Apple 1998 Annual Report Download - page 56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--SHAREHOLDERS' EQUITY (CONTINUED)
level of Senior Vice President and above and other key employees. These options generally become exercisable over a period of 4 years, based
on continued employment, and generally expire 10 years after the grant date. The 1998 Plan permits the granting of incentive stock options,
nonstatutory stock options, stock appreciation rights, and stock purchase rights.
1997 EMPLOYEE STOCK OPTION PLAN
In August 1997, the Company's Board of Directors approved the 1997 Employee Stock Option Plan (the 1997 Plan), for grants of stock options
to employees who are not officers of the Company. Options may be granted under the 1997 Plan to employees at not less than the fair market
value on the date of grant. These options generally become exercisable over a period of 4 years, based on continued employment, and generally
expire 10 years after the grant date. The Company's Board of Directors has reserved 9 million shares for issuance under the provisions of the
1997 Plan.
1997 DIRECTOR STOCK OPTION PLAN
In August 1997, the Company's Board of Directors approved a Director Stock Option Plan (DSOP) for which directors of the Company are
eligible. Options granted under the DSOP vest in three equal installments, on each of the first through third anniversaries of the date of grant.
The Company's Board of Directors has reserved 400,000 shares for issuance under the provisions of the DSOP. As of September 25, 1998,
150,000 options had been granted and were outstanding under the DSOP. Supplementally and separate from the DSOP, 30,000 options had
been granted in total to two members of the Company's Board of Directors, and were outstanding as of September 25, 1998.
EMPLOYEE STOCK PURCHASE PLAN
The Company has an employee stock purchase plan (the Purchase Plan) under which substantially all employees may purchase common stock
through payroll deductions at a price equal to 85% of the lower of the fair market values as of the beginning and end of the six-month offering
period. Stock purchases under the Purchase Plan are limited to 10% of an employee's compensation, up to a maximum of $25,000 in any
calendar year. During 1998 and 1997, 1.1 million and 775,000 shares, respectively, were issued under the Purchase Plan. As of September 25,
1998, approximately 3.5 million shares were reserved for future issuance under the Purchase Plan.
SENIOR OFFICERS RESTRICTED PERFORMANCE SHARE PLAN
In November 1997, the Company's Board of Directors issued approximately 24,000 fully vested shares and cash in settlement of shares to
certain officers of the Company under the Senior Officers Restricted Performance Share Plan (the PSP) based upon the achievement of certain
performance goals established in advance by the Compensation Committee of the Board. Immediately after these shares were issued, the
Company's Board of Directors terminated the PSP.
SHAREHOLDER RIGHTS PLAN
In May 1989, the Company adopted a shareholder rights plan and distributed a dividend of one right to purchase one share of common stock (a
Right) for each outstanding share of common stock of the Company. The Rights become exercisable in certain limited circumstances involving
a potential business combination transaction of the Company and are initially exercisable at a price of $200 per share. Following certain other
events after the Rights have become exercisable, each Right entitles its holder to
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