Separation Agreement - Apple Computer Inc. and Joseph A. Graziano
Separation Agreement
In consideration of the mutual agreements set forth below, Joseph A.
Graziano ("Graziano") and Apple Computer, Inc. ("Apple") agree to the
following terms and conditions of this Separation Agreement (the
"Agreement"):
1. Nature of Business. Apple is in the business of designing,
developing, producing, selling and marketing computer systems, related
products and services. The business practices of Apple and the market
conditions in which Apple operates change rapidly and these changes have
necessitated prompt changes in management, and/or managers'
responsibilities. These changes are needed from time to time in the high
level management positions such as those for which Graziano has been
employed.
2. Resignations and Rescission of Retention Agreement. Employee has
resigned from his position on Apple's Board of Directors effective as of
October 3, 1995 and from his position as Chief Financial Officer effective
as of October 31, 1995. Graziano also hereby resigns effective October 31,
1995 from all other positions he holds on behalf of Apple, its subsidiaries
and affiliates (except for his position as an employee), which positions
are set forth at Exhibit A hereto. Graziano agrees to sign at Apple's
request all appropriate mutually agreeable documentation prepared by Apple
to facilitate these resignations.
Graziano and Apple agree that in exchange for the terms and conditions
of this Agreement, the June 9, 1995 Retention Agreement between Graziano
and Apple, a copy of which is attached hereto as Exhibit B, is hereby
rescinded and that neither party has any further rights or obligations
under the Retention Agreement.
3. Employment Status/Termination. Subject to paragraph 2 above and
paragraph 11 below, from October 31, 1995 through January 2, 1996
("Termination Date") or such earlier date as a result of an event under
paragraph 11, Graziano will continue to devote his best efforts to Apple
and will remain an employee of Apple as provided in this paragraph,
reporting to Edward B. Stead. Until January 2, 1996, Graziano will remain
an appointed vice-president of Apple and continue to receive his regular
salary and full executive level medical insurance benefits. On or about
October 31, 1995, Apple will designate Graziano as a participant in Apple's
Executive Severance Plan ("Plan") and Graziano will become eligible to
receive benefits under the Plan valued as of December 31, 1995. To the
extent this Agreement varies from the terms and conditions of the Plan or
Apple's Senior/Executive Bonus Program ("Bonus Plan"), this Agreement shall
govern.
4. Compensation and Benefits Upon Termination. Subject to paragraph
11 below, on or about Termination Date, Apple will pay the following:
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a. Severance Payments. Graziano is eligible to receive a lump
sum severance payment under the Plan based on his 6 years' and 6 months'
employment and a proration of his FY '96 bonus, less deductions. Subject
to paragraph 11 below, on or about Termination Date, Apple will pay
Graziano three hundred forty thousand, six-hundred twenty-six dollars
($340,626.00), less deductions, in full satisfaction of all Apple's
obligations to pay severance benefits under the Plan, Bonus Plan, and any
and all other written or oral agreements between Graziano and Apple
including but not limited to, the employment agreement dated June 14, 1989,
a copy of which is attached hereto as Exhibit C. On or about Termination
Date and subject to paragraph 11 below, Apple will pay Graziano an
additional lump sum payment of fifty nine thousand, three hundred seventy
four dollars ($59,374), less deductions, in consideration of the covenants
and promises made in this Agreement expressly including the promises and
covenants contained in paragraph 7 of this Agreement. Except as provided
for below in Paragraph 4(b), there shall be no other payments to Graziano
except as stated in this paragraph 4(a) and in paragraph 3 above and the
amount of such payments shall at all times remain subject to paragraph 11.
b. Stock Options. Apple's Board of Directors (the "Board")
previously granted Graziano options to purchase shares of Apple Common
Stock under Apple's 1981 and 1990 Stock Option Plans (the "1981 and 1990
Plans") and options to purchase shares of stock under Apple's 1987
Executive Long Term Stock Option Plan ("ELTSOP"). Nothing in this
Agreement shall alter the terms and conditions of such options and such
options shall continue to vest and be exercisable in accordance with the
terms of the grant agreement issued to Graziano with respect to such
grants, and the terms of the 1981 and 1990 Stock Option Plans and the
ELTSOP administered by the Board. Notwithstanding this paragraph, the
administrator of the ELTSOP has determined that the three (3) month period
relating to the exercise of options after termination of employment as
provided for in Section 9(e) of the ELTSOP shall be extended to twelve (12)
months with respect to those outstanding stock options granted to Graziano
only under the ELTSOP which are vested and exercisable on or before January
2, 1996.
c Receipt of Documentation. Graziano acknowledges that he has
previously received from Apple copies of pertinent portions of Apple's
Executive Severance Plan, Apple's Senior/Executive Bonus Program, Apple's
1981 and 1990 Stock Option Plans, Apple's ELTSOP, Apple's Vacation and
Holiday Policies, and Apple's Benefit Plans relating to health care, life
insurance, accidental death and disability, short and long term disability
and Savings Plans. Graziano understands and agrees to be bound by the
written terms and conditions of these various plans, policies or programs,
unless expressly provided for otherwise under this Agreement or in the
Plan, and agrees that Apple has reserved the right and option, in its sole
discretion, to change, interpret, modify or terminate these and all other
plans, policies or programs at any time without Graziano's consent so long
as such action does not conflict with or reduce Graziano's rights under
this Agreement.
e. No Other Benefits. Graziano will not be entitled to receive
any other compensation, bonus or benefits provided by, through or on behalf
of Apple, its affiliates or subsidiaries, other than benefits that are
vested as of Termination Date and that are payable in accordance with the
terms of any applicable Benefit Plan, or otherwise provided for herein.
5. Confidentiality. The terms of this Agreement are confidential.
Neither Graziano nor Apple will at any time disclose to any third party the
fact or terms of this Agreement, except as
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authorized by this agreement or as required by law. Graziano may also make
such disclosure to his
spouse, tax advisor and/or lawyer, all of whom shall be instructed to keep
the information disclosed to them confidential; any disclosure by any such
party shall be deemed a disclosure by Graziano. Apple and Graziano shall
not disparage each other in their communications in response to all
inquiries from the press, public media or any other third parties regarding
this Agreement or Graziano's employment termination. If Apple makes a
press statement which disparages Graziano, then Graziano may invoke the
procedures outlined in paragraph 21 of this Agreement. If Graziano makes a
press statement which disparages Apple, then Apple may invoke the
procedures outlined in paragraph 21 of this Agreement.
6. Trade Secrets, Proprietary and Confidential Information.
Graziano agrees to comply with Apple's "Proprietary Rights and Information
Agreement" which is attached hereto as Exhibit D to this Agreement.
In addition, Graziano agrees to continue to abide by the principles
and guidelines in Apple's Global Ethics brochure, the terms of which are
incorporated herein to the extent it applies to employee through
Termination Date and to former employees thereafter.
On or before Termination Date, Graziano agrees to promptly return to
Apple or its records retention designee, all Apple proprietary and
confidential information, including but not limited to all inventions,
discoveries, improvements, computer programs, designs, documentation,
notes, plans, drawings and copies thereof to Apple. Graziano shall be
entitled to keep as his own personal property the equipment listed at
Exhibit E together with manuals and product data information associated
with such equipment.
Graziano and Apple agree that this section regarding Trade Secrets,
Proprietary and Confidential Information shall survive the termination of
this Agreement.
7. Non-Competition/Non-Solicitation. Graziano further recognizes
that Apple's work force constitutes an important and vital aspect of its
business. Graziano agrees, therefore, that both during his employment with
Apple, and thereafter until January 2, 1997, Graziano shall not solicit, or
assist others employed by Apple, or any of its subsidiaries or affiliates,
to become employed by any firm, company or other business enterprise.
Graziano further represents that he has no time prior to this areement
solicited or encouraged any employee to leave Apple. Nothing in this
Agreement will prevent Graziano from providing favorable recommendations or
favorable references on behalf of persons who previously worked with
Graziano.
Graziano will not, without the prior express written consent of Apple,
compete with Apple on or before June 30, 1996 by engaging in or assisting
others to develop or market products or services that are in competition
with Apple products or services. Graziano's agreement not to compete is
limited to the state of California. Nothing in this Agreement shall
prohibit Graziano from serving as a member of the Boards of Directors of
Stratacom, Intellicorp, Pixar and/or Sharedata.
Graziano and Apple also agree, that upon a breach or violation or
threatened breach or violation of any confidentiality, trade secrets, non-
competition or non-solicitation agreement by Graziano contained herein, or
if any provision of Sections 5, 6, or 7 of this Agreement, Apple, in
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addition to all other remedies which might be available to it including
rescission of the Agreement and repayment of the consideration paid to
Graziano for the covenants or promises breached, shall be entitled as a
matter of right to equitable relief in any court of competent jurisdiction,
including the right to obtain injunctive relief or specific performance.
Graziano and Apple agree that the remedies at law for any such breach or
violation are not fully adequate and that the injuries to Apple as a result
of the continuation of any breach or violation are incapable of full
calculation in monetary terms and therefore constitute irreparable harm.
This paragraph 7 shall survive the termination of this Agreement.
8. Indemnification. All rights of indemnification previously
provided by Apple to Graziano by Apple's By-Laws and/or by the
Indemnification Agreement dated June 14, 1989 shall continue in full force
and effect in accordance with their terms, following the date of this
Agreement. A copy of Graziano's Indemnification Agreement is attached
hereto as Exhibit F to this Agreement.
9. Successors. Apple will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Apple to expressly
assume and agree to perform this Agreement in the manner and to the same
extent that Apple would be required to perform it if no such succession had
taken place. Failure of Apple to obtain such assumption and agreement
prior to the effectiveness of any such succession shall entitle Graziano to
the benefits listed in paragraphs 3 and 4 of this Agreement, subject to the
terms and conditions therein.
10. Governing Law. The validity, interpretation, effect, and
enforcement of this Agreement shall be governed by the laws of the State of
California without regard to its choice of law principles.
11. Entire Agreement. This Agreement, and Exhibits A, B, C, D, E & F
to this Agreement, set forth the entire Agreement and understanding between
Graziano and Apple, and supersede any other negotiations, written
agreements, understandings, oral agreements, representations or past or
future practices, whether written or oral, by Apple, including but not
limited to, the employment agreement between Apple and Graziano dated June
14, 1989, except as otherwise provided for herein. This Agreement may be
amended only by written agreement, signed by the parties to be bound by the
amendment. Parol evidence will be inadmissible to show agreement by and
between the parties to any term or condition contrary to or in addition to
the terms and conditions contained in this Agreement.
Each Apple plan or policy referred to herein directly or by
implication (except the 1981 and 1990 Stock Option Plans and the ELTSOP) is
incorporated herein only insofar as it does not contradict this Agreement.
If any inconsistencies exist between this Agreement and any such plan or
policy, this Agreement shall control. If any inconsistencies exist between
this Agreement and the 1981 and 1990 Stock Option Plans or the ELTSOP,
those stock plans shall control.
Nothing in any such plan, policy, or this Agreement shall change the
At Will nature of Graziano's employment under this Agreement and as
provided under his employment agreement dated June 14, 1989 by which either
party can terminate Graziano's employment without regard to cause.
Notwithstanding any provision in this Agreement to the contrary, Graziano
understands and agrees that Apple is obligated to make the payments
outlined in paragraph 3 and 4 of this Agreement in the event Graziano's
employment terminates before Termination Date for any reason other than:
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a. by Apple for "Business Reasons" as defined below;
b. by Graziano for any reason, except if Graziano's employment
is terminated for any material breach by Apple of this Agreement. In this
event, Graziano will be entitled to the payments outlined in paragraph 3
and 4 adjusted according to the actual, accelerated Termination Date and
offsetting any payments made to him prior to the actual, accelerated
Termination Date;
For purposes of this Agreement only, "Business Reasons" shall mean that
Graziano is 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
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 delegate.
12. Right to Advice of Counsel. Graziano understands that he has the
right to have this Agreement reviewed by his lawyer and acknowledges that
Apple has encouraged him to consult with his lawyer so that he is fully
aware of his rights and obligations under this Agreement. Graziano
acknowledges that he has done so.
13. Modification. This Agreement may not be amended, modified,
changed or discharged in any respect except as agreed in writing and signed
by Graziano and the Chief Executive Officer of Apple Computer, Inc.
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14. Severability and Interpretation. In the event that any provision
or any portion of this Agreement is held invalid or unenforceable by a
court of competent jurisdiction, such provision or portion thereof shall be
considered separate and apart from the remainder of this Agreement and the
other provisions shall remain fully valid and enforceable, provided that,
if paragraph 2, 5, 6, 7, 19 or 21 is held to be invalid or unenforceable in
response to a motion, argument or other act by Graziano, then Apple, at its
sole discretion, may rescind the Agreement and recover all consideration
paid to Graziano under the Agreement.
15. Notices. All notices required by this Agreement shall by given
in writing either by personal delivery or by first class mail, return
receipt requested. Notices shall be addressed as follows:
To Apple: Apple Computer, Inc.
1 Infinite Loop, Mail Stop 38-I
Cupertino, California 95014
Attention: General Counsel
To Graziano : 14055 Chester Avenue
Saratoga, California 95070
or in each case to such other address as Graziano or Apple shall notify the
other. Notice given by mail shall be deemed given five (5) days following
the date of mailing.
16. Miscellaneous. The rights and obligations of Apple under this
Agreement shall inure to the benefit of and shall be binding upon the
present and future subsidiaries of Apple, any and all subsidiaries of a
subsidiary, all affiliated corporations, and successors and assigns of
Apple. No assignment of this Agreement by Apple will relieve Apple of its
obligations. Graziano shall not assign any of his rights and/or
obligations under this Agreement and any such attempted assignment will be
void. This Agreement shall be binding upon and inure to the benefit of
Graziano's heirs, executors, administrators, or other legal representatives
and their legal assigns.
17. Damage Limitation. At Termination Date, Graziano shall not be
entitled to recover any compensation, benefits or damages except as
specifically described in this Agreement. This damage waiver provides that
no damages (including without limitation, special, consequential, general,
liquidated or punitive damages) shall be sought or due from Apple.
18. Waiver. A waiver by either party of any of the terms or
conditions of this Agreement in any instance shall not be deemed or
construed to be a waiver of such term or condition for the future, or of
any subsequent breach thereof. All remedies, rights, undertakings,
obligations, and agreements contained in this Agreement shall be cumulative
and none of them shall be in limitation of any other remedy, right,
undertaking, obligation or agreement of either party.
19. Release. Graziano hereby completely releases and forever
discharges Michael Spindler, Apple, its officers, directors, agents,
employees, attorneys, insurers, subsidiaries and affiliates ("Apple
Parties") from, and covenants not to sue any Apple Party with respect to,
all claims, rights, demands, actions, obligations, debts, sums of money,
damages (including but not limited to general, special, punitive,
liquidated and compensatory damages) and causes of action of every kind,
nature
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and character, known and unknown, in law or equity, connected with
Graziano's employment relationship with the Apple Parties, or any other act
or omission of any Apple Party which may have occurred prior to the date
this Agreement is signed. Graziano further agrees that by his acceptance
and negotiation of the payment provided for in paragraph (4) of this
Agreement, he thereby completely releases and forever discharges the Apple
Parties from, and covenants not to sue any Apple Party with respect to, all
claims, rights, demands, actions, obligations, debts, sums of money,
damages (including but not limited to general, special, punitive,
liquidated and compensatory damages) and causes of action of every kind,
nature and character, known and unknown, in law or equity, connected with
Graziano's employment relationship with the Apple Parties, or the
termination of such relationship, or any other act or omission of any Apple
Party which may have occurred prior to Termination Date. This release and
discharge includes, but is not limited to, all "wrongful discharge" claims;
all claims relating to any contracts of employment, express or implied; any
covenant of good faith and fair dealing, express or implied; any tort of
any nature: any federal, state, or municipal statute or ordinance; any
claims under the California Fair Employment and Housing Act, Title VII of
the Civil Rights Act of 1964, 42 U.S.C. Section 1981, and any other laws
and regulations relating to employment discrimination and any and all
claims for attorney's fees and costs. Graziano specifically acknowledges
that the foregoing release includes a complete release and discharge of all
Apple Parties from any and all claims, damages of any kind, and claims for
attorneys fees and costs, under the Age Discrimination in Employment Act of
1967 ("ADEA") as amended by the Older Worker Benefit Protection Act
("OWBPA"). Graziano and Apple agree that part of the consideration payable
to Graziano under this Agreement is consideration that Graziano would not
otherwise be entitled to and is in consideration for Graziano's release of
claims under the ADEA as amended by the OWBPA.
Graziano acknowledges that he understands the protections provided by
the OWBPA and that the provisions of the OWBPA have been met by the terms
of this Agreement. Graziano states that he knowingly and voluntarily
enters into this Agreement. Graziano acknowledges that this Agreement is
written in a manner calculated to be understood by him. Graziano further
acknowledges that this Agreement refers without limitation to rights under
the Age Discrimination in Employment Act. Graziano understands that by
this Agreement, he does not waive rights or claims that may arise after the
date the Agreement is executed. Graziano acknowledges that he is entering
this Agreement in exchange for consideration in addition to anything of
value to which he already is entitled due to his employment with Apple.
Further, Graziano acknowledges that this release of claims under the OWBPA
is not requested in connection with an exit incentive program or other
employment termination program offered to a group or class of employees
within the meaning of OWBPA. Notwithstanding this provision, Graziano
acknowledges that he has been allowed up to forty five (45) days from the
date that he received this Agreement to accept its terms. Graziano
acknowledges he has consulted with an attorney about the Agreement.
Graziano acknowledges that after he signs the Agreement, he will then be
given seven (7) days following the date on which he signs the Agreement to
revoke it and that this Agreement will only become effective after this
seven (7) day period has lapsed. Any such revocation must be in writing
signed by Graziano and immediately delivered to Apple's General Counsel.
Graziano has read and expressly waives Section 1542 of the California
Civil Code, which provides as follows:
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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.
This waiver is not a mere recital, but is a known waiver of rights and
benefits. This is a bargained-for provision of this Agreement and is
further consideration for the covenants and conditions contained herein.
The Apple Parties hereby release and forever discharge Graziano, his
agents and attorneys from, and covenant not to sue Graziano, his agents and
attorneys with respect to, all claims, rights, demands, actions,
obligations, debts, sums of money, damages, and causes of action ("claims")
arising from his employment relationship with Apple to the extent permitted
by law and public policy, except for any claims arising from any
intentional acts of misconduct, or any other act taken in bad faith or
without a reasonable belief that it was in the best interests of the Apple
Parties.
20. Cooperation. Graziano agrees that he will make himself available
at reasonable times and intervals to participate in the conduct of and
preparation for any pending or future litigation to which Apple is a party
and in which his experience or knowledge may be relevant. Graziano shall
be reimbursed for his reasonable travel and out-of-pocket expenses incurred
by virtue of his cooperation as described in this paragraph. In no respect
shall this provision be deemed to pertain to or affect the nature or
substance of Graziano testimony at deposition or trial or in any other
truthful testimony at deposition or trial or in any other circumstances.
21. Remedies in Event of Future Dispute.
a. Except as provided in subparagraph (b) below, in the event
of any future dispute, controversy or claim between the parties arising
from or relating to this Agreement, its breach, any matter addressed by
this Agreement, and/or Graziano's employment with Apple through Termination
Date, 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 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 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.
b. In the event that a dispute arises concerning compliance
with this Agreement, either party will be entitled to obtain from a court
with jurisdiction over the parties preliminary and permanent injunctive
relief to enjoin or restrict the other party from such breach or to enjoin
or restrict a third party from inducing any such breach, and other
appropriate relief, including money damages. In seeking any such relief,
however, the moving party will retain the right to have any remaining
portion of the controversy resolved by binding confidential arbitration in
accordance with subparagraph (a) above.
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By signing the below, the parties agree to the terms hereof, including
the Exhibits hereto, and agree that this document, and Exhibits A, B, C, D,
E & F hereto, set forth their entire agreement, except as otherwise
expressly provided herein.
APPLE COMPUTER, INC.
By _/s/ Michael Spindler__________
Date 12/20/95 Michael Spindler
Chief Executive Officer
Apple Computer, Inc.
I have read, understand, and agree to the foregoing:
By _/s/ Joseph A. Graziano________
Date 12/19/95 Joseph A. Graziano
APPROVED AS TO FORM:
By _____________________________
Date Greg Gallo, Esq.
Gray, Cary, Ware & Freidenrich
Attorneys for Joseph Graziano