EXHIBIT 10.2
Separation Agreement and Release
This Separation Agreement and Release entered into as of the 12th day of May,
2000, is made by and between Inso Corporation ("the Company") and Xxxxx X. Xxxx
("the Executive"), and constitutes the parties' agreement with respect to the
termination of the Executive's employment.
1. The Executive voluntarily resigns as an officer of the Company and all of
the Company's subsidiaries effective May 12, 2000 ("the Resignation Date")
and as an employee with the Company (apart from holding an office as
aforesaid) on November 12, 2001 ("the Termination Date"). Executive shall
execute and return to the Company the resignation letter attached hereto as
Exhibit A.
2. (a) During the period between the Resignation Date and the Termination
Date ("the Interim Period"), Executive or his estate shall continue to be
paid his base salary as in effect on the Resignation Date (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. 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 Board of Directors
during the Interim Period.
(b) At Executive's option, Executive may elect in writing to receive the
salary continuation set forth in Paragraph 2(a) above in an accelerated
lump sum payment, provided that such lump sum payment shall be discounted
to its present value, at a discount rate to be determined by the Company's
investment bankers. However, if the election is made six months or less
prior to the Termination Date, then the discount rate shall be deemed to be
the six (6) month US Treasury xxxx rate on the election date plus one
hundred and fifty (150) basis points. In the event Executive elects this
lump sum payment option, Executive's Termination Date shall be the date of
such election for purposes of this Agreement (including without limitation
Paragraphs 3, 4, 6 and Attachment A to this Agreement).
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3. During the Interim Period 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 the Resignation Date regardless of the
intervening death of Executive; provided however, such participation shall
cease on the earlier of: (a) the Termination Date, and (b) the last day of
the month in which he may be covered by any plan, program or arrangement,
sponsored by another employer offering similar coverage.
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4. On the Termination Date, 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 as described in
Attachment A: "Executive Separation Agreement, Summary of Benefits
Continuation". Executive's entitlement to and eligibility for further
vacation, sick leave and other paid time off shall cease on the Resignation
Date. The Executive shall be entitled to four weeks of earned but unused
vacation, which shall be paid to him within 15 days of the execution of
this Agreement.
6. Previously granted, but unexercised stock options held by Executive for the
purchase of stock of the Company shall be exercisable pursuant to the terms
of the Company's stock option plans, for a period of 90 days after the
Termination Date or 180 days following the death of Executive, as the case
may be. All previously granted, but unexercised stock options and
restricted shares held by the Executive will continue to vest over the
Interim Period and will become fully vested upon a change in control of the
Company as outlined in the Company's stock option plans.
7. Intentionally omitted.
8. Anything contained in paragraphs 14 and 15 notwithstanding, the Company and
Executive shall continue to be bound by the Non-Disclosure Agreement
executed by Executive on March 3, 1994, which Agreement is incorporated
herein by reference.
9. The Company will provide a $10,000 cash payment directly to the Executive
in lieu of Executive Outplacement assistance.
10. During the Interim Period, 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
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. On December 16, 1997, the Company lent the Executive $199,998 (the
"Principal Amount") pursuant to a Secured Promissory Note (the "Share
Loan"), which Loan Amount the Executive used to purchased 19,512 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
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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 (on an after-tax basis taking
into account the net present value of any reasonably realizable tax
benefits resulting solely from the disposition of the Purchased Shares) an
amount equal to the difference between (a) the Principal Amount plus
accrued interest, whether paid or unpaid; and (b) the product of the
closing price per share of the Company's common stock on the Maturity Date
and 19,512. "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) 19,512.
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 upon request, 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 the preceding, Executive shall not be required to return to
the Company the laptop computer and peripherals purchased by the Company
for his use.
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 July
31, 2000. 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, except as required
by law. Even after a copy of this Agreement is included as an exhibit to
the Company's Form 10-Q, the parties agree to keep completely and strictly
confidential any settlement negotiations that occurred in connection with
this Agreement.
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15. 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 hereafter 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 Title VII the Civil Rights Act of 1964, 42
U.S.C. (S) 2000e et seq., the Age Disrimination in employment Act, 29
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U.S.C. (S) 621 et seq., the Family and Medial Leave Act, 29 U.S.C. (S) 2601
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et seq., the Employee retirement Income Security Act, 29 U.S.C. (S) et
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seq., the Massachusetts Civil Rights Act, M.G.L.c. 12 (S) 11H and 11I, the
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Massachusetts Fair Employment Practices Act, M.G.L.c. 151b, (S) 1 et. seq.,
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the Americans with Disabilities Act, 29 U.S.C. (S) 12101 et. seq., and the
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Massachusetts Equal Rights Act, c.93, (S) 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, 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. Intentionally omitted.
18. The Executive herein represents that he has not filed any complaints,
charges or claims for release against the Released Parties with any local,
state, or federal court or administrative agency which currently are
outstanding.
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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. The Employee acknowledges that he has been given twenty-one (21) days to
consider this Agreement and has been advised to consult with an attorney
before signing.
21. This Agreement shall become effective on the eighth (8/th/) day following
the date on which it is signed by the Employee. The Employee may revoke
this Agreement in the seven-day period following the date on which the
Employee 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. Employee acknowledges that:
. He was advised to consult with an attorney to review this Agreement
prior to signing it, 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
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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.
25. This Agreement is to be governed and will be construed under and in
accordance with the laws of the Commonwealth of Massachusetts.
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 and agree that each of the Management Retention
Agreement by and between Inso and the Executive, and the Restricted Stock
Award
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Agreement dated February 15, 2000 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 The Executive
By: /s/ Xxxxxxxx Xxxxxx /s/ Xxxxx X. Xxxx
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Xxxxxxxx Xxxxxx Xxxxx X. Xxxx
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Entered into as of the 12th day of May, 2000
Inso Corporation
00 Xx. Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Chairman of the Board of Directors of Inso Corporation
Dear Xxxxx:
Effective May 12, 2000, I hereby resign my position as Vice President,
Business Development of Inso Corporation, and resign from any position I hold
as an officer or director of any subsidiaries and affiliates of Inso
Corporation, pursuant to the Separation Agreement and Release entered into as
of the 12th day of May, 2000.
Sincerely,
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
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