Document:

Exhibit 10.2

 

*** TEXT OMITTED AND FILED SEPARATELY

CONFIDENTIAL TREATMENT REQUESTED

Under 17 C.F.R. Sections 200.80(b)(4) and
240.24b-2

 

INTELLECTUAL PROPERTY LICENSE AGREEMENT

 

BETWEEN

 

“CYMER”
CORPORATION AND INTEL CORPORATION

 

This Intellectual Property License Agreement
(“Agreement”) is entered into as of January 28, 2004(“Effective Date”) by
and between Cymer, Inc. a Nevada corporation, having an office at 17075
Thornmint Ct., San Diego, California, 92127, USA, (“Cymer”) and Intel
Corporation, a Delaware corporation, having an office at 2200 Mission College
Blvd., Santa Clara, California 95052, U.S.A. (“Intel”).

 

WHEREAS, Cymer intends to
commercialize EUV systems for an anticipated business opportunity,

 

NOW, THEREFORE, IN CONSIDERATION
OF THE MUTUAL COVENANTS AND PROMISES CONTAINED HEREIN, THE PARTIES AGREE AS
FOLLOWS:

 

1.              DEFINITIONS

 

1.1.                              “EUV” means
extreme ultraviolet lithography.

 

1.2.                              “EUV Source
System” means a system including all apparatus to deliver debris-free, in-band,
collected photons based on a [...***...] or a [...***...] to the intermediate focus
of the EUV lithography system for generating a supply of such collected photons
at a central wavelength in the range of [...***...].

 

1.3.                              “Intermediate
Focus” means the illuminator entrance of the EUV Lithography System, such
illuminator entrance being downstream of the collection optics, debris
mitigation system and optional spectral purity filter.

 

1.4.                              “EUV
Lithography System” means an integrated exposure tool containing an EUV Source
System and capable of creating lithographic patterns in semiconductor wafers.

 

1.5.                              “Cymer
Licensed Products” shall mean a Complete EUV Source System that is sold by
Cymer as Cymer’s own product (subject to the limitations set forth in
Section 2.6) and not on behalf of another.

 

1.6.                              “Complete EUV
Source System” means an EUV Source System and supporting EUV metrology devices
which are designed, developed and marketed by or for Cymer for integration into
an EUV Lithography System and which are assembled substantially into the form
ordinarily sold to EUV Lithography System producers under Cymer’s name.

 

1.7.                              “Integrated
Circuit” shall mean an integrated unit comprising one or more active and/or
passive circuit elements associated on one or more substrates, such unit
forming, or contributing to the formation of, a circuit for performing
electrical functions (including, if provided therewith, housing and/or
supporting means). The definition of “Integrated Circuit” shall also include
any and all firmware, microcode or drivers, if needed to cause such circuit to
perform substantially all of its intended hardware functionality, whether or
not such firmware, microcode or drivers are shipped with such integrated unit
or installed at a later time.

 

1.8.                              “Intel’s
Products” shall mean any Integrated Circuits.

 

*Confidential Treatment Requested

 

 

INTEL CONFIDENTIAL

 

1.9.                              “Patents”
shall mean all classes or types of patents other than design patents
(including, without limitation, originals, divisions, continuations,
continuations-in-part, extensions or reissues), and applications for these
classes or types of patent rights in all countries of the world that are owned
or controlled by the applicable party or any of its Subsidiaries or to which
such entities have the right to grant licenses, and to the extent that the applicable
party or its Subsidiaries has the right to grant licenses within and of the
scope set forth herein and without the requirement to pay consideration to any
third party (other than employees of the applicable party or its Subsidiaries)
for the grant of a license under this Agreement.

 

1.10.                        “Patent
Rights” shall mean all rights which may be exercised to enforce Patents.

 

1.11.                        “Intel
Patents” shall mean those Patents and patent applications that are listed in
Exhibit A and all EUV Source System Patents that become owned by Intel during
the Term of this Agreement and including their divisionals or continuations or
both.

 

1.12.                        “Trade
Secrets” shall mean know-how, inventions, discoveries, concepts, ideas,
methods, processes, designs, formulae, technical data, drawings,
specifications, data bases, models, prototypes, specimens,  notes, documents, schematics, layout, and
other data and materials and any other confidential information , including
that have been obtained and will be by Intel from its EUV related agreements
with various universities, that will be transmitted to Cymer by Intel during
the Term of this Agreement as part of this Agreement.

 

1.13.                        “Subsidiary”
shall mean any corporation, partnership, joint venture, limited liability
corporation or other entity, now or hereafter, in which a party owns or
controls (either directly or indirectly) the following:

 

(a)                                  an interest
sufficient to receive at least thirty percent (30%) of the profits and/or
losses of such entity (in the event that such entity distributes its profits or
losses); and

 

(b)                                 either of the
following:

 

(1)                                  if such entity
has voting shares or other voting securities, more than fifty percent (50%) of
the outstanding shares or securities entitled to vote for the election of
directors or similar managing authority; or

 

(2)                                  if such entity
does not have voting shares or other voting securities, more than fifty percent
(50%) of the ownership interest that represents the right to make decisions for
such entity.

 

An entity shall be deemed to be a Subsidiary under
this Agreement only so long as:

 

(c)                                  the party
owning or controlling the interest required under subsection (a) above has
not contractually or otherwise agreed to forfeit any part of its share of the
profits or losses distributed by the entity; and

 

(d)                                 the party
owning or controlling the shares, securities, or other ownership interest
required under subsections (b)(1) or (b)(2) above has not contractually or otherwise
surrendered, limited, or in any other way constrained its authority to elect
the managing authority or make decisions for the entity; and

 

(e)                                  all requisite
conditions of being a Subsidiary are met.

 

1.14.                        “Assert” means
to bring an action of any nature before any legal, judicial, arbitration,
administrative, executive or other type of body or tribunal that has or claims
to have authority to adjudicate such action in whole or in part.  Examples of such body or tribunal include,
without

 

2

 

limitation, United States State and Federal
Courts, the United States International Trade Commission and any foreign counterparts
of any of the foregoing.

 

1.15.                        “Cymer’s
Products” means all products manufactured by or for Cymer other than (i)
Chipsets; and (ii) microprocessors that are hardware or software compatible
with one or more Intel microprocessors.

 

2.              GRANT OF RIGHTS

 

2.1           Subject to the terms
of this Agreement, Intel grants to Cymer a [...***...] license, [...***...], under the Intel Patents
to

 

(a)                                  make, use,
sell, offer to sell, import and otherwise dispose of Cymer Licensed Product,
and

 

(b)                                 make, have
made, use and/or import any components solely for integrating into Cymer
Licensed Product.

 

2.2         The licenses
granted to Cymer to make, use, sell, offer for sale, import or otherwise
dispose of Cymer Licensed Product includes the right to assemble and combine
Integrated Circuits into Cymer Licensed Product, but does not include any
license to make, have made, use, sell, offer to sell, import or otherwise dispose
of Integrated Circuits themselves, including those Integrated Circuits that are
included in Cymer Licensed Product except as replacement parts for Cymer
Licensed Product.

 

2.3         Subject to the
terms of this Agreement, Intel grants to Cymer a [...***...] license, [...***...], under the Trade Secrets,
to use internally and to have Cymer third party contractors make components
(subject to requirements of confidentiality consistent with this Agreement), to
make use, sell offer for sale, import or otherwise dispose of Cymer Licensed
Products.

 

2.4         License Fee.

 

(a)                                  In
consideration for the license grants from Intel pursuant to this Agreement,
Cymer shall pay to Intel a [...***...] license fee, and payments will be due starting on
the last business day of the [...***...] during which the first high volume manufacturing
shipment of Cymer Licensed Product is made.  
The [...***...] license fee
will be in the amount of [...***...] which will be paid for a period of [...***...].  Each license fee payment will be made via check payable to Intel
Corporation, Post Contract Management, JF3-149, 2111 N.E. 25th
Avenue, Hillsboro, OR 97124; or wire transfer to the following account:  CITIBANK, New York, New York, ABA#
021000089, General Account # 38385954.

 

2.5  Clarification Regarding Patent Laundering.  The parties understand and acknowledge that
the licenses granted hereunder are intended to cover only Cymer Licensed
Product, and are not intended to cover manufacturing activities that Cymer may
undertake on behalf of third parties whose intention is to re-sell the Cymer
Licensed Product as a standalone component and not otherwise use the Cymer
Licensed Product or integrate in another tool (patent laundering activities).

 

2.6         Licenses and
Subsidiaries.

 

(a)                                  Intention for
Subsidiaries to be Bound.

 

(1)                                  Except as
expressly set forth herein, the parties intend that this Agreement shall extend
to all of each party’s Subsidiaries. 
The parties agree that to the extent

 

3

 

they are not already bound, each party shall
use reasonable and diligent efforts to ensure that all such Subsidiaries are
bound by the terms of this Agreement.

 

(b)                                 Either party
to this Agreement shall have the right to request a written confirmation or
denial from the other party to this Agreement that a specific Subsidiary is (or
is not) bound by this Agreement.  A
party receiving such a request shall provide such written confirmation
(including a full explanation in support of such confirmation or denial) within
30 days after the receipt of the request.

 

(c)                                  The parties
represent, warrant and covenant that they shall not participate in the creation
or acquisition of Subsidiaries where a primary purpose of such creation or
acquisition is to extend the benefits of this Agreement to a third party and
agree that any such attempt to extend such benefits shall not extend this
license to such third party.

 

(d)                                 If either party or one of their Subsidiaries (“First Party”) owns or has
the right to enforce or control the enforcement of any rights in any Patent but
such First Party does not have the right to license those rights to the other
party to this Agreement (the “Second Party”) hereunder (“Restricted Patent
Rights”), then, if and to the extent that such Restricted Patent Rights would
have been licensed to the Second Party if the First Party had the right to
license such patents:

 

(1)                                  the First Party grants to the Licensed Products of the Second Party an immunity
from suit for infringement of such Restricted Patent Rights of a scope
identical to the rights that would have been granted hereunder if the First
Party had the right to license such Restricted Patent Rights;

 

(2)                                  the First Party shall not give its assent if that assent is required to
allow a third party entity to assert the Restricted Patent Rights against the Licensed
Products of the Second Party; provided that (i) this restriction shall be
dropped if the Second Party first initiates litigation alleging infringement of
Patent Rights against the holder of the Restricted Patent Rights, and (ii) in
any event the First Party shall be free to fulfill its preexisting contractual
obligations to provide assistance and support as may be required under the
relevant contractual agreement; and

 

(3)                                  the First Party promises to off-set of or repay over to the Second Party
any monetary awards for damages and/or royalties actually to be paid or paid by
the Second Party and owing to said First Party as a result of litigation by the
holder of the Restricted Patent Rights against the Licensed Products of the Second
Party to the extent attributable to such Restricted Patent Rights.

 

(e)                                  The extension
of license rights to a Subsidiary shall apply only during the time period when
such Subsidiary meets all requirements of a Subsidiary.  However, if a Subsidiary of a party that
holds any Patents that are licensed to the other party hereunder ceases to meet
all requirements of being a Subsidiary, the licenses granted by such Subsidiary
to the other party under this Agreement shall continue for the life of such
Patents even after such entity ceases to meet all the requirements of being a
Subsidiary.

 

2.7         No Other
Rights.  No other rights are granted
hereunder, by implication, estoppel, statute or otherwise, except as expressly
provided herein.  Specifically, (i)
except as expressly provided in Section 2, nothing in the licenses granted
hereunder or otherwise contained in this Agreement shall expressly or by
implication, estoppel or otherwise give either party any right to license the
other party’s Patents to others, and (ii) no license or immunity is granted by
either party hereto directly or by

 

4

 

implication, estoppel or otherwise to any
third parties acquiring items from either party for the combination of Licensed
Products with other items or for the use of such combination.

 

3.
COVENANT NOT TO SUE

 

3.1 Covenant Not to Sue.  Cymer agrees that Cymer shall not Assert any
Patent Right against Intel, its Subsidiaries or affiliates, or their customers
(direct or indirect), distributors (direct or indirect), agents (direct or indirect)
and contractors (direct or indirect), wherein contractors does not include
equipment suppliers, for the manufacture, use, import, offer for sale or sale
of any of Intel’s Products or any process or any method or any component
employed in the manufacture, testing, distribution or use thereof for so long
as Intel does not Assert any Patent Right against Cymer, its subsidiaries or
affiliates, or their customers (direct or indirect), distributors (direct or
indirect), agents (direct or indirect) and contractors (direct or indirect) for
the manufacture, use, import, offer for sale or sale of Cymer’s Products or any
process or method employed in the manufacture, testing, distribution or use
thereof.   For clarity, an injunction
against an equipment supplier is not precluded by any of the above.

 

4. EFFECTIVE DATE, TERM AND TERMINATION FOR CAUSE

 

4.1 Effective Date.  This
Agreement is effective as of the last date of signature on this Agreement.

 

4.2 Term.  This Agreement
and the rights and licenses granted hereunder shall become effective on the
Effective Date, and shall continue in effect until terminated by a party pursuant
to Section 4.3.

 

4.3 Termination for Cause.

 

(a)                                  A party may
terminate this Agreement including all rights and licenses hereunder to the
other Party upon written notice of termination to the other party if the other
party hereto commits a material breach of this Agreement and does not correct
such breach within sixty (60) days after receiving written notice complaining
thereof.

 

(b)                                 This Agreement
and the licenses herein shall be terminated if Cymer does not commercialize a
Cymer Licensed Product by [...***...] (or other date mutually agreed by the parties) or
if the parties mutually agree to terminate this Agreement.

 

(c)                                  A party hereto
may terminate this Agreement including all rights and licenses hereunder to the
other Party upon sixty (60) days written notice of termination to the other
party given at any time upon or after:

 

(1)                                  the filing by
the other party of a petition in bankruptcy or insolvency;

 

(2)                                  any
adjudication that the other party is bankrupt or insolvent;

 

(3)                                  the filing by
the other party of any petition or answer seeking reorganization, readjustment
or arrangement of its business under any law relating to bankruptcy or
insolvency;

 

(4)                                  the
appointment of a receiver for all or substantially all of the property of the
other party;

 

(5)                                  the making by
the other party of any assignment for the benefit of creditors;

 

(6)                                  the institution
of any proceedings for the liquidation or winding up of the other party’s
business or for the termination of its corporate charter;

 

5

 

(7)                                  the other
party undergoes a Change of Control. 
For purposes of this Section 4.3, “Change of Control” shall mean a
transaction or a series of related transactions in which (i) one or more
related parties who did not previously own at least a fifty percent (50%)
interest in a party to this Agreement obtain at least a fifty percent (50%)
interest in such party, and, in the reasonable business judgment of the other
party to this Agreement, such change in ownership will have a material effect
on the other party’s business, or (ii) a party acquires, by merger, acquisition
of assets or otherwise, all or any portion of another legal entity such that
the market value of such party after the close of such transaction is greater
than two and two thirds (2 2/3) of the market value of such party prior to such
transaction.

 

4.4         Survival.  The provisions of Sections will survive any
termination or expiration of this Agreement: 
1, 3 (but only upon Agreement termination as incorporated into a
Corporate Purchase Agreement), 4, 5 and 6.

 

5.DISCLAIMER

 

5.1 Nothing contained in this Agreement shall be construed as:

 

(a)                                  a warranty or
representation by Intel as to the validity, enforceability or scope of any
class or type of Patent Right; or

 

(b)                                 a warranty or
representation that any manufacture, sale, lease, use or other disposition of
Licensed Products hereunder will be free from infringement of any patent rights
of any third party; or

 

(c)                                  an agreement
to bring or prosecute actions or suits against third parties for infringement
or conferring any right to bring or prosecute actions or suits against third
parties for infringement; or

 

(d)                                 conferring any
right to use in advertising, publicity, or otherwise, any trademark, trade name
or names, or any contraction, abbreviation or simulation thereof, of either
party; or

 

(e)                                  conferring by
implication, estoppel or otherwise, upon Cymer licensed hereunder, any license
or other right under any Patent Rights, copyright, maskwork, trade secret,
trademark other intellectual property right except the licenses and rights
expressly granted hereunder; or

 

(f)                                    an obligation
to furnish any technical information or know-how outside of what is transmitted
pursuant of this Agreement.

 

5.2  NO IMPLIED WARRANTIES. INTEL HEREBY DISCLAIMS ANY
IMPLIED WARRANTIES WITH RESPECT TO THE PATENTS LICENSED HEREUNDER, INCLUDING
WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

 

6. MISCELLANEOUS PROVISIONS

 

6.1 Authority.  Intel
represents and warrants that it has the right to grant to Cymer the licenses
granted hereunder.

 

6.2 No Assignment.  This
Agreement is personal to the parties, and the Agreement or any right or
obligation hereunder is not assignable, whether in conjunction with a change in
ownership, merger, acquisition, the sale or transfer of all, or substantially
all or any part of a party’s business or assets or otherwise, either
voluntarily, by operation of law, or otherwise, without the prior written
consent of the

 

6

 

other party, which consent may be withheld at the sole discretion of
such other party.  Any such purported
assignment or transfer shall be deemed a breach of this Agreement and shall be
null and void.  This Agreement shall be
binding upon and inure to the benefit of the parties and their permitted
successors and assigns.

 

6.3  Notice.  All notices required or permitted to be
given hereunder shall be in writing and shall be delivered by hand, or if
dispatched by prepaid air courier or by registered or certified airmail,
postage prepaid, addressed as follows:

 

	
  If to Cymer:

  

  Law Department

  Cymer, Inc.

  17075 Thornmint Ct.

  San Diego, CA 92127

  	
   

  	
  If to Intel:

  

  General Counsel

  Intel Corporation

  2200 Mission College Blvd.

  Santa Clara, CA 95052

  United States of America

  

 

Such notices shall be deemed to have been
served when received by addressee or, if delivery is not accomplished by reason
of some fault of the addressee, when tendered for delivery.  Either party may give written notice of a
change of address and, after notice of such change has been received, any
notice or request shall thereafter be given to such party as above provided at
such changed address.

 

6.4 No Rule of Strict Construction.  Regardless of which party may have drafted this Agreement, no
rule of strict construction shall be applied against either party.  If any provision of this Agreement is
determined by a court to be unenforceable, the parties shall deem the provision
to be modified to the extent necessary to allow it to be enforced to the extent
permitted by law, or if it cannot be modified, the provision will be severed
and deleted from this Agreement, and the remainder of the Agreement will
continue in effect.

 

6.5  Taxes.  Each party shall be responsible for the
payment of its own tax liability arising from this transaction.

 

6.6  Entire Agreement.  This Agreement embodies the entire
understanding of the parties with respect to the subject matter hereof, and
merges all prior discussions between them, and neither of the parties shall be
bound by any conditions, definitions, warranties, understandings, or
representations with respect to the subject matter hereof other than as expressly
provided herein.  No oral explanation or
oral information by either party hereto shall alter the meaning or
interpretation of this Agreement.

 

6.7 Modification; Waiver. 
No modification or amendment to this Agreement, nor any waiver of any
rights, will be effective unless assented to in writing by the party to be
charged, and the waiver of any breach or default will not constitute a waiver
of any other right hereunder or any subsequent breach or default.

 

6.8 Governing Law.  This
Agreement and matters connected with the performance thereof shall be
construed, interpreted, applied and governed in all respects in accordance with
the laws of the United States of America and the State of California, without
reference to conflict of laws principles.

 

6.9 Jurisdiction.  Intel
and Cymer agree that all disputes and litigation regarding this Agreement and
matters connected with its performance shall be subject to the exclusive jurisdiction
of the courts of the State of California or of the Federal courts sitting
therein.

 

6.10 Dispute Resolution. 
All disputes arising directly under the express terms of this Agreement
or the grounds for termination thereof shall be resolved as follows:  First, the senior management of both parties
shall meet to attempt to resolve such disputes.  If the senior management cannot resolve the disputes,

 

7

 

either party may make a written demand for formal dispute
resolution.  Within thirty (30) days
after such written demand, the parties agree to meet for one day with an
impartial mediator and consider dispute resolution alternatives other than
litigation.  If an alternative method of
dispute resolution is not agreed upon within thirty (30) days after the one-day
mediation, either party may begin litigation proceedings.

 

6.11  Confidentiality of Terms.  The parties hereto shall keep the terms of
this Agreement confidential and shall not now or hereafter divulge these terms
to any third party except:

 

(a)                                  with the prior
written consent of the other party; or

 

(b)                                 to any
governmental body having jurisdiction to call therefor; or

 

(c)                                  subject to (d)
below, as otherwise may be required by law or legal process, including to legal
and financial advisors in their capacity of advising a party in such matters;
or

 

(d)                                 during the
course of litigation so long as the disclosure of such terms and conditions are
restricted in the same manner as is the confidential information of other
litigating parties and so long as (a) the restrictions are embodied in a
court-entered Protective Order and (b) the disclosing party informs the other
party in writing at least ten (10) days in advance of the disclosure; or

 

(e)                                  in confidence to
legal counsel, accountants, banks and financing sources and their advisors
solely in connection with complying with financial transactions.

 

6.12  Trademarks. Neither
party may use the other party’s name or trademarks in advertisement, materials,
web sites, press releases, interviews, articles, brochures, banners,
letterhead, business cards, project reference or client listings, without the
other’s prior review and written consent.

 

6.13  Compliance with Laws.  Anything contained in this Agreement to the
contrary notwithstanding, the obligations of the parties hereto and of the
Subsidiaries of the parties shall be subject to all laws, present and future,
of any government having jurisdiction over the parties hereto or the
Subsidiaries of the parties, and to orders, regulations, directions or requests
of any such government.

 

6.14  Force Majeure.  The parties hereto shall be excused from any
failure to perform any obligation hereunder to the extent such failure is
caused by war, acts of public enemies, strikes or other labor disturbances,
fires, floods, acts of God, or any causes of like or different kind beyond the
control of the parties.

 

8

 

IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed on the date below written.

 

 

	
  INTEL CORPORATION

  	
   

  	
  Cymer, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ CHRIS PHILIPPI

  	
   

  	
  By:

  	
  /s/ ROBERT P. AKINS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Chris Philippi

  	
   

  	
  Robert P. Akins

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
   

  
	
  Capital Manager

  	
   

  	
  CEO

  
	
  Title

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  
	
  2/4/04

  	
   

  	
  2/3/04

  
	
  Date

  	
   

  	
  Date

  
					

 

9

 

EXHIBIT A – LICENSED PATENTS

 

	
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EXHIBIT B – TRADE SECRETS

 

10Exhibit
10.A.54

 

APPLE COMPUTER, INC.

RESTRICTED STOCK UNIT AWARD AGREEMENT

 

This
Agreement is made [DATE] (the “Date of Grant”), by and between Apple Computer,
Inc. (“Apple”) and [NAME] (the “Grantee”).

 

Grantee and Apple agree as follows:

 

1.   Grant
of  Restricted Stock Units.   Apple hereby grants to Grantee
as of the Date of Grant, an award of
                     
restricted stock units (the “Units”) pursuant to the terms and conditions
contained herein and the terms and conditions of the 2003 Employee Stock Option
Plan (“2003 Plan”).

 

2.   Vesting
of the Units.

 

(a)  Release
Date. 
            %
of the Units shall vest on [DATE] and
                  %
of the Units shall vest on [DATE] (the “Release Dates”) provided that Grantee
has remained continuously employed by Apple, or any parent or subsidiary of
Apple, until each such Release Date.

 

(b)  Termination
Without Cause Prior to Release Date. In the event of termination by Apple
of Grantee’s employment other than for “Cause” (as defined below) prior to any
Release Date, all unvested Units shall be fully vested in Grantee as of such
termination date.

 

(c)  Resignation
for Good Reason Following a Change in Control.  In the event there is a “Change in Control” of Apple (as defined
in Section 16(d) of the 2003 Plan) and if in connection with or following
such Change in Control, the Grantee’s employment is terminated without “Cause”
or if the Grantee resigns for “Good Reason” (as defined below), all unvested
Units shall be fully vested in Grantee as of such termination or resignation
date.

 

(d)  Termination
Due to Death.  In the event of
termination of employment due to Grantee’s death prior to a Release Date, that
number of Units deemed to have vested on a pro rata daily basis from the Date
of Grant to the date of death shall be immediately vested in Grantee as of the
date of death.  Any Units not so vested shall be immediately forfeited.

 

(e)  Termination
for Other Reasons.  In the event
that Grantee’s employment with Apple, or any parent or subsidiary of Apple,
terminates prior to a Release Date for any reason other than those specified in
Sections (b), (c) and (d) above, including termination voluntarily by Grantee
or by Apple for Cause, any unvested Units shall be immediately forfeited.

 

 

(f)                                    Certain
Definitions.

 

(i)                                     “Cause.”
For purposes of this Section 2, “Cause” shall mean a termination of
Grantee’s employment which is a result of (i) Grantee’s felony conviction, (ii)
Grantee’s willful disclosure of material trade secrets or other material
confidential information related to the business of Apple and its subsidiaries
or (iii) Grantee’s refusal or failure to perform [his or her] duties with Apple
(other than any such failure resulting from incapacity due to physical or
mental illness) or to comply with the reasonable directions received from or
policies established by Apple, the CEO, or the Board of Directors or (iv) any
act or omission that is the result of willful misconduct or gross negligence
and that, in the good faith opinion of Apple, is injurious in any material
respect to the financial condition, business or reputation of Apple.

 

(ii)                                  “Good
Reason.”  For purposes of this
Section 2, “Good Reason” shall mean a resignation of Grantee’s employment
as a result of any of the following:

 

(a)                                  A
substantial diminution in Grantee’s position or duties, or an adverse change to
Grantee’s title from those in effect immediately prior to the Change in
Control;

 

(b)                                 A
reduction by Apple in Grantee’s annual base salary as in effect immediately
prior to the Change in Control or the failure to pay Grantee’s salary when due;

 

(c)          The relocation of the
office of Apple where Grantee is employed as of the Change in Control to a
location which is more than seventy-five (75) miles away from such location, or
a requirement that Grantee be based more than seventy-five (75) miles away from
the employment location as of the Change in Control;

 

which, in any case, is
not remedied within thirty (30) days after receipt of written notice from
Grantee to Apple, specifically delineating each such act and setting forth
Grantee’s intentions to resign if such breach is not duly remedied, provided,
that if the specified breach cannot be remedied within said thirty (30)-day
period and Apple commences reasonable steps within said thirty (30)-day period
to remedy such breach and diligently continues such steps thereafter until a
remedy is effected, such breach shall not constitute “Good Reason.”

 

3.                                       Restriction
on Transfer.  Grantee shall not
sell, transfer, pledge, hypothecate or otherwise dispose of any Units or the
consideration to be received upon payout of vested Units prior to the
applicable payout date.

 

 

4.                                       Payout
of Units.

 

(a)                                  Status
as a Creditor.  Unless and until Units
have vested in accordance with the schedule set forth in Section 2
above, Grantee shall have no right to a payout with respect to any Units.  Prior to payout of any vested Units, the
vested Units will represent an unsecured obligation of Apple, payable (if at
all) only from the general assets of Apple. 
Grantee is an unsecured creditor of Apple, and payouts are subject to
the claims of Apple’s creditors.

 

(b)                                 Form
and Timing of Payout.  Vested Units
shall be paid out in the form of shares of Apple common stock (“Shares”) as
soon as practicable following each Release Date.  Notwithstanding the foregoing, Grantee may elect to defer payout
by submitting a properly completed Payout Deferral Election Form to Apple at
least twelve (12) months prior to the applicable Release Date and otherwise
complying with the deferral procedures or conditions as Apple may specify from
time to time.

 

5.                                       Tax
Consequences.  Grantee understands
that [he or she] (and not Apple) shall be responsible for [his or her] own tax
liability that may arise as a result of the transactions contemplated by this
Agreement.  Grantee understands that [he
or she] will recognize ordinary income in an amount equal to the fair market
value of the Shares received as of each payout date for such Shares, and
Grantee is obligated to pay applicable income tax withholding on the amount of
ordinary income recognized upon receipt of such Shares.  Grantee shall pay such income tax
withholding amounts to Apple within 24 hours of the payout date for such
Shares. In addition, Grantee understands that Apple will be required to withhold
applicable employment taxes on each Release Date from compensation due Grantee.
To the extent that the compensation due Grantee is insufficient to cover the
applicable employment taxes on each Release Date, Grantee agrees to pay to
Apple within 24 hours of such Release Date, the amount due for employment
taxes.

 

[Note: For grants
permitting net share settlement: Grantee may satisfy such tax withholding
obligations, in whole or in part by: (a) paying cash, or (b) electing to have
Apple withhold otherwise deliverable Shares having a fair market value equal to
the minimum amount required to be withheld. 
Unless Grantee notifies Apple otherwise within a reasonable time prior
to the applicable payout date, Grantee will be deemed to have elected to satisfy
the withholding obligations through Apple retaining otherwise deliverable
Shares as provided in clause (b).]

 

6.                                       General
Provisions.

 

(a)                                  This
Agreement and the 2003 Employee Stock Option Plan represent the entire
agreement and understanding between the parties as to the subject matter hereof
and supersede all prior or contemporaneous agreements, whether written

 

 

or oral.   In the event of a conflict between this
Agreement and the 2003 Plan, the provisions of the 2003 Plan will govern.  The Administrator has the power to interpret
the 2003 Plan and this Agreement.  All
interpretations and determinations made by the Administrator will be binding
upon Grantee, Apple, and all other interested parties.

 

(b)                                 This
Agreement shall be governed by the laws of the State of California without
reference to its conflicts of law principles.

 

(c)                                  No
waiver, alteration or modification of any of the provisions of this Agreement
shall be binding, unless in writing and signed by duly authorized
representatives of the parties hereto. This Agreement shall be binding on, and
shall inure to the benefit of, the parties and their respective successors and
assigns.

 

(d)                                 This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.

 

IN
WITNESS WHEREOF, the parties have duly executed this Agreement effective as of
the date set forth above.

 

 

	
  APPLE COMPUTER,
  INC.

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  [Grantee’s Name]

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