CFO Settlement Agreement

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 David Gerth ("Gerth" 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. Gerth's 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, Gerth 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 Gerth, the Company shall pay Gerth 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. Gerth 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. Gerth acknowledges and agrees that he would not otherwise be entitled to receive the Settlement Payment. The Company shall also pay Gerth 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, Gerth 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 Gerth 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 Gerth 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 Gerth with the Settlement Payment, Gerth, 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 Gerth's employment relationship, and/or the ending of that relationship, with the Company. By entering into this Agreement, Gerth 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 Gerth, and in particular, the consideration paid pursuant to paragraph 2 of this Agreement, Gerth on his behalf and on behalf of his heirs, executors, administrators and assigns, hereby fully releases, discharges and covenants not to sue 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 absen ...