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Amelio's golden handshake

If you're feeling sorry for Gil Amelio, consider his severance package: The chief executive is leaving Apple with close to $3.5 million.

If you're feeling sorry for Gil Amelio, consider his severance package: The chief executive is leaving Apple Computer (AAPL) with close to $3.5 million.

According to public documents, Amelio is entitled to a $990,000 annual base salary of his five-year contract in the event of an involuntary termination after his first year of service under an employment agreement signed in February 1996.

Amelio will officially leave the company in September. That will leave about 3-1/2 years on his contract, or $3.5 million in severance.

If Amelio would have been terminated during the first year of his contract, he would have earned much more. Under a different provision of the contract, Amelio would have received $10 million if he were involuntarily terminated before the "initial vesting date" of the contract or the one-year anniversary of stockholder approval of the agreement. That took place earlier this year.

Amelio came to Apple as the chief executive officer and chairman in February 1996 after the ouster of then-CEO Michael Spindlier and immediately drew fire for his excessive compensation package. The deal included guaranteed bonuses, large stock options, and a loan-lease on his personal plane for $5 million.

In 1996, Amelio's compensation last year came to $655,061 in salary, $2,334,000 in performance bonuses, and $3,830,580 in stock, according to corporate spokeswoman Katie Cotton. Apple's fiscal 1996 ended in September, right before Apple experienced a disastrous Christmas season.

Cotton added, however, that Amelio's stock options awarded in 1996 turned out to be worthless because their strike price--the price at which they could be purchased--came to $26. Apple's stock has been significantly below that for some time.

By contrast, a number of former Apple employees griped last year that they did not receive any bonuses because the company failed to turn an overall profit.

Amelio's employment agreement was published in filings with the Securities and Exchange Commission. It is unclear whether Apple could have reserved any rignt to modify the terms of that deal.

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