| SEPARATIONAGREEMENT AND GENERAL RELEASE
1. Agreement. ThisSeparation Agreement and General Release (“Agreement”) is entered intoby and between Iomega Corporation, a Delaware corporation with its principalheadquarters in Roy, Utah, on behalf of itself and each of its subsidiaries(“Iomega” or the “Company”), and Herbert K. Scales(“Employee”) for the purpose of amicably concluding their employmentrelationship. By entering into this agreement neither party admits anydeficiency, wrongdoing or liability, expressly or by implication. 

2. Last Working Day. Employee's  last regular  working day at Iomega will be July 10, 2001.  The  effective  date of  Employee'stermination of employment with Iomega will be July 10, 2001 (the "Termination Date").

3.       Consideration.(a) Iomega shall make a total special severance payment to Employee in the amount of $130,000**,**less necessary federal, state and other withholdings, to be paid in equalbi-weekly increments over the next approximately six months (“SeverancePeriod”) on Iomega’s regular payroll schedule. Employee will alsoreceive a sum of $3,930, less necessary federal, state and other withholdings toassist with COBRA costs (medical, dental and vision plans). Iomega will pay theEmployee this portion of the Separation Pay in a lump sum payment. 

(b) Iomega will provide 12 months of outplacement services to Employee as directed by Iomega.

(c) The amounts andprovisions set forth in Section 3 (a) through (b) above will be paid orimplemented following receipt of a fully executed copy of this Agreement and theexpiration of the Age Release Period described in this Agreement. These paymentsshall be in full satisfaction of any and all claims Employee may have arisingdirectly or indirectly from his/her employment and separation from Iomega.Employee acknowledges and understands that, except as described in Section 3 ofthis agreement, Employee will not be entitled to receive from Iomega any otherseverance or termination allowance or any other compensation or payment.Employee acknowledges that the foregoing is not required to be provided byIomega pursuant to any policy or practice and that Employee is not otherwiseentitled to payment. 

4. Participation inBenefit and Other Programs. Employee will be entitled to participate throughthe Termination Date in all employee benefit programs and policies generallyavailable 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 andagrees that under the terms of any outstanding stock option agreement(s) betweenemployee and Iomega, the vesting of any options to purchase company stockgranted to employee will cease as of the Termination Date, and employee has aperiod of three months following the Termination Date within which to exerciseany vested options. Any options not exercised within the three month periodshall expire and thereafter not be exercisable. No unearned bonuses or otherincentive compensation will be due Employee. 

5. Re-Employment byIomega. Employee agrees that if employee becomes re-employed with Iomega oris assigned to Iomega as a temporary or contract Employee while Employee isreceiving payments pursuant to this Agreement, Employee shall waive anyremaining payments, which shall be discontinued without affecting any otherterms of the Agreement. 

6. Release of AllClaims. In consideration of the payments and other valuable considerationunder the terms of this Agreement, Employee hereby knowingly, voluntarily, andirrevocably agrees to fully, unconditionally, completely and forever releaseIomega, and all of Iomega’s predecessors and successors, and theirofficers, directors, shareholders, agents, employees and representatives, andall parent, subsidiary and affiliated companies, together with their employees,officers, directors and shareholders (the “Released Parties”), fromany and all rights and claims, including, without limitation, demands, causes ofaction, charges, complaints, promises, grievances, losses, damages, liabilities,debts, or injuries, whether known or unknown, contingent or matured, at law orin equity or in arbitration, which Employee holds or has ever held againstIomega resulting from any act, obligation, or omission occurring on or prior tothe date Employee signs this Agreement (“Released Claims”), including,but not limited to, any Released Claims connected with or arising out ofEmployee’s employment, or separation therefrom, or terms of such employmentor employment separation by Iomega; employee benefit plans whether or notarising under the Employee Retirement Income Security Act of 1974, as amended;any discrimination claims whether or not arising under any local, state orfederal law or regulation, public policy or common law (including, withoutlimitation, the Age Discrimination in Employment Act, Title VII of the CivilRights Act of 1964, the Americans with Disabilities Act, and the Older WorkersBenefit Protection Act); or any state, federal or local statute, regulation,public policy, contract or tort principle in any way governing or regulatingEmployee’s employment, or termination, or terms of employment ortermination by Iomega. It is expressly agreed and understood that this Agreementis a general release. Nothing contained in this Agreement is a waiver of anyrights or claims that may arise after the date of execution by Employee orwhich, as a matter of law, cannot be released or waived. 

THIS MEANS THAT BY SIGNINGTHIS AGREEMENT, EMPLOYEE WILL HAVE WAIVED ANY RIGHT TO BRING A LAWSUIT, FILE ACHARGE OR BRING A CLAIM AGAINST IOMEGA IN ANY COURT OR AGENCY BASED ON ANYACTIONS TAKEN UP TO THE DATE AND TIME OF SIGNING THIS AGREEMENT, AND WILL HAVERELEASED IOMEGA AND THE RELEASED PARTIES FROM ANY AND ALL CLAIMS OF ANY NATURERELATING TO EMPLOYEE’S EMPLOYMENT, OR SEPARATION THEREFROM, ARISING UP TOTHE DATE AND TIME OF SIGNING THIS AGREEMENT. 

**Employee understands andagrees that if he/she does file a claim against Iomega for any action that mayhave occurred up to and including the date this Agreement is executed, employeemust repay to Iomega any and all severance amounts, including the cost ofbenefits (if applicable), paid to employee pursuant to this Agreement.**

7. No Admission ofFault. Iomega and Employee agree that this Agreement in whole or in partshall not be admissible in any legal or quasi-legal proceeding as evidence of oradmission by Company of any violation of its policies or procedures or local,state or federal law or regulation. Further, Company expressly denies anyviolation of any of its policies, procedures, local, state or federal laws orregulations. 

8. Age DiscriminationRelease.****In addition to the waivers and releases contained in thepreceding paragraph, Employee further agrees that in consideration of thepayments provided above, she/he also specifically releases Iomega from any andall liabilities claims, causes of action, demand for damages or remedies of anykind, including claims for attorneys’ fees and legal costs, arising underthe Age Discrimination in Employment Act of 1967, as amended, related to orarising out of his/her employment or termination from employment with Iomega upto and including the date of this Agreement. Employee understands andacknowledges that by this Agreement she/he does not waive any rights or claimsrelating to age discrimination that may arise after the date of this Agreement.She/he is advised to consult with an attorney regarding 45 days from the date ofhis receipt of the Agreement within which to consider it and to consult withthis Agreement. Employee also acknowledges that prior to signing this Agreementshe/he has 45 days from the date of receipt of the agreement within which toconsider it and to consult with an attorney of his/her choice regarding it.Should she/he nevertheless elect to execute this Agreement sooner than 45 daysafter she/he has received it, she/he specifically and voluntarily waives theright to claim or allege that she/he has not been allowed by Iomega or by anycircumstances beyond his/her control to consider the Agreement for a full 45days. Employee also acknowledges and agrees that this Agreement will not becomeeffective or enforceable until after seven days from the date it is signed byhim (“Age Release Period”). During the Age Release Period Employeeunderstands and agrees that she/he may revoke the provisions of this Section bydelivering written notice of this revocation to **Iomega Corporation, 1821West Iomega Way, Roy, UT 84067 Attn: Charlotte Miller, Senior Vice President,Human Resources.**

9. Return ofDocuments. Employee has returned to Iomega all documents, records andmaterials, relating to Iomega’s business, whether stored electronically orin written or printed form, or otherwise, including but not limited to records,notes, memoranda, computer storage media, drawings, reports, files, softwarematerials, notebooks, rolodex files, telephone lists, computer or dataprocessing disks and tapes, marketing plans, financial plans and studies,customer lists, names of business contacts, policies and procedures, and anymaterials prepared, compiled or acquired by Employee relating to any aspect ofIomega or its business, products, plans or proposals and all copies thereof, inEmployee’s or related party’s possession, custody or control, whetherprepared by Employee or others. Employee also agrees to participate in an exitinterview upon the termination of Employee’s employment with Iomega. 

10. Non-Disclosure.Employee acknowledges his or her obligations under a non-disclosure agreementpreviously entered into between Employee and Iomega. Any breach ofEmployee’s non-disclosure obligations to Iomega shall, in addition to allother remedies available to Iomega, result in the immediate release of Iomegafrom any obligations it would otherwise have to provide further payments underthis Agreement. **Employee expressly acknowledges that Iomega is prepared tovigorously enforce these promises, and that violation of this provision couldresult in the assessment of damages and other legal remedies against Employeeand any of Employee’s subsequent employers. Any breach by Employee of thisprovision shall result in the immediate release of Iomega from any obligationsit may have to provide further payments under this Agreement, except as may berequired by applicable law.**

11. EmployeeInventions. Employee acknowledges that certain innovations, products andprocesses invented or discovered by Employee during Employee’s employmentwith Iomega are the property of Iomega and have been assigned to Iomega under anagreement previously entered into between Employee and Iomega which is still ineffect. Any breach of Employee’s obligations to Iomega with respect to theassignment of inventions shall, in addition to all other remedies available toIomega, result in the immediate release of Iomega from any obligations it wouldotherwise have to provide further payments under this Agreement. 

12.Non-Disparagement. Employee agrees not to disparage, orally or inwriting, Iomega, its officers, employees, management, operations, products,designs, or any other aspects of Iomega’s affairs to any third person orentity. 

13. Non-Solicitation ofEmployees. Employee agrees that for one year following Employee’sseparation from employment with Iomega, Employee shall not, directly orindirectly, in any capacity (including but not limited to, as an individual, asole proprietor, a member of a partnership, a stockholder, investor, officer, ordirector of a corporation, an employee, agent, associate, or consultant of anyperson, firm or corporation or other entity) hire any person from, attempt tohire any person from, or solicit, induce, persuade, or otherwise cause anyperson to leave his or her employment with Iomega. Any breach of Employee’sobligations under this paragraph shall, in addition to all other remediesavailable to Iomega, result in the immediate release of Iomega from anyobligations it would otherwise have to provide further payments under thisAgreement. 

14. Non-Solicitation ofCustomers. Employee agrees that for one year following Employee’sseparation from employment with Iomega, Employee shall not, directly orindirectly, in any capacity, solicit the business of any customer of Iomegaexcept on behalf of Iomega, or attempt to induce any customer of Iomega to ceaseor reduce its business with Iomega; provided that following Employee’sseparation from employment with Company he or she may solicit a customer ofIomega to purchase goods or services that do not compete directly or indirectlywith those then offered by Iomega. Any breach of Employee’s obligationsunder this paragraph shall, in addition to all other remedies available toIomega, result in the immediate release of Iomega from any obligations it has toprovide further payments under this Agreement. 

15. Remedies. Theparties shall attempt in good faith to resolve any dispute arising out of orrelating to this Agreement by negotiation. The parties recognize thatirreparable injury to Iomega will result from a material breach of thisAgreement, and that monetary damages will be inadequate to rectify such injury.Accordingly, notwithstanding anything to the contrary, Iomega shall be entitledto one or more preliminary or permanent orders: (i) restraining or enjoining anyact which would constitute a material breach of this Agreement, and (ii)compelling the performance of any obligation which, if not performed, wouldconstitute a material breach of this Agreement, and to attorney’s fees inconnection with any such action. 

16. Party's  Bear Own  Costs. Each  party  shall  bear the  cost  of,  and  shall be  responsible  for,  its own  attorneys'  and accountants' fees and costs, if any, in connection with the negotiation and execution of this Agreement.

17. Agreement isConfidential. Employee further agrees that the terms and conditions of thisAgreement are strictly confidential and shall not be discussed with, disclosedor revealed to any other persons, whether within or outside Iomega, exceptprofessional advisors with whom Employee may consult regarding this Agreementand Employee’s immediate family members, unless disclosure is compelled bysubpoena or other legal process. **Any breach by Employee of this provisionshall immediately release Iomega from any obligations it may have to providefurther payments under this Agreement.**

18. EntireAgreement. This Agreement and any exhibits hereto constitute the entireunderstanding of the parties with respect to the subject hereof. Employeewarrants that he or she: (a) has read and fully understands this Agreement andany exhibits hereto; (b) has had the opportunity to consult with legal counselof his or her own choosing and have the terms of this Agreement fully explained;(c) is not executing this Agreement in reliance on any promises, representationsor inducements other than those contained herein; and (d) is executing thisAgreement voluntarily, free of any duress or coercion. 

19. Severability. The  invalidity or  unenforceability  of any provision or  provisions  of this  Agreement  shall not affect thevalidity or enforceability of any other provision hereof, which shall remain in full force and effect.

20. Governing  Law. This  Agreement  shall be  interpreted,  construed  and governed in  accordance  with the laws of the State ofUtah, without giving effect to the choice of law rules thereof.

21.Nonassignment. Employee warrants that no person other thanEmployee is entitled to assert any claim based on or arising out of any allegedwrong suffered by Employee in or as a consequence with or severance ofemployment from Company and that employee has not assigned or transferred orpurported to assign or transfer to any person or entity any claim Employee nowhas or may have against Company or any portion thereof or interest therein. 

22. Acknowledgement byEmployee. Employee understands that the terms of this Agreement shall becomeeffective on Employee’s Termination Date and that although Employee may notsign this Agreement until after his Termination Date, Employee was made fullyaware that this Agreement would become void, and any offers presented in thisAgreement revoked if Employee violates any provision of this Agreement,specifically sections 10, 12, 13, 14, and 17 during the time betweenEmployee’s Termination Date and execution of the Agreement. Employeeacknowledges and agrees that Employee was made aware of this term onEmployee’s Termination Date and upon receipt of this Agreement and thatEmployee’s acknowledgement of this term is evidenced by an Acknowledgementof Terms document executed by Employee on Employee’s Termination Date. 
I, Employee, understand theterms and conditions of this document and have been given ample opportunity toconsult with counsel and/or someone whose opinion I trust before signing it. Bymy signature, I, Employee, agree to the terms set forth above**.**

Employee has until August24, 2001 to accept terms and conditions of this Agreement by signing below andreturning the document to Sheree Lupton, Director, Human Resources at Iomega. IfEmployee does not accept such terms and conditions by such date, this offershall expire at****that time. 
       EMPLOYEE  Dated:    July 16, 2001               /s/ Herbert K. Scales, III             Herbert K. Scales   IOMEGA CORPORATION  Dated:    July 26, 2001               /s/ Werner T. Heid                        Werner T. Heid President and CEOACKNOWLEDGEMENTOF TERMS
On July 10, 2001*,*myTermination Date, I received a Separation Agreement (“Agreement”) fromIomega, which includes an offer of severance. One condition of that offer ofseverance is that I agree to be bound by certain terms of that Agreementeffective immediately. I understand that even though I may not sign theAgreement immediately, or that I may not sign it at all, the offers made in thatAgreement are only valid if I comply with all terms of the Agreement from myTermination Date. The specific terms of which I have been made aware are: 
- Non-Disclosure Non-Disparagement
Non-Solicitation of Employees
Non-Solicitation of Customers
Confidentiality (Terms of Agreement)

I acknowledge and agreethat I have been informed that the Separation Agreement which I have beenoffered shall become void and all offers revoked in the event that I violate anyof the terms above during the period from my Termination Date through executionof the Agreement (if I decide to sign the Agreement). I acknowledge that theterms above have been explained to me and that if I decide to sign theSeparation Agreement, I must not have violated any of those terms or all offerswill be revoked and any money paid to me by Iomega pursuant to the SeparationAgreement must be returned to Iomega. 

I also acknowledge thatthis Acknowledgement of Terms represents only a portion of the terms in theSeparation Agreement and that if I do sign the Agreement, I will do so onlyafter having reviewed and agreed to all of the terms of that Agreement. 

Accepted and Agreed to this 10th day of July 2001. |
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