Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL
RELEASE
This
SEPARATION AGREEMENT AND GENERAL RELEASE
(“Agreement”) is made and entered into by SMART ONLINE,
INC. (the “Company”) and David E. Colburn
(“Employee”). Throughout the remainder of the
Agreement, the Company and Employee may be collectively referred to
as “the parties.”
The
Company currently employs Employee as President and Chief Executive
Officer. The parties desire to conclude the employment
relationship, effective December 9, 2008 on mutually agreeable
terms and to avoid all litigation relating to the employment
relationship and its termination, and Employee desires certain
benefits. Accordingly, the parties have agreed upon the terms
described herein
Employee represents that he has carefully read
the entire Agreement, understands its consequences, and voluntarily
enters into it.
In
consideration of the above and the mutual promises and good and
valuable consideration set forth below, the sufficiency of which is
acknowledged by the parties, Employee and the Company agree as
follows:
1. SEPARATION .
Employee’s employment by the
Company will terminate, effective December 9, 2008
(“Termination Date”). Employee also resigns as a member
of the board of directors of the Company effective
December 10, 2008.
2. BENEFITS .
The Company will pay Employee his
current salary through and including March 31, 2009 (less any
applicable taxes and withholdings). This amount shall be paid in
eight substantially equal installments, in accordance with the
Company’s payroll practices and schedule applicable to
Employee immediately prior to the termination of his employment,
beginning with the first regularly scheduled payday after the
revocation period set forth in Paragraph 7 below expires. In
addition, the Company shall pay Employee’s premium payments
under the Consolidated Budget Reconciliation Act
(“COBRA”) to continue his and his family’s health
insurance coverage through and including March 31, 2009. Any
obligation for the Company to make payments for COBRA under this
paragraph 2 shall immediately cease when Employee is employed by an
entity providing health insurance coverage.
The
benefits afforded under this Agreement are in lieu of any other
compensation or benefits to which Employee otherwise might be
entitled, including without limitation under the Employment
Agreement effective December 12, 2007 by and between Employee
and the Company (the “Employment
Agreement”).
3. RELEASE .
In consideration of the benefits
conferred by this Agreement, EMPLOYEE (ON BEHALF OF HIMSELF AND
HIS ASSIGNS, HEIRS, AND OTHER REPRESENTATIVES) RELEASES THE
COMPANY, ITS PREDECESSORS, SUCCESSORS, AND ASSIGNS AND ITS AND/OR
THEIR PAST, PRESENT, AND FUTURE OWNERS, PARENTS, SUBSIDIARIES,
AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS,
EMPLOYEES, EMPLOYEE BENEFIT PLANS (TOGETHER WITH ALL PLAN
ADMINISTRATORS, TRUSTEES, FIDUCIARIES, AND INSURERS), AND AGENTS
(“RELEASEES”) FROM ALL CLAIMS AND WAIVES
ALL RIGHTS, KNOWN OR UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE
RELATING TO HIS EMPLOYMENT WITH THE COMPANY, ITS PREDECESSORS,
SUBSIDIARIES, OR AFFILIATES OR HIS SEPARATION THEREFROM arising
before the execution of this Agreement, including, but not
limited to , claims: (i) for discrimination, harassment,
or retaliation arising under federal, state, or local laws
prohibiting age (including, but not limited to, claims under the
Age Discrimination in Employment Act of 1967 (ADEA), as amended,
and the Older Workers Benefit Protection Act of 1990 (OWBPA)), sex,
national origin, race, religion, disability, veteran status, or
other protected class discrimination, harassment, or retaliation
for protected activity; (ii) for compensation and benefits
(including, but not limited to, claims under the Employee
Retirement Income Security Act of 1974 (ERISA), as amended, the
Fair Labor Standards Act of 1938 (FLSA), as amended, and similar
federal, state, and local laws); (iii) arising under federal,
state, or local law of any nature whatsoever (including, but not
limited to, constitutional, statutory, tort, express or implied
contract, or other common law); and (iv) for attorneys’
fees. The release of claims set forth in this paragraph does not
apply to claims for workers’ compensation benefits or
unemployment benefits filed with the applicable state
agencies.
4. COVENANT NOT TO SUE .
Employee will not sue Releasees on
any matters relating to his employment arising before the execution
of this Agreement, including, but not limited to, claims under the
ADEA, or join as a party with others who may sue Releasees on any
such claims; provided, however, this paragraph will not bar a
challenge under the OWBPA to the enforceability of the waiver and
release of ADEA claims set forth in this Agreement or claims for
workers’ compensation or unemployment benefits referenced in
paragraph 3 above, and this paragraph will not apply when
prohibited by law. If Employee does not abide by thi
