Author: Ken Chan

Categories
consulting agreement

Apple iPhone Development Revealed

When Jon Rubinstein left Apple Computer Inc. (now Apple Inc.), he signed a consulting agreement with some interesting terms. Would have been much cooler to have found this contract before MacWorld. 🙂

In general, the Services may consist of advice regarding the design and development of personal computers, digital music players, and cell phone devices, and related intellectual property matters, as agreed between you and Steve Jobs or his designees from time to time.

Here’s another interesting paragraph that covers the non-compete provisions:

You further agree that during the term of this Agreement, you will not become or be employed, directly or indirectly, by, nor will you provide consulting services to, any of Intel Corporation, Dell Inc., Hewlett-Packard Company, Sony Corporation, Motorola Inc., Nokia Corporation, Samsung Group, Microsoft Corporation, or any other company that is working on a final product that is a personal computer, digital music player, or cell phone device, unless otherwise approved in advance by Apple in its sole discretion.

You can find the full terms of the Consulting Services Agreement between Apple Computer Inc. and Jon Rubinstein on the website now.

Categories
cease and desist

Big Bird Jumps on the Bandwagon

So, I get a letter regarding an American Idol contract yesterday. Today, Big Bird pays an unwelcome visit. Yes, that tall, cute yellow bird.

On your website at the following address http://contracts.onecle.com/looksmart/pbs.grant-sesame.1999.06.28.shtml You have posted an agreement dated June 28, 1999 between CTW and LookSmart Ltd.

Sesame Workshop (formerly known as CTW) has not granted permission for this contract to be posted on the internet. The terms and conditions of this contract are confidential. Sesame Workshop is the owner of the contract and your posting of the contract without our permission infringes our valuable rights. Please remove the contract immediately and contact me to confirm your agreement to this request. Sesame Workshop reserves all its rights and claims in connection with this matter.

Very truly yours,

Richard Siegmeister, Counsel
Legal & Business Affairs
Sesame Workshop
One Lincoln Plaza
New York, NY 10023

What do you think of Big Bird now? I’m not sure what so confidential about a contract that was included in a Form S-1/A securities filing that LookSmart had filed back on July 27, 1999. Yes, the SEC’s own website had been displaying the contract online since…oh the previous millenium. 😉

Categories
cease and desist

Idol Confidential

Sony sent me an e-mail this morning:

I am an attorney at SONY BMG MUSIC ENTERTAINMENT (“SONY BMG”), and it has come to our attention that the link on oneCLE’s website found at http://contracts.onecle.com/ckx/american-idol.lic.2005.11.28.shtml contains a highly confidential contract between Sony BMG’s UK affiliate and various other entities relating to the American Idol series. We hereby request that the contract be immediately removed from the above-referenced link and any other site within the control of oneCLE. We also request that you inform us how oneCLE came into the possession of this confidential agreement. Please confirm by return email that the link(s) have been removed.

This letter is written without prejudice to or waiver of the claims, rights, remedies and/or defenses of Sony BMG and its affiliates, all of which are hereby expressly reserved.

Regards,

Wade Leak
Vice President and Senior Counsel
SONY BMG MUSIC ENTERTAINMENT
550 Madison Avenue, 15th Floor
New York, NY 10022

Not too sure how confidential a contract is if one of the parties to the contract has filed it with the U.S. Securities and Exchange Commission.

I wonder if Sony will be asking the SEC to remove this link as well: Exhibit 10.31.

Categories
employment agreement severance agreement

And They Were Pissed at Carly…

Marketplace:: Sloan Sessions: Goodbye Bob Nardelli. When Home Depot CEO Bob Nardelli resigned last week, a lot of people were outraged at his severance package: $210 million. That’s a lot of money for a CEO whose company struggled badly while he was on the job.

When Carly Fiorina walked away from HP with a $21 million severance package, the critics scowled. Now, Bob Nardelli leaves Home Depot and suddenly $21 million looks like chump change. You can find Robert Nardelli’s employment agreement on the site now, along with other Home Depot contracts.

Categories
mergers and acquisitions

Reader’s Digest Named Best Buy

New York Times: For One Critic, a Magazine Trumps MySpace as a Smart Buy. Despite all the coverage of MySpace as the most astute media buy in recent history, Ad Age’s Simon Dumenco begs to differ. His idea of a wise acquisition: the $2.4 billion buyout two weeks ago of Reader’s Digest Association, publisher of the long-lived magazine of the same name.

Reader’s Digest contracts are all here.

Categories
stock options

Re-pay Company for Backdated Stock Options Language

From the Resignation Agreement between KB Home and Bruce Karatz:

6. Karatz acknowledges and agrees that the exercise price of each annual stock option granted to him since October 2, 1998 (the “Subject Options”) shall be changed to the closing price per share of the Company’s common stock on the new measurement dates selected by KB Home for such grants as reflected in the restated financial statements or adjusted books and records expected to be completed by KB Home. For each Subject Option exercised by Karatz prior to the date hereof, Karatz shall pay to KB Home, in cash, the product of (i) any positive difference between the exercise price and the fair market value of KB Home common stock on the new measurement date for the Subject Option and (ii) the number of shares subject to such Subject Option. KB Home will provide Karatz with a schedule containing reasonable detail regarding the new measurement dates and amounts payable by Karatz in respect of the Subject Options within 15 days of filing financial statements with the Securities and Exchange Commission and Karatz shall make the required payments and enter into amended option agreements within 90 days thereafter. Karatz acknowledges that KB Home makes no representation as to the tax treatment of Karatz’s KB Home stock options and shares of restricted stock and that he will be responsible for any tax obligations that may arise therefrom.

We’re not talking about loose change here. The accompanying press release states: “This is expected to involve an aggregate voluntary value transfer from Mr. Karatz to the Company of approximately $13 million.” Wow!

Categories
employment agreement severance agreement stock options

Stock Options Backdating Scandal Widens

New York Times: KB Home Ousts Its Chief and 2 Others. The longtime chief executive of KB Home, one of the nation’s largest home builders, resigned under pressure on Sunday night and agreed to return $13 million in profit from backdated stock options, the company said.

At first, I thought the stock options backdating problem was only a tech company issue. However, recent events indicate that this problem spans across companies from different industries and may be more widespread. I’ve posted KB Home contracts to the web site where you can find the employment agreement for Bruce Karatz from 1995 and 2001, as well as his recent resignation agreement with KB Home.

Categories
technology

Microsoft Hearts Novell

On November 2, 2006, Novell, Inc. (“Novell”) and Microsoft Corporation (“Microsoft”) announced that they had entered into a Business Collaboration Agreement, a Technical Collaboration Agreement, and a Patent Cooperation Agreement. This set of broad business and technical collaboration agreements is designed to build, market and support a series of new solutions to make Novell and Microsoft products work better together for customers.

You can find a summary of the three agreement in Novell’s 8-K. The actual agreements aren’t on EDGAR just yet. I have added Novell Inc. contracts to the website though. You can also read the earlier Settlement Agreemenet Between Microsoft and Novell.

Categories
ipo non-disclosure

Wrinkle Treatment Stock Sags

Reuters: Thermage IPO raises $42 mln, below range. Thermage Inc., a wrinkle treatment company, raised $42 million with an initial public offering on Thursday that priced below a forecast range, according to an underwriter.

I’ve added Thermage Inc. contracts to the website. Here’s an interesting Severance Agreement between Thermage and Keith Mullowney. So, the severange agreement has a confidentiality clause:

The Parties acknowledge that Employee’s agreement to keep the terms and conditions of this Agreement confidential was a material factor on which all parties relied in entering into this Agreement. Employee hereto agrees to use his/her best efforts to maintain in confidence the existence of this Agreement, the contents and terms of this Agreement, the consideration for this Agreement, and any allegations relating to the Company or his/her employment with the Company except as otherwise provided for in this Agreement (hereinafter collectively referred to as “Settlement Information”). Employee agrees to take every reasonable precaution to prevent disclosure of any Settlement Information to third parties, and agrees that there will be no publicity, directly or indirectly, concerning any Settlement Information. Employee agrees to take every precaution to disclose Settlement Information only to those attorneys, accountants, governmental entities, and family members who have a reasonable need to know of such Settlement Information. The Parties agree that an enforcement action shall be arbitrated pursuant to this Agreement and that, if Company proves that Employee breached this Confidentiality provision, it shall be entitled to an award of its costs spent enforcing this provision, including all reasonable attorneys’ fees associated with the enforcement action, without regard to whether the Company can establish actual damages from the breach by Employee.

So, after all that wasted ink, the company discloses the settlement agreement. Huh?

Categories
stock options

Repricing Stock Options

The Company has determined that the stock option (“Option ”) granted to you on June 7, 2004 in respect of 30,000 shares of our Series B common stock (“Common Stock ”) at an exercise price of $10.00 per share was granted with an exercise price less than the fair market value of the Common Stock at the time of grant.
…
[Y]ou and the Company desire to raise the exercise price of the Common Stock in respect of the Option from $10.00 per share to $21.25 per share, which the Company has determined to be the fair market value of the Common Stock on June 7, 2004.

Just a few years ago, companies were racing to reprice stock options that had gone underwater. Now, we have an agreement to reprice an option to a higher exercise price. How about that? Read the full agreement between ExlService Holdings Inc. and Amit Shashank.