Employment Agreement - Apple Computer Inc. and John Floisand
April 2, 1996
John Floisand
21223 Deepwell Court
Saratoga, CA 95070
Re: Apple Computer, Inc. Employment
Dear John:
The following sets forth our agreement ("Letter Agreement")
regarding the terms and provisions of your employment as an officer and
employee of Apple Computer, Inc. ("Apple"). This Letter Agreement shall
supersede any and all other agreements, oral and written, which may
presently exist between you and Apple with the following exception; the
June 9, 1995 Retention Agreement ("Retention Agreement") between you and
Apple. Upon a Change in Control Date, as defined in the Retention
Agreement, the Retention Agreement shall superceded this Letter Agreement
and shall govern exclusively.
1. Term of Employment Under the Agreement. The initial term of
your employment under this Agreement (the "Term") shall be effective as of
November 1, 1995 (the "Effective Date") and shall continue until the third
anniversary of the Effective Date. Thereafter, the parties agree to
renegotiate the terms and provisions of your employment with Apple.
2. Employment. You will be an Appointed Senior Vice-President
of Apple (grade 98), specifically assigned to Apple Pacific (and excluding
Apple Japan), and your duties and responsibilities to Apple shall be
consistent in all respects with such positions. You shall prorate your
business time, attention, skills and efforts to the business and affairs of
Apple and Apple Japan, as provided for in your employment Letter Agreement
with Apple Japan, other than de minimis amounts of time devoted by you to
the management of your personal finances or to engaging in charitable or
community services.
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3. Compensation.
(a) Base Salary. As compensation to you for all services
rendered to Apple, Apple will pay you a base salary at the rate of not less
than one hundred seventy-five thousand dollars ($175,000) per annum as of
the Effective Date. This will be paid in United States dollars and in
monthly increments of $14,583.33. The amount of your base salary shall be
reviewed annually by Apple and shall be increased to reflect market
compensation of similarly situated executive officers as determined by
Apple. Any increase in your base salary shall be effective as of each
anniversary of the Effective Date and shall be treated as your rate of base
salary for all purposes under this Letter Agreement. Your base salary will
be paid to you in accordance with Apple's regular payroll practices
applicable to its executive employees.
(b) Hire-On Bonus. Apple has paid you a hire-on bonus of one
hundred thousand dollars ($100,000). This amount was paid in United States
dollars and in lump sum.
(c) Bonus. You shall be eligible to participate in Apple's
Senior Executive Bonus Plan or any successor plan thereto. Such bonus
program shall afford you the opportunity to earn an annual bonus for each
fiscal year of Apple. During the first year of the Term, your annual
target bonus is two hundred, eighty-one thousand, two hundred fifty dollars
($281,250). The actual amount paid to you, if any, will be based on a
combination the overall corporate results, including Apple Pacific, as
outlined in Apple's Senior Executive Bonus Plan .
The amount of your annual bonus shall be reviewed annually by
Apple and shall be increased to reflect market bonus compensation of
similarly situated executive officers as determined by Apple. Any increase
in your annual bonus shall be effective as of each anniversary of the
Effective Date. Each annual bonus shall be paid to you in accordance with
the payment provisions of Apple's Senior Executive Bonus Plan.
(d) Long-Term Incentive Compensation. You shall be eligible to
participate in each Long-Term Incentive Plan or Arrangement established by
Apple for its executive employees in accordance with the terms and
provisions of such Long-Term Incentive Plan or Arrangement. In
consideration of this Letter Agreement, we
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will recommend to the Apple Computer, Inc. Board of Directors an initial
stock option grant of 30,000 shares of Apple Computer, Inc. common stock.
Each grant vests over a three year period at 33% increments beginning one
year from the grant date and shall at all times be subject to the terms and
conditions of the Long-Term Incentive Plan or Arrangement.
(e) Benefits. You shall be eligible to participate in all
employee benefit plans and arrangements that Apple provides to its
executive employees in accordance with the terms of such plans and
arrangements, which shall be no less favorable to you, in the aggregate,
than the terms and provisions available to other executive employees of
Apple.
4. Termination.
Subject to the conditions of this paragraph, Apple shall
designate you for participation in the Apple Computer, Inc. Executive
Severance Plan upon the termination of your employment during the term or
thereafter provided that (1) you have not obtained or been offered another
position with Apple or its affiliates, or (2) the termination of your
employment was not the result of your voluntary resignation, or (3) the
decision to terminate your employment was not for "Business Reasons".
"Business Reasons" shall mean that you are terminated for any of the
following reasons: (i) engaging in unfair or unlawful competition with
Apple; or (ii) inducing any customer of Apple to breach any contract with
Apple; or (iii) making any unauthorized disclosure of or otherwise misusing
any of the secrets or confidential information of Apple; or (iv) committing
any act of embezzlement, fraud or material theft with respect to any Apple
property; or (v) violating any Apple policy or guideline or the terms of
this Letter Agreement; or (vi) causing material loss, damage or injury to
or otherwise endangered the property, reputation or employees of Apple; or
(vii) engaging in malfeasance, negligence or misconduct, or failing to
perform reasonable duties and responsibilities consistent with your duties
and responsibilities to Apple; or (viii) failure to act in accordance with
specific, reasonable and lawful instructions from Apple's Chief Executive
Officer, or his designess.
5. Relocation. Apple will provide you will full international
relocation benefits to Japan in accordance with Apple's Relocation Policy.
Apple will continue to pay for and maintain your apartment in Japan,
including its furnishings and utilities, and reasonable costs of
maintenance and cleaning. In the event you choose to move
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your personal household goods to Japan, Apple will pay the reasonable costs
of moving your household goods and provide you with a relocation allowance
of $31,250. Apple also will reimburse you for the reasonable costs of
supplementing your current furnishings when you move to your new residence
in Japan. Upon Termination of your employment, Apple will provide you with
full relocation to the destination of your choice in accordance with
Apple's Relocation Policy..
6. Housing. Apple shall provide you with housing in accordance
with Apple's Expatriate Policy. In the event you elect not to stay in the
apartment currently provided to you, you will be responsible to pay for
your Japanese housing to the extent it represents the hypothetical housing
costs if you were in the United States in a similar home in accordance with
Apple's Expatriate Policy.
Your wife and daughter currently do not intend to relocate to
Japan so that your daughter may complete her education in California. So
long as your wife and daughter continue to live in your California home,
Apple will pay for the reasonable costs of an appliance guarantee contract
and pool and gardening services, not to exceed $250 per month. In the event
you choose to sell your California home, Apple will arrange for the
purchase your home. The purchase price will be determined based on three
(3) independent appraisals which will be obtained at Apple's expense. If
you travel to California on business after the sale of your California
home, you will be entitled to reasonable per diem expenses. If you choose
not to sell your California home, Apple will facilitate the rental of your
California home and pay mortgage payments, fees, taxes and maintenance from
the Effective Date. In the event your California home is not rented within
6 months, Apple will arrange for the purchase your home as outlined above.
7. Home Leave and Education. Apple will pay for six (6) round
trip business class airline tickets between Japan and California for your
wife and your daughter.
In the event your wife and daughter relocate to Japan during the
Term, Apple will pay for the reasonable costs of tuition, books and fees
for your daughter's education in Japan.
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8. Accountant Fees. Apple will pay the reasonable costs of
accounting services as provided in Apple's Expatriate Policy to handle
appropriate and covered financial matters.
9. Notice. For the purpose of this Letter Agreement, notices
and all other communications provided for in this Letter Agreement shall be
in writing and shall be deemed to have been duly given when delivered or
mailed by registered mail, return receipt requested, postage prepaid,
addressed to Apple Computer, Inc., 1 Infinite Loop, Mail Stop, MS 75-8A,
Cupertino, California 95014, Attn.: General Counsel, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
10. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this Letter
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Letter Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this Letter
Agreement and this Letter Agreement shall supersede all prior agreements,
negotiations, correspondence, undertakings and communications of the
parties, oral or written, with respect to the subject matter hereof;
provided, however, that, except as expressly set forth herein, this Letter
Agreement shall not supersede the Retention Agreement or the terms of any
stock options previously granted to you under the Long-Term Incentive Plans
and Arrangements. "Long-Term Incentive Plan and/or Arrangement" shall mean
the Apple Computer, Inc. 1990 Stock Option Plan and the Apple Computer,
Inc. 1987 Executive Long Term Stock Option Plan, all as amended, and any
successor plans thereto.
(b) Validity. The invalidity or unenforceability of any
provision of this Letter Agreement shall not affect the validity or
enforceability of any other provision of this Letter Agreement, which shall
remain in full force and effect.
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(c) Counterparts. This Letter Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same instrument.
(d) Equalization. Apple will provide you with tax equalization
benefits in accordance with Apple's Expatriate Policy.
(e) Source of Payments. All payments provided under this Letter
Agreement, other than payments made pursuant to a plan which provides
otherwise, shall be paid in cash from the general funds of Apple, and no
special or separate fund shall be established, and no other segregation of
assets made, to assure payment. You will have no right, title or interest
whatsoever in or to any investments which Apple may make to aid it in
meeting its obligations hereunder. To the extent that any person acquires
a right to receive payments from Apple hereunder, such right shall be no
greater than the right of an unsecured creditor of Apple.
(f) Headings. The headings contained in this Letter Agreement
are intended solely for convenience of reference and shall not affect the
rights of the parties to this Letter Agreement.
(g) Governing Law. The validity, interpretation, construction,
and performance of this Letter Agreement shall be governed by the laws of
the State of California without regard to its choice of law principles. The
parties agree that, except as expressly provided for to the contrary, venue
for any dispute shall be Santa Clara County, California.
(h) Remedies in Event of Future Dispute. In the event of any
future dispute, controversy or claim between the parties arising from or
relating to this Letter Agreement, its breach, any matter addressed by this
Letter 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 Gregoria, Haldeman & Piazza, Mediated Negotiations, 625
Market Street, Suite 400, San Francisco, California 94105. If the parties'
dispute is not resolved through mediation, it will be resolved through
binding confidential arbitration to be conducted by the American
Arbitration Association in San Francisco, pursuant to its Model Employment
Arbitration Rules, and judgment upon the award rendered by the
Arbitrator(s) may be entered by any court having
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jurisdiction of the matter. The prevailing party in such arbitration shall
be entitled to recover from the losing party, not only the amount of any
judgment awarded in its favor, but also any and all costs and expenses
incurred in arbitrating the dispute or in preparing for such arbitration.
* * * *
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to Apple the enclosed copy of this letter
which will then constitute our agreement on this subject.
Sincerely,
APPLE COMPUTER, INC.
By _/s/ Kevin Sullivan
Kevin Sullivan
Senior Vice-President,
Human Resources
Agreed to as of this ___ day of April, 1996.
_______________________________
John Floisand