SETTLEMENT AND GENERAL RELEASE AGREEMENT
THIS SETTLEMENT AND GENERAL RELEASE AGREEMENT (the "Agreement") is made and
entered into as of the 19th day of December, 1997 by and between Xxxxx X.
Cinnamon ("BAC" or the "Employee"), Xxxx Xxxxxx Cinnamon, each an individual
residing at 00 Xxxxxxxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxxxx 00000 ("LKC"; and
together with BAC, hereinafter sometimes referred to as the "Cinnamons"), and
Software Publishing Corporation Holdings, Inc. (formerly known as Allegro New
Media, Inc.), a Delaware corporation (the "Company") (collectively, the
"Parties"). The Parties acknowledge that the terms and conditions of this
Agreement have been voluntarily agreed to and that such terms are final and
binding.
WHEREAS, BAC has been a director of the Company and has been employed by
the Company as Chairman of the Board, Chief Executive Officer and President; and
WHEREAS, LKC has been Assistant Vice President and Vice President of
Marketing and as a director of the Company and has been employed by the Company
in various capacities; and
WHEREAS, the Company desires to accept BAC's and LKC's resignation as
employees, officers and directors; and
WHEREAS, the Parties now desire to settle fully and finally claims BAC
and/or LKC may have against the Company and that the Company may have against
BAC and/or LKC and others released herein, including, but not limited to, any
matters arising out of their respective employment with the Company and their
separation therefrom.
NOW, THEREFORE, in consideration of the premises and mutual promises herein
contained, it is agreed as follows:
1. Non-Admission of Liability or Wrongdoing.
This Agreement shall not be construed in any way as an admission by the
Parties that any of them have acted wrongfully with respect to each other or any
other person or that any one of them has any rights whatsoever against the
others.
2. Resignation.
BAC hereby resigns as an officer (Chairman of the Board, President and
Chief Executive Officer), employee and director of the Company. LKC hereby
resigns as a director and as an officer and employee of the Company. The
Cinnamons agree to return to the Company all assets, equipment or other items
which are owned by the Company not later than one (1) month after the date of
this Agreement, except that BAC may retain his desk and chairs from his
Fairfield, New Jersey office and his laptop computer, fax machine and printer
from his San Jose, California office. If reasonably acceptable to the Chief
Operating Officer of the Company, BAC shall be permitted to
remove these items from the Company's premises after normal business hours
provided he is escorted by an authorized representative of the Company.
Otherwise, the Company shall deliver to BAC these items and his personal
belongings located on the Company's premises within one (1) month after the date
hereof. From and after the date hereof, BAC shall make himself available to the
Company at reasonable times and upon reasonable notice to assist and consult
with the Company with respect to marketing, sales, product development and other
activities of the Company which BAC was involved in during his employment by the
Company. Until January 31, 1998, BAC shall not be required to devote more than
five (5) hours per week in this regard, and thereafter through June 30, 1998
shall not be required to devote more than one (1) hour per week in this regard,
and from and after July 1, 1998 BAC shall have no further obligation in this
regard.
3. Consideration to Cinnamon.
(a) On the eighth day after the execution and delivery of this Agreement:
(i) the Company shall pay to BAC an amount equal to $6,000 in respect of
accrued vacation;
(ii) the Company shall pay to BAC his unpaid reasonable expenses incurred
in the normal course of the fulfillment of his duties as an officer
and director of the Company, including but not limited to reasonable
travel and business expenses incurred through the date of this agree-
ment, upon submission of customary documentation relating thereto. It
is expressly acknowledged that BAC will continue to make his best
efforts to minimize these expenses;
(iii)the Company shall pay to BAC an amount equal to $50,000 in a cashiers
or certified check;
(iv) in the event that the Company has not actually paid BAC's reasonable
credit card xxxx of approximately $13,000, as previously purported to
have been wire transferred by the Company pursuant to BAC's instruc-
tions and acknowledged by BAC's credit card issuer, the Company shall
do so within fifteen (15) days after BAC requests such payment;
(b) the Company shall pay to BAC the sum of $10,000 on the 15th day of each
month for twenty (20) months after the date hereof pursuant to the Company's
normal payroll practices;
(c) the Company shall continue to make all payments with respect to health
insurance for Cinnamons' benefit comparable to that coverage made available to
the Company's executive officers through the earlier of (1) December 31, 1999 or
(2) such time as BAC is employed or retained on a substantially full-time basis;
(d) the Company shall reimburse BAC for his moving expenses, up to a
maximum of $15,000 upon submission of customary documentation relating thereto;
(e) the Company shall register for resale by BAC 865,000 shares of common
stock, par value $.001 per share (the "Common Stock"), of the Company in the
Registration Statement on Form S-3 currently proposed to be filed by the
Company. The Cinnamons agree that they will sell their shares of Common Stock of
the Company only in the following manner: (a) in accordance with all applicable
federal and state securities laws; (b) the Cinnamons will not sell any shares of
Common Stock until the earlier of (i) six (6) months after the date of this
Agreement or (ii) upon the
closing price per share of Common Stock on Nasdaq being less than $.60 on
any trading day; (c) the Cinnamons shall not sell during any one week an amount
in excess of an aggregate of more than 30% of the average daily sales volume of
the Common Stock on Nasdaq over the preceding two weeks, without the consent of
a market maker in the Company's Common Stock to be named by the Company which
will purchase or effectuate any such purchase, in the event such a consent is
hereunder required; and (d) prior to selling any shares of Common Stock, the
Cinnamons agree to first contact the Company's President or Chief Operating
Officer, and to comply with the Company's Xxxxxxx Xxxxxxx Policy so long as they
are subject thereto;
(f) the Company enter into a license agreement with BAC in the form
attached hereto as Exhibit A (the "License Agreement"); and
(g) all consideration set forth in this Section 2 shall be paid to the
Cinnamons' or their heirs, regardless of their ability to provide services in
any given period, and regardless of the Cinnamons' health, death or disability
status.
(h) subject to the terms of the Company's Long-Term Incentive Plan, all
incentive stock options granted to the Cinnamons by the Company shall be exer-
cisable for a period of 12 months from and after the date hereof to the extent
otherwise exercisable, and thereafter shall terminate.
4. Surrender of Series B Voting Preferred Stock and the Proxy with Respect
to Shares of Common Stock.
Upon the execution and delivery of this Agreement:
(a) BAC hereby surrenders to the Company for cancellation stock certificate
no. B 1 representing 60,520 shares of Class B Voting Preferred Stock Series A of
the Company, and all right, title and interest with respect to any such shares
of Class B Voting Preferred Stock, Series A; and
(b) BAC and LKC hereby appoint the President of the Company as attorney and
proxy, with full power of substitution, in the name and place of BAC, to vote as
proxy all of the shares of Common Stock of the Company owned beneficially or of
record by either of them, in any capacity, now or at any time hereafter, in such
manner as may be determined by the President of the Company in his sole
discretion. The Cinnamons hereby acknowledge that the Company would not agree to
this Agreement in the absence of this proxy, that this proxy is a requirement
for the Company to enter into this Agreement and that this proxy is and shall at
all times be irrevocable and coupled with an interest. The Cinnamons further
acknowledge that this proxy shall remain in effect for ten (10) years, except to
the extent that the shares of Common Stock subject to this proxy are no longer
owned beneficially or of record by either of them or any member of their family
or any affiliate thereof.
5. Complete Release.
(a) As a material inducement to the Company to enter into this Agreement,
the Cinnamons hereby waive, release and discharge the Company, its subsidiaries
and their respective officers, directors, stockholders, employees, agents,
attorneys, subsidiaries, servants, successors, insurers, affiliates and their
successors and assigns, from any and all manner of action, claims, liens,
demands, liabilities, causes of action, charges, complaints, suits (judicial,
administrative or otherwise), damages, debts, demands, obligations of any other
nature, past or present, known or unknown, whether in law or in equity, whether
founded upon contract (expressed or implied), tort (including, but not limited
to, defamation), statute or regulation (State, Federal or local), common law
and/or any other theory or basis, from the beginning of the world to the date
hereof, including, but not limited to, any claim that either Cinnamon has
asserted, now asserts or could have asserted, but not including any claim for
the enforcement of this Agreement. This includes, but is not limited to, claims
arising under Federal, State or local laws prohibiting employment or other
discrimination or claims growing out of any legal restrictions on the Company's
rights to terminate its employees, including without limitation any claim
arising under Title VII of the United States Code or under any age or gender
discrimination law. Notwithstanding anything else contained in this Agreement,
this Agreement is not intended to release any rights either Cinnamon has with
respect to participation in company sponsored stock option plans, or any rights
either Cinnamon has to seek and obtain indemnification and/or defense from the
Company in the event that any claim is asserted against either Cinnamon by a
third party.
(b) As a material inducement to the Cinnamons to enter into this Agreement,
the Company and its subsidiaries hereby irrevocably and unconditionally waives,
releases and discharges each Cinnamon, their agents and attorneys, successors
and assigns, from any and all manner of action, claims, liens, demands,
liabilities, causes of action, charges, complaints, suits (judicial,
administrative or otherwise), damages, debts, demands, obligations of any other
nature, past or present, known or unknown to the Company, whether in law or in
equity, whether founded upon contract (expressed or implied), tort (including,
but not limited to, defamation), statute or regulation (State, Federal or
local), common law and/or any other theory or basis, from the beginning of the
world to the date hereof, arising out of their employment and positions as
officers and/or directors, and the resignation therefrom or the termination
thereof, including, but not limited to, any claim that the Company has asserted,
now asserts or could have asserted, but not including any (i) claims for the
enforcement of this Agreement or the License Agreement and (ii) action, claims,
liens, demands, liabilities, causes of action, charges, complaints, suits
(judicial, administrative or otherwise), damages, debts, demands or obligations
of any other nature which directly arise out of or directly relate to any
willful misconduct, gross negligence or fraud committed by either of the
Cinnamons, or any violation by either of the Cinnamons of Section 13(d) or 16 of
the Securities Exchange Act of 1934, as amended, unless such actions were taken
in good faith with a reasonable belief that such actions were in the best
interests of the Company.
(c) It is understood and agreed by the Parties that the facts and
respective assumptions of law in contemplation of which this Agreement is made
may hereafter prove to be other than or different from those facts and
assumptions now known, made or believed by them to be true. The Parties
expressly accept and assume the risk of the facts and assumptions to be so
different, and agree that
all terms of this agreement shall be in all respects effective and not
subject to termination or reclusion by any such difference in facts or
assumptions of law.
6. Acknowledgments.
Each Cinnamon acknowledges that:
(a) He or she has had a full twenty-one (21) days within which to consider
this Agreement before executing it;
(b) He or she has carefully read and fully understands all of the
provisions of this Agreement;
(c) He or she is, through this Agreement, releasing the Company and its
affiliates from any and all claims he or she may have against any of them and
being released from certain potential liabilities by the Company;
(d) He or she knowingly and voluntarily agrees to all of the terms set
forth in this Agreement;
(e) He or she knowingly and voluntarily intends to be legally bound by the
same;
(f) He or she was advised and hereby is advised in writing to consider the
terms of this Agreement and consult with an attorney of his or her choice prior
to executing this Agreement;
(g) He or she has a full seven (7) days following the execution of this
Agreement to revoke this Agreement and has been and hereby is advised in writing
that this Agreement shall not become effective or enforceable until the
revocation period has expired; and
(h) He or she understands that rights or claims under the Age
Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.) that may arise
after the date of this Agreement is executed are not waived.
7. Non-Disclosure.
Neither Cinnamon shall disclose or deliver to any other party any trade
secrets or confidential or proprietary information gained through employment
with the Company. This includes, but is not limited to, proprietary
technologies, patents, patent applications, software programs and tools,
financial information, business plans, systems, files, algorithms, file
structures, customer lists, supplier lists, internal program structures,
options, documentation and data developed by the Company or any subsidiary or
division thereof. Each Cinnamon agrees that any breach of this Section 7 may
cause the Company substantial and irreparable damages that would not be
quantifiable and therefore, in the event of any such breach, in addition to
other remedies that may be available, the Company shall have the right to seek
specific performance and other injunctive and equitable relief.
8. Non-Disparagement.
The Parties mutually agree not to publish, communicate or disseminate any
negative information or any information regarding this Agreement to the public,
the media, suppliers, vendors and other industry participants, except that they
may disclose its contents to their respective financial advisors, accountants
and attorneys and as required by law.
9. No Representations.
The Parties represent that in signing this Agreement, they do not rely on
nor have they relied on any representation or statement not specifically set
forth in this Agreement by any of the releasees or by any of the releasees'
agents, representatives or attorneys with regard to the subject matter, basis or
effect of this Agreement or otherwise.
10. Successors.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective administrators, representatives, executors,
successors and assigns, by reason of merger, consolidation, and/or purchase or
acquisition of substantially all of the Company's assets or otherwise.
11. Governing Law.
This agreement is made and entered into in this State of New York, and
shall in all respects be interpreted, enforced and governed under the laws of
the State of New York.
12. Arbitration.
(a) Any dispute arising between the Parties, including but not limited to
those pertaining to the formation, validity, interpretation, effect or alleged
breach of this Agreement ("Arbitrable Dispute") will be submitted to arbitration
in New York, New York, before an experienced employment arbitrator and selected
in accordance with the rules of the American Arbitration Association labor
tribunal. Each party shall pay the fees of their respective attorneys, the
expenses of their witnesses and any other expenses connected with presenting
their claim. Other costs of the arbitration, including the fees of the
arbitrator, cost of any record or transcript of the arbitration, administrative
fees, and other fees and costs shall be borne equally by the Parties.
(b) Should any party to this Agreement hereafter institute any legal action
or administrative proceedings against another party with respect to any claim
waived by this Agreement or pursue any other Arbitrable Dispute by any method
other than said arbitration, the responding party shall be entitled to recover
from the initiating party all damages, costs, expenses and attorneys' fees
incurred as a result of such action.
13. Proper Construction.
(a) The language of all parts of this Agreement shall in all cases be
construed as a whole according to its fair meaning, and not strictly for or
against any of the parties;
(b) As used in this Agreement, the term "or" shall be deemed to include the
term "and/or" and the singular or plural number shall be deemed to include the
other whenever the context so indicates or requires;
(c) The paragraph headings used in this Agreement are intended solely for
convenience of reference and shall not in any manner amplify, limit, modify or
otherwise be used in the interpretation of any of the provisions hereof.
14. Severability.
Should any of the provisions of this Agreement be declared or be determined
to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal or invalid part, term
or provision shall be deemed not to be a part of this Agreement.
15. Entire Agreement.
This Agreement sets forth the entire agreement between the Parties, and
fully supersedes any and all prior agreements or understandings between the
Parties pertaining to the subject matter hereof. All other contracts, agreements
or understandings between the Parties, other than the License Agreement, are
null and void. Without limiting the foregoing, any and all employment
agreements, including all amendment and/or addendums thereto, shall be
terminated and of no further force or effect, whether or not such agreements
state that the same, or portions thereof, are to survive termination.
16. Third Party Beneficiaries.
Software Publishing Corporation, Serif, Inc. and Serif (Europe) Limited
shall be third party beneficiaries of this Agreement.
17. Non-Solicitation and Non-Interference.
For a period of twelve (12) months after the date of this Agreement,
neither BAC nor LKC shall:
(a) for either of the Cinnamons' own account or for the account of any
other person or entity, directly or indirectly interfere with the Company's or
any of its affiliates' or subsidiaries' relationship with any of its suppliers,
customers, accounts, brokers, representatives or agents; or
(b) employ or otherwise engage, or solicit, entice or induce on behalf of
either of the Cinnamons' or any other person or entity, directly or indirectly,
the services, retention or
employment of any of Xxxxxxx Xxxxxx, Xxxxxx Xxxxxx or Xxxx Xxxx or any
person or entity which employs, retains or otherwise in any way utilizes the
services of any such person.
18. Counterparts.
This Agreement may be executed in counterparts. Each counterpart shall be
deemed an original, and when taken together with the other signed counterpart,
shall constitute one fully executed Agreement.
19. Further Assurances.
From and after the date hereof, the parties hereto shall take all actions,
including the execution and delivery of all documents, necessary to effectuate
the terms hereof.
20. Survival.
All obligations of the Parties as set forth herein shall survive the
execution and delivery hereof.
21. Indemnification.
The Cinnamons will be indemnified as provided in the Company's by-laws in
effect on December 15, 1997, from and after the date of this Agreement.
PLEASE READ CAREFULLY. THIS SETTLEMENT AND GENERAL RELEASE AGREEMENT
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
Dated: New York, New York Dated: New York, New York
December 19, 1997 December 19, 1997
SOFTWARE PUBLISHING CORPORATION
HOLDINGS, INC.
By: /s/Xxxx X. Xxxxxxxxx /s/ Xxxxx X. Cinnamon
Name: Xxxx X. Xxxxxxxxx Xxxxx Xxxxxxxx
Title: Vice President and Chief Operating
Officer
/s/ Xxxx X. Cinnamon
Xxxx Xxxxxx Cinnamon
