Apple 2001 Annual Report Download - page 59

(3) Includes 758,332 shares of Common Stock which Mr. Anderson has the right to acquire by exercise of stock options.
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(4)
Includes 70,000 shares of Common Stock which Messrs. Campbell, Ellison and York each have the right to acquire by exercise of stock
options.
(5) Includes 350,000 shares of Common Stock which Mr. Cook has the right to acquire by exercise of stock options.
(6) Includes 40,000 shares of Common Stock which Mr. Drexler has the right to acquire by exercise of stock options.
(7)
Includes 1,400 shares of Common Stock which Mr. Levinson holds indirectly and 10,000 shares of Common Stock which Mr. Levinson
has the right to acquire by exercise of stock options.
(8) Includes 650,000 shares of Common Stock which Mr. Rubinstein has the right to acquire by exercise of stock options.
(9) Includes 725,838 shares of Common Stock which Dr. Tevanian has the right to acquire by exercise of stock options.
* Represents less than 1% of the issued and outstanding shares of Common Stock on the Table Date.
Item 13. Arrangements with Named Executive Officers
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, except the Director Plan,
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. The Director Plan provides that upon a "change in control"
of the Company, all unvested options held by non-employee directors will automatically become fully vested and exercisable and will be
cashed out at an amount equal to the difference between the applicable "change in control price" and the exercise price of the options. 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 Fred D. Anderson, Timothy D. Cook, Nancy R. Heinen, Sina Tamaddon, Jonathan Rubinstein and Avadis
Tevanian provide 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with a relocation assistance package, the Company loaned Mr. Johnson (Senior Vice President, Retail) $1,500,000 for the
purchase of his principal residence. The loan is secured by a deed of trust and is due and payable in May 2004. Under the terms of the loan,
Mr. Johnson agreed that should he exercise any of his stock options prior to the due date of the loan, that he would pay the Company an amount
equal to the lessor of (1) an amount equal to 50% of the total net gain realized from the exercise of the options; or (2) $375,000 multiplied by
the number of years between the exercise date and the date of the loan. The largest amount of the indebtedness outstanding on this loan during
fiscal year 2001 was $1,500,000.
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