be governed and will be construed as
a sealed instrument under and in accordance with the laws
of the Commonwealth of Massachusetts. If any dispute or
disagreement arises between the parties relating to the
terms of this Agreement, the parties shall attempt to
mediate their differences through the offices of
J.A.M.S./Endispute. If mediation does not resolve the
dispute, the parties agree to binding arbitration with
J.A.M.S./Endispute. The parties shall abide by and perform
any arbitration award and such award shall be entered as a
judgement by any court having jurisdiction thereof.
26. This Agreement, together with the document incorporated
herein by reference, constitutes the
entire agreement between the parties hereto and supersedes
all prior and contemporaneous negotiations, representations,
understandings and agreements, whether written or oral. Without limitation,
the parties acknowledge that the Management Retention
Agreement, by and between Inso and the Executive is
terminated and is of no further force and effect.
IN WITNESS WHEREOF, the Company and Executive have entered into
this Agreement on the date first above written.
Inso Corporation
By: /s/ Xxxxxxxx Xxxxxx /s/ Xxxxxx X. Xxxx-Xxxxxx
----------------------- -------------------------
Xxxxxxxx Xxxxxx Xxxxxx X. Xxxx-Xxxxxx
Secretary
