updated 05:35 pm EST, Thu March 20, 2003
Apple today announced that its Board of Directors yesterday , including adding two additional independent directors to its board, increasing the use of independent committees on the board and reducing issued stock option overhang from 23 percent to 16 percent.
- As part of its plan to add two additional independent directors, Apple yesterday announced the addition of former Vice President Albert Gore Jr. and has commenced a formal search for a second independent director, which the Company says it hopes to add before the end of the summer. With the addition of the second independent director, five out of seven Apple directors will be independent under SEC and NASDAQ rules.
- Apple’s Board of Directors has also expanded the role of its independent Nominating Committee to include corporate governance as the new Nominating and Corporate Governance Committee and has expanded the role of its Audit Committee in accordance with the Sarbanes-Oxley Act and proposed SEC and NASDAQ regulations. These two committees are chaired by independent directors and staffed by a majority of independent directors.
- The Board also approved two measures to reduce its issued stock options as a percentage of total options and shares outstanding from the current level of 23 percent to 16 percent. The first measure is a voluntary employee stock option exchange program which allows Apple employees who are not executive officers and hold options with exercise prices at or above $25.00 to exchange them for a lesser number of new stock options priced at fair market value six months and one day after their existing options are cancelled. The second measure is for Apple CEO Steve Jobs to voluntarily exchange his 27.5 million stock options for a new grant of 5 million restricted shares that will vest three years after the grant. Both measures are expected to return a net total of over 32 million options back to Apple, which represent almost 7 percent of the total options and shares currently outstanding.
- In addition, the Board approved cancelling its non-shareholder approved option plan upon (1) the completion of the employee exchange program and (2) shareholder approval to amend the remaining shareholder-approved executive officer stock plan so it can be used to grant options to all employees.