EXHIBIT 10.38
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This Settlement Agreement and General Release (the "Agreement") is made as
of this 28th day of September, 2004 by and between Scansoft, Inc. ("the
Company") and Xxxxx Xxxxx ("Xxxxx" or "Employee").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned parties agree as follows:
1. Termination of Employment. Xxxxx'x last day of work with the Company
shall be September 24, 2004 ("Separation Date"). Except as set forth in Sections
2 and 3, as of the Separation Date, Xxxxx shall not receive, and shall not be
entitled to receipt of, any wage, salary or employment benefits from the
Company.
2. Settlement Payment. Upon execution of this Agreement by Xxxxx, the
Company shall pay Xxxxx twelve (12) weeks salary, minus all applicable payroll
deductions, as a settlement payment (the "Settlement Payment"). The Settlement
Payment will be paid in semi-monthly installments in accordance with the
Company's current payroll schedule. Xxxxx will receive his Settlement Payment
checks via direct deposit and a copy will be mailed to his home address that the
Company has on record. Xxxxx acknowledges and agrees that he would not otherwise
be entitled to receive the Settlement Payment. The Company shall also pay Xxxxx
all accrued salary, and all accrued and unused vacation earned through the
Separation Date, subject to standard payroll deductions and withholdings.
3. Health Insurance. After the Separation Date, Xxxxx may elect to
continue receiving health insurance coverage, at his expense, in accordance with
COBRA (if applicable pursuant to his current health insurance coverage). He will
receive separate notification regarding his COBRA rights, in accordance with
applicable law. If Xxxxx elects COBRA coverage, then the
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Company will pay the standard Company contribution for each applicable
sub-category of coverage (e.g., health, dental, vision) for three (3) months.
The Company's obligation to pay the standard Company contribution for a
sub-category of COBRA coverage will terminate prior to the applicable time set
forth in the preceding sentence on Xxxxx becoming eligible to accept, under
another employer's health plan, coverage of such sub-category of COBRA coverage.
4. General Release by Employee. In consideration of the Company's
agreement to provide Xxxxx with the Settlement Payment, Xxxxx, for himself and
his heirs, successors and assigns, hereby remises, releases and forever
discharges the Company, its affiliated and related entities, subsidiaries and
parent corporation, and all of its past, present and future officers, directors,
principals, agents, servants, representatives, employees and attorneys (the
"Releasees"), from any and all claims and causes of action of every name and
nature, both in law and equity, whether known or unknown, which he may now have,
or in the past may have had, against the Releasees, or any of them, on account
of any act, event, neglect, or omission occurring from the beginning of the
world to the date of this Agreement, including but not limited to any claims
arising out of, or related to, his employment by the Company or the ending of
that employment relationship (the "Claims"). This General Release includes, but
is not limited to, any claims under federal, state and local laws that prohibit
discrimination (including without limitation, claims of discrimination based on
race, religion, national origin, sex, disability or handicap and sexual
orientation) and any claims with respect to breach of contract (express and/or
implied), including but not limited to claims arising under any alleged
employment agreement, wrongful termination, intentional or negligent infliction
of emotional distress, interference with contractual or advantageous business
relations, loss of consortium,
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invasion of privacy, defamation, payment of wages, debts, costs and expenses,
attorneys' fees and other damages, whether known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he now has, may have,
or may have had against the Releasees, or any of them, from the beginning of the
world to this date, including without limitation claims arising out of or in any
way related to Xxxxx'x employment relationship, and/or the ending of that
relationship, with the Company. By entering into this Agreement, Xxxxx
acknowledges that he has been advised, and that he understands, that except as
is expressly provided herein, he is knowingly and voluntarily relinquishing any
and all rights he may have to recover damages from the Releasees, or any of
them, in his own lawsuit or any lawsuit instituted by another person, entity or
agency.
5. Other Releases. In consideration of the obligation of the Company
hereunder to Xxxxx, and in particular, the consideration paid pursuant to
paragraph 2 of this Agreement, Xxxxx on his behalf and on behalf of his heirs,
executors, administrators and assigns, hereby fully releases, discharges and
covenants not to xxx the Company, as well as its past, present and future
directors, officers, agents, attorneys, employees, representatives, affiliates,
subsidiaries, parent corporations, any related entities, successors and assigns,
for any claims he may have had in the absence of this Agreement for employment
discrimination based on age under the federal law known as the Age
Discrimination in Employment Act, 29 U.S.C. Section 621, et seq., and comparable
state laws, including without limitation M.G.L. c. 151B, Section 4 and M.G.L. c.
93, Section 103. By executing this Agreement, Xxxxx does not waive rights or
claims under these provisions that may arise after the date this Agreement is
executed.
6. Effective Date; Consideration. Prior to executing this Agreement, Xxxxx
has consulted with an attorney about the terms of this Agreement and was given a
period of at least
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21 days within which to consider this Agreement. The parties agree that any
changes made to the original draft Agreement given to Xxxxx on or about
September 27, 2004, as reflected in this Agreement, do not restart the running
of the 21 -day period. For a period of seven days following the date this
Agreement is executed by Xxxxx, Xxxxx may revoke the Agreement by
hand-delivering to the Company within that period of time a written statement to
that effect. This Agreement shall not become effective or enforceable until the
day after the seven-day revocation period has expired (the "Effective Date").
7. No Action Commenced. Xxxxx represents and warrants that he has not
commenced an action or proceeding against the Company or any of the other
Releasees in any court, or before any administrative agency, and agrees that he
will not do so in the future.
8. Available for Consultation. Xxxxx agrees to make himself available for
consultation with employees, representatives or agents of the Company on a
reasonable schedule and with reasonable advance notice; provided however, in no
event shall Xxxxx contact any such employee, representative or agent of the
Company without the prior written approval of any of the Chief Executive
Officer, the VP Human Resources or the General Counsel.
9. Nondisparagment. Neither Xxxxx nor the Company will make any statements
that are professionally or personally disparaging about, or adverse to, the
interests of the other (which in the case of the Company, includes the
Releasees), including but not limited to, any statements that disparage any
person, product, service, finances, financial condition, capability or any other
aspect of the other party. Neither Xxxxx nor the Company will engage in any
conduct which is intended to harm professionally or personally the reputation of
the other party. It shall not be a violation of tins paragraph if an employee of
the Company makes
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a disparaging remark about Xxxxx that was not an official statement of the
Company or was not made on behalf of the Company by a person authorized to make
such statements.
10. No Further Employment with the Company. Xxxxx agrees that he shall not
apply for employment or be eligible for employment by the Company.
11. Stock Options. If Xxxxx held any Company Stock Options, vesting in
such options will cease as of the Separation Date. Xxxxx'x right to exercise
stock options as to any vested shares is governed by the Company's Stock Option
Plans.
12. Expense Reimbursements. Within ten (10) days of this Agreement, Xxxxx
will submit his final documented expense reimbursement statement reflecting all
business expenses he incurred through the Separation Date, if any, for which he
seeks reimbursement. The Company will reimburse Xxxxx for such expenses pursuant
to its regular business practice.
13. Return of Company Property. Within ten (10) days of the date of this
Agreement, Xxxxx shall return to the Company all Company documents (and all
copies thereof) and other Company property which he has had in his possession at
any time, including, but not limited to, files, notes, drawings, records,
business plans and forecasts, financial information, specifications,
computer-recorded information, tangible property (excluding the laptop computer
issued to Xxxxx), credit cards, entry cards, identification badges and keys,
and any materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof).
14. Proprietary Information Obligations. Both during and after his
employment, Xxxxx acknowledges his continuing obligations under the Proprietary
Information and Inventions Agreement not to use or disclose any confidential or
proprietary information of the Company
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without prior written authorization from a duly authorized representative of the
Company. (A copy of Xxxxx'x Proprietary Information and Inventions Agreement is
attached as Exhibit A.)
15. Covenant Not to Compete. In exchange for the Settlement Payment and
other consideration under this Agreement to which Xxxxx would not otherwise be
entitled, Xxxxx agrees that for a period of one (1) year, he will not, without
the express written consent of the Company, enter, engage in, participate in, or
assist either as an individual on his own or as a partner, joint venturer,
employee, agent, consultant, officer, trustee, director, owner, part-owner,
shareholder, or in any other capacity, in the United States of America, directly
or indirectly, in any business activities that compete with the activities of
Scansoft. For purposes of this paragraph, "business activities that compete with
the activities of Scansoft" shall mean a business that develops, implements or
markets speech and imaging solutions. Xxxxx acknowledges that these restrictions
on competition are reasonable because of the Company's investment in goodwill,
its customer lists, and other proprietary information, and Xxxxx'x knowledge of
the Company's business and business plan. If any period of time or geographical
areas should be determined by a court to be unreasonable in any judicial
proceeding, then the period of time or geographical area shall be reduced to
such extent as may be deemed required so as to be reasonable and enforceable.
Nothing in this Agreement shall preclude Xxxxx from making passive investments
of not more than two percent (2%) of a class of securities of any business
enterprise registered under the Securities Exchange Act of 1934, as amended.
16. Non-solicitation. Xxxxx agrees that he will not, without the express
written consent of the Company, either in his individual capacity or on behalf
of or through any other entity, either directly or indirectly, hire, engage,
recruit or participate in any way in the hiring,
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engagement or recruitment of, or participate in any effort to hire or solicit,
any current or future employees of the Company or any subsidiary thereof for a
period of one (1) year from the Separation Date.
17. Legal Fees. ScanSoft will reimburse Xxxxx for his actual legal fees
incurred in connection with the preparation and negotiation of this Agreement,
as demonstrated by detailed invoices from his counsel, up to a maximum of one
thousand dollars ($1,000).
18. Employment References. All inquiries by potential future employers of
Xxxxx must be directed to the Company's Vice President of Human Resources. Upon
inquiry, the Company shall only state the following: Xxxxx'x last position and
dates of employment.
19. No Admissions. The parties agree and acknowledge that the
considerations exchanged herein do not constitute and shall not be construed as
constituting an admission of any sort by either party and shall not be used as
evidence of liability or wrongdoing on the part of any party to this Agreement.
20. Severability. The parties agree further that the provisions of this
Agreement will be deemed severable, and if any part of this Agreement shall be
judged invalid, such judgment shall not affect other parts thereof.
21. Complete Agreement. This Agreement is intended by the parties as a
final written expression of their agreement that supersedes any prior written
expression of their intent regarding the terms of this Agreement, and it sets
forth their entire agreement. The parties warrant that no representation,
promise or inducement has been offered or made to induce any party to enter into
this Agreement. The parties further represent that they are competent to execute
this Agreement and accept full responsibility for its terms. Xxxxx acknowledges
that he has been represented by counsel in connection with this Agreement and
that he has entered
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into it knowingly, voluntarily and on the advice of counsel. This Agreement may
not be amended or modified except by a writing signed by all of the parties to
this Agreement.
22. Governing Law. This Agreement shall be governed by and construed as a
contract in accordance with the laws of the Commonwealth of Massachusetts.
23. Multiple Counterparts. This Settlement Agreement and General Release
may be executed in counterpart or duplicate originals, each having the same
force and effect as an original.
24. Paragraph Headings. The paragraph headings throughout this Agreement
are for convenience and reference only and the words therein shall in no way be
held to explain, modify, amplify or aid in the interpretation, construction or
meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the undersigned parties, intending to be legally
bound, have caused this Agreement to be executed as a sealed instrument and
delivered at Peabody, Massachusetts, as of this 28th day of September, 2004.
XXXXX XXXXX SCANSOFT, INC.
/s/ Xxxxx Xxxxx /s/ Xxxx Xxxxxxxx
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A Duly Authorized Representative
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ACKNOWLEDGEMENT
I was given twenty-one (21) days within which to decide whether to sign
the attached Settlement Agreement and General Release. I voluntarily decided to
sign the Settlement Agreement and General Release before the end of twenty-one
(21) days so that I could conclude the Agreement and receive the initial
installment of the Settlement Payment provided for in the Agreement more
quickly. I have been given the opportunity to seek legal counsel, and I have
consulted with counsel in connection with my decision to waive the twenty-one
(21) day period.
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Dated As of September 28, 2004
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