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Sample Business Contracts

Retention Agreement - Apple Computer Inc. and Ellen Hancock

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								June 25, 1996
Ms. Ellen Hancock
165 Altura Vista
Los Gatos, CA 95030

Retention Agreement


Dear Ellen:

		Apple Computer, Inc., a California corporation (the "Company"),
considers it essential to the best interests of its stockholders to take
reasonable steps to retain key management personnel.  Further, the Board of
Directors of the Company (the "Board") recognizes that the uncertainty and
questions which might arise among management in the context of a change in
control of the Company could result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.

		The Board has determined, therefore, that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of members of the management of the Company and its subsidiaries,
including yourself, to their assigned duties without distraction in the face
of potentially disturbing circumstances arising from any possible change in
control of the Company.

		In order to induce you to remain in the employ of the Company,
the Company has determined to enter into this letter agreement (this
"Agreement") which addresses the terms and conditions of your employment in
the event of a change in control of the Company.  Capitalized words which are
not otherwise defined herein shall have the meanings assigned to such words in
Section 8 of this Agreement.

		1.  Term of Employment Under the Agreement.  The term of your
employment under this Agreement shall commence on the Change in Control Date
and shall continue until the second anniversary of the Change in Control Date
(the "Term").

		2.  Employment During the Term.  During the Term, the following
terms and conditions shall apply to your employment with the Company:

		(a)  Titles; Reporting and Duties.  Your position, titles,
nature and status of responsibilities and reporting obligations shall be no
less favorable to you than those that you enjoyed immediately prior to the
Change in Control Date.

		(b)  Salary and Bonus.  Your base salary and annual bonus
opportunity may not be reduced, and your base salary shall be periodically
reviewed and increased in the manner commensurate with increases awarded to
other similarly situated executives of the Company.

		(c)  Incentive Compensation.  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 plan or arrangement and at a level consistent with the
Company's practices applicable to you prior to the Change in Control Date.

					
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		(d)  Benefits.  You shall be eligible to participate in all
pension, welfare and fringe 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
Company.

		(e)  Location.  You will continue to be employed at the
business location at which you were employed prior to the Change in Control
Date and the amount of time that you are required to travel for business
purposes will not be increased in any significant respect from the amount of
business travel required of you prior to the Change in Control Date.

		3.  Involuntary Termination During the Term. 

		(a)  Severance Payment.  In the event of your Involuntary
Termination during the Term, the Company shall pay you within 5 days of the
date of such Involuntary Termination the full amount of any earned but unpaid
base salary through the Date of Termination at the rate in effect at the time
of the Notice of Termination, plus a cash payment (calculated on the basis of
your Reference Salary) for all unused vacation time which you may have accrued
as of the Date of Termination.  The Company shall also pay you within 5 days of
the Date of Termination a pro rata portion of the annual bonus for the year in
which your Involuntary Termination occurs, calculated on the basis of your
target bonus for that year and on the assumption that all performance targets
have been or will be achieved.  In addition, the Company shall pay you in a
cash lump sum, within 8 days following the date of your execution of the
release described in the last sentence of this Section 3(a) (or on the Date of
Termination, if later), an amount (the "Severance Payment") equal to the sum of
(i) two times your Reference Salary and (ii) one times your Reference Bonus. 
The Severance Payment shall be in lieu of any other severance payments which
you are entitled to receive under any other severance pay plan or arrangement
sponsored by the Company and its subsidiaries.  Your right to the Severance
Payment shall be conditioned upon your execution of a release in favor of the
Company in substantially the form of the release required for the receipt of
severance payments under the Severance Plan (as in effect on the date of this
Agreement) which is not revoked by you within the seven-day revocation period
specified therein.

		(b)  Benefit Payment.  In the event of your Involuntary
Termination during the Term, you and your eligible dependents shall continue
to be eligible to participate during the Benefit Continuation Period (as
hereinafter defined) in the medical, dental, health, life and other fringe
benefit plans and arrangements applicable to you immediately prior to your
Involuntary Termination on the same terms and conditions in effect for you and
your dependents immediately prior to such Involuntary Termination.  For
purposes of the previous sentence, "Benefit Continuation Period" means the
period beginning on the Date of Termination and ending on the earlier to occur
of (i) the second anniversary of the Date of Termination and (ii) the date that
you and your dependents are eligible and elect coverage under the plans of a
subsequent employer which provide substantially equivalent or greater benefits
to you and your dependents.
	
		(c)  Date and Notice of Termination.  Any termination of your
employment by the Company or by you during the Term shall be communicated by a
notice of termination to the other party hereto (the "Notice of Termination"). 
The Notice of Termination shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of your employment
under the provision so indicated.  The date of your termination of employment
with the Company and its subsidiaries (the "Date of Termination") shall be
determined as follows:  (i) if your employment is terminated for Disability,
thirty (30) days after a Notice of Termination is given (provided that you
shall not have returned to the full-time performance of your duties during such
thirty (30) day period), (ii) if your employment is terminated by the Company
in an Involuntary Termination, five (5) days after the date the Notice of
Termination is received by you and (iii) if your employment is terminated by
the Company for Cause, the later of the date specified in the Notice of
Termination or ten (10) days following the date such notice is received by
you. 

					
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If the basis for your Involuntary Termination is your resignation for Good
Reason, the Date of Termination shall be ten (10) days after the date your
Notice of Termination is received by the Company.   The Date of Termination
for a resignation of employment other than for Good Reason shall be the date
set forth in the applicable notice, which shall be no earlier than ten (10)
days after the date such notice is received by the Company.		
		
		(d)  No Mitigation or Offset.  You shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Agreement be reduced by any compensation earned by you as
the result of employment by another employer or by pension benefits paid by the
Company or another employer after the Date of Termination or otherwise except
as specifically provided in clause (ii) of the last sentence of Section 3(b).

		4.  Additional Payment. 

		(a)  Gross-Up Payment.  Notwithstanding anything herein to the
contrary, if it is determined that any Payment would be subject to the excise
tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any interest or
penalties thereon, is herein referred to as an "Excise Tax"), then you shall be
entitled to an additional payment (a "Gross-Up Payment") in an amount that will
place you in the same after-tax economic position that you would have enjoyed
if the Excise Tax had not applied to the Payment.  The amount of the Gross-Up
Payment shall be determined by the Accounting Firm in accordance with the
formula {(E x (1 - M)/(1 - T)) - E} (or such other formula as the Accounting
Firm deems appropriate which is intended to achieve the same result), where

		E	equals the Payments which are determined to be "excess
			parachute payments" within the meaning of Section 280G
			(b)(1) of the Code;

		M	equals the sum of the highest marginal rates1 for Taxes
			applicable to you at the time of the Payment; and

		T	equals M plus the rate of Excise Tax applicable to the
			Payment.

No Gross-Up Payments shall be payable hereunder if the Accounting Firm
determines that the Payments are not subject to an Excise Tax.

 		(b)	Determination of Gross-Up Payment.  Subject to the
provisions of Section 4(c), all determinations required under this Section 4,
including whether a Gross-Up Payment is required, the amount of the Payments
constituting excess parachute payments, and the amount of the Gross-Up Payment,
shall be made by the Accounting Firm, which shall provide detailed supporting
calculations both to you and the Company within fifteen days of the Change in
Control Date, your Date of Termination or any other date reasonably requested
by you or the Company on which a determination under this Section 4 is
necessary or advisable.  The Company shall pay to you the initial Gross-Up
Payment within 5 days of the receipt by you and the Company of the Accounting
Firm's determination.  If the Accounting Firm determines that no Excise Tax is
payable by you, the Company shall cause the Accounting Firm to provide you with
an opinion that the Accounting Firm has substantial authority under the Code
and Regulations not to report an Excise Tax on your federal income tax return. 
Any determination by the Accounting Firm shall be binding upon you and the
Company.


					
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If the initial Gross-Up Payment is insufficient to cover the amount of the
Excise Tax that is ultimately determined to be owing by you with respect to any
Payment (hereinafter an "Underpayment"), the Company, after exhausting its
remedies under Section 4(c) below, shall promptly pay to you an additional
Gross-Up Payment in respect of the Underpayment.

		(c)  Procedures.  You shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of a Gross-Up Payment.  Such notice shall be given
as soon as practicable after you know of such claim and shall apprise the
Company of the nature of the claim and the date on which the claim is requested
to be paid.  You agree not to pay the claim until the expiration of the
thirty-day period following the date on which you notify the Company, or such
shorter period ending on the date the Taxes with respect to such claim are due
(the "Notice Period"). If the Company notifies you in writing prior to the
expiration of the Notice Period that it desires to contest the claim, you shall:
(i) give the Company any information reasonably requested by the Company
relating to the claim; (ii) take such action in connection with the claim as
the Company may reasonably request, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company and reasonably acceptable to you; (iii) cooperate with
the Company in good faith in contesting the claim; and (iv) permit the Company
to participate in any proceedings relating to the claim.  You shall permit the
Company to control all proceedings related to the claim and, at its option,
permit the Company to pursue or forgo any and all administrative appeals,
proceedings, hearings, and conferences with the taxing authority in respect of
such claim.  If requested by the Company, you agree either to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner and
to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts as the Company shall determine; provided, however, that, if the Company
directs you to pay such claim and pursue a refund, the Company shall advance
the amount of such payment to you on an after-tax and interest-free basis (the
"Advance").  The Company's control of the contest related to the claim shall be
limited to the issues related to the Gross-Up Payment and you shall be entitled
to settle or contest, as the case may be, any other issues raised by the
Internal Revenue Service or other taxing authority.  If the Company does not
notify you in writing prior to the end of the Notice Period of its desire to
contest the claim, the Company shall pay to you an additional Gross-Up Payment
in respect of the excess parachute payments that are the subject of the claim,
and you agree to pay the amount of the Excise Tax that is the subject of the
claim to the applicable taxing authority in accordance with applicable law.

		(d)  Repayments.  If, after receipt by you of an Advance, you
become entitled to a refund with respect to the claim to which such Advance
relates, you shall pay the Company the amount of the refund (together with any
interest paid or credited thereon after Taxes applicable thereto).  If, after
receipt by you of an Advance, a determination is made that you shall not be
entitled to any refund with respect to the claim and the Company does not
promptly notify you of its intent to contest the denial of refund, then the
amount of the Advance shall not be required to be repaid by you and the amount
thereof shall offset the amount of the additional Gross-Up Payment then owing
to you. 

		(e)  Further Assurances.  The Company shall indemnify you and
hold you harmless, on an after-tax basis, from any costs, expenses, penalties,
fines, interest or other liabilities ("Losses") incurred by you with respect to
the exercise by the Company of any of its rights under this Section 4,
including, without limitation, any Losses related to the Company's decision to
contest a claim or any imputed income to you resulting from any Advance or
action taken on your behalf by the Company hereunder.  The Company shall pay
all legal fees and expenses incurred under this Section 4, and shall promptly
reimburse you for the reasonable expenses incurred by you in connection with
any actions taken by the Company or required to be taken by you hereunder.  The
Company shall also pay all of the fees and expenses of the Accounting Firm,
including, without limitation, the fees and expenses related to the opinion
referred to in Section 4(b).		

					
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		(f)  Combined Payments.   Anything in this Section 4 to the
contrary notwithstanding, the Company shall have no obligation to pay you a
required Gross-Up Payment under this Section 4 if the aggregate amount of all
Combined Payments has at the time such payment is due exceeded the Limit.  If
the amount of a Gross-Up Payment to you under this Section 4 would result in
the Combined Payments exceeding the Limit, the Company shall pay you only the
portion, if any, of the Gross-Up Payment which can be paid to you without
causing the aggregate amount of all Combined Payments to exceed the Limit. In
the event that you are entitled to a Gross-Up Payment under this Section 4 and
other employees or former employees of the Company are also entitled to
gross-up payments under the corresponding provisions of the applicable Combined
Arrangements and the aggregate amount of all such payments would cause the
Limit on Combined Payments to be exceeded, the Company shall allocate the
amount of the reduction necessary to comply with the Limit among all such
payments in the proportion that the amount of each such gross-up payment bears
to the aggregate amount of all such payments.  Nothing in this Section 4(f)
shall require you to repay to the Company any amount that was previously paid
to you under this Section 4.

		5.  Other Provisions. 

		(a)  Vesting and Exercise.  All Equity Awards granted to you
under the Equity Plans (including Short-Term Awards) shall vest and become
exercisable in the event of your Involuntary Termination on or following the
Change in Control Date.  If you are employed by the Company on the date of the
Equity Plan Change in Control, your Equity Awards will vest and become
exercisable as of such date.

		(b)  Effect of 30-Day Alternative.  In accordance with the
terms of the Equity Plans, upon an Equity Plan Change in Control, Equity Awards
which are options or stock appreciation rights are "cashed out," unless the
Administrator in its discretion determines not to do so.  In the event that
the Administrator elects not to cash out such Equity Awards, the Administrator
has the discretion in the context of a merger or sale of all or substantially
all of the assets of the Company either (i) to cause such Equity Awards to be
assumed or an equivalent option or stock appreciation right granted by the
successor corporation to the Company or a parent or subsidiary of such
successor corporation, or (ii) to provide that your Equity Awards will remain
outstanding for a thirty-day period beginning on the date that you are so
notified of such action by the Administrator and that such Equity Awards will
expire to the extent not exercised at the end of such thirty-day period (the
"30-Day Alternative").  If the Administrator determines to utilize the 30-Day
Alternative, the Company shall pay you with respect to each such Equity Award
the excess, if any (the "Additional Amount"), of the Change in Control Price
you would have received had the Equity Award been cashed out on the date of
the Equity Plan Change in Control over the value of the consideration actually
received by you in settlement of such awards (determined as of the date such
consideration is received by you).  Further, in the event of your Involuntary
Termination on or after the Change in Control Date but on or prior to the date
of the Equity Plan Change in Control, the Company shall pay you the Additional
Amount as if your employment had continued through the date of the Equity Plan
Change in Control.  In either case, the payment of the Additional Amount shall
be made within 5 days following the determination by the Administrator of the
Change in Control Price.

		(c)  Short-Term Awards.  In the event that (i) the transaction
resulting in an Equity Plan Change in Control occurs at such a time or is
structured in such a manner so as to make it reasonably likely that you would
be subject to actual or potential liability for short-swing profits under
Section 16 of the Exchange Act ("Short-Swing Profit Liability") if you were to
exercise, tender, sell or otherwise dispose (including through a merger) of
your Short-Term Awards as part of, or prior to, such transaction and (ii) your
inability to exercise, tender, sell or otherwise dispose of your Short-Term
Awards on or prior to the date of such Equity Plan Change in Control eliminates
or reduces the value of some or all of your Short-Term Awards, then, on the
date of the Equity Plan Change in Control, the Company  shall pay you in a cash
lump sum the amount of $0.  The  provisions of  clause (ii) of the previous  

    					
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sentence shall be deemed to apply where (a) you are precluded from exercising,
tendering or otherwise disposing of your Short-Term Awards on or prior to the
Transaction Date in order to avoid Short-Swing Profit Liability, (b) a
Short-Term Award cannot be repurchased, exchanged or cashed-out by the Company
(or other person) on or prior to the Transaction Date without a risk of
Short-Swing Profit Liability to you, or (c) you are required to delay the
exercise, sale, tender, or other disposition of your Short-Term Awards in order
to avoid Short-Swing Profit Liability and such delay results in your receiving
consideration for your Short-Term Awards (valued at the date such consideration
is received) which is of lesser value than the consideration you would have
received (valued as of the date of the Equity Plan Change in Control) for such
awards had such delay not occurred.  The foregoing provisions shall apply to
your Equity Awards notwithstanding your Involuntary Termination of employment
with the Company on or after the Change in Control Date but prior to the Equity
Plan Change in Control.  The provisions of this Section 5(c) shall not apply if
(A) prior to the Equity Plan Change in Control, the Company provides you at its
expense with an opinion from a nationally recognized firm of attorneys stating
that the exercise, tender, sale or other disposition of your Short-Term Awards
as part of, or prior to, the transaction resulting in the Equity Plan Change in
Control will not subject you to Short-Swing Profit Liability and (B) following
your receipt of such opinion there is sufficient time for you to exercise,
tender, sell or otherwise dispose of your Short-Term Awards on or prior to the
Equity Plan Change in Control without impairing the value thereof.  

		(d)  General.  Anything in this Agreement to the contrary not
withstanding, in no event shall the vesting and exercisability provisions
applicable to you under the terms of your Equity Awards be less favorable to
you then the terms and provisions of such awards in effect on the date hereof.

		6.  Legal Fees and Expenses.  The Company shall pay or
reimburse you on an after-tax basis for all costs and expenses (including,
without limitation, court costs and reasonable legal fees and expenses which
reflect common practice with respect to the matters involved) incurred by you
as a result of any claim, action or proceeding (i) arising out of your
termination of employment during the Term, (ii) contesting, disputing or
enforcing any right, benefits or obligations under this Agreement or (iii)
arising out of or challenging the validity, advisability or enforceability of
this Agreement or any provision thereof; provided, however, that the amount of
the payments and reimbursements under this Section 6 shall not exceed $2
million.

		7.  Successors; Binding Agreement.

		(a)  Assumption by Successor. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
expressly to assume and to agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to perform it if no
such succession had taken place; provided, however, that no such assumption
shall relieve the Company of its obligations hereunder.  As used in this
Agreement, the "Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law or otherwise.

		(b)  Enforceability; Beneficiaries.  This Agreement shall be
binding upon and inure to the benefit of you (and your personal representatives
and heirs) and the Company and any organization which succeeds to substantially
all of the business or assets of the Company, whether by means of merger,
consolidation, acquisition of all or substantially all of the assets of the
Company or otherwise, including, without limitation, as a result of a Change in
Control or by operation of law.  This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If you
should die while any amount would still be payable to you hereunder 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 devisee, legatee or
other designee or, if there is no such designee, to your estate.
					
					
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		8.  Definitions.  For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below:

		"Accounting Firm" shall mean Ernst & Young or, if such firm is
unable or unwilling to perform such calculations, such other national
accounting firm as shall be designated by agreement between you and the
Company.  To the extent reasonably practicable, one such accounting firm shall
be designated to perform the calculations in respect of the Combined
Arrangements.

		"Administrator" shall mean the "Administrator" as defined in
the applicable Equity Plan or, if no such term is defined in the Equity Plan,
the Board.

		"Cause" shall mean a termination of your employment during the
Term 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 for Good Reason) after a written demand for
substantial performance is delivered to you by the Board, which demand
specifically identifies the manner in which the Board 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.  Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-fourths (3/4ths) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
to you and an opportunity for you, together with your counsel, to be heard
before the Board), finding that in the good faith opinion of the Board you were
guilty of conduct set forth above in clause (i), (ii) or (iii) of the first
sentence of this section and specifying the particulars thereof in detail.

		"Change in Control" shall mean a change in control of the
Company of a nature that would be required to be reported in response to Item 6
(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Company is then subject to such reporting requirement;
provided, however, that, anything in this Agreement to the contrary
notwithstanding, a Change in Control shall be deemed to have occurred if:

		(i)  any individual, partnership, firm, corporation, association,
	trust, unincorporated organization or other entity or person, or any
	syndicate or group deemed to be a person under Section 14(d)(2) of the
	Exchange Act, is  or becomes the "beneficial owner" (as defined in
	Rule 13d-3 of the General Rules and Regulations under the Exchange
	Act), directly or indirectly, of securities of the Company representing
	30% or more of the combined voting power of the Company's then
	outstanding securities entitled to vote in the election of directors
 	of the Company;

		(ii)  during any period of two (2) consecutive years (not
	including any period prior to the execution of this Agreement)
	individuals who at the beginning of such period constituted the Board
	and any new directors, whose election by the Board or nomination for	
	election by the Company's stockholders was approved by a vote of at
	least three-fourths (3/4ths) of the directors then still in office
	who either were directors at the beginning of the period or whose 	
	election or nomination for election was previously so approved (the
	"Incumbent Directors"), cease for any reason to constitute a majority
	thereof;

					
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		(iii)  There occurs a reorganization, merger, consolidation
	or other corporate transaction involving the Company (a "Transaction"),
	in each case, with respect to which the stockholders of the Company
	immediately prior to such Transaction do not, immediately after the
	Transaction, own more than 50 percent of the combined voting power of
	the Company or other corporation resulting from such Transaction;

		(iv)  all or substantially all of the assets of the Company are
 	sold, liquidated or distributed; or

		(v) there is a "change in control" of the Company within the
	meaning of Section 280G of the Code and the Regulations.

		"Change in Control Date" shall mean the earliest of (i) the
date on which the Change in Control occurs, (ii) the date on which the Company
executes an agreement, the consummation of which would result in the occurrence
of a Change in Control, (iii) the date the Board approves a transaction or
series of transactions, the consummation of which would result in a Change in
Control and (iv) the date the Company fails to satisfy its obligations to have
this agreement assumed by any successor to the Company in accordance with
Section 7(a) of this Agreement.  If the Change in Control Date occurs as a
result of an agreement described in clause (ii) of the previous sentence or
as a result of the approval of the Board described in clause (iii) of the
previous sentence and the Change in Control to which such agreement or approval
relates (the "Contemplated Change in Control") subsequently does not occur,
then the Term shall expire on the sixtieth day (the "Reset Date") following the
date the Board certifies by resolution duly adopted by three-fourths (3/4ths)
of the Incumbent Directors then in office that the Contemplated Change in
Control is not reasonably likely to occur; provided, however, that this
sentence shall not apply if (A) an Involuntary Termination of your employment
with the Company has occurred on and after the Change in Control Date and on or
prior to the Reset Date or (B) the Contemplated Change in Control subsequently
occurs within three months of the Reset Date.  Following the Reset Date, the
provisions of this Agreement shall remain in effect and a new Term shall
commence upon the occurrence of a subsequent Change in Control Date. 
Notwithstanding the first sentence of this section, if your employment with the
Company terminates prior to the Change in Control Date and it is reasonably
demonstrated that your termination of employment (i) was at the request of the
third party who has taken steps reasonably calculated to effect the Change in
Control or (ii) otherwise arose in connection with or in anticipation of the
Change in Control, then Change in Control Date shall mean the date immediately
prior to the date of your termination of employment.

		"Change in Control Price" shall mean the "Change in Control
Price" as defined in the applicable Equity Plan and determined by the
Administrator as of the date of the Equity Plan Change in Control, whether or
not the Administrator is required under the terms of the applicable Equity Plan
to determine such price as of such date.

		"Combined Arrangements" shall mean this Agreement, the
Retention Agreements entered into as of the date first set forth above between
the Company and certain of its executive officers, any Retention Agreement
entered into after the date hereof which is specifically designated by the
terms thereof as one of the Combined Arrangements and the Supplement to the
Severance Plan.

		"Combined Payments" shall mean the aggregate cash amount of (i)
severance payments made to you under Section 3(a) of this Agreement or to any
other employee or former employee under the corresponding provisions of the
applicable Combined Arrangement, (ii) severance payments made under Sections 2
(e) and 2(f) of the Supplement or the corresponding provisions of the
applicable Combined Arrangement, (iii) Gross-Up Payments made to you under
Section 6 of this Agreement or to any other employee or former employee under
the corresponding provisions of the applicable Combined Arrangement, (iv) fees
and expenses which are paid or reimbursed to you under Section 6 of this

					
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Agreement or to any other employee or former employee under the corresponding
provisions of the applicable Combined Arrangement, (v) payments made to you
under Section 5 of this Agreement or to any other employee or former employee
under the corresponding provisions of the applicable Combined Arrangement and
(vi) costs incurred by the Company in respect of any employee or former
employee under Section 2(d) of the Supplement or the corresponding provisions
of the applicable Combined Arrangement.

		"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor provisions thereto.

		"Common Stock" shall mean the common stock of the Company.

		"Disability" shall mean (i) your incapacity due to physical or
mental illness which causes you to be absent from the full-time performance of
your duties with the Company for six (6) consecutive months, and (ii) your
failure to return to full-time performance of your duties for the Company
within thirty (30) days after written Notice of Termination due to Disability
is given to you.  Any question as to the existence of your Disability upon
which you and the Company cannot agree shall be determined by a qualified
independent physician selected by you (or, if you are unable to make such
selection, such selection shall be made by any adult member of your immediate
family), and approved by the Company.  The determination of such physician made
in writing to the Company and to you shall be final and conclusive for all
purposes of this Agreement.

		"ELTSOP" shall mean the Apple Computer, Inc. 1987 Executive
Long Term Stock Option Plan, as amended, and any successor plan thereto.

		"Equity Awards" shall mean options, restricted stock, bonus
stock or other grants or awards which consist of, or relate to, equity
securities of the Company and which have been granted to you under the Equity
Plans.  For purposes of this Agreement, Equity Awards shall also include any
securities acquired upon the exercise of an option, warrant or similar right
that constitutes an Equity Award.

		"Equity Plan Change in Control" shall mean a change in control
of the Company as defined in the applicable Equity Plan.

		"Equity Plans" shall mean the Stock Option Plan, the ELTSOP,
and any other equity-based incentive plan or arrangement adopted by the
Company.

		"Exchange Act"  shall mean the Securities Exchange Act of 1934,
as amended, and any successor provisions thereto.

		"Good Reason" shall mean a resignation of your employment
during the Term as a result of any of the following:

	(i)   A meaningful and detrimental alteration in your position, your
titles, or the nature or status of your responsibilities (including your
reporting responsibilities) from those in effect immediately prior to the
Change in Control Date;

	(ii)  A reduction by the Company in your annual base salary as in
effect immediately prior to the Change in Control Date or as the same may be
increased from time to time thereafter; a failure by the Company to increase
your salary at a rate commensurate with that of other key executives of the
Company; or a reduction in your target annual bonus (expressed as a percentage
of base salary) below the target in effect for you prior to the Change in
Control Date;

					
<PAGE>

	(iii) The relocation of the office of the Company where you are
employed immediately prior to the Change in Control Date (the "CIC Location")
to a location which is more than fifty (50) miles away from the CIC Location
or the Company's requiring you to be based more than fifty (50) miles away from
the CIC Location (except for required travel on the Company's business to an
extent substantially consistent with your customary business travel obligations
in the ordinary course of business prior to the Change in Control Date);

	(iv)  The failure by the Company to continue in effect any compensation
plan in which you participated prior to the Change in Control Date or made
available to you after the Change in Control Date, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan in connection with the Change in Control, or the
failure by the Company to continue your participation therein on at least as
favorable a basis, both in terms of the amount of benefits provided and the
level of your participation relative to other participants, as existed on the
Change in Control Date;

	(v)   The failure by the Company to continue to provide you with
benefits at least as favorable in the aggregate to those enjoyed by you under
the Company's pension, savings, life insurance, medical, health and accident,
disability, and fringe benefit plans and programs in which you were
participating immediately prior to the Change in Control Date; or the failure
by the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect immediately
prior to the Change in Control;

	(vi)  The failure of the Company to obtain an agreement reasonably
satisfactory to you from any successor to assume and agree to perform this
Agreement, as contemplated in Section 7(a) hereof or, if the business of the
Company for which your services are principally performed is sold at any time
after a Change in Control, the failure of the Company to obtain such an
agreement from the purchaser of such business;

	(vii) Any termination of your employment which is not effected pursuant
to the terms of this Agreement; or

	(viii)A material breach by the Company of the provisions of this
Agreement;

provided, however, that an event described above in clause (i), (ii), (iv), (v)
or (viii) shall not constitute Good Reason unless it is communicated by you to
the Company in writing and is not corrected by the Company in a manner which is
reasonably satisfactory to you (including full retroactive correction with
respect to any monetary matter) within 10 days of the Company's receipt of such
written notice from you.

		"Involuntary Termination" shall mean (i) your termination of
employment by the Company and its subsidiaries during the Term other than for
Cause or Disability or (ii) your resignation of employment with the Company and
its subsidiaries during the Term for Good Reason.

		"Limit" shall mean the dollar amount determined in accordance
with the formula [A x B x C], where

		A  equals 0.02;
					
					
<PAGE>

		B  equals the number of issued and outstanding shares of Common
		   Stock of the Company immediately prior to the Change in
		   Control Date; and

		C  equals the greater of (i) (A) if the Common Stock is listed
		   on any established stock exchange or national market system
		   (including, without limitation, the National Market System
	     	   of the National Association of Securities Dealers, Inc.
		   Automated Quotation ("NASDAQ") System, the highest closing 	
		   sale price (or closing bid price, if no sales are reported)
		   of a share of Common Stock, or (B) if the Common Stock is
		   regularly quoted on the NASDAQ System (but not on a national
		   market system) or quoted by a recognized securities dealer
		   but selling prices are not reported, the highest mean 	
		   between the high and low asked prices for the Common Stock,
      		   in each case, on any day during the ninety-day period ending
 		   on the Change in Control Date, and (ii) the highest price 	
		   paid or offered, as determined by the Accounting Firm, in 	
		   any bona fide transaction or bona fide offer related to the
 		   Change in Control.

		"Payment" means (i) any amount due or paid to you under this
Agreement, (ii) any amount that is due or paid to you under any plan, program
or arrangement of the Company and its subsidiaries (including, without
limitation, the Equity Plans), and (iii) any amount or benefit that is due or
payable to you under this Agreement or under any plan, program or arrangement
of the Company and its subsidiaries not otherwise covered under clause (i) or
(ii) hereof which must reasonably be taken into account under Section 280G of
the Code and the Regulations in determining the amount of the "parachute
payments" received by you, including, without limitation, any amounts which
must be taken into account under the Code and Regulations as a result of (A)
the acceleration of the vesting of any option, restricted stock or other equity
award granted under the Equity Plans or otherwise, (B) the acceleration of the
time at which any payment or benefit is receivable by you or (C) any contingent
severance or other amounts that are payable to you.

		"Reference Bonus" shall mean the greater of (i) the target
annual bonus applicable to you for the year in which your Involuntary
Termination occurs and (ii) the highest target annual bonus applicable to you
in any of the three years ending prior to the Change in Control Date.

		"Reference Salary" shall mean the greater of (i) the annual
rate of your base salary from the Company and its subsidiaries in effect
immediately prior to the date of your Involuntary Termination and (ii) the
annual rate of your base salary from the Company in effect at any point during
the three-year period ending on the Change in Control Date.

		"Regulations" shall mean the proposed, temporary and final
regulations under Section 280G of the Code or any successor provision thereto.

		"Severance Plan" means the Apple Computer, Inc. Executive
Severance Plan, as amended.

		"Short-Term Awards" shall mean Equity Awards which have been
granted to you within the six-month period ending on the date of a Equity Plan
Change in Control.  For purposes of this Agreement, Short-Term Awards shall
also include any securities acquired upon the exercise of an Equity Award that
constitutes a Short-Term Award.

		"Stock Option Plan" shall mean the Apple Computer, Inc. 1990
Stock Option Plan, as amended, and any successor plan thereto.

					
<PAGE>

		"Supplement" means the amendment to the Severance Plan adopted
as of the date of this Agreement and any future amendment thereto.

		"Taxes" shall mean the federal, state and local income taxes
to which you are subject at the time of determination, calculated on the basis
of the highest marginal rates then in effect, plus any additional payroll or
withholding taxes to which you are then subject.

		"Transaction Date" shall mean the date described in clause (i)
of the definition of Change in Control Date.

		9.  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 Board of Directors, Apple Computer, Inc., 1 Infinite Loop, M/S: 75 8A,
Cupertino, CA  95014, 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.

		10. Miscellaneous. 

		(a)  Amendments, Waivers, 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, except as expressly set forth herein, this Agreement shall not supersede
the terms of Equity Awards previously granted to you.

		(b)  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 and
effect.

		(c)  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.

		(d)  No Contract of Employment.  Nothing in this Agreement
shall be construed as giving you any right to be retained in the employ of the
Company or shall affect the terms and conditions of your employment with the
Company prior to the commencement of the Term hereof.

		(e)  Withholding.  Amounts paid to you hereunder shall be
subject to all applicable federal, state and local withholding taxes.

					
<PAGE>

		(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 such State.

			*       *      *       *

	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.

				Sincerely,

			APPLE COMPUTER, INC.



			By  /s/ Gilbert F. Amelio		
			    Name:  Gilbert F. Amelio
			    Title:  Chief Executive Officer



Agreed to as of this 30th day of June, 1996.



_/s/ Ellen M. Hancock	
Ellen Hancock