SEVERANCE AGREEMENT
The parties to this agreement are eSoft, Inc. ("eSoft") and Xxxxx
Xxxxxx ("Employee"). This document describes the agreements of eSoft and
Employee concerning the resignation of Employee as officer and director of eSoft
and termination of his employment with eSoft. This agreement, and the payments
and other arrangements described below, give valuable consideration to both
eSoft and Employee.
1. EMPLOYMENT RELATIONSHIP. eSoft and Employee have agreed that Employee
has resigned as an officer and director of eSoft effective November 7, 1997, and
termination of his employment as provided herein.
2. PAYMENTS AND OTHER ARRANGEMENTS. eSoft has agreed to make the following
payments to Employee:
a. The amount of $10,000 per month as continued salary through March
7, 1998, payable in equal semi-monthly installments, in
accordance with eSoft's usual payroll practices, with the payment
for the final period through March 7 payable on that date.
b. Promptly after execution of this agreement eSoft shall pay to
Employee, in lieu of accrued vacation, the amount of $1,875.
eSoft also agrees to the following terms:
c. Employee shall be entitled to continue to participate under
eSoft's health insurance program with coverage for his family,
and with the premiums paid by eSoft through the month of March
1998. Thereafter, the Employee may obtain, at Employee's cost,
such health insurance as is permitted to a former employee under
COBRA or the Colorado Health Care Coverage Act and/or the
Company's health insurance program.
d. The employee is entitled to purchase, and has agreed to purchase,
60,000 shares of eSoft Common Stock at a price of $.50 per share,
pursuant to an incentive stock option granted to Employee by
eSoft. The purchase shall be made after eSoft is merged into a
newly created Delaware corporation for the purpose of
reincorporating eSoft under the Delaware Business Corporation
Law, which is planned to occur before January 31, 1998. Employee
shall have 15 business days after receipt of written notice from
eSoft of the effectiveness of the merger to purchase said 60,000
shares. In payment for such shares Employee will pay to the
Company $600 in cash or check and the Company shall accept a
non-interest bearing, non-recourse promissory note,
payable to the Company and due on or before September 5, 1999.
The shares of stock purchased by the Employee shall be held by
eSoft as security for payment of the note.
e. The Employee shall be promptly reimbursed for all reasonable
out-of-pocket expenses incurred in connection with the
performance of his duties upon presentation to eSoft of an
itemized accounting of the expenses, including reasonable
supporting data.
3. PROPERTY. eSoft and the Employee each hereby acknowledge that neither
has possession of any tangible property which belongs to or is the property of
the other party.
4. OTHER AGREEMENTS. This agreement, together with a Mutual Release
entered into among eSoft, and three consultants to eSoft with the Employee of
even date herewith constitutes the entire agreement concerning the termination
of Employee's employment by eSoft, except that the Employment Agreement dated
September 2, 1997, between eSoft and the Employee shall remain in effect with
respect to the provisions of Sections 8 and 9 of said Employment Agreement.
5. AMENDMENT. This agreement can be modified only by an agreement in
writing signed by both parties.
6. SUCCESSORS. This agreement benefits and binds the parties' successors.
7. COLORADO LAW. This agreement will be interpreted in accordance with the
laws of the State of Colorado.
8. ENFORCEABILITY. If any portion of this agreement is unenforceable, the
remaining portions of the agreement will remain enforceable.
eSOFT, INC.
By:
--------------------------------- ------------------------------------
Xxxxx Xxxxxx Date Xxxxxx X. Xxxxxx, Chairman Date
and Chief Executive Officer
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MUTUAL RELEASE
The parties to this agreement are eSoft, Inc. ("eSoft"), W. Xxxxxxxx
Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx Xxxxx, consultants to eSoft, (together with
eSoft, the "eSoft Parties") and Xxxxx Xxxxxx ("Employee"). The Employee and
eSoft have entered into a Severance Agreement dated this date (the "Severance
Agreement) that describes the agreements of eSoft and Employee concerning the
resignation of Employee as officer and director of eSoft and termination of his
employment with eSoft. This document sets forth the mutual releases between the
eSoft Parties and the Employee. This agreement, the payments and other
arrangements made pursuant to the Severance Agreement, and the mutual releases
contained herein give valuable consideration to both the eSoft Parties and
Employee.
9. RELEASE BY EMPLOYEE OF ESOFT PARTIES. In consideration of the premises,
the payments by eSoft to the Employee and the mutual agreements herein, Employee
releases and waives all claims against any of the eSoft Parties, and any
officers or directors of eSoft and any affiliates of the eSoft Parties for loss,
damage or injury (collectively referred to as "Claims") arising from or in
connection with the Employee's employment by eSoft, including the following:
o defamation based on statements made by directors, officers or
agents of eSoft or others;
o breach of an express or implied employment contract;
o compensation or reimbursement of Employee;
o unfair employment practices; and
o any act or omission by or on behalf of any eSoft Party.
The Claims released and waived by Employee include:
o those arising before the date of this agreement;
o those that are presently known, suspected, unknown or unsuspected;
o those for reinstatement or future employment;
o those for actual, consequential, punitive or special damages;
o those for attorney's fees, costs, experts' fees and other expenses
of investigating, litigating or settling Claims; and
o those against the eSoft Parties and/or eSoft's subsidiaries,
employees, officers, directors, agents and contractors, and
any affiliate of any eSoft Party.
Nothing herein is intended to release any Claims that may hereafter arise by
reason of Employee's status as a shareholder of eSoft, or by reason of any
breach of this Agreement or the Severance Agreement.
10. RELEASE BY ESOFT PARTIES OF THE EMPLOYEE. In consideration of the
agreements by the Employee herein, each of the eSoft Parties hereby releases the
Employee of any and all claims for loss, damage or injury ("Claims") or
obligations whatsoever arising out of or in any way connected with the
Employee's employment and any related activities, including his resignation and
the termination of the Employment Agreement dated September 2, 1997, between
eSoft and Employee
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(the "Employment Agreement"), and including any claim of the kind or nature
described in Section 3 above, provided, however, that the Employee's obligations
under Sections 8 and 9 of the Employment Agreement, shall continue as provided
therein.
11. AGREEMENT NOT TO XXX. The eSoft Parties and the Employee each waive
any right to file suit for any Claims. The eSoft Parties will not xxx Employee
and Employee will not xxx the eSoft Parties for any Claims. Neither Employee nor
any of the eSoft Parties will initiate or proceed with any other action or
proceeding against each other that relates to any action or condition that could
give rise to Claims.
12. NO ADMISSION OF WRONG DOING. Neither the eSoft Parties nor the
Employee admit any wrong doing or liability of any kind and have entered into
this agreement voluntarily to establish the agreed rights of the parties with
respect to Employee's resignation and termination of the Employment Agreement
between eSoft and the Employee. Payments and other arrangements by eSoft to the
Employee hereunder compromise and settle any Claims by Employee against the
eSoft Parties.
13. COMMENTS. Employee will not criticize, disparage or ridicule eSoft or
its business, products or employment practices. The eSoft Parties will not
criticize, disparage or ridicule Employee with respect to his business or
leadership abilities, skills or the performance of his duties to eSoft. The
eSoft Parties and Employee represent that they have made no statements that
criticize, disparage or ridicule the other Party.
14. OTHER AGREEMENTS. This Agreement, together with the Severance
Agreement, constitutes the entire agreement concerning the termination of
Employee's employment by eSoft, except that the Employment Agreement dated
September 2, 1997, between eSoft and the Employee shall remain in effect with
respect to the provisions of Sections 8 and 9 of said Employment Agreement.
15. AMENDMENT. This agreement can be modified only by an agreement in
writing signed by both parties.
16. SUCCESSORS. This agreement benefits and binds the parties' successors.
17. COLORADO LAW. This agreement will be interpreted in accordance with
the laws of the State of Colorado.
18. ENFORCEABILITY. If any portion of this agreement is unenforceable, the
remaining portions of the agreement will remain enforceable.
EMPLOYEE UNDERSTANDS THAT THIS AGREEMENT IS A FINAL AND BINDING WAIVER OF
ANY CLAIMS AGAINST THE eSOFT PARTIES, INCLUDING CLAIMS FOR AGE
DISCRIMINATION UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT AND CLAIMS
FOR SEX, RACE OR OTHER DISCRIMINATION UNDER TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964.
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THE ONLY PROMISES MADE TO CAUSE EMPLOYEE TO SIGN THIS
AGREEMENT ARE THOSE STATED IN THE SEVERANCE AGREEMENT
AND IN THIS AGREEMENT.
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN TOLD BY THE
eSOFT PARTIES TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
THIS AGREEMENT.
EMPLOYEE REPRESENTS THAT THIS AGREEMENT HAS BEEN FULLY
EXPLAINED BY EMPLOYEE'S ATTORNEYS, OR THAT EMPLOYEE HAS
WAIVED CONSULTATION WITH AN ATTORNEY, CONTRARY TO eSOFT'S
RECOMMENDATION.
EMPLOYEE REPRESENTS THAT EMPLOYEE WAS GIVEN THIS AGREEMENT AND ADVISED
THAT HE COULD CONSIDER THE AGREEMENT FOR AT LEAST TWENTY-ONE (21) DAYS
BEFORE SIGNING IT IF HE SO DESIRES. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE
HAS THE RIGHT TO REVOKE THIS AGREEMENT FOR SEVEN (7) DAYS AFTER SIGNING
IT. THIS AGREEMENT WILL NOT BE EFFECTIVE UNTIL THAT TIME HAS PASSED.
EMPLOYEE AGREES THAT THE PAYMENTS REFERENCED ABOVE WILL BE MADE AFTER THE
EXPIRATION OF THE SEVEN DAY REVOCATION PERIOD.
eSOFT, INC.
By:
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Xxxxx Xxxxxx Date Xxxxxx X. Xxxxxx, Chairman, Date
and Chief Executive Officer
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Xxxx X. Xxxxxxxx Date
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W. Xxxxxxxx Xxxxxxxx Date
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Xxxxx Xxxxx Date
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