CONFIDENTIAL EXECUTIVE RESIGNATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS
1. Xxxx X. Xxxx ("Executive") was employed by Adobe Systems Incorporated
(the "Company") on or about December 26, 1996. Executive and the Company
have now agreed to terminate his employment relationship with the Company.
It is the Company's desire to provide Executive with certain benefits that he
would not otherwise be entitled to receive upon his termination and to
resolve any claims that Executive has or may have against the Company.
Accordingly, Executive and the Company agree as set forth below. This
Agreement shall become effective on the eighth day after it is signed by
Executive, but only if Executive has not previously revoked his acceptance of
this Agreement.
2. Executive hereby resigns voluntarily from any positions that he holds
as an officer of the Company and/or any of its subsidiaries (including, but
not limited to, his position as Executive Vice President, Product Divisions),
with all such resignations effective as of August 11, 1998 (the "Resignation
Date"). Executive and the Company agree that his employment with the Company
and any of its subsidiaries will terminate effective as of October 19, 1998
(the "Termination Date"). During the period between the Resignation Date and
the Termination Date: (a) Executive will provide transition assistance as
requested by the Company, and will take paid time off in accordance with the
Company's paid time off policies; and (b) the Company will continue to
provide Executive with the same base salary and employee benefits that he was
receiving immediately prior to the Resignation Date.
3. The Company will provide Executive with the following payments and
benefits when this Agreement becomes effective:
(a) a lump sum severance payment of $800,000.00, less applicable
withholding (provided that if such payment and/or any other benefits that
Executive receives under this Agreement constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code,
then such payment and/or benefits shall be reduced to the amount that has the
maximum value to Executive without causing any such payment to be
nondeductible by the Company under Section 280G); this severance payment will
be made to Executive on the eighth day following his re-execution of this
Agreement as described in paragraph 4 below;
(b) Executive and his eligible dependents will receive continued
group health insurance coverage in accordance with federal law (COBRA) at the
Company's expense for the period starting on the Resignation Date and ending
on the earlier of (i) November 19, 1999, or (ii) the date on which Executive
first becomes eligible to obtain other group health insurance coverage
through another employer;
(c) as soon as practicable following the Termination Date, the
Company will amend Executive's Company stock option grants so as to allow
Executive to exercise his right to purchase any stock options that have
become vested as of the Termination Date at any time up to and including
June 15, 1999; except as modified by this subparagraph (c), Executive's
rights with
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respect to any stock options granted to him by the Company shall continue to
be determined in accordance with the terms of the applicable stock option
plans and/or agreements;
(d) the Company hereby assigns to Executive all right, title and
interest in and to the laptop computer and desktop computer that were
provided to Executive by the Company, and the Company also assigns to
Executive any Adobe software that is on such computers; by signing this
Agreement, Executive agrees that his use of such software shall be solely in
accordance with the terms of the Company's end user license agreements that
apply to such software, which license agreements are hereby incorporated by
reference into this Agreement; Executive shall allow the Company to remove
all non-Adobe software from such computers before Executive takes possession
of them;
(e) the Company agrees to provide Executive with a mutually agreed
upon letter of reference; and
(f) the Company agrees that it will not contest any claim for
unemployment benefits that may be filed by Executive after the Termination
Date.
Executive will be paid all wages and accrued, unused vacation that he earns
through the Termination Date, and he will receive all of his vested benefits
under the Company's 401(k) and employee stock purchase plans in accordance
with the terms of those plans. Executive will be reimbursed by the Company
for any reasonable business expenses incurred by Executive in the course of
his employment with the Company, pursuant to the Company's applicable
business expense reimbursement policies (except that the Company shall not
deny the reimbursement of any such expenses under those policies on the
ground that they were not timely submitted by Executive). Executive's rights
with respect to any equity awards (such as stock options, performance share
unit awards and restricted units in Adobe Incentive Partners, L.P.) shall be
determined in accordance with the terms of the applicable equity award plans
and/or agreements, which are not modified in any way by this Agreement
(except as set forth in subparagraph (c)). Executive understands and
acknowledges that he shall not be entitled to any payments or benefits
(including, but not limited to, any bonus for the second half of the
Company's 1998 fiscal year) from the Company other than those expressly set
forth in this paragraph 3.
4. Executive and his successors release the Company, its subsidiaries and
their respective shareholders, investors, directors, officers, employees,
agents, attorneys, insurers, legal successors and assigns of and from any and
all claims, actions and causes of action, whether now known or unknown, which
Executive now has, or at any other time had, or shall or may have against the
released parties based upon or arising out of any matter, cause, fact, thing,
act or omission whatsoever occurring or existing at any time up to and
including the Termination Date, including, but not limited to, any claims of
breach of contract, wrongful termination, retaliation, fraud, defamation,
infliction of emotional distress or national origin, race, age, sex, sexual
orientation, disability or other discrimination or harassment under the Civil
Rights Act of 1964, the Age Discrimination In Employment Act of 1967, the
Americans With Disabilities Act, the Fair Employment and Housing Act or any
other applicable law. As additional consideration for the severance payment
described in paragraph 3(a), Executive agrees that he will reaffirm this
release
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of claims by re-signing this Agreement in the space provided at the end of
the Agreement on or after the Termination Date. The parties agree that the
releases of claims contained in this Agreement shall not affect Executive's
right to be indemnified by the Company in accordance with the terms of their
Indemnity Agreement of on or about May 30, 1997.
5. Executive acknowledges that he has read section 1542 of the Civil Code
of the State of California, which states in full:
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.
Executive waives any rights that he has or may have under section 1542 to the
full extent that he may lawfully waive such rights pertaining to this general
release of claims, and affirms that he is releasing all known and unknown
claims that he has or may have against the parties listed above.
6. Executive acknowledges and agrees that he shall continue to be bound by
and comply with the terms of the Employee Inventions and Proprietary Rights
Assignment Agreement that Executive signed in connection with his employment
by the Company.
7. Prior to the Resignation Date, the Company will provide Executive with
a form of press release announcing the termination of their employment
relationship. The Company will consider any reasonable revisions that
Executive may propose to the press release, but the Company will determine,
in its sole discretion, whether any such revisions are made to the press
release. The press release will be issued by the Company no later than
August 11, 1998.
8. Executive agrees that he shall not:
(a) for a period of six months following the Resignation Date,
directly or indirectly disclose any of the terms of this Agreement to anyone
other than his immediate family, his counsel, his financial advisors, or the
Employment Development Department, except as such disclosure may be required
for accounting or tax reporting purposes or as otherwise may be required by
law;
(b) make any critical or disparaging statements at any time about the
Company, or any of its products or employees, unless such statements are made
truthfully in response to a subpoena or other legal process; or
(c) make any comments at any time concerning the termination of
Executive's employment relationship with the Company that are inconsistent
with the press release described in paragraph 7.
9. The Company agrees that it will not, through any of its officers or
directors:
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(a) for a period of six months following the Resignation Date,
disclose any of the terms of this Agreement to anyone other than the
Company's legal counsel and accountants, except as such disclosure may be
required for tax or securities reporting purposes or by law;
(b) make any critical or disparaging statements about Executive at
any time, unless such statements are made truthfully in response to a
subpoena or other legal process; or
(c) make any comments at any time concerning the termination of
Executive's employment relationship with the Company that are inconsistent
with the press release described in paragraph 7.
10. Executive agrees that in the event of his breach of any of the
provisions of paragraph 8, it will be impractical and extremely difficult to
determine the actual damages suffered by the Company as a result of that
breach. Accordingly, Executive agrees that if he breaches any provision of
paragraph 8, he shall repay the Company 30% of the net sum (that is, after
deducting all taxes and other withholdings) that he receives pursuant to
paragraph 3(a) as liquidated damages. If the Company breaches any of the
provisions of paragraph 9, then the corresponding provision(s) of paragraph 8
shall be cancelled and of no further force or effect.
11. Following the Termination Date, Executive agrees to provide
reasonable assistance to the Company in connection with any litigation to
which the Company is or may become a party and with respect to which
Executive possesses any relevant knowledge or expertise. Executive's
assistance will be provided at mutually convenient times, and the Company
will reimburse Executive for any reasonable expenses incurred by him in
providing such assistance.
12. In the event of any legal action relating to or arising out of this
Agreement, the prevailing party shall be entitled to recover from the losing
party its attorneys' fees and costs incurred in that action.
13. This Agreement shall be governed by and construed in accordance with
the laws of the State of California. To the extent that any provision of
this Agreement is held to be invalid or unenforceable for any reason, such
provision shall be deemed stricken from this Agreement, and the remainder of
this Agreement shall continue to be in full force and effect.
14. This Agreement, along with any other agreements referenced herein,
constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior negotiations and agreements
between the parties (including the parties' Retention Agreement of on or
about September 12, 1997, which is of no further force or effect). This
Agreement may not be modified or amended except by a document signed by an
authorized officer of the Company and Executive.
EXECUTIVE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS
AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS AGREEMENT. EXECUTIVE
FURTHER UNDERSTANDS THAT HE MAY HAVE UP TO 45
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DAYS TO CONSIDER THIS AGREEMENT, THAT HE MAY REVOKE IT AT ANY TIME DURING THE
7 DAYS AFTER HE SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT
7-DAY PERIOD HAS PASSED. EXECUTIVE ACKNOWLEDGES THAT HE IS SIGNING THIS
AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE
COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 3.
Dated: August 19, 1998 /s/ Xxxx Xxxx
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Xxxx X. Xxxx
Dated: August 20, 1998 Adobe Systems Incorporated
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By: /s/ Xxxx X. Xxxxxxx
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By re-signing this Agreement on or after the Termination Date, I hereby
reaffirm the release of all known and unknown claims set forth in paragraphs
4 and 5 above. I understand that I may revoke this Agreement at any time
during the 7 days after I re-sign it.
Dated: October __, 1998 ------------------------------
Xxxx X. Xxxx
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