{"id":40370,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/retention-agreement-apple-computer-inc-and-jon-rubinstein.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"retention-agreement-apple-computer-inc-and-jon-rubinstein","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/retention-agreement-apple-computer-inc-and-jon-rubinstein.html","title":{"rendered":"Retention Agreement &#8211; Apple Computer Inc. and Jon Rubinstein"},"content":{"rendered":"<pre>\n                                 APPLE COMPUTER, INC.\n                                   1 INFINITE LOOP\n                                CUPERTINO, CA  95014\n\n\n                                                 May 1, 1997\nJon Rubinstein\n1 Infinite Loop\nCupertino, CA  95014\n\n\n                                 RETENTION AGREEMENT\n\n\nDear Jon:\n\n         Apple Computer, Inc., a California corporation (the 'COMPANY'),\nconsiders it essential to the best interests of its stockholders to take\nreasonable steps to retain key management personnel.  Further, the Board of\nDirectors of the Company (the 'BOARD') recognizes that the uncertainty and\nquestions which might arise among management in the context of a change in\ncontrol of the Company could result in the departure or distraction of\nmanagement personnel to the detriment of the Company and its stockholders.\n\n         The Board has determined, therefore, that appropriate steps should be\ntaken to reinforce and encourage the continued attention and dedication of\nmembers of the management of the Company and its subsidiaries, including\nyourself, to their assigned duties without distraction in the face of\npotentially disturbing circumstances arising from any possible change in control\nof the Company.\n\n         In order to induce you to remain in the employ of the Company, the\nCompany has determined to enter into this letter agreement (this 'AGREEMENT')\nwhich addresses the terms and conditions of your employment in the event of a\nchange in control of the Company.  Capitalized words which are not otherwise\ndefined herein shall have the meanings assigned to such words in Section 8 of\nthis Agreement.\n\n         1.   TERM OF EMPLOYMENT UNDER THE AGREEMENT.  The term of your\nemployment under this Agreement shall commence on the Change in Control Date and\nshall continue until the second anniversary of the Change in Control Date (the\n'TERM').\n\n         2.   EMPLOYMENT DURING THE TERM.  During the Term, the following terms\nand conditions shall apply to your employment with the Company:\n\n\n\n                                          2\n\n\n         (a)  TITLES; REPORTING AND DUTIES.  Your position, titles, nature and\nstatus of responsibilities and reporting obligations shall be no less favorable\nto you than those that you enjoyed immediately prior to the Change in Control\nDate.\n\n         (b)  SALARY AND BONUS.   Your base salary and annual bonus opportunity\nmay not be reduced, and your base salary shall be periodically reviewed and\nincreased in the manner commensurate with increases awarded to other similarly\nsituated executives of the Company.\n\n         (c)  INCENTIVE COMPENSATION.  You shall be eligible to participate in\neach long-term incentive plan or arrangement established by the Company for its\nexecutive employees, in accordance with the terms and provisions of such plan or\narrangement and at a level consistent with the Company's practices applicable to\nyou prior to the Change in Control Date.\n\n         (d)  BENEFITS.  You shall be eligible to participate in all pension,\nwelfare and fringe benefit plans and arrangements that the Company provides to\nits executive employees in accordance with the terms of such plans and\narrangements, which shall be no less favorable to you, in the aggregate, than\nthe terms and provisions available to other executive employees of the Company.\n\n         (e)  LOCATION.  You will continue to be employed at the business\nlocation at which you were employed prior to the Change in Control Date and the\namount of time that you are required to travel for business purposes will not be\nincreased in any significant respect from the amount of business travel required\nof you prior to the Change in Control Date.\n\n         3.   INVOLUNTARY TERMINATION DURING THE TERM.\n\n         (a)  SEVERANCE PAYMENT.  In the event of your Involuntary Termination\nduring the Term, the Company shall pay you within 5 days of the date of such\nInvoluntary Termination the full amount of any earned but unpaid base salary\nthrough the Date of Termination at the rate in effect at the time of the Notice\nof Termination, plus a cash payment (calculated on the basis of your Reference\nSalary) for all unused vacation time which you may have accrued as of the Date\nof Termination.  The Company shall also pay you within 5 days of the Date of\nTermination a pro rata portion of the annual bonus for the year in which your\nInvoluntary Termination occurs, calculated on the basis of your target bonus for\nthat year and on the assumption that all performance targets have been or will\nbe achieved.   In addition, the Company shall pay you in a cash lump sum, within\n8 days following the date of your execution of the release described in the last\nsentence of this Section 3(a) (or on the Date of Termination, if later), an\namount (the 'SEVERANCE PAYMENT') equal to the sum of (i) three times your\nReference Salary and (ii) three times your Reference Bonus.  The Severance\nPayment shall be in lieu of any other severance payments which you are entitled\nto receive under any other severance pay plan or arrangement sponsored by the\nCompany and its subsidiaries.  Your right to the Severance Payment shall be\nconditioned upon your execution of a release in favor of the Company in\nsubstantially the form of the release required for the receipt of severance\npayments under the Severance Plan (as in\n\n\n\n                                          3\n\n\neffect on the date of this Agreement) which is not revoked by you within the\nseven-day revocation period specified therein.\n\n         (b)  BENEFIT PAYMENT.  In the event of your Involuntary Termination\nduring the Term, you and your eligible dependents shall continue to be eligible\nto participate during the Benefit Continuation Period (as hereinafter defined)\nin the medical, dental, health, life and other fringe benefit plans and\narrangements applicable to you immediately prior to your Involuntary Termination\non the same terms and conditions in effect for you and your dependents\nimmediately prior to such Involuntary Termination.  For purposes of the previous\nsentence, 'BENEFIT CONTINUATION PERIOD' means the period beginning on the Date\nof Termination and ending on the earlier to occur of (i) the second anniversary\nof the Date of Termination and (ii) the date that you and your dependents are\neligible and elect coverage under the plans of a subsequent employer which\nprovide substantially equivalent or greater benefits to you and your dependents.\n\n         (c)  DATE AND NOTICE OF TERMINATION.  Any termination of your\nemployment by the Company or by you during the Term shall be communicated by a\nnotice of termination to the other party hereto (the 'NOTICE OF TERMINATION').\nThe Notice of Termination shall indicate the specific termination provision in\nthis Agreement relied upon and shall set forth in reasonable detail the facts\nand circumstances claimed to provide a basis for termination of your employment\nunder the provision so indicated.  The date of your termination of employment\nwith the Company and its subsidiaries (the 'DATE OF TERMINATION') shall be\ndetermined as follows:  (i) if your employment is terminated for Disability,\nthirty (30) days after a Notice of Termination is given (provided that you shall\nnot have returned to the full-time performance of your duties during such thirty\n(30) day period), (ii) if your employment is terminated by the Company in an\nInvoluntary Termination, five (5) days after the date the Notice of Termination\nis received by you and (iii) if your employment is terminated by the Company for\nCause, the later of the date specified in the Notice of Termination or ten (10)\ndays following the date such notice is received by you.  If the basis for your\nInvoluntary Termination is your resignation for Good Reason, the Date of\nTermination shall be ten (10) days after the date your Notice of Termination is\nreceived by the Company.  The Date of Termination for a resignation of\nemployment other than for Good Reason shall be the date set forth in the\napplicable notice, which shall be no earlier than ten (10) days after the date\nsuch notice is received by the Company.\n\n         (d)  NO MITIGATION OR OFFSET.  You shall not be required to mitigate\nthe amount of any payment provided for in this Agreement by seeking other\nemployment or otherwise, nor shall the amount of any payment or benefit provided\nfor in this Agreement be reduced by any compensation earned by you as the result\nof employment by another employer or by pension benefits paid by the Company or\nanother employer after the Date of Termination or otherwise except as\nspecifically provided in clause (ii) of the last sentence of Section 3(b).\n\n         4.   ADDITIONAL PAYMENT.\n\n         (a)  GROSS-UP PAYMENT.  Notwithstanding anything herein to the\ncontrary, if it is determined that any Payment would be subject to the excise\ntax imposed by Section 4999 of the Code or any interest or penalties with\nrespect to such excise tax (such excise tax, together\n\n\n\n                                          4\n\n\nwith any interest or penalties thereon, is herein referred to as an 'EXCISE\nTAX'), then you shall be entitled to an additional payment (a 'GROSS-UP\nPAYMENT') in an amount that will place you in the same after-tax economic\nposition that you would have enjoyed if the Excise Tax had not applied to the\nPayment.  The amount of the Gross-Up Payment shall be determined by the\nAccounting Firm in accordance with the formula {(E x (1 - M)\/(1 - T)) -E} (or\nsuch other formula as the Accounting Firm deems appropriate which is intended to\nachieve the same result), where\n\n         E    equals the Payments which are determined to be 'excess parachute\n              payments' within the meaning of Section 280G(b)(1) of the Code;\n\n         M    equals the sum of the highest marginal rates(1) for Taxes\n              applicable to you at the time of the Payment; and\n\n         T    equals M plus the rate of Excise Tax applicable to the Payment.\n\nNo Gross-Up Payments shall be payable hereunder if the Accounting Firm\ndetermines that the Payments are not subject to an Excise Tax.\n\n         (b)  DETERMINATION OF GROSS-UP PAYMENT.  Subject to the provisions of\nSection 4(c), all determinations required under this Section 4, including\nwhether a Gross-Up Payment is required, the amount of the Payments constituting\nexcess parachute payments, and the amount of the Gross-Up Payment, shall be made\nby the Accounting Firm, which shall provide detailed supporting calculations\nboth to you and the Company within fifteen days of the Change in Control Date,\nyour Date of Termination or any other date reasonably requested by you or the\nCompany on which a determination under this Section 4 is necessary or advisable.\nThe Company shall pay to you the initial Gross-Up Payment within 5 days of the\nreceipt by you and the Company of the Accounting Firm's determination.  If the\nAccounting Firm determines that no Excise Tax is payable by you, the Company\nshall cause the Accounting Firm to provide you with an opinion that the\nAccounting Firm has substantial authority under the Code and Regulations not to\nreport an Excise Tax on your federal income tax return.  Any determination by\nthe Accounting Firm shall be binding upon you and the Company.  If the initial\nGross-Up Payment is insufficient to cover the amount of the Excise Tax that is\nultimately determined to be owing by you with respect to any Payment\n(hereinafter an 'UNDERPAYMENT'), the Company, after exhausting its remedies\nunder Section 4(c) below, shall promptly pay to you an additional Gross-Up\nPayment in respect of the Underpayment.\n\n         (c)  PROCEDURES.  You shall notify the Company in writing of any claim\nby the Internal Revenue Service that, if successful, would require the payment\nby the Company of a Gross-Up Payment.  Such notice shall be given as soon as\npracticable after you know of such claim and shall apprise the Company of the\nnature of the claim and the date on which the claim is requested to be paid.\nYou agree not to pay the claim until the expiration of the thirty-day period\nfollowing the date on which you notify the Company, or such shorter period\nending on the date\n\n-------------------------\n(1) To be expressed in up to three decimal places.  For example, a combined\n    federal, state and local marginal rate of 56% would be expressed as .560\n\n\n\n                                          5\n\n\nthe Taxes with respect to such claim are due (the 'NOTICE PERIOD'). If the\nCompany notifies you in writing prior to the expiration of the Notice Period\nthat it desires to contest the claim, you shall:  (i) give the Company any\ninformation reasonably requested by the Company relating to the claim; (ii) take\nsuch action in connection with the claim as the Company may reasonably request,\nincluding, without limitation, accepting legal representation with respect to\nsuch claim by an attorney reasonably selected by the Company and reasonably\nacceptable to you; (iii) cooperate with the Company in good faith in contesting\nthe claim; and (iv) permit the Company to participate in any proceedings\nrelating to the claim.  You shall permit the Company to control all proceedings\nrelated to the claim and, at its option, permit the Company to pursue or forgo\nany and all administrative appeals, proceedings, hearings, and conferences with\nthe taxing authority in respect of such claim.  If requested by the Company, you\nagree either to pay the tax claimed and sue for a refund or contest the claim in\nany permissible manner and to prosecute such contest to a determination before\nany administrative tribunal, in a court of initial jurisdiction and in one or\nmore appellate courts as the Company shall determine; PROVIDED, HOWEVER, that,\nif the Company directs you to pay such claim and pursue a refund, the Company\nshall advance the amount of such payment to you on an after-tax and\ninterest-free basis (the 'ADVANCE').  The Company's control of the contest\nrelated to the claim shall be limited to the issues related to the Gross-Up\nPayment and you shall be entitled to settle or contest, as the case may be, any\nother issues raised by the Internal Revenue Service or other taxing authority.\nIf the Company does not notify you in writing prior to the end of the Notice\nPeriod of its desire to contest the claim, the Company shall pay to you an\nadditional Gross-Up Payment in respect of the excess parachute payments that are\nthe subject of the claim, and you agree to pay the amount of the Excise Tax that\nis the subject of the claim to the applicable taxing authority in accordance\nwith applicable law.\n\n         (d)  REPAYMENTS.  If, after receipt by you of an Advance, you become\nentitled to a refund with respect to the claim to which such Advance relates,\nyou shall pay the Company the amount of the refund (together with any interest\npaid or credited thereon after Taxes applicable thereto).  If, after receipt by\nyou of an Advance, a determination is made that you shall not be entitled to any\nrefund with respect to the claim and the Company does not promptly notify you of\nits intent to contest the denial of refund, then the amount of the Advance shall\nnot be required to be repaid by you and the amount thereof shall offset the\namount of the additional Gross-Up Payment then owing to you.\n\n         (e)  FURTHER ASSURANCES.  The Company shall indemnify you and hold you\nharmless, on an after-tax basis, from any costs, expenses, penalties, fines,\ninterest or other liabilities ('LOSSES') incurred by you with respect to the\nexercise by the Company of any of its rights under this Section 4, including,\nwithout limitation, any Losses related to the Company's decision to contest a\nclaim or any imputed income to you resulting from any Advance or action taken on\nyour behalf by the Company hereunder.  The Company shall pay all legal fees and\nexpenses incurred under this Section 4, and shall promptly reimburse you for the\nreasonable expenses incurred by you in connection with any actions taken by the\nCompany or required to be taken by you hereunder.  The Company shall also pay\nall of the fees and expenses of the Accounting Firm, including, without\nlimitation, the fees and expenses related to the opinion referred to in Section\n4(b).\n\n\n\n                                          6\n\n\n         (f)  COMBINED PAYMENTS.  Anything in this Section 4 to the contrary\nnotwithstanding, the Company shall have no obligation to pay you a required\nGross-Up Payment under this Section 4 if the aggregate amount of all Combined\nPayments has, at the time such payment is due, exceeded the Limit.  If the\namount of a Gross-Up Payment to you under this Section 4 would result in the\nCombined Payments exceeding the Limit, the Company shall pay you only the\nportion, if any, of the Gross-Up Payment which can be paid to you without\ncausing the aggregate amount of all Combined Payments to exceed the Limit. In\nthe event that you are entitled to a Gross-Up Payment under this Section 4 and\nother employees or former employees of the Company are also entitled to gross-up\npayments under the corresponding provisions of the applicable Combined\nArrangements and the aggregate amount of all such payments would cause the Limit\non Combined Payments to be exceeded, the Company shall allocate the amount of\nthe reduction necessary to comply with the Limit among all such payments in the\nproportion that the amount of each such gross-up payment or Gross-Up Payment\nbears to the aggregate amount of all such payments.  Nothing in this Section\n4(f) shall require you to repay to the Company any amount that was previously\npaid to you under this Section 4.\n\n         5.   OTHER PROVISIONS.\n\n         (a)  VESTING AND EXERCISE.  All Equity Awards granted to you under the\nEquity Plans shall vest and become exercisable in the event of your Involuntary\nTermination on or following the Change in Control Date.  If you are employed by\nthe Company on the date of the Equity Plan Change in Control, your Equity Awards\nwill vest and become exercisable as of such date.\n\n         (b)  EFFECT OF 30-DAY ALTERNATIVE.  In accordance with the terms of\nthe Equity Plans, upon an Equity Plan Change in Control, Equity Awards which are\noptions or stock appreciation rights are 'cashed out,' unless the Administrator\nin its discretion determines not to do so.  In the event that the Administrator\nelects not to cash out such Equity Awards, the Administrator has the discretion\nin the context of a merger or sale of all or substantially all of the assets of\nthe Company either (i) to cause such Equity Awards to be assumed or an\nequivalent option or stock appreciation right granted by the successor\ncorporation to the Company or a parent or subsidiary of such successor\ncorporation, or (ii) to provide that your Equity Awards will remain outstanding\nfor a thirty-day period beginning on the date that you are so notified of such\naction by the Administrator and that such Equity Awards will expire to the\nextent not exercised at the end of such thirty-day period (the '30-DAY\nALTERNATIVE').  If the Administrator determines to utilize the 30-Day\nAlternative, the Company shall pay you with respect to each such Equity Award\nthe excess, if any (the 'ADDITIONAL AMOUNT'), of the Change in Control Price you\nwould have received had the Equity Award been cashed out on the date of the\nEquity Plan Change in Control over the value of the consideration actually\nreceived by you in settlement of such awards (determined as of the date such\nconsideration is received by you).  Further, in the event of your Involuntary\nTermination on or after the Change in Control Date but on or prior to the date\nof the Equity Plan Change in Control, the Company shall pay you the Additional\nAmount as if your employment had continued through the date of the Equity Plan\nChange in\n\n\n\n                                          7\n\n\nControl.  In either case, the payment of the Additional Amount shall be made\nwithin 5 days following the determination by the Administrator of the Change in\nControl Price.\n\n         (c)  GENERAL.  Anything in this Agreement to the contrary\nnotwithstanding, in no event shall the vesting and exercisability provisions\napplicable to you under the terms of your Equity Awards be less favorable to you\nthan the terms and provisions of such awards in effect on the date hereof.\n\n\n\n                                          8\n\n\n         6.   LEGAL FEES AND EXPENSES.  The Company shall pay or reimburse you\non an after-tax basis for all costs and expenses (including, without limitation,\ncourt costs and reasonable legal fees and expenses which reflect common practice\nwith respect to the matters involved) incurred by you as a result of any claim,\naction or proceeding (i) arising out of your termination of employment during\nthe Term, (ii) contesting, disputing or enforcing any right, benefits or\nobligations under this Agreement or (iii) arising out of or challenging the\nvalidity, advisability or enforceability of this Agreement or any provision\nthereof; PROVIDED, HOWEVER, that the amount of the payments and reimbursements\nunder this Section 6 shall not exceed $2 million.\n\n         7.   SUCCESSORS; BINDING AGREEMENT.\n\n         (a)  ASSUMPTION BY SUCCESSOR.  The Company will require any successor\n(whether direct or indirect, by purchase, merger, consolidation or otherwise) to\nall or substantially all of the business or assets of the Company expressly to\nassume and to agree to perform this Agreement in the same manner and to the same\nextent that the Company would be required to perform it if no such succession\nhad taken place; PROVIDED, HOWEVER, that no such assumption shall relieve the\nCompany of its obligations hereunder.  As used in this Agreement, the 'Company'\nshall mean the Company as hereinbefore defined and any successor to its business\nand\/or assets as aforesaid which assumes and agrees to perform this Agreement by\noperation of law or otherwise.\n\n         (b)  ENFORCEABILITY; BENEFICIARIES.  This Agreement shall be binding\nupon and inure to the benefit of you (and your personal representatives and\nheirs) and the Company and any organization which succeeds to substantially all\nof the business or assets of the Company, whether by means of merger,\nconsolidation, acquisition of all or substantially all of the assets of the\nCompany or otherwise, including, without limitation, as a result of a Change in\nControl or by operation of law.  This Agreement shall inure to the benefit of\nand be enforceable by your personal or legal representatives, executors,\nadministrators, successors, heirs, distributees, devisees and legatees.  If you\nshould die while any amount would still be payable to you hereunder if you had\ncontinued to live, all such amounts, unless otherwise provided herein, shall be\npaid in accordance with the terms of this Agreement to your devisee, legatee or\nother designee or, if there is no such designee, to your estate.\n\n         8.   DEFINITIONS.  For purposes of this Agreement, the following\ncapitalized words shall have the meanings set forth below:\n\n         'ACCOUNTING FIRM' shall mean KPMG Peat Marwick LLP or, if such firm is\nunable or unwilling to perform such calculations, such other national accounting\nfirm as shall be designated by agreement between you and the Company.  To the\nextent reasonably practicable, one such accounting firm shall be designated to\nperform the calculations in respect of the Combined Arrangements.\n\n         'ADMINISTRATOR' shall mean the 'Administrator' as defined in the\napplicable Equity Plan or, if no such term is defined in the Equity Plan, the\nBoard.\n\n\n\n                                          9\n\n\n         'CAUSE' shall mean a termination of your employment during the Term\nwhich is a result of (i) your felony conviction, (ii) your willful disclosure of\nmaterial trade secrets or other material confidential information related to the\nbusiness of the Company and its subsidiaries or (iii) your willful and continued\nfailure substantially to perform your duties with the Company (other than any\nsuch failure resulting from your incapacity due to physical or mental illness or\nany such actual or anticipated failure resulting from a resignation by you for\nGood Reason) after a written demand for substantial performance is delivered to\nyou by the Board, which demand specifically identifies the manner in which the\nBoard believes that you have not substantially performed your duties, and which\nperformance is not substantially corrected by you within 10 days of receipt of\nsuch demand.  For purposes of the previous sentence, no act or failure to act on\nyour part shall be deemed 'willful' unless done, or omitted to be done, by you\nnot in good faith and without reasonable belief that your action or omission was\nin the best interest of the Company.  Notwithstanding the foregoing, you shall\nnot be deemed to have been terminated for Cause unless and until there shall\nhave been delivered to you a copy of a resolution duly adopted by the\naffirmative vote of not less than three-fourths (3\/4ths) of the entire\nmembership of the Board at a meeting of the Board called and held for such\npurpose (after reasonable notice to you and an opportunity for you, together\nwith your counsel, to be heard before the Board), finding that in the good faith\nopinion of the Board you were guilty of conduct set forth above in clause (i),\n(ii) or (iii) of the first sentence of this section and specifying the\nparticulars thereof in detail.\n\n          'CHANGE IN CONTROL' shall mean a change in control of the Company of\na nature that would be required to be reported in response to Item 6(e) of\nSchedule 14A of Regulation 14A promulgated under the Exchange Act, whether or\nnot the Company is then subject to such reporting requirement; PROVIDED,\nHOWEVER, that, anything in this Agreement to the contrary notwithstanding, a\nChange in Control shall be deemed to have occurred if:\n\n         (i)     any individual, partnership, firm, corporation, association,\n    trust, unincorporated organization or other entity or person, or any\n    syndicate or group deemed to be a person under Section 14(d)(2) of the\n    Exchange Act, is or becomes the 'beneficial owner' (as defined in Rule\n    13d-3 of the General Rules and Regulations under the Exchange Act),\n    directly or indirectly, of securities of the Company representing 30% or\n    more of the combined voting power of the Company's then outstanding\n    securities entitled to vote in the election of directors of the Company;\n\n         (ii)    during any period of two (2) consecutive years (not including\n    any period prior to the execution of this Agreement), individuals who at\n    the beginning of such period constituted the Board and any new directors,\n    whose election by the Board or nomination for election by the Company's\n    stockholders was approved by a vote of at least three-fourths (3\/4ths) of\n    the directors then still in office who either were directors at the\n    beginning of the period or whose election or nomination for election was\n    previously so approved (the 'INCUMBENT DIRECTORS'), cease for any reason to\n    constitute a majority thereof;\n\n\n\n                                          10\n\n\n         (iii)   there occurs a reorganization, merger, consolidation or other\n    corporate transaction involving the Company (a 'TRANSACTION'), in each case\n    with respect to which the stockholders of the Company immediately prior to\n    such Transaction do not, immediately after the Transaction, own more than\n    50% of the combined voting power of the Company or other corporation\n    resulting from such Transaction;\n\n         (iv)    all or substantially all of the assets of the Company are\n    sold, liquidated or distributed; or\n\n         (v)     there is a 'change in control' or a 'change in the effective\n    control' of the Company within the meaning of Section 280G of the Code and\n    the Regulations.\n\n         'CHANGE IN CONTROL DATE' shall mean the earliest of (i) the date on\nwhich the Change in Control occurs, (ii) the date on which the Company executes\nan agreement, the consummation of which would result in the occurrence of a\nChange in Control, (iii) the date the Board approves a transaction or series of\ntransactions, the consummation of which would result in a Change in Control and\n(iv) the date the Company fails to satisfy its obligations to have this\nagreement assumed by any successor to the Company in accordance with Section\n7(a) of this Agreement.  If the Change in Control Date occurs as a result of an\nagreement described in clause (ii) of the previous sentence or as a result of\nthe approval of the Board described in clause (iii) of the previous sentence and\nthe Change in Control to which such agreement or approval relates (the\n'CONTEMPLATED CHANGE IN CONTROL') subsequently does not occur, then the Term\nshall expire on the sixtieth day (the 'RESET DATE') following the date the Board\ncertifies by resolution duly adopted by three-fourths (3\/4ths) of the Incumbent\nDirectors then in office that the Contemplated Change in Control is not\nreasonably likely to occur; PROVIDED, HOWEVER, that this sentence shall not\napply if (A) an Involuntary Termination of your employment with the Company has\noccurred on and after the Change in Control Date and on or prior to the Reset\nDate or (B) the Contemplated Change in Control subsequently occurs within three\nmonths of the Reset Date.  Following the Reset Date, the provisions of this\nAgreement shall remain in effect and a new Term shall commence upon the\noccurrence of a subsequent Change in Control Date.  Notwithstanding the first\nsentence of this definition, if your employment with the Company terminates\nprior to the Change in Control Date and it is reasonably demonstrated that your\ntermination of employment (i) was at the request of the third party who has\ntaken steps reasonably calculated to effect the Change in Control or\n(ii) otherwise arose in connection with or in anticipation of the Change in\nControl, then 'Change in Control Date' shall mean the date immediately prior to\nthe date of your termination of employment.\n\n        'CHANGE IN CONTROL PRICE' shall mean the 'Change in Control Price' as\ndefined in the applicable Equity Plan and determined by the Administrator as of\nthe date of the Equity Plan Change in Control, whether or not the Administrator\nis required under the terms of the applicable Equity Plan to determine such\nprice as of such date.\n\n        'COMBINED ARRANGEMENTS' shall mean this Agreement, the Retention\nAgreements entered into as of the date first set forth above between the Company\nand certain of its executive officers, any Retention Agreement entered into\nafter the date hereof which is specifically\n\n\n\n\n\n                                          11\n\n\ndesignated by the terms thereof as one of the Combined Arrangements and the\nSupplement to the Severance Plan.\n\n        'COMBINED PAYMENTS' shall mean the aggregate cash amount of\n(i) severance payments made to you under Section 3(a) of this Agreement or to\nany other employee or former employee under the corresponding provisions of the\napplicable Combined Arrangement, (ii) severance payments made under Sections\n2(e) and 2(f) of the Supplement or the corresponding provisions of the\napplicable Combined Arrangement, (iii) Gross-Up Payments made to you under\nSection 6 of this Agreement or to any other employee or former employee under\nthe corresponding provisions of the applicable Combined Arrangement, (iv) fees\nand expenses which are paid or reimbursed to you under Section 6 of this\nAgreement or to any other employee or former employee under the corresponding\nprovisions of the applicable Combined Arrangement, (v) payments made to you\nunder Section 5 of this Agreement or to any other employee or former employee\nunder the corresponding provisions of the applicable Combined Arrangement and\n(vi) costs incurred by the Company in respect of any employee or former employee\nunder Section 2(d) of the Supplement or the corresponding provisions of the\napplicable Combined Arrangement.\n\n        'CODE' shall mean the Internal Revenue Code of 1986, as amended, and\nany successor provisions thereto.\n\n        'COMMON STOCK' shall mean the common stock of the Company.\n\n        'DISABILITY' shall mean (i) your incapacity due to physical or mental\nillness which causes you to be absent from the full-time performance of your\nduties with the Company for six (6) consecutive months and (ii) your failure to\nreturn to full-time performance of your duties for the Company within thirty\n(30) days after written Notice of Termination due to Disability is given to you.\nAny question as to the existence of your Disability upon which you and the\nCompany cannot agree shall be determined by a qualified independent physician\nselected by you (or, if you are unable to make such selection, such selection\nshall be made by any adult member of your immediate family), and approved by the\nCompany.  The determination of such physician made in writing to the Company and\nto you shall be final and conclusive for all purposes of this Agreement.\n\n         'ELTSOP' shall mean the Apple Computer, Inc. 1987 Executive Long Term\nStock Option Plan, as amended, and any successor plan thereto.\n\n         'EQUITY AWARDS' shall mean options, restricted stock, bonus stock or\nother grants or awards which consist of, or relate to, equity securities of the\nCompany and which have been granted to you under the Equity Plans.  For purposes\nof this Agreement, Equity Awards shall also include any securities acquired upon\nthe exercise of an option, warrant or similar right that constitutes an Equity\nAward.\n\n         'EQUITY PLAN CHANGE IN CONTROL' shall mean a change in control of the\nCompany as defined in the applicable Equity Plan.\n\n\n\n                                          12\n\n\n         'EQUITY PLANS' shall mean the Stock Option Plan, the ELTSOP, and any\nother equity-based incentive plan or arrangement adopted by the Company.\n\n         'EXCHANGE ACT' shall mean the Securities Exchange Act of 1934, as\namended, and any successor provisions thereto.\n\n         'GOOD REASON' shall mean a resignation of your employment during the\nTerm as a result of any of the following:\n\n         (i)     A meaningful and detrimental alteration in your position, your\n    titles, or the nature or status of your responsibilities (including your\n    reporting responsibilities) from those in effect immediately prior to the\n    Change in Control Date.  For purposes of this clause (i), a meaningful and\n    detrimental alteration shall exist if, on or after the Change in Control\n    Date, without limitation, any of the following occurs:  (A) at any time you\n    do not hold the position of senior vice president in charge of hardware\n    engineering of the Company (or the surviving entity resulting from a merger\n    or consolidation (through one or more related transactions) of the Company\n    with another entity (the 'SURVIVING ENTITY')); (B) at any time you do not\n    report directly to the chief executive officer of the Company (or the\n    Surviving Entity); (C) at any time you do not have regular direct access to\n    the chief executive officer of the Company (or the Surviving Entity) or\n    (D) any similar adverse change on or after the Change in Control Date in\n    your title, position or reporting responsibilities;\n\n         (ii)    A reduction by the Company in your annual base salary as in\n    effect immediately prior to the Change in Control Date or as the same may\n    be increased from time to time thereafter; a failure by the Company to\n    increase your salary at a rate commensurate with that of other key\n    executives of the Company; or a reduction in your target annual bonus\n    (expressed as a percentage of base salary) below the target in effect for\n    you prior to the Change in Control Date;\n\n         (iii)   The relocation of the office of the Company where you are\n    employed immediately prior to the Change in Control Date (the 'CIC\n    LOCATION') to a location which is more than fifty (50) miles away from the\n    CIC Location or the Company's requiring you to be based more than fifty\n    (50) miles away from the CIC Location (except for required travel on the\n    Company's business to an extent substantially consistent with your\n    customary business travel obligations in the ordinary course of business\n    prior to the Change in Control Date);\n\n         (iv)    The failure by the Company to continue in effect any\n    compensation plan in which you participated prior to the Change in Control\n    Date or made available to you after the Change in Control Date, unless an\n    equitable arrangement (embodied in an ongoing substitute or alternative\n    plan) has been made with respect to such plan in connection with the Change\n    in Control, or the failure by the Company to continue your participation\n    therein on at least as favorable a basis, both in terms of the amount of\n\n\n\n                                          13\n\n\n    benefits provided and the level of your participation relative to other\n    participants, as existed on the Change in Control Date;\n\n         (v)     The failure by the Company to continue to provide you with\n    benefits at least as favorable in the aggregate to those enjoyed by you\n    under the Company's pension, savings, life insurance, medical, health and\n    accident, disability, and fringe benefit plans and programs in which you\n    were participating immediately prior to the Change in Control Date; or the\n    failure by the Company to provide you with the number of paid vacation days\n    to which you are entitled on the basis of years of service with the Company\n    in accordance with the Company's normal vacation policy in effect\n    immediately prior to the Change in Control;\n\n         (vi)    The failure of the Company to obtain an agreement reasonably\n    satisfactory to you from any successor to assume and agree to perform this\n    Agreement, as contemplated in Section 7(a) hereof or, if the business for\n    which your services are principally performed is sold at any time after a\n    Change in Control, the failure of the Company to obtain such an agreement\n    from the purchaser of such business;\n\n         (vii)   Any termination of your employment which is not effected\n    pursuant to the terms of this Agreement; or\n\n         (viii)  A material breach by the Company of the provisions of this\nAgreement; PROVIDED, HOWEVER, that an event described above in clause (i), (ii),\n(iv), (v) or (viii) shall not constitute Good Reason unless it is communicated\nby you to the Company in writing and is not corrected by the Company in a manner\nwhich is reasonably satisfactory to you (including full retroactive correction\nwith respect to any monetary matter) within 10 days of the Company's receipt of\nsuch written notice from you.\n\n         'INVOLUNTARY TERMINATION' shall mean (i) your termination of\nemployment by the Company and its subsidiaries during the Term other than for\nCause or Disability or (ii) your resignation of employment with the Company and\nits subsidiaries during the Term for Good Reason.\n\n         'LIMIT' shall mean the dollar amount determined in accordance with the\nformula [A x B x C], where\n\n         A       equals 0.02;\n\n         B       equals the number of issued and outstanding shares of Common\n                 Stock of the Company immediately prior to the Change in \n                 Control Date; and\n\n         C       equals the greater of (i) (A) if the Common Stock is listed on\n                 any established stock exchange or national market system\n                 (including, without limitation, the National Market System of\n                 the National Association of Securities Dealers, Inc. Automated\n                 Quotation ('NASDAQ') System), the\n\n\n\n                                          14\n\n\n                 highest closing sale price (or closing bid price, if no sales\n                 are reported) of a share of Common Stock, or (B) if the Common\n                 Stock is regularly quoted on the NASDAQ System (but not on a\n                 national market system) or quoted by a recognized securities\n                 dealer but selling prices are not reported, the highest mean\n                 between the high and low asked prices for the Common Stock, in\n                 each case, on any day during the ninety-day period ending on\n                 the Change in Control Date, and (ii) the highest price paid or\n                 offered, as determined by the Accounting Firm, in any bona\n                 fide transaction or bona fide offer related to the Change in\n                 Control.\n\n         'PAYMENT' means (i) any amount due or paid to you under this\nAgreement, (ii) any amount that is due or paid to you under any plan, program or\narrangement of the Company and its subsidiaries (including, without limitation,\nthe Equity Plans) and (iii) any amount or benefit that is due or payable to you\nunder this Agreement or under any plan, program or arrangement of the Company\nand its subsidiaries not otherwise covered under clause (i) or (ii) hereof which\nmust reasonably be taken into account under Section 280G of the Code and the\nRegulations in determining the amount the 'parachute payments' received by you,\nincluding, without limitation, any amounts which must be taken into account\nunder the Code and Regulations as a result of (A) the acceleration of the\nvesting of any option, restricted stock or other equity award granted under the\nEquity Plans or otherwise, (B) the acceleration of the time at which any payment\nor benefit is receivable by you or (C) any contingent severance or other amounts\nthat are payable to you.\n\n         'REFERENCE BONUS' shall mean the greater of (i) the target annual\nbonus applicable to you for the year in which your Involuntary Termination\noccurs and (ii) the highest target annual bonus applicable to you in any of the\nthree years ending prior to the Change in Control Date.\n\n         'REFERENCE SALARY' shall mean the greater of (i) the annual rate of\nyour base salary from the Company and its subsidiaries in effect immediately\nprior to the date of your Involuntary Termination and (ii) the annual rate of\nyour base salary from the Company in effect at any point during the three-year\nperiod ending on the Change in Control Date.\n\n         'REGULATIONS' shall mean the proposed, temporary and regulations under\nSection 280G of the Code or any successor provision thereto.\n\n         'SEVERANCE PLAN' means the Apple Computer, Inc. Executive Severance\nPlan, as amended.\n\n         'STOCK OPTION PLAN' shall mean the Apple Computer, Inc. 1990 Stock\nOption Plan, as amended, and any successor plan thereto.\n\n         'SUPPLEMENT' means the amendment to the Severance Plan adopted as of\nthe date of this Agreement and any future amendment thereto.\n\n\n\n                                          15\n\n\n         'TAXES' shall mean the federal, state and local income taxes to which\nyou are subject at the time of determination, calculated on the basis of the\nhighest marginal rates then in effect, plus any additional payroll or\nwithholding taxes to which you are then subject.\n\n         'TRANSACTION DATE' shall mean the date described in clause (i) of the\ndefinition of Change in Control Date.\n\n         9.      NOTICE.  For the purpose of this Agreement, notices and all\nother communications provided for in this Agreement shall be in writing and\nshall be deemed to have been duly given when delivered or mailed by United\nStates registered mail, return receipt requested, postage prepaid, addressed to\nthe Board of Directors, Apple Computer, Inc., 1 Infinite Loop, M\/S: 381,\nCupertino, CA 95014, with a copy to the General Counsel of the Company, or to\nyou at the address set forth on the first page of this Agreement or to such\nother address as either party may have furnished to the other in writing in\naccordance herewith, except that notice of change of address shall be effective\nonly upon receipt.\n\n         10.     MISCELLANEOUS.\n\n         (a)     AMENDMENTS, WAIVERS, ETC.  No provision of this Agreement may\nbe modified, waived or discharged unless such waiver, modification or discharge\nis agreed to in writing.  No waiver by either party hereto at any time of any\nbreach by the other party hereto of, or compliance with, any condition or\nprovision of this Agreement to be performed by such other party shall be deemed\na waiver of similar or dissimilar provisions or conditions at the same or at any\nprior or subsequent time.  No agreements or representations, oral or otherwise,\nexpress or implied, with respect to the subject matter hereof have been made by\neither party which are not expressly set forth in this Agreement and this\nAgreement shall supersede all prior agreements, negotiations, correspondence,\nundertakings and communications of the parties, oral or written, with respect to\nthe subject matter hereof; PROVIDED, HOWEVER, that, except as expressly set\nforth herein, this Agreement shall not supersede the terms of Equity Awards\npreviously granted to you.\n\n         (b)     VALIDITY.  The invalidity or unenforceability of any provision\nof this Agreement shall not affect the validity or enforceability of any other\nprovision of this Agreement, which shall remain in full force and effect.\n\n         (c)     COUNTERPARTS.  This Agreement may be executed in several\ncounterparts, each of which shall be deemed to be an original but all of which\ntogether will constitute one and the same instrument.\n\n         (d)     NO CONTRACT OF EMPLOYMENT.  Nothing in this Agreement shall be\nconstrued as giving you any right to be retained in the employ of the Company or\nshall affect the terms and conditions of your employment with the Company prior\nto the commencement of the Term hereof.\n\n         (e)     WITHHOLDING.  Amounts paid to you hereunder shall be subject\nto all applicable federal, state and local withholding taxes.\n\n\n\n                                          16\n\n\n         (f)     SOURCE OF PAYMENTS.  All payments provided under this\nAgreement, other than payments made pursuant to a plan which provides otherwise,\nshall be paid in cash from the general funds of the Company, and no special or\nseparate fund shall be established, and no other segregation of assets made, to\nassure payment.  You will have no right, title or interest whatsoever in or to\nany investments which the Company may make to aid it in meeting its obligations\nhereunder.  To the extent that any person acquires a right to receive payments\nfrom the Company hereunder, such right shall be no greater than the right of an\nunsecured creditor of the Company.\n\n         (g)     HEADINGS.  The headings contained in this Agreement are\nintended solely for convenience of reference and shall not affect the rights of\nthe parties to this Agreement.\n\n         (h)     GOVERNING LAW.  The validity, interpretation, construction,\nand performance of this Agreement shall be governed by the laws of the State of\nCalifornia applicable to contracts entered into and performed in such State.\n\n\n         If this letter sets forth our agreement on the subject matter hereof,\nkindly sign and return to the Company the enclosed copy of this letter which\nwill then constitute our agreement on this subject.\n\n\n                                            Sincerely,\n\n\n                                            APPLE COMPUTER, INC.\n\n\n                                            By:   \/s\/ Gilbert F. Amelio\n                                               -----------------------------\n                                               Name:  Gilbert F. Amelio\n                                               Title: Chief Executive Officer\n\n\nAgreed to as of this 3rd day of June, 1997\n\n\n\/s\/ Jon Rubinstein\n----------------------------\nJon Rubinstein\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6722],"corporate_contracts_industries":[9508],"corporate_contracts_types":[9539,9544],"class_list":["post-40370","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-apple-computer-inc","corporate_contracts_industries-technology__hardware","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40370"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40370"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40370"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}