**Exhibit 10.34**

**SEPARATION AGREEMENT AND GENERAL RELEASE**

 

1.    Agreement. This Separation Agreement and General Release (“Agreement”) is entered into by and between Iomega Corporation, a Delaware corporation, on behalf of itself and each of its subsidiaries (“Iomega” or the “Company”), and Ronald Gillies (“Employee”) for the purpose of amicably concluding their employment relationship. By entering into this agreement neither party admits any deficiency, wrongdoing or liability, expressly or by implication.

 

2.    Last Working Day. Employee’s last regular working day at Iomega will be March 24, 2006 (“Last Working Day”)**.**The effective date of Employee’s termination of employment with Iomega will be****March 24, 2006 (the “Termination Date”).

 

 

(a)  Iomega shall make a total special severance payment to Employee in the amount of **$187,500.00,**less necessary federal, state and other withholdings to be paid in **bi-weekly increments over approximately nine months**, beginning on the first regular payroll cycle after receipt of this fully executed Agreement, provided Employee provides any assistance related to the business of Iomega that the Company requests during those months. Employee acknowledges and agrees that no payments hereunder constitute compensation under the 401(k) plan eligible for elected deferrals and matching contributions. 

 

(b)  Iomega shall pay to Employee **$12,253.95**less necessary federal, state and other withholdings to be paid in a lump sum payment, which is equivalent to the cost of **COBRA for a nine month period**, based on Employee’s current health insurance benefits through Iomega. 

 

(d) The amounts and provisions set forth in Section 3 (a) through (c) above will be paid or implemented **after receipt of a fully executed and unchanged copy of this Agreement and the expiration of the Age Release Period described in this Agreement**. These payments shall be in full satisfaction of any and all claims Employee may have arising directly or indirectly from his/her employment and separation from Iomega and shall also be consideration for the other promises contained herein. Employee acknowledges and understands that, except as described in Section 3 of this Agreement, Employee will not be entitled to receive from Iomega any other severance or termination allowance or any other compensation or payment, including any other payments for any sales commissions or bonuses or other consideration. 

 

4.    Participation in Benefit and Other Programs. Employee will be entitled to participate through the Termination Date in all employee benefit programs and policies generally available to Iomega employees, in which Employee is eligible to participate, including stock option vesting, health insurance, and Iomega’s 401(k) plan (if applicable), as allowed by law.

 

Employee acknowledges and agrees that, under the terms of any outstanding stock option agreement(s) between Employee and Iomega, the vesting of any options to purchase company stock granted to employee will cease as of the Termination Date, and Employee has a period of three months following the Termination Date within which to exercise any vested options. Any vested options not exercised within the three month period shall expire and thereafter not be exercisable. All unvested options will be canceled on Employee’s Termination Date. No unearned bonuses or other incentive compensation will be due Employee.

 

5.    Re-Employment by Iomega. Employee agrees that if employee becomes re-employed with Iomega or is assigned to Iomega as a temporary or contract Employee while Employee is receiving payments pursuant to this