September 22, 1997
Xx. Xxxxxxx X. Xxxxxx
Apple Computer, Inc.
0 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
RESIGNATION AGREEMENT
Dear Xx. Xxxxxx:
This will reflect our agreement concerning your resignation as a director,
officer and employee of Apple Computer, Inc. (the "Company") and each of its
direct and indirect subsidiaries (collectively with the Company, the
"Companies"), in accordance with the terms and conditions set forth below.
1. RESIGNATION. By signing this Resignation Agreement, you (i) hereby
confirm your resignation as a director and officer of each of the Companies,
effective as of July 8, 1997 (the "Director and Officer Resignation Date") and
(ii) hereby agree that the date of your resignation as an employee of each of
the Companies shall be September 27, 1997 (the "Employee Resignation Date").
2. TERMINATION OF PRIOR AGREEMENTS AND UNDERSTANDINGS. As of the date of
this Resignation Agreement first set forth above (the "Effective Date"), this
Resignation Agreement supersedes and replaces any written or oral agreements or
understandings between you and any of the Companies, and any of their respective
officers, directors, shareholders, employees, agents and affiliates, including,
without limitation, the Employment Agreement between you and the Company dated
February 28, 1996, as amended May 1, 1997 (the "Employment Agreement"), and each
such agreement or understanding (including, without limitation, the Employment
Agreement) is hereby void and of no further force and effect.
3. INTERIM PERIOD. During the period beginning on the Director and
Officer Resignation Date and ending on the Employee Resignation Date (the
"Interim Period"), you will continue to be eligible to receive your base salary
(at the annual rate in effect immediately prior to the Effective Date) and to
participate in the Company's Employee Stock Purchase Plan and all pension and
welfare plans (including but not limited to the 401(k) Plan) in accordance with
the terms and provisions applicable to you immediately prior to the Director and
Officer Resignation Date, and you agree to take all accrued unused vacation.
During the period through August 15, 1997, you were entitled to office space
from the Company. You shall be entitled to secretarial support from the Company
until the Employee Resignation Date. Except as otherwise expressly provided
herein, you shall cease, as of the Director and Officer Resignation Date, to be
eligible to receive any annual or long-term incentive compensation and benefits
from any of the Companies with respect to periods prior to, on or following the
Director and Officer Resignation Date.
4. PAYMENTS AND BENEFITS IN CONNECTION WITH YOUR RESIGNATION. Subject to
Sections 6, 9 and 10 below, the Company agrees to pay or to provide you with the
compensation and benefits described below in connection with your resignation of
employment:
(a) As soon as reasonably practicable following the date which is the
later of (i) the Expiration of the Revocation Period (as such phrase is defined
in Section 10 below) (but in no event later than thirty (30) days following the
expiration of such period) or (ii) the perfection of the security interest for
the Loan as described in Section 4(g) (but in no event later than thirty (30)
days following the expiration of such period), the Company will make a one-time
lump sum cash payment to you of Six Million Seven Hundred Thirty-One Thousand
Eight Hundred Seventy Dollars and Ninety-Six Cents ($6,731,870.96), less
applicable withholding taxes. The Company will deduct from this payment the sum
of One Million Five Hundred Thousand Dollars ($1,500,000) as a partial repayment
of the
balance of the Loan (as defined in Section 4(g) below) as of the date on which
such payment is made to you; the amount will be applied first to accrued
interest on the Loan as of such date, and the balance of said amount shall be
applied to the then remaining principal balance on the Loan.
(b) As soon as practicable following the date which is the later of
(i) the Expiration of the Revocation Period (but in no event later than thirty
(30) days following the expiration of such period) or (ii) the perfection of the
security interest for the Loan as described in Section 4(g) (but in no event
later than thirty (30) days following the expiration of such period), you shall
receive an additional payment from the Company in the amount of One Million
Dollars ($1,000,000), less applicable withholding taxes, representing the
Component B Bonus (as defined in the Employment Agreement) for the fiscal year
of the Company ending September 27, 1997 (the "1997 Fiscal Year").
(c) You acknowledge that, as of the Director and Officer Resignation
Date, you were a participant in the Company's Senior Officers Restricted Share
Plan (the "SORP"). You shall be eligible for an award of performance shares
under the SORP for the 1997 Fiscal Year, subject to the Company achieving the
applicable performance goals and targets established for that year. A copy of
said goals and targets is attached hereto as EXHIBIT A. The actual number of
performance shares and cash amount, if any, awarded to you for the 1997 Fiscal
Year will be determined by the Compensation Committee based upon the goals and
targets for that year, and the percentage of your target award paid to you will
be the same percentage paid to other senior officers of the Company who were
participants in the SORP for the entire 1997 Fiscal Year. The performance
shares and cash amounts, if any, payable to you under the SORP for the 1997
Fiscal Year shall be payable to you at the same time as payments are made to
other SORP participants. Except as provided in this Section 4(c), no other
amounts shall be payable to you under the SORP.
(d) On the Employee Resignation Date, the Company will pay you any
accrued but unpaid salary you have earned through such date.
(e) During the Benefit Continuation Period (as hereinafter defined),
you and your eligible dependents shall continue to be eligible to participate in
the medical, dental and health insurance plans applicable to you immediately
prior to the Employee Resignation Date on the same terms and conditions in
effect for you and your dependents immediately prior to the Employee Resignation
Date, or equivalent coverage obtained by the Company. For purposes of the
previous sentence, "Benefit Continuation Period" means the period beginning on
the Employee Resignation Date and ending on the earliest to occur of (i) the
date you revoke the Release (as defined in Section 9 below), (ii) the Employee
Resignation Date (if you fail to execute the Release), or (iii) February 2,
2001; provided, however, that your coverage under such plans and arrangements
shall end on the date that you are eligible for comparable coverage under the
plan of a subsequent employer. Following the end of the Benefit Continuation
Period, you shall be eligible to elect any applicable "continuation coverage"
under Section 4980B(f) of the Internal Revenue Code of 1986, as amended, as if
the last day of the Benefit Continuation Period were the date of your
"qualifying event" for such continuation coverage.
(f) Following the Expiration of the Revocation Period, you shall be
entitled to keep any of the Company computer and software products in your
office or made available to you at your home for business use as listed in
EXHIBIT B; provided, however, that you agree to delete from such products all
confidential and propriety information of the Companies. During the Benefit
Continuation Period, you shall continue to be eligible to purchase Company
products for your personal use at the discounted price then offered to employees
of the Company; provided, however, you shall be precluded from purchasing at a
discounted price any more than ten (10) comparable items in any twelve- (12)
month period. In addition, the Company will deliver one "Spartacus" unit to you
within ninety (90) days of the date on which such product becomes available on
the commercial market.
(g) In consideration of your execution and delivery of the Release,
the Company hereby agrees to extend the maturity date of the loan made to you
pursuant to Section 3(c) of the Employment Agreement (the "Loan") until
September 15, 1998, whereupon the then entire outstanding principal amount
thereof, together with all accrued and unpaid interest, shall be payable in
full; provided,
however, that, if you fail to execute the Release or if you revoke the Release,
then the Loan shall be immediately due and payable as of the Employee
Resignation Date. The Loan shall be fully recourse to you and shall be secured
by your residence in Lake Tahoe ("Stonewood"), which you have represented to the
Company as having a current fair market value of approximately Six Million
Dollars ($6,000,000) to Seven Million Dollars ($7,000,000). You hereby agree to
execute such documents and to take such further actions as the Company may deem
necessary or advisable to effect and to perfect such security interest.
Notwithstanding the provisions of the promissory note representing the Loan, you
expressly acknowledge and agree that, as of the Employee Termination Date, the
Loan shall bear interest at the rate of seven percent (7%) per annum. You may
prepay some or all of the principal amount of the Loan, and any portion of the
accrued but unpaid interest on the Loan, at any time, without premium or
penalty. The Company may reduce or set off against any amounts that the Company
owes to you any amounts currently due and payable by you under the Loan.
(h) Any stock options granted to you pursuant to the Employment
Agreement, the Apple Computer, Inc. 1990 Stock Option Plan, or other plan or
program which are vested by their terms as of the Employee Resignation Date
shall remain exercisable for ninety (90) days following the Employee Resignation
Date. Upon expiration of such ninety- (90) day period, such vested options
shall expire and be of no further force or effect, to the extent not previously
exercised. Any unvested portion of the options so granted will be forfeited as
of the Employee Resignation Date. As of the Director and Officer Resignation
Date, you shall not be eligible to participate in any option repricing or
exchange program announced by the Company and you hereby irrevocably waive any
right to participate in any such program.
(i) The Company shall have no obligation to make any payments to you
with respect to your airplane, whether pursuant to the airplane use arrangement
referred to in Section 3(f) of the Employment Agreement or otherwise, for any
period on and after the Director and Officer Resignation Date.
5. NO OTHER SEVERANCE, PAYMENTS OR BENEFITS. Except as otherwise
expressly provided herein, you hereby acknowledge and agree that you are not
entitled to any other compensation or benefits from any of the Companies or any
of their respective officers, directors, shareholders, employees, agents or
affiliates in connection with your resignation of employment or otherwise and
that, except as expressly set forth herein, you are not entitled to any
severance or similar benefits under any plan, program, policy or arrangement,
whether formal or informal, written or unwritten, of any of the Companies or any
of their respective officers, directors, shareholders, employees, agents or
affiliates.
6. PROTECTION OF THE COMPANY'S INTERESTS.
(a) On the Employee Resignation Date, you shall return to the Company
all property of the Companies then in your possession and all property made
available to you in connection with your service to any of the Companies, other
than property described in Section 4(f), including, without limitation, your
Company credit cards, and all records, drawings, manuals, reports, papers and
documents kept or made by you in connection with your employment as a director,
officer or employee of any of the Companies, including any files, memoranda,
correspondence, vendor and customer lists, financial data, keys and security
access cards, and any other materials or documents described in Section 6(c)
below.
(b) You shall keep the terms of this Resignation Agreement and all
communications with any of the Companies and its counsel regarding the same
confidential.
(c) You will not, at any time, directly or indirectly divulge or
disclose to any person, firm, association or corporation, or use for your own
benefit, gain or otherwise, any confidential or proprietary plans, products,
customer lists, trade secrets, technical or business materials, or information
of any of the Companies or in the possession of any of the Companies, including
any or all information or instructions, technical or otherwise, issued or
proclaimed for the sole use of the Companies, or any confidential information
that was disclosed to you or in any way acquired by you during your employment
with any of the Companies.
(d) During the period beginning on the Director and Officer
Resignation Date and ending on the date which is twelve (12) months after the
Employee Resignation Date, you shall not, whether for your own account or for
the account of any other individual, partnership, firm, corporation or other
business organization (other than the Company), intentionally solicit, endeavor
to entice away from any of the Companies, or otherwise interfere with the
relationship of any of the Companies with any person with a base salary of at
least Seventy-Five Thousand Dollars ($75,000) per year who is employed by or
otherwise engaged to perform services for any of the Companies.
(e) If you breach in any material respect the provisions of this
Section 6, you shall immediately forfeit any and all rights to future payments
or benefits under Sections 3 and 4 above.
7. COOPERATION. You agree that you will make yourself available at
reasonable times and intervals to participate in the conduct of and preparation
for any pending or future litigation to which any of the Companies is a party
and in which your experience or knowledge may be relevant. You shall be
reimbursed for your reasonable travel and out-of-pocket expenses incurred by
virtue of your cooperation as described in this Section 7. If such cooperation
takes more than twenty (20) hours, the Company agrees to reimburse you, at the
rate of Five Hundred Dollars ($500.00) per hour, for time spent in excess of
twenty (20) hours. In no event shall this provision be deemed to pertain to or
affect the nature or substance of employee testimony at deposition or trial or
in any other truthful testimony at deposition or trial or in any other
circumstances or your obligation to give such testimony.
8. ACKNOWLEDGMENT. By signing this Resignation Agreement, you hereby
acknowledge and confirm the following:
(a) You were advised by the Company in connection with your
resignation to consult with an attorney of your choice prior to signing this
Resignation Agreement and the Release and to have such attorney explain to you
the terms of this Resignation Agreement and the Release including, without
limitation, the terms relating to your release of claims arising under the Age
Discrimination in Employment Act of 1967.
(b) You were given not less than twenty-one (21) days to consider the
terms of this Resignation Agreement and the Release and to consult with an
attorney of your choosing with respect thereto and that, for a period of seven
(7) days following your execution of the Release, you have the right to revoke
the Release in accordance with the terms set forth below.
9. RELEASE. You agree to execute and deliver to the Company a release in
the form of EXHIBIT C attached hereto (the "Release") on the Employee
Resignation Date. If you do not deliver the Release to the Company on the
Employee Resignation Date, or if you subsequently revoke the Release in the
manner contemplated by Section 10 below, the Company will have no obligation to
pay or provide you with any of the payments or benefits contemplated by Sections
3 and 4 above.
10. REVOCATION. You shall have the right to revoke the Release during the
seven- (7) day period (the "Revocation Period") commencing immediately following
the date you sign and deliver the Release to the Company. The Revocation Period
shall expire at 5:00 p.m. (Pacific time) on the seventh day immediately
following the date that the Release is executed by you; provided, however, that
if such seventh day is not a business day, then the Revocation Period shall
extend to 5:00 p.m. (Pacific time) on the next succeeding business day. No such
revocation by you shall be effective unless it is in writing and signed by you,
and received by the Company prior to the Expiration of the Revocation Period.
For purposes of this Agreement, the phrase "Expiration of the Revocation Period"
shall mean the expiration of the Revocation Period without your having revoked
the Release in accordance with this Section 10.
11. ACCEPTANCE. You may indicate your acceptance of this Agreement by
signing and dating both counterparts of this Agreement and delivering one such
copy to the Company by no later than 5:00 p.m. (Pacific time) on September 26,
1997. This offer shall expire without further action by the Company if a signed
and dated counterpart of this Agreement is not returned to the Company by the
time and date set forth above.
12. TAX CONSIDERATIONS. Any payments made to you under this Resignation
Agreement shall be reduced by the full amount legally required to be withheld
for federal, state or local tax purposes by the Company.
13. MODIFICATION OF EMPLOYEE BENEFIT PLANS. Nothing in this Resignation
Agreement shall prohibit the Company from modifying, terminating or otherwise
amending any or all of the Company's pension and welfare plans, if such
termination, modification or amendment similarly affects other executives of the
Company as well as you.
14. MODIFICATION. This Resignation Agreement may not be amended or
modified except by a writing executed by you and the Company that specifically
refers to this Resignation Agreement and expressly states that it is intended to
amend one or more of the terms of this Resignation Agreement or to supersede
this Resignation Agreement.
15. VALIDITY. The invalidity or unenforceability of any provision of this
Resignation Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and effect.
16. REMEDIES IN THE EVENT OF FUTURE DISPUTE.
(a) Except as provided in Section 16(b) below, in the event of any
future dispute, controversy or claim between the parties arising from or
relating to this Resignation Agreement, its breach, or any matter addressed by
this Resignation Agreement, the parties will first attempt to resolve the
dispute through confidential mediation to be conducted in San Francisco by a
member of the firm of Xxxxxxxx, Xxxxxxxx & Xxxxxx, Mediated Negotiations, 000
Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
(b) In the event that a dispute arises concerning compliance with
this Resignation Agreement, the parties agree to resolve any such dispute by
confidential binding arbitration by the American Arbitration Association in San
Francisco, pursuant to its California Employment Dispute Resolution Rules, and
judgment upon the award rendered by the arbitrator(s) may be entered by any
court having jurisdiction of the matter. The prevailing party in such
arbitration shall be entitled to recover costs and attorneys' fees incurred in
arbitrating the dispute and in preparing for such arbitration.
17. INDEMNIFICATION. All rights of indemnification previously provided by
the Company to you by the Company's bylaws and/or the Indemnification Agreement
dated November 10, 1994, as well as such rights to indemnification that you have
by law, shall continue in full force and effect in accordance with their terms,
following the date of this Agreement.
18. GOVERNING LAW. This Resignation Agreement shall be governed by, and
construed in accordance with, the laws of California applicable to contracts to
be performed exclusively therein
Your signature on the line below constitutes your agreement with each
provision contained herein.
Apple Computer, Inc.
By: /s/ Xxxx X. Xxxxxxx III
---------------------------------------
Xxxx X. Xxxxxxx III
Senior Vice President, General Counsel
and Secretary
I UNDERSTAND AND AGREE WITH THE ABOVE:
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Xxxxxxx X. Xxxxxx
Dated: September 23, 1997
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