Exhibit 10.4


 


EXECUTIVE SEVERANCE AGREEMENT


AND GENERAL RELEASE OF CLAIMS


 


1.     Ivan
Koon (“Executive”) was employed by Adobe Systems Incorporated (the “Company”)
on or about August 12, 2002.  The
Company has determined to eliminate Executive’s position, effective December 3,
2005 (the “Termination Date”).  It is the
Company’s desire to provide Executive with certain severance benefits that he would not otherwise be entitled to
receive upon his termination and
to resolve any claims that Executive has or may have against the Company.  Accordingly, Executive and the Company agree
as set forth below.  This Agreement shall be effective on the
eighth day after it is signed by Executive, but only if Executive has
not previously revoked his
acceptance of this Agreement.


 


2.     Executive’s
employment with the Company and any of its subsidiaries will terminate
effective as of the Termination Date. During the period between the date of
this Agreement and the Termination Date, if any: (a) Executive will
provide transition assistance as requested by the Company, and will take all
available paid time off in accordance with the Company’s paid time off
policies; and (b) the Company will continue to provide Executive with the
same base salary and employee benefits that he was receiving immediately prior
to his execution of this Agreement.


 


3.     In addition, the Company shall provide
Executive with the following benefits:


 


(a)                                  a lump sum severance payment of $350,000,
less applicable withholding;


 


(b)                                 in
the event that Executive elects to obtain continued group health insurance
coverage for himself and his eligible dependents in accordance with federal law
(COBRA) following the Termination Date, the Company will pay the premiums for
such coverage through the earlier of  November 30,
2006 or the date on which Executive first becomes eligible for other group
health insurance coverage; thereafter, Executive may elect to purchase
continued group health insurance coverage at his own expense in accordance with COBRA;


 


(c)                                  the
Company hereby assigns to Executive all right, title and interest in and to the
laptop computer that was provided to Executive by the Company, and the Company
also assigns to Executive any Adobe software that is on the computer; by
signing this Agreement, Executive agrees that his use of such software shall be
solely in accordance with the terms of the Company’s end user license
agreements that apply to such software, which license agreements are hereby
incorporated by reference into this Agreement; Executive must remove all
non-Adobe software and all Adobe  


 





















 


confidential or proprietary information, including all
financial information, from the computer on or before the Termination Date;


 


(d)                                 the
Company agrees that it will not contest any claim for unemployment benefits
that may be filed by Executive after the Termination
Date; and


 


(e)                                  payment for 2005 profit sharing and
Annual Incentive Plan earned by
Executive, if any, through the Termination Date, per the terms of all applicable plan documents.


 


By signing (or re-signing, as the case may be) this
Agreement on or after the Termination Date, Executive acknowledges that he was
paid all wages and accrued, unused PTO that Executive earned during his
employment with the Company. Executive will be reimbursed by the Company for
any reasonable business expenses incurred by Executive in the course of his
employment with the Company, pursuant to the Company’s applicable business
expense reimbursement policies. Executive’s rights with respect to any equity
awards (such as stock options) shall be determined in accordance with the terms
of the applicable equity award plans and/or agreements, which are not modified
in any way by this Agreement.   Executive
understands and acknowledges that he shall not be entitled to any payments or benefits
from the Company other than those expressly set forth in this paragraph 3.  The Company shall provide the severance
payment in paragraph 3(a) to Executive within 15 days of the date this
Agreement is (i) signed by Executive (if such execution occurs on or after
the Termination Date), or (ii) re-signed by Executive (if his original
execution of this Agreement occurs prior to the Termination Date), in either
case provided Executive has not revoked the Agreement prior to the eighth day
following such signing or re-signing, and provided that if either Executive or
the Company reasonably determines that Executive is a key employee as defined
in Section 409A and that payment deferral is required according to Section 409A
rules, payment will be made in accordance with those rules.


 


4.     Executive and his successors release the Company and
its shareholders, investors, officers, directors, affiliates, employees,
agents, attorneys, insurers, legal successors, and assigns of and from any and
all claims, actions and causes of action, whether now known or unknown, which
Executive now has, or at any other time, had or shall or may have against the
released parties based upon or arising out of any matter, cause, fact, thing,
act or omission whatsoever occurring or existing at any time up to and
including the date on which Executive
signs this Agreement,  including,
but not limited to, any claims of breach of contract, wrongful termination,
retaliation, fraud, defamation, infliction of emotional distress or national
origin, race, age, sex, sexual orientation, disability or other discrimination
or harassment under the Civil Rights Act of 1964, the Age Discrimination In
Employment Act of 1967, the Americans With Disabilities Act, the Fair
Employment and Housing Act or any other 


 





















 


applicable law.  In the event
that Executive signs this Agreement prior to the Termination Date, as
additional consideration for the severance benefits described in paragraph 3,
Executive agrees that he will reaffirm this release of claims by re-signing
this Agreement in the space provided at the end of the Agreement on or after
the Termination Date; until the eighth day after Executive so reaffirms this
release of claims without revoking it, he shall not be entitled to any of the
severance benefits described in paragraph 3.


 


5.               Executive
acknowledges that he has read section 1542
of the Civil Code of the State of California, which states in full:


 


A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her
favor at the time of executing the release, which if known by him or her must
have materially affected his
or her settlement with the debtor.


 


Executive waives any rights that he has or may have
under section 1542 or any similar provision of the laws of any other
jurisdiction to the full extent that he may lawfully waive such rights
pertaining to this general release of claims, and affirms that he is releasing
all known and unknown claims that he has or may have against the parties listed
above.


 


6.     In the event that Executive does not
provide any work, services, or assistance (as an employee, director,
contractor, consultant, investor, or otherwise) to any competitor of the
Company (except with the prior written consent of the Company) during the
period between the date of this Agreement and November 30, 2006, the
Company shall make a payment to Executive of $175,000, less applicable
withholding.  Such payment, if earned,
shall be made on or before December 15, 2006, and shall also be
conditioned upon Executive’s execution and return of a general release of known
and unknown claims against the Company and its affiliated persons and entities
in a form satisfactory to the Company.


 


For purposes of this
paragraph, (a) the determination of whether an entity constitutes a
competitor of the Company shall be made by the Company in its sole discretion,
and (b) Executive’s ownership of up to two percent (2%) of the stock of
any publicly-traded company shall not be deemed to be the provision of work,
services, or assistance to a competitor of the Company.


 


The parties acknowledge
and agree that this paragraph 6 does not preclude Executive from accepting
employment with, or otherwise working for or providing services to, a
competitor of the Company.  Executive may
elect to accept employment with, or provide work, services, or assistance to,
any competitor of the Company, without incurring any liability to the Company;
provided, however, that such 


 





















 


action by Executive shall
excuse the Company’s performance of the payment obligation described in this
paragraph 6.


 


7.     Executive acknowledges and agrees that he
shall continue to be bound by and comply with the terms of the Employee
Inventions and Proprietary Rights Assignment Agreement that Executive signed in
connection with his employment by the Company, which agreement is incorporated
herein by reference.  Executive
acknowledges and agrees that due to the unique nature of the Company’s
confidential information, there will be no adequate remedy at law for any breach
of Executive’s obligations.  Executive
further acknowledges that any such breach will result in irreparable harm to
the Company and, therefore, that upon any such breach or any threat thereof,
the Company shall be entitled to immediate equitable relief, including but not
limited to injunction, in addition to whatever remedies the Company may have at
law.


 


8.     Executive agrees that he shall not directly or indirectly
disclose any of the terms of this Agreement to anyone other than his immediate family or counsel,
except as such disclosure may be required for accounting or tax reporting
purposes or as otherwise may be required by law, unless the Company has
previously publicly disclosed such terms.


 


9.     Executive further agrees that he will not, at any time in the
future, make any disparaging statements about the Company, its products or its
employees, unless such statements are made truthfully in response to a subpoena
or other legal process.  Employee further
agrees that for a period of twenty-four months following the Termination Date,
he shall not, either directly or indirectly, solicit or encourage any employee
of the Company or any affiliate of the Company to terminate his or her
employment with the Company or its affiliate.


 


10.   Executive agrees that in the event of his
breach of any of the provisions of paragraphs 9 or 12, it will be impractical
and extremely difficult to determine the actual damages suffered by the Company
as a result of that breach. Accordingly, Executive agrees that if he breaches any
provision of paragraphs 9 or 12, he shall repay the Company 30% of the net sum
(that is, after deducting all taxes and other withholdings) that he receives
pursuant to paragraph 3(a) as liquidated damages.


 


11.   The Company agrees that it will not, through
any of its officers or directors, at any time in the future, make any
disparaging statements about Executive, unless such statements are made
truthfully in response to a subpoena or other legal process.


 


12.   Following the Termination Date, Executive
agrees to provide reasonable assistance to the Company in connection with any
litigation to which the Company is or may become a party and with respect to
which Executive possesses any relevant knowledge or expertise. 


 





















 


Executive’s assistance will be provided at mutually convenient times,
and the Company will reimburse Executive for any reasonable expenses incurred
by him in providing such assistance.


 


13.   In the event of any legal action relating to
or arising out of this Agreement, the prevailing party shall be entitled to
recover from the losing party its attorneys’ fees and costs incurred in that
action.


 


14.   In response to inquiries from prospective
employers regarding Executive, the Company’s Human Resources Department will
provide no information other than Executive’s dates of employment and positions
held with the Company.


 


15.   This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral.  This Agreement may not be modified or amended
except by a document signed by an authorized officer of the Company and
Executive.


 





















 


EXECUTIVE UNDERSTANDS
THAT HE
SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND THAT HE
IS GIVING UP ANY LEGAL CLAIMS HE
HAS AGAINST THE PARTIES RELEASED ABOVE BY
SIGNING THIS AGREEMENT.  EXECUTIVE
FURTHER UNDERSTANDS THAT HE
MAY HAVE UP TO 21 DAYS TO CONSIDER THIS AGREEMENT, THAT HE
MAY REVOKE IT AT ANY TIME DURING THE 7 DAYS AFTER HE
SIGNS IT, AND THAT IT SHALL NOT BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS
PASSED.  EXECUTIVE ACKNOWLEDGES THAT HE IS
SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY, AND VOLUNTARILY IN EXCHANGE FOR
THE COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPHS 2 AND 3.


 


 


	
  Dated:

  	
  December 3,
  2005

  	
   

  
	
   

  	
   

  	
  /s/ Ivan Koon

  	
   

  	
   

  
	
   

  	
   

  	
          Ivan
  Koon

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  December 5,
  2005

  	
  ADOBE SYSTEMS
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Theresa
  Townsley

  	
   

  
	
   

  	
   

  	
  By:  Theresa
  Townsley

  
	
   

  	
   

  	
   Senior Vice
  President, Human Resources

  
							



 


 


By re-signing this
Agreement on or after the Termination Date, I hereby reaffirm and extend the
release of all known and unknown claims set forth in paragraphs 4 and 5 above
through and including the date on which I re-sign this Agreement.  I understand that I may revoke this reaffirmation
at any time during the 7 days after I re-sign this Agreement.


 


	
  Dated:

  	
  December 3,
  2005

  	
   

  
	
   

  	
   

  	
  /s/ Ivan Koon

  	
   

  	
   

  
	
   

  	
   

  	
          Ivan
  Koon