[ADOBE SYSTEMS INCORPORATED LETTERHEAD]
October 9, 1997
Mr. David B. Pratt
12324 Melody Lane
Los Altos Hills, California 94022
RESIGNATION AGREEMENT
Dear Mr. Pratt:
This will reflect our mutual agreement concerning your resignation from your position as an officer of Adobe Systems Incorporated (the "COMPANY") and of each of the subsidiaries of the Company (collectively, the "COMPANIES") and the Company's retention of you as an employee following such resignation, in accordance with the terms and conditions set forth below. Your acceptance of and agreement with the provisions of this letter (hereinafter, the "RESIGNATION AGREEMENT") will be signified by applying your signature to the end of this letter by a date no later than 21 days after the letter date.
1. YOUR RESIGNATION AS AN OFFICER. By signing this Resignation Agreement, you hereby agree that your resignation from all positions you hold as an officer of the Companies shall become effective as of November 30, 1997 (the "RESIGNATION DATE").
2. TRANSITIONAL EMPLOYMENT ARRANGEMENT. You further agree that as of the Resignation Date and continuing through January 15, 1998 (the "SEVERANCE DATE") you shall remain employed by the Company and you shall devote substantially all of your business time, attention and abilities to the business of the Company (including its subsidiaries or affiliates, when so required) and faithfully serve the Company and use your best efforts to promote and develop the interests of the Company. During the period beginning on the Resignation Date and ending on the Severance Date (hereinafter, the "TRANSITIONAL PERIOD"), your responsibilities and duties as an employee of the Company will be to provide advice to the President and Co-Chairman of the Board of Directors of the Company regarding all matters relating to the transitional management activities associated with the Pathfinder project.
3. TERMINATION OF EMPLOYMENT. On the Severance Date, you will cease to be employed in any capacity by the Company.
4. PAYMENTS AND BENEFITS IN CONNECTION WITH YOUR RESIGNATION AND TRANSITIONAL EMPLOYMENT. In connection with your resignation and transitional employment, subject to Section 8, the Company agrees to provide you with the compensation and benefits described below.
(a) SALARY CONTINUATION PAYMENTS. In consideration of your agreement to continue your employment with the Company during the Transitional Period, the Company shall continue to pay you your base salary, at the annual rate currently in effect as of the Resignation Date, payable in accordance with the Company's normal payroll procedures.
(b) BENEFIT CONTINUATION DURING THE TRANSITIONAL PERIOD. During the Transitional Period, you shall continue to participate in all Company welfare benefit plans, including, without limitation, health, medical and disability insurance plans, in which you participate as of the Resignation Date (the "Welfare Benefit Plans"), in accordance with the terms and conditions applicable to you which are currently in effect as of such date.
(c) BENEFIT CONTINUATION AFTER THE SEVERANCE DATE. For a period of two years and nine months following the Severance Date, you and your eligible dependents shall continue to participate in the Welfare Benefit Plans on the same terms (including contribution levels) as are in effect on the Resignation Date. Your participation in the Welfare Benefit Plans will terminate at the time you become eligible to receive benefits under the welfare benefit plans of a subsequent employer. You hereby acknowledge and agree that you have an affirmative obligation to notify the Company of any subsequent employment that offers you such welfare benefits.
(d) BONUS. As soon as practicable following the Severance Date, the Company will pay you your bonus for fiscal year ending 1997, subject to the terms and conditions of the bonus plan and arrangements applicable to you. You will not however, receive a bonus for any portion of fiscal year ending 1998.
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