Who is running Apple after the 1997 leadership changes?

Steven P. Jobs, a co-founder, serves as Interim Chief Executive Officer and a director. Fred D. Anderson is Executive Vice President and Chief Financial Officer. The Board was reconstituted on August 5, 1997, after Amelio's departure, and includes Jobs, Lawrence J. Ellison, William V. Campbell, Jerome B. York, Gareth C.C. Chang, and Edgar S. Woolard, Jr.

How much did former CEO Gilbert Amelio receive when he left?

Amelio received a lump-sum severance of about $6,731,871 under his separation agreement, of which $1.5 million was immediately applied to repay part of his $5 million Company loan. He also received a $1,000,000 fiscal 1997 Component B bonus. He forfeited 800,000 unvested options, and his loan maturity was extended to September 15, 1998.

What was the stock option exchange program?

Under the Exchange Program, 7,866,155 outstanding options were canceled and replaced on a one-for-one basis with new options granted on July 11, 1997, at an exercise price of $13.25. Executives with replacement grants included Anderson (500,000), De Luca (309,750), and Rubinstein (200,000). The filing does not state the price of the canceled options.

Could management be paid substantial amounts after a takeover?

Yes. Options vest fully and are cashed out on a change in control, unless the plan administrator decides otherwise. Retention agreements with Anderson and Rubinstein provide cash payments of three times base salary plus three times target bonus on involuntary termination within two years after a change in control, along with continued benefits for two years and excise-tax gross-ups.

Does any single shareholder control Apple?

No. As of the November 7, 1997 table date, the Company knew of no shareholder who beneficially owned more than 5% of its common stock. Directors and executive officers together held about 20,252 shares, less than 1% of the 127,989,659 shares outstanding.

AAPL 10-K FY1997 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K/A filed January 23, 1998. Cited figures are marked; the original filing is the authoritative source.

This filing is an amendment that replaces Part III of Apple's fiscal 1997 10-K.

It covers governance, executive compensation, and related-party matters, and it contains no financial statements, revenue, or earnings data. Its main significance for investors is the leadership overhaul that followed the August 1997 board reconstitution and the NeXT acquisition. Steven P.

Jobs, a co-founder, serves as Interim CEO and also sits on the Board. The Board was reshuffled on August 5, 1997, when all members except Messrs. Woolard and Chang resigned and were replaced by Jobs, Lawrence J.

Ellison, William V. Campbell, and Jerome B. York.

Former CEO Gilbert F. Amelio received a lump-sum severance of about $6.73 million^a, less $1.5 million applied to his outstanding loan from the Company. The filing also shows a significant reset of the equity incentive program.

The Company ran a stock option exchange program in which 7,866,155 options were canceled and reissued on a one-for-one basis at a lower exercise price of $13.25^b (July 11, 1997 grants). Total FY1997 option grants to employees reached 19,629,231. Management is also protected by change-in-control arrangements.

Retention agreements with Messrs. Anderson and Rubinstein provide for cash payments of three times base salary plus three times target bonus on involuntary termination within two years after a change in control. Options accelerate on a change in control, and the agreements include excise-tax gross-ups.

Shareholders were asked to approve declassifying the Board so that all directors stand for annual election. On ownership, as of November 7, 1997, Apple had 127,989,659 shares of common stock outstanding. The Company reported no 5%^c beneficial owners.

Directors and executive officers as a group held about 20,252 shares, under 1%^d of the total. Jobs held one share directly, with 30,000 options granted for director service subject to shareholder approval of the Director Plan.

Investors should treat this document as governance context. Financial performance must come from the original 10-K, which is not included here.

02—Key points

Key Highlights

Leadership transition: Steven P. Jobs serves as Interim CEO and Director; the Board was reconstituted on August 5, 1997, with Jobs, Ellison, Campbell, and York joining.
Former CEO Gilbert F. Amelio resigned in 1997 and received a $6.73M lump-sum severance, with $1.5M applied to his $5M Company loan, which was extended to September 15, 1998.
Stock Option Exchange Program: 7,866,155 options were canceled and reissued one-for-one at a lower price of $13.25, with 19,629,231 total options granted to employees in FY1997.
Change-in-control protections: retention agreements for CFO Fred D. Anderson and SVP Jonathan Rubinstein provide 3x salary plus 3x target bonus on involuntary termination within two years of a change in control, with excise-tax gross-ups.
Governance change proposed: shareholders were asked to approve declassifying the Board so all directors stand for annual election.
Ownership: 127,989,659 shares outstanding as of November 7, 1997; no known holders of more than 5%; directors and officers as a group held about 20,252 shares (under 1%).
Related-party items: about $471,461 was paid to Aero Ventures (wholly owned by Amelio) for aircraft use in FY1997, and a $100,000 relocation loan was made to SVP James McCluney.

03—Questions

Frequently Asked Questions

Who is running Apple after the 1997 leadership changes?
Steven P. Jobs, a co-founder, serves as Interim Chief Executive Officer and a director. Fred D. Anderson is Executive Vice President and Chief Financial Officer. The Board was reconstituted on August 5, 1997, after Amelio's departure, and includes Jobs, Lawrence J. Ellison, William V. Campbell, Jerome B. York, Gareth C.C. Chang, and Edgar S. Woolard, Jr.
How much did former CEO Gilbert Amelio receive when he left?
Amelio received a lump-sum severance of about $6,731,871 under his separation agreement, of which $1.5 million was immediately applied to repay part of his $5 million Company loan. He also received a $1,000,000 fiscal 1997 Component B bonus. He forfeited 800,000 unvested options, and his loan maturity was extended to September 15, 1998.
What was the stock option exchange program?
Under the Exchange Program, 7,866,155 outstanding options were canceled and replaced on a one-for-one basis with new options granted on July 11, 1997, at an exercise price of $13.25. Executives with replacement grants included Anderson (500,000), De Luca (309,750), and Rubinstein (200,000). The filing does not state the price of the canceled options.
Could management be paid substantial amounts after a takeover?
Yes. Options vest fully and are cashed out on a change in control, unless the plan administrator decides otherwise. Retention agreements with Anderson and Rubinstein provide cash payments of three times base salary plus three times target bonus on involuntary termination within two years after a change in control, along with continued benefits for two years and excise-tax gross-ups.
Does any single shareholder control Apple?
No. As of the November 7, 1997 table date, the Company knew of no shareholder who beneficially owned more than 5% of its common stock. Directors and executive officers together held about 20,252 shares, less than 1% of the 127,989,659 shares outstanding.

04—Continue

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