Retention Agreement - Apple Computer Inc. and Avie Tevanian



                                 APPLE COMPUTER, INC.
                                   1 INFINITE LOOP
                                CUPERTINO, CA  95014 


                                                 May 1, 1997
Avie Tevanian
1 Infinite Loop
Cupertino, CA  95014


                                 RETENTION AGREEMENT


Dear Avie:

         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: 



                                          2


         (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.  

         (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) three times your
Reference Salary and (ii) three 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 



                                          3


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.  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 



                                          4


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 rates(1) 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.  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 

------------------
(1)To be expressed in up to three decimal places.  For example, a combined
        federal, state and local marginal rate of 56% would be expressed as .560



                                          5


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).  



                                          6


         (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 or 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 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 



                                          7


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)  GENERAL.  Anything in this Agreement to the contrary
notwithstanding, in no event shall the vesting and exercisability provisions
applicable to you under the terms of your Equity Awards be less favorable to you
than the terms and provisions of such awards in effect on the date hereof.



                                          8

         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.  

         8.   DEFINITIONS.  For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below:

         'ACCOUNTING FIRM' shall mean KPMG Peat Marwick LLP 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.



                                          9


         '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;



                                          10


         (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% 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' or a 'change in the effective
    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 definition, 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 



                                          11


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
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.



                                          12


         '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.  For purposes of this clause (i), a meaningful
    and detrimental alteration shall exist if, on or after the Change in
    Control Date, without limitation, any of the following occurs:  (A) at any
    time you do not hold the position of senior vice president in charge of
    software engineering of the Company (or the surviving entity resulting from
    a merger or consolidation (through one or more related transactions) of the
    Company with another entity (the'SURVIVING ENTITY')); (B) at any time you
    do not report directly to the chief executive officer of the Company (or
    the Surviving Entity); (C) at any time you do not have regular direct
    access to the chief executive officer of the Company (or the Surviving
    Entity) or (D) any similar adverse change on or after the Change in Control
    Date in your title, position or reporting responsibilities;

         (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; 

         (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



                                          13


    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 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; 

         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 



                                          14


              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 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 regulations under
Section 280G of the Code or any successor provision thereto.  

         'SEVERANCE PLAN' means the Apple Computer, Inc. Executive Severance
Plan, as amended.  

         'STOCK OPTION PLAN' shall mean the Apple Computer, Inc. 1990 Stock
Option Plan, as amended, and any successor plan thereto.  

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



                                          15


         '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: 381, 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.  



                                          16


         (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 May, 1997


/s/ Avie Tevanian
--------------------------------
Avie Tevanian