Apple 1998 Annual Report Download - page 79

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CHANGE IN CONTROL ARRANGEMENTS--RETENTION AGREEMENTS
The Company is currently party to retention agreements (The "Retention Agreements") with three Named Executive Officers (Messrs.
Anderson, Rubinstein and Tevanian) providing for certain cash payments in the event of a termination of an executive's employment following
a change in control of the Company. For purposes of the Retention Agreements, a "change in control" is defined as (i) a reorganization, merger,
consolidation or other corporate transaction in which the holders of voting stock of the Company immediately before the corporate transaction
will not own more than 50% of the voting shares of the continuing or surviving corporation immediately after such corporate transaction, (ii)
the acquisition of 30% or more of the combined voting power of the Company's then-outstanding securities, (iii) a change of 50% in the
membership of the Board within a two-year period, unless the election or nomination for election by shareholders of an adequate number of
directors within such period was approved by the vote of at least three-fourths of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was previously so approved, (iv) all or substantially all of the assets of
the Company are sold, liquidated or distributed, or (v) a "change in control" or a "change in the effective control" of the Company within the
meaning of Section 280G of the Code.
In the event of an Involuntary Termination (as defined in the Retention Agreements) of any executive officer who is a party to a Retention
Agreement within two years following a change in control, such executive officer will receive a cash payment equal to the sum of (i) three
times his annual base salary immediately prior to the date of his termination or, if greater, the highest annualized base salary in effect during the
three-year period ending on the change in control, and (ii) three times his target bonus for the year in which the termination occurs or, if
greater, the highest target annual bonus applicable to the executive officer in any of the three years ending prior to the change in control. In
addition, the executive officer would be eligible to participate in the medical, dental, health, life and other fringe benefit plans and
arrangements applicable to him until the second anniversary of his date of termination.
The Retention Agreements further provide that, in the event of an Involuntary Termination of an executive officer on or following a change in
control, such executive officer's equity awards granted to him under the Company's equity-based incentive plans (the "Equity Plans") will vest
and become exercisable. All equity awards also will vest and become exercisable as of the date of a change in control as defined in the Equity
Plans, regardless of whether the executive officer's employment has then terminated. Subject to certain limits on payments, the Retention
Agreements also require tax gross-up payments to the executive officers to mitigate any excise tax imposed on the executive officers under
Section 4999 of the Code in connection with a change in control.
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