Employment Agreement - Apple Computer Inc. and Fred D. Anderson Jr.
March 4, 1996
Mr. Fred D. Anderson, Jr.
114 Old Chester Road
Essex Fells, New Jersey 07021
Dear Mr. Anderson:
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 7 of this
1. Commencement of Employment. Your employment under this
Agreement shall commence on April 1, 1996 (the 'Effective Date').
2. Position. You shall be employed as Executive Vice
President/Chief Financial Officer of the Company and shall report directly
to the Chief Executive Officer of the Company, 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.
(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 five hundred thousand dollars
($500,000) 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 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, you shall be guaranteed a bonus
payout of at least $400,000. During the Company's Fiscal Year 1997 only,
your target annual bonus will be set at 80% of your base salary. The
amount of your target annual bonus thereafter shall be reviewed annually by
the Company. Subject to the provision above regarding a guaranteed bonus
payout during the Company's Fiscal Year 1996 only, each annual bonus shall
be paid to you in accordance with the terms and conditions 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 eight
hundred thousand dollars ($800,000). 50% of this Hiring Bonus ($400,000)
shall be paid to you within 5 days after the Effective Date of this
Agreement. The balance of your Hiring Bonus ($400,000) shall be paid to
you within 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 Apple Computer, Inc. Board of Directors
an initial stock option grant of 400,000 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.
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
(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.
(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 ($500,000)
100% of target bonus
50% of hiring bonus
Following first anniversary 100% of annual base salary
of Effective Date 100% of target annual bonus
There shall be no other payments or benefits on termination.
5. Relocation. The Company will provide you with full
executive relocation benefits in accordance with the Company's Relocation
Policy for executives. Any additional relocation items or arrangements
will be determined in writing as authorized by the Company's Senior Vice
President of Human Resources.
6. Automobile Expense. For the first 3 years of your
employment, the Company will provide you with an annual automobile expense
not to exceed ten thousand dollars ($10,000).
7. 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 or any such actual or anticipated failure resulting from
a resignation by you) after a written demand for substantial performance is
delivered to you by the Company's Chief Executive Officer, which demand
specifically identifies the manner in which the Company believes that you
have not substantially performed your duties, and which performance is not
substantially corrected by you within 10 days of receipt of such demand.
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
8. 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 registered mail, return receipt requested, postage prepaid,
addressed to the Apple Computer, Inc., 1 Infinite Loop, MS 75-8A,
Cupertino, California 95014, Attn.: Gilbert F. Amelio, Chairman and Chief
Executive Officer, 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.
(a) Amendments, Waivers, Retention Agreement, 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, that
the Retention Agreement between you and the Company shall supersede this
Agreement in its entirety, with the exception of paragraph 3(c) above, upon
the Change in Control Date as specified in the Retention Agreement.
(b) Beneficiaries. If you should die while any amount for
accrued salary, vacation, guaranteed bonus during Fiscal Year 1996 only or
hiring bonus under paragraph 3(c) of this Agreement would still be payable
to you if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this
Agreement to your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees or
(c) 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
(d) 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.
(e) Withholding. Amounts paid to you hereunder shall be subject
to all applicable federal, state and local withholding taxes.
(f) 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.
(g) 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.
(h) 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
* * * *
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.
APPLE COMPUTER, INC.
By_/s/ G.F. Amelio___
Gilbert F. Amelio
Agreed to as of this 4th day of March, 1996.
_/s/ F.D. Anderson______
Fred D. Anderson, Jr.