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Former Exec Tim Bucher Sues Apple for Wrongful Termination (UPDATE)

Former Exec Tim Bucher Sues Apple for Wrongful Termination (UPDATE)

by , 6:05 PM EST, March 1st, 2005

A former top executive at Apple Computer has filed suit against the company accusing it of wrongful termination. The suit also contends that Apple denied Mr. Bucher compensation owed to him in the course of his termination.

According to the filed complaint, obtained by The Mac Observer, Mr. Bucher is seeking compensatory and punitive damages. The suit was filed February 4 in Santa Clara County Superior Court.

"The evidence in this case demonstrates that there was no cause for Bucher's termination," said council Dan Pyne, of the law firm Hopkins & Carley. "During his nearly two years at Apple, he did an outstanding job for the company and was well-regarded by colleagues on the Macintosh team. This is a case of a senior executive being treated differently than his peers and falling victim to a corporate power play. We are confident that when the facts of this case are evaluated by a jury, we will prevail."

Mr. Bucher was the head of Macintosh Hardware Engineering for Apple and oversaw development of the recently introduced Mac mini. He joined Apple in March of 2003 as Vice President of Macintosh System Development and was promoted to Senior Vice President of Macintosh Hardware Engineering in May of 2004 when Apple reorganized the company into Macintosh and iPod divisions.

History

Through a timeline, the complaint builds its case against Apple focusing on Mr. Bucher's successes and his former employers acceptance of his work.

After numerous promotions, raises and bonuses, Mr. Bucher was sent home from his job on November 10th, 2004, and then informed in January of 2005 that he had been terminated as of December 31st.

The lawsuit alleges that Apple CEO Steve Jobs and Tim Cook, Apple's executive vice president of worldwide sales and operations, told Mr. Bucher on two separate occassions that he had not failed in his work, but never gave specific reasons as to why they wanted him to leave the company.

"You're not a failure," Mr. Jobs reportedly told Mr. Bucher in early November. "Even God couldn't have done both of the jobs I pushed you to do."

Two days later, according to the lawsuit, Mr. Jobs told him "People sometimes think you are manic-depressive...I'm not sure what I am going to do, but I think I am going to have to ask you to leave the company."

In a November 14th meeting after he was sent home four days earlier, Mr. Cook reportedly told Mr. Bucher that "this is not a situation where you failed," but that Apple would nevertheless terminate his employment unless he took an option to resign.

After not taking the offer to resign, Apple terminated his employment on January 3 of this year. The complaint said that in the process of escorting him off the premises, standard practice for executive terminations at most companies, Roben Talia, Apple's human resources director, "told the plaintiff that he 'should talk to a psychologist; I will get someone to help you.'"

Though Mr. Bucher said he didn't want a psychologist, Ms. Talia insisted, and Apple arranged for him to speak with one. The complaint does not specify whether or not he actually spoke with a psychologist, or whether or not he underwent treatment or counselling.

Shares and options

Mr. Bucher was hired in 2003 at US$350,00 per year, and given a raise of $50,000 per year on June 7th, 2004. On April 1st, 2003, he was also given a bonus of 250,000 stock options as part of the executive bonus plan for that year.

On February 4th, 2004, Mr. Bucher was awarded another 75,000 options that the complaint alleges was "in recognition of the plaintiff's 'vital contribution and teamwork.'"

Both of these option awards vested over time, with 20,312 of them vesting at the end of the December quarter of 2004. At today's stock price (including the subsequent stock split of February 18th, 2005), these options would be worth approximately $760,000.

In addition, he was awarded an outright grant of 100,000 restricted shares that also had a vesting period that the suit does not specify. What it does specify, however, is that an agreement between Apple and Mr. Bucher provides that "all unvested units of restricted stock granted to the plaintiff shall vest fully on the date the plaintiff's employment terminates, if employment terminates for reasons other than 'cause' as defined" by the agreement.

At today's value (again, including the recent stock split), the restricted shares have a value of approximately $8.9 million.

According to the complaint, Mr. Bucher did not receive his restricted shares, or the options that should have vested at the end of the December quarter in 2004.

The plaintiff's pitch

The complaint filed with the court paints a picture of an executive who was praised and rewarded for his work throughout his employment with Apple until November 10th, 2004. It also states when he was promoted to executive vice president, he asked for transition time to fill his old position, but that Apple CEO Steve Jobs felt he could handle the task of managing his new duties at the same time he transitioned out of the old job.

Mr. Bucher's complaint carefully suggests, but never actually states, that Apple terminated him for problems in the work place associated with manic depression, with the added inference that this was the result of the pressures of undertaking both of those jobs.

At the same time, according to his complaint, mental illness is not a proper (and therefore legal) cause for termination, and that he is entitled to his restricted stock grant, his stop options that vested during the December quarter, and any other bonuses included in the executive compensation plan covering that quarter, all of which the complaint said he did not receive.

Apple's policy is to not comment on on-going litigation.

CNet News was first to break the story Wednesday.

Brad Gibson contributed to this article.

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