Employment Agreement - Apple Computer Inc. and George M. Scalise
February 26, 1996
Mr. George M. Scalise
26055 Newbridge Road
Los Altos Hills, California 94022
Employment Agreement
Dear George:
The following sets forth our agreement regarding the terms and
provisions of your employment as an officer and employee of Apple Computer,
Inc. (the "Company"). Capitalized words which are not otherwise defined
herein shall have the meanings assigned to such words in Section 5 of this
Agreement.
1. Commencement of Employment. Your employment under this Agreement
shall commence on March 1, 1996 (the "Effective Date").
2. Position. You shall be employed as Executive Vice President and
Chief Administrative Officer, reporting to me, in my position as Chief
Executive Officer and Chairman of the Board, and your duties and
responsibilities to the Company shall be consistent in all respects with
such position. You shall devote substantially all of your business time,
attention, skills and efforts exclusively to the business and affairs of
the Company, 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. Your principal place of employment shall be the
executive offices of the Company in Cupertino, California, although you
understand and agree that you will be required to travel from time to time
for business purposes.
3. Compensation.
(a) Base Salary. As compensation to you for all services
rendered to the Company and its subsidiaries, the Company will pay you a
base salary at the rate of not less than Four Hundred Twenty Thousand
Dollars ($420,000) per annum as of the Effective Date. Your base salary
will be paid to you in accordance with the Company's regular payroll
practices applicable to its executive employees.
(b) Bonus. You shall be eligible to participate in the annual
Senior Executive Bonus Plan (domestic) sponsored by the Company or any
successor plan thereto. Such bonus program shall
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afford you the opportunity to earn an annual bonus for each fiscal year of
the Company during your employment. During the Company's Fiscal Year 1996
only, your target bonus shall be Three Hundred Fifteen Thousand Dollars
($315,000), prorated based on that portion of FY96 during which you are
employed by the Company, commencing on the Effective Date. The amount of
your annual bonus thereafter shall be an amount equal to seventy-five
percent (75%) of your base salary which shall be reviewed annually by the
Company. Each annual bonus shall be paid to you in accordance with the
payment provisions of the bonus plan then in effect.
(c) Hiring Bonus. Subject to other provisions of this
Agreement, the Company shall pay you a Hiring Bonus in the amount of Six
Hundred Thirty Thousand Dollars ($630,000). Fifty percent (50%) of this
Hiring Bonus, in the amount of Three Hundred Fifteen Thousand Dollars
($315,000), shall be paid to you within thirty (30) days of the Effective
Date of this Agreement. The balance of your Hiring Bonus, in the amount of
Three Hundred Fifteen Thousand Dollars ($315,000), shall be paid to you
within five (5) days after the first anniversary of the Effective Date.
(d) Long-Term Incentive Compensation. In consideration of this
Agreement, we will recommend to the Company's Board of Directors an initial
stock option grant of two hundred forty thousand (240,000) shares of Apple
Computer, Inc. common stock. You shall be eligible to participate in each
Long-Term Incentive Plan or Arrangement established by the Company for its
executive employees in accordance with the terms and provisions of such
Long-Term Incentive Plan or Arrangement. The Company shall revise and
restate as appropriate its Long-Term Incentive Plans and Arrangements in
order to attract and retain the best qualified executives and officers.
You will receive a reasonable amount of incentives under the Company's
revised and restated Long-Term Incentive Plans and Arrangements.
(e) Benefits. You shall be eligible to participate in all
employee benefit plans and arrangements that the Company 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 the
Company.
4. Termination.
(a) Termination for Cause. If your employment is terminated by
the Company for Cause, the Company shall pay you the full amount of the
accrued but unpaid base salary you have earned through the date of your
termination, plus a cash payment (calculated on the basis of your base
salary then in effect) for all unused accrued vacation. In addition, you
shall be entitled to benefits under the employee plans and arrangements
described in Section 3(e) above in accordance with terms and provisions of
such plans and arrangements.
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(b) Termination Other than for Cause. During the five (5) year
period following the Effective Date only, if your employment is terminated
by the Company for reasons other than for Cause, the Company shall pay you
the full amount of the accrued but unpaid base salary you have earned
through the date of your termination, plus a cash payment (calculated on
the basis of your base salary then in effect) for all unused accrued
vacation. In addition, the Company shall pay you a lump sum amount
depending on the date of your employment termination as follows:
Termination Date Amount
During 1-year period 100% of annual base salary
following Effective Date ($420,000)
100% of target bonus
($315,000)
50% of hiring bonus
($315,000)
Following first anniversay 100% of annual base salary
of Effective Date 100% of target annual bonus
There shall be no other payments or benefits on termination.
5. Definitions. For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below:
"Cause" shall mean a termination of your employment which is a
result of (i) your felony conviction, (ii) your willful disclosure of
material trade secrets or other material confidential information related
to the business of the Company and its subsidiaries or (iii) your willful
and continued failure substantially to perform your duties with the Company
(other than any such failure resulting from your incapacity due to physical
or mental illness). For purposes of the previous sentence, no act or
failure to act on your part shall be deemed "willful" unless done, or
omitted to be done, by you not in good faith and without reasonable belief
that your action or omission was in the best interest of the Company.
"Long-Term Incentive Plan and/or Arrangement" shall mean the
Apple Computer, Inc. 1990 Stock Option Plan, as amended, and any successor
plan thereto.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
mail, registered, return receipt requested, postage prepaid, addressed to
the Apple Computer, Inc., 1 Infinite Loop, MS 75-8A, Cupertino, California
95014, Attn.: Gilbert F. Amelio, with a copy to the General Counsel of the
Company, or to you at the address set forth on the first page of this
Agreement 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.
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7. Miscellaneous.
(a) Amendments, Waivers, Etc. No provision of this 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 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 Agreement and this 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, except as expressly set forth herein,
this Agreement shall not supersede the terms of any stock options
previously granted to you under the Long-Term Incentive Plans and
Arrangements.
(b) Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
(c) Counterparts. This 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) Withholding. Amounts paid to you hereunder shall be subject
to all applicable federal, state and local withholding taxes.
(e) Source of Payments. All payments provided under this
Agreement, other than payments made pursuant to a plan which provides
otherwise, shall be paid in cash from the general funds of the Company, 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 the Company may make to
aid it in meeting its obligations hereunder. To the extent that any person
acquires a right to receive payments from the Company hereunder, such right
shall be no greater than the right of an unsecured creditor of the Company.
(f) Headings. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect the
rights of the parties to this Agreement.
(g) Governing Law. The validity, interpretation, construction,
and performance of this Agreement shall be governed by the laws of the
State of California applicable to contracts entered into and performed in
such State.
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* * * *
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter
which will then constitute our agreement on this subject.
Sincerely,
APPLE COMPUTER, INC.
By_/s/ G. F. Amelio__
Gilbert F. Amelio
Agreed to as of this 26th day of February, 1996.
__/s/ George M. Scalise____
George M. Scalise
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