Apple 1998 Annual Report Download - page 76

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(1) All options received by Messrs. De Luca, Manovich and Douglas pursuant to the stock option exchange program were forfeited upon
termination of employment.
COMPENSATION COMMITTEE REPORT ON THE STOCK OPTION EXCHANGE PROGRAM
In order to address concerns regarding the retention of the Company's key employees, the Compensation Committee approved a stock option
exchange program (the "Exchange Program") on December 21, 1997. Pursuant to the Exchange Program, all individuals who held stock
options granted under one of the Company's stock option plans, excluding the Directors Stock Option Plan, were offered the opportunity to
exchange all of their stock options with an exercise price of greater than $13.6875 on a one-for-one basis for new stock options with an
exercise price of $13.6875, the fair market value of the Common Stock on December 19, 1997, and a new four year vesting schedule. All stock
options issued under the Exchange Program will expire on December 19, 2007. The Company's employees exchanged approximately 4.7
million stock options.
MEMBERS OF THE COMPENSATION COMMITTEE
Edgar S. Woolard, Jr. (Chairman) Gareth C.C. Chang
COMPENSATION OF DIRECTORS
In 1997, the Company ended its practice of paying cash retainers and fees to directors, and approved the Apple Computer, Inc. 1997 Director
Stock Option Plan (the "Director Plan"). The Director Plan was approved by the shareholders in April 1998 and 400,000 shares have been
reserved for issuance under the Director Plan. Pursuant to the Director Plan, the Company's non-employee directors are granted 30,000 stock
options upon their initial election to the Board. On the fourth anniversary of a non-employee director's initial election to the Board and on each
subsequent anniversary, the director will be entitled to receive 10,000 vested stock options. As of October 31, 1998, there were 150,000 shares
outstanding under the Director Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Board's Compensation Committee are Messrs. Woolard and Chang, neither of whom is an employee of the
Company. No person who was an employee of the Company in fiscal year 1998 served on the Compensation Committee in fiscal year 1998.
During fiscal year 1998, no executive officer of the Company (i) served as a member of the compensation committee (or other board committee
performing similar functions or, in the absence of any such committee, the board of directors) of another entity, one of whose executive officers
served on the Company's Compensation Committee, (ii) served as a director of another entity, one of whose executive officers served on the
Company's Compensation Committee, or (iii) served as a member of the compensation committee (or other board committee performing
similar functions or, in the absence of any such committee, the board of directors) of another entity, one of whose executive officers served as a
director of the Company.
72
NUMBER OF
SECURITIES EXERCISE
UNDERLYING MARKET PRICE PRICE AT
OPTIONS OF STOCK AT TIME OF NEW
DATE OF REPRICED TIME OF REPRICING EXERCISE
NAME AND POSITION REPRICING (#) REPRICING ($) ($) PRICE ($)
--------------------------------------------------- ----------- ----------- ------------- ----------- -----------
Avadis Tevanian, Jr. 12/19/97 275,837 13.6875 19.75 13.6875
Senior Vice President, Software Engineering 7/11/97 100,000 13.25 17.00 13.25
LENGTH OF
ORIGINAL OPTION
TERM REMAINING
AT DATE OF
NAME AND POSITION REPRICING
--------------------------------------------------- ---------------
Avadis Tevanian, Jr. 9 years
Senior Vice President, Software Engineering 8 months
9 years
7 months