Apple 2006 Annual Report Download - page 131

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Arrangements with Named Executive Officers
Change In Control Arrangements—Stock Options and Restricted Stock Units
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, and all restricted stock units granted on or after January 1, 2005, will, unless otherwise determined by the plan administrator, become
fully exercisable, 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 outstanding options held by non-employee directors will
automatically become fully 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.
Agreements governing certain restricted stock units granted to the Named Executive Officers and other officers prior to January 1, 2005
generally 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,
restricted stock, and restricted stock units outstanding that are not yet vested as of the date of such “change in control” shall become fully
vested. Further, these restricted stock unit agreements also provide that, in the event the Company terminates the Officer without cause at any
time, the restricted stock and restricted stock units will vest in full. 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.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of November 30, 2006 (the “ Table Date ”) with respect to the beneficial ownership of the
Company’s Common Stock by (i) each person the Company believes beneficially holds more than 5% of the outstanding shares of Common
Stock; (ii) each director; (iii) each Named Executive Officer listed in the Summary Compensation Table under the heading “ Executive
Compensation; ” and (iv) all directors and executive officers as a group. On the Table Date, 859,202,448 shares of Common Stock were
issued and outstanding. Unless otherwise indicated, all persons named as beneficial owners of Common Stock have sole voting power and sole
investment power with respect to the shares indicated as beneficially owned. In addition, unless otherwise indicated, all persons named below
can be reached at Apple Computer, Inc., 1 Infinite Loop, Cupertino, CA 95014.
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