Apple 1998 Annual Report Download - page 78

(6) Represents shares of Common Stock held by 13 executive officers and directors and options held by such individuals that were exercisable
at the Table Date or within 60 days thereafter.
* Amount represent less than 1% of the issued and outstanding shares of Common Stock on the Table Date.
ITEM 13. ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company entered into an employment agreement with Mr. Anderson effective April 1, 1996, pursuant to which he serves as Executive
Vice President and Chief Financial Officer of the Company. Pursuant to his agreement, Mr. Anderson is entitled to an annual base salary of no
less than $500,000. If Mr. Anderson's employment is terminated by the Company without "Cause" at any time during the five-year period
following April 1, 1996, he will be entitled to receive a lump sum severance payment equal to the sum of his annual base salary and target
bonus, if any. Mr. Anderson's agreement generally defines "Cause" to include a felony conviction, willful disclosure of confidential
information or willful and continued failure to perform his employment duties.
In February 1998, Mr. Cook joined the Company as Senior Vice President, Operations. Under the terms of his employment, he is entitled to an
annual base salary of no less than $400,000. In addition, Mr. Cook received a one-time hiring bonus in the amount of $500,000 and a stock
option grant with a sell-back provision. The sell-back provision provides that during the five day period starting on the second anniversary of
his commencement of employment, he may elect to sell all of his remaining vested and unvested options and shares (obtained through the
exercise of such options) back to the Company for the sum of $3 million less any profits Mr. Cook has realized to date through the exercise and
sale of such options. If Mr. Cook's employment is terminated by the Company without "Cause" during the first two years of his employment,
he will be entitled to receive an amount equal to $800,000 minus the total base salary he has received since the start of his employment. In
addition, he will be allowed to immediately exercise the stock option sell-back provision described above.
CHANGE IN CONTROL ARRANGEMENTS--STOCK OPTIONS
In the event of a "change in control" of the Company, all outstanding options under the Company's stock option plans will, unless otherwise
determined by the plan administrator, become exercisable in full, and will be cashed out at an amount equal to the difference between the
applicable "change in control price" and the exercise price. A "change in control" under these plans is generally defined as (i) the acquisition by
any person of 50% or more of the combined voting power of the Company's outstanding securities or (ii) the occurrence of a transaction
requiring shareholder approval and involving the sale of all or substantially all of the assets of the Company or the merger of the Company with
or into another corporation.
In addition, options granted to Nancy R. Heinen, Timothy D. Cook, Mitchell Mandich and Sina Tamaddon have a provision so that in the event
there is a Change in Control, as defined in the Company's stock option plans, and if in connection with or following such Change in Control,
their employment is terminated without "Cause" or if they should resign for "Good Reason", those options outstanding that are not yet vested
and exercisable as of the date of such change in control, shall become fully vested and exercisable. Generally, "Cause" is defined to include a
felony conviction, willful disclosure of confidential information or willful and continued failure to perform his or her employment duties.
"Good Reason" includes resignation of employment as a result of a substantial diminution in position or duties, or an adverse change in title or
reduction in annual base salary.
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