Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter “AGREEMENT”) is made
and entered into by and between David L. Morash (hereinafter “MORASH”) and
Axesstel, Inc. (hereinafter “EMPLOYER”), and inures to the benefit of each of
EMPLOYER’s current, former and future parents, subsidiaries, related entities,
employee benefit plans and their fiduciaries, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns.

 

RECITALS

 

A. MORASH was for a period of time an employee of EMPLOYER;

 

B. MORASH had an Executive Employment Agreement with EMPLOYER, effective
January 5, 2004 (“Employment Agreement);

 

C. On December 5, 2005, MORASH resigned from his position as an officer,
director and employee of EMPLOYER;

 

D. MORASH has been given the choice of accepting certain separation
compensation, described below, in exchange for his execution of this Agreement
within the time period set forth herein;

 

E. MORASH has agreed to accept the benefits to be provided to him under this
Agreement.

 

NOW, THEREFORE, for and in consideration of the execution of this AGREEMENT
within the time frame provided for herein, and the mutual covenants contained in
the following paragraphs, EMPLOYER and MORASH agree as follows:

 

1. No Admission of Liability. The parties agree that this AGREEMENT, and
performance of the acts required by it, does not constitute an admission of
liability, culpability, negligence or wrongdoing on the part of anyone, and will
not be construed for any purpose as an admission of liability, culpability,
negligence or wrongdoing by any party and/or by any party’s current, former or
future parents, subsidiaries, related entities, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns. The parties
specifically acknowledge and agree that this AGREEMENT is a compromise of
disputed claims, that EMPLOYER denies any liability for any matter released
herein.

 

2. Severance. EMPLOYER agrees that (i) on January 2, 2006 it will pay to MORASH
the lump sum payment of 18 month’s base salary (which MORASH and EMPLOYER agree
is $390,000), less applicable withholding taxes; (ii) on the effectiveness of
this AGREEMENT all of MORASH’s outstanding stock options and other equity awards
shall immediately vest in full and become immediately exercisable, all
restrictions or rights of repurchase relating to such stock options and other
equity awards will be waived, and such stock options and other equity awards
will remain outstanding and exercisable for the remainder of the respective term
of each award; (iii) EMPLOYER will pay monthly the COBRA payment to maintain
MORASH’s health insurance benefits for the lesser of the period of time until

 

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MORASH has the right to obtain health insurance through new employment or 18
months from the effective date of this Agreement; and (iv) EMPLOYER will pay the
next annual premium to maintain the effectiveness of MORASH’s current life
insurance benefits. Under the Employment Agreement, MORASH is required to
execute this release agreement in order to receive severance benefits.

 

3. Wages and Vacation Time Paid. MORASH acknowledges that he has been paid for
all of his wages and his accrued and unused vacation time through his last day
of work.

 

4. General Release. MORASH for himself, his heirs, executors, administrators,
assigns and successors, fully and forever releases and discharges EMPLOYER and
each of its current, former and future parents, subsidiaries, related entities,
employee benefit plans and their fiduciaries, predecessors, successors,
officers, directors, shareholders, agents, employees and assigns (collectively,
“Releasees”), with respect to any and all claims, liabilities and causes of
action, of every nature, kind and description, in law, equity or otherwise,
which have arisen, occurred or existed at any time prior to the signing of this
AGREEMENT, including, without limitation, any and all claims, liabilities and
causes of action arising out of or relating to MORASH’s employment with EMPLOYER
or the cessation of that employment. Notwithstanding the foregoing, nothing in
this agreement shall be deemed to constitute a waiver or release of MORASH’s
claims for indemnification pursuant to the terms of the Indemnification
Agreement between EMPLOYER and MORASH dated as of January 5, 2004.

 

5. Knowing Waiver of Employment-Related Claims. MORASH understands and agrees
that, with the exception of potential employment-related claims identified
below, he is waiving any and all rights he may have had, now has, or in the
future may have, to pursue against any of the Releasees any and all remedies
available to him under any employment-related causes of action, including
without limitation, claims of wrongful discharge, breach of contract, breach of
the covenant of good faith and fair dealing, fraud, violation of public policy,
defamation, discrimination, personal injury, physical injury, emotional
distress, claims under Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act, the Americans With Disabilities Act,
the Federal Rehabilitation Act, the Family and Medical Leave Act, the California
Fair Employment and Housing Act, the California Family Rights Act, the Equal Pay
Act of 1963, the provisions of the California Labor Code and any other federal,
state or local laws and regulations relating to employment, conditions of
employment (including wage and hour laws), perquisites of employment (including
but not limited to claims relating to stock and/or stock options) and/or
employment discrimination. Claims not covered by the release provisions of this
AGREEMENT are (i) claims for unemployment insurance benefits, (ii) claims under
the California Workers’ Compensation Act, and (iii) claims arising from
EMPLOYER’s nonperformance under this AGREEMENT. The release provisions of this
AGREEMENT do not apply to claims which may arise after the date of execution.

 

6. Knowing Waiver of ADEA Claims. MORASH acknowledges that he is knowingly and
voluntarily waiving and releasing any rights he may have under the federal Age
Discrimination in Employment Act of 1967, as amended (“ADEA”). He also
acknowledges that the consideration given for this waiver and release is in
addition to anything of value to which he was already was entitled. MORASH
further acknowledges that he has been advised by this

 

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writing, as required by law, that: (a) his waiver and release specified in this
paragraph do not apply to any rights or claims that may arise after the date he
signs this Agreement; (b) he has been advised hereby that he has the right to
consult with an attorney prior to executing this Agreement; (c) he has twenty
one (21) days to consider this Agreement (although he may choose to voluntarily
execute this Agreement earlier); (d) he has seven (7) days following his
execution of this Agreement to revoke the Agreement (in writing); and (e) this
Agreement will not be effective until the date upon which the revocation period
has expired, which will be the eighth (8th) day after this Agreement is executed
by MORASH, provided that EMPLOYER has also executed this Agreement by that date
(“Effective Date”).

 

7. Waiver of Civil Code § 1542. MORASH expressly waives any and all rights and
benefits conferred upon him by Section 1542 of the Civil Code of the State of
California, which states as follows:

 

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

 

MORASH expressly agrees and understands that the Release given by him pursuant
to this AGREEMENT applies to all unknown, unsuspected and unanticipated claims,
liabilities and causes of action which he may have against EMPLOYER or any of
the other Releasees.

 

8. Severability of Release Provisions. MORASH agrees that if any provision of
the release given by him under this AGREEMENT is found to be unenforceable, it
will not affect the enforceability of the remaining provisions and the courts
may enforce all remaining provisions to the extent permitted by law.

 

9. Promise to Refrain from Suit or Administrative Action. MORASH promises and
agrees that he will never sue EMPLOYER or any of the other Releasees, or
otherwise institute or participate in any legal or administrative proceedings
against EMPLOYER or any of the other Releasees, with respect to any claim
covered by the release provisions of this AGREEMENT, including but not limited
to claims arising out of MORASH’s employment with EMPLOYER or the termination of
that employment, unless he is compelled by legal process to do so. MORASH
promises and agrees that he shall not advocate or incite the institution of, or
assist or participate in, any suit, complaint, charge or administrative
proceeding by any other person against EMPLOYER or any of the other Releasees,
unless compelled by legal process to do so.

 

10. Confidentiality of Settlement. MORASH promises and agrees that, unless
compelled by legal process, he will not disclose to others and will keep
confidential both the fact of and the terms of this settlement, including the
amounts referred to in this AGREEMENT, except that he may disclose this
information to his spouse and to his attorneys, accountants and other
professional advisors to whom the disclosure is necessary to accomplish the
purposes for which MORASH has consulted such professional advisors. MORASH
expressly promises and agrees that, unless compelled by legal process, he will
not disclose to any present or former employees of EMPLOYER the fact or the
terms of this settlement.

 

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11. Public Announcements. MORASH agrees that EMPLOYER will be required to issue
a press release and filing on Form 8-K with the United States Securities and
Exchange Commission in connection with the resignation. MORASH agrees that
EMPLOYER may state that MORASH has “elected to resign personal reasons.” MORASH
will not make any contradictory statement and will refrain from making any
statements that are defamatory, derogatory or detrimental with respect to
EMPLOYER.

 

12. Promise to Maintain Confidentiality of EMPLOYER’s Confidential Information.
MORASH acknowledges that due to the position he has occupied and the
responsibilities he has had at EMPLOYER, he has received confidential
information concerning EMPLOYER’s products, procedures, customers, sales,
prices, contracts, and the like. MORASH hereby promises and agrees that, unless
compelled by legal process, he will not disclose to others and will keep
confidential all information he has received while employed by EMPLOYER
concerning EMPLOYER’s products and procedures, the identities of EMPLOYER’s
customers, EMPLOYER’s sales, EMPLOYER’s prices, the terms of any of EMPLOYER’s
contracts with third parties, and the like. MORASH agrees that a violation by
him of the foregoing obligation to maintain the confidentiality of EMPLOYER’s
confidential information will constitute a material breach of this AGREEMENT.
MORASH specifically confirms that he will continue to comply with the terms of
the Employee Innovations and Proprietary Rights Assignment Agreement dated as of
January 9, 2004 and executed by MORASH and EMPLOYER.

 

13. Integrated Agreement. The parties acknowledge and agree that no promises or
representations were made to them which do not appear written herein and that
this AGREEMENT contains the entire agreement of the parties on the subject
matter thereof. The parties further acknowledge and agree that parol evidence
shall not be required to interpret the intent of the parties.

 

14. Voluntary Execution. The parties hereby acknowledge that they have read and
understand this AGREEMENT and that they sign this AGREEMENT voluntarily and
without coercion.

 

15. Waiver, Amendment and Modification of AGREEMENT. The parties agree that no
waiver, amendment or modification of any of the terms of this AGREEMENT shall be
effective unless in writing and signed by all parties affected by the waiver,
amendment or modification. No waiver of any term, condition or default of any
term of this AGREEMENT shall be construed as a waiver of any other term,
condition or default.

 

16. Representation by Counsel. The parties acknowledge that they have had the
opportunity to be represented in negotiations for the preparation of this
AGREEMENT by counsel of their own choosing, and that they have entered into this
AGREEMENT voluntarily, without coercion, and based upon their own judgment and
not in reliance upon any representations or promises made by the other party or
parties or any attorneys, other than those contained within this AGREEMENT. The
parties further agree that if any of the facts or matters upon which they now
rely in making this AGREEMENT hereafter prove to be otherwise, this AGREEMENT
will nonetheless remain in full force and effect.

 

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17. California Law. The parties agree that this AGREEMENT and its terms shall be
construed under California law, without regard to any choice of law provisions.

 

18. Agreement to Arbitrate Claims Arising from AGREEMENT. The parties agree that
with the exception of disputes and claims identified below, if any dispute
arises concerning interpretation and/or enforcement of the terms of this
AGREEMENT, said dispute shall be resolved by binding arbitration before a single
arbitrator conducted in San Diego, California in accordance with the Judicial
Arbitration and Mediation Services entity (“JAMS”). The rules of JAMS then in
effect shall govern. In the event that such a dispute arises, counsel for both
parties will attempt to jointly select an arbitrator. If unable to do so, the
procedures outlined in the JAMS rules shall govern.

 

Exceptions: If EMPLOYER claims that MORASH has violated the confidentiality
provisions of this AGREEMENT and/or the confidentiality provisions of any other
agreement referenced herein, EMPLOYER may, but is not required to, arbitrate
said dispute. Furthermore, neither party to this AGREEMENT shall be prohibited
from seeking injunctive relief in a judicial proceeding.

 

19. Drafting. The parties agree that this AGREEMENT shall be construed without
regard to the drafter of the same and shall be construed as though each party to
this AGREEMENT participated equally in the preparation and drafting of this
AGREEMENT.

 

20. Counterparts. This AGREEMENT may be signed in counterparts and said
counterparts shall be treated as though signed as one document.

 

21. Period to Consider Terms of AGREEMENT. MORASH acknowledges that this
AGREEMENT was presented to him on December 4, 2005 and that he is entitled to
have up to twenty-one (21) days’ time in which to consider the terms of this
AGREEMENT. MORASH acknowledges that he has obtained the advice and counsel from
the legal representative of his choice and executes this AGREEMENT having had
sufficient time within which to consider its terms. MORASH represents that if he
executes this AGREEMENT before 21 days have elapsed, he does so voluntarily,
upon the advice and with the approval of his legal counsel, and that he
voluntarily waives any remaining consideration period. MORASH understand that if
not executed on or before December 25, 2005, this AGREEMENT shall expire and may
not be executed thereafter.

 

22. Revocation of AGREEMENT. MORASH understands that after executing this
AGREEMENT, he has the right to revoke it within seven (7) days after his
execution of it. MORASH understands that this AGREEMENT will not become
effective and enforceable unless the seven day revocation period passes and
MORASH does not revoke the AGREEMENT in writing. MORASH understands that this
AGREEMENT may not be revoked after the seven day revocation period has passed.
MORASH understands that any revocation of this AGREEMENT must be made in writing
and delivered to EMPLOYER’s General Counsel within the seven day period.

 

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23. Effective Date. This AGREEMENT shall become effective and binding upon the
parties eight (8) days after MORASH’s execution thereof, so long as he has not
revoked it within the time period and in the manner specified in paragraph 22,
above.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth below.

 

Dated: 12/13/05

     

/s/ David L. Morash

       

David L. Morash

 

       

Axesstel, Inc.

Dated: 12/13/05

     

By:

 

/s/ Clark Hickock

               

Clark Hickock

               

Chief Operating Officer

 

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