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S&S DRAFT
05/26/97
As filed with the Securities and Exchange Commission on May 30, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------------------
APPLE COMPUTER, INC.
(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA
(State or Other Jurisdiction of Incorporation or Organization)
94-2404110
(I.R.S. Employer Identification No.)
1 INFINITE LOOP
CUPERTINO, CALIFORNIA 95014
(408) 996-1010
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-------------------------------------
JOHN B. DOUGLAS III
SENIOR VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY
APPLE COMPUTER, INC.
1 INFINITE LOOP
CUPERTINO, CALIFORNIA 95014
(408) 996-1010
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
-------------------------------------
Copy to:
WILLIAM H. HINMAN, JR.
Shearman & Sterling
555 California Street
San Francisco, California 94104
(415) 616-1100
-------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
<PAGE>
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /__________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SHARES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER OFFERING FEE
SHARE (1) PRICE(1)
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Common Stock, no par value 1,500,000 Shares $16.8125 25,218,750.00 $7,642.05
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
on the average high and low prices of the Common Stock as reported on the
Nasdaq National Market on May 23, 1997.
----------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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SUBJECT TO COMPLETION, DATED MAY 30, 1997
PROSPECTUS
1,500,000 SHARES
APPLE COMPUTER, INC.
COMMON STOCK
(NO PAR VALUE)
This Prospectus relates to an aggregate of 1,500,000 shares (the "Shares")
of common stock, no par value (the "Common Stock"), of Apple Computer, Inc.
("Apple" or the "Company") which may be offered and sold from time to time by a
shareholder of the Company (the "Selling Shareholder"). See "Selling
Shareholder". The Shares were acquired by the Selling Shareholder in connection
with the Company's acquisition of NeXT Software, Inc. ("NeXT") on February 4,
1997. See "The NeXT Acquisition".
The Shares may be offered for sale by the Selling Shareholder from time to
time in the over-the-counter market, in the Nasdaq National Market, in privately
negotiated transactions or otherwise at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Shares may be sold by the Selling Shareholder directly to
purchasers or through agents, underwriters or dealers. See "Selling
Shareholder" and "Plan of Distribution". If required, the names of any such
agents or underwriters involved in the sale of the Shares in respect of which
this Prospectus is being delivered and the applicable agent's commission,
dealer's purchase price or underwriter's discount, if any, will be set forth in
an accompanying supplement to this prospectus (a "Prospectus Supplement").
The Selling Shareholder will receive all of the net proceeds from the sale
of the Shares and will pay all underwriting discounts and selling commissions,
if any, applicable to the sale of the Shares. The Company is responsible for
payment of all other expenses incident to the offer and sale of the Shares.
The Selling Shareholder and any broker/dealers, agents or underwriters
which participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any commissions, discounts or concessions received by
them and any profit on the resale of the Shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS IN
EVALUATING AN INVESTMENT IN THE SHARES OFFERED HEREBY, SEE "RISK FACTORS" ON
PAGE -.
On May 23, 1997, the closing bid price of the Common Stock, which is quoted
on the Nasdaq National Market under the symbol "AAPL", was $16.875 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
AVAILABLE INFORMATION
Apple is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material also can be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549 at prescribed rates.
Such reports, proxy statements and other information can also be inspected at
the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of the site is http://www.sec.gov. In addition, such reports, proxy
statements and other information concerning the Company can be inspected and
copied at the offices of the Nasdaq National Market, Nasdaq Operations, 1735 K
Street, N.W., Washington, D.C. 20006, on which the Common Stock of the Company
is quoted.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Shelf Registration Statement") under the Securities Act with respect to the
offering of the Common Stock made hereby. This Prospectus does not contain all
of the information set forth in the Shelf Registration Statement, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is hereby made to the Shelf Registration Statement. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Shelf Registration Statement, each such statement being qualified
in all respects by such reference. A copy of the Shelf Registration Statement
may be inspected without charge at the offices of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and copies of all or any part thereof may
be obtained from the Public Reference Section of the Commission upon the payment
of the fees prescribed by the Commission. In addition, copies of the Shelf
Registration Statement may be obtained from the Commission's World Wide Web site
at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated by reference in this Prospectus:
1. Apple's Annual Report on Form 10-K for the fiscal year ended September
27, 1996.
2. Apple's Quarterly Report on Form 10-Q for the fiscal quarter ended
December 27, 1996.
3. Apple's Current Report on Form 8-K, filed October 28, 1996.
4. Apple's Current Report on Form 8-K, filed December 13, 1996.
5. Apple's Current Report on Form 8-K/A, filed December 23, 1996.
6. Apple's Current Report on Form 8-K, filed December 24, 1996.
7. Apple's Current Report on Form 8-K, filed April 10, 1997.
8. Apple's Current Report on Form 8-K, filed April 25, 1997.
9. Apple's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 28, 1997.
10. The description of Apple's capital stock contained in Apple's
Registration Statement filed on Form 8-A, dated October 30, 1981 and
the description of the Common Share Purchase Rights contained in its
Registration Statement filed on Form 8-A, dated May 15, 1989.
All documents filed by Apple pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of the filing of this Shelf Registration
Statement of which this Prospectus forms a part and prior to the end of
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Offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (WITHOUT EXHIBITS, UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE WITHOUT
CHARGE UPON REQUEST. REQUESTS FOR DOCUMENTS SHOULD BE DIRECTED TO APPLE
COMPUTER, INC., 1 INFINITE LOOP, CUPERTINO, CALIFORNIA 95014, ATTENTION:
DIRECTOR, INVESTOR RELATIONS, (TELEPHONE: (408) 996-1010).
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THE COMPANY
Apple designs, manufactures and markets microprocessor-based personal
computers and related personal computing and communicating solutions for sale
primarily to education, home, business and government customers. Substantially
all of the Company's net sales to date have been derived from the sale of
personal computers from its Apple Macintosh-Registered Trademark- line of
computers and related software and peripherals. The Company operates in one
principal industry segment across geographically diverse marketplaces.
Apple was incorporated under the laws of the State of California on January
3, 1977. The Company's principal executive offices are located at 1 Infinite
Loop, Cupertino, California 95014 and its telephone number is (408) 996-1010.
THE NEXT ACQUISITION
On February 4, 1997, Apple acquired all of the outstanding shares of NeXT
pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated
December 20, 1996, among Apple, Blackbird Acquisition Corporation and NeXT.
NeXT, which was headquartered in Redwood City, California, developed, marketed
and supported software that enables customers to easily and quickly implement
business applications on the Internet/World Wide Web, intranets and
enterprise-wide client/server networks. Pursuant to the Merger Agreement, Apple
issued the Shares to the Selling Shareholder without registration pursuant to
the exemption set forth in Section 4(2) of the Securities Act and Regulation D
thereunder.
The terms of the Merger Agreement provide for Apple to file a shelf
registration statement covering the Shares. The Shelf Registration Statement of
which this Prospectus is a part constitutes such required shelf registration
statement.
RISK FACTORS
FACTORS AFFECTING FUTURE OPERATING RESULTS AND FINANCIAL CONDITION
The Company's future operating results and financial condition are
dependent upon the Company's ability to successfully develop, manufacture, and
market technologically innovative products in order to meet dynamic customer
demand patterns, and its ability to effect a change in marketplace perception of
the Company's prospects, including the viability of the Macintosh platform.
Inherent in this process are a number of factors that the Company must
successfully manage in order to achieve favorable future operating results and a
favorable financial condition. Potential risks and uncertainties that could
affect the Company's future operating results and financial condition include,
without limitation, continued competitive pressures in the marketplace and the
effect of any reaction by the Company to such competitive pressures, including
pricing actions by the Company; the Company's ability to supply products in
certain categories; the Company's ability to supply products free of latent
defects or other faults; the Company's ability to make timely delivery to the
marketplace of technological innovations, including its ability to make timely
delivery of planned enhancements to the current Macintosh operating system
("Mac-Registered Trademark- OS") and to make timely delivery of a new and
substantially backward-compatible OS; the Company's ability to successfully
integrate NeXT technologies, processes and employees with those at Apple; the
Company's ability to successfully implement its strategic direction and
restructuring actions, including reducing its expenditures; the Company's
ability to attract, motivate and retain employees; the effects of significant
adverse publicity; and the availability of third-party software for particular
applications.
The Company expects that it will not return to profitability until at least
the fourth quarter of 1997, if not later.
RECENT FINANCIAL RESULTS
The Company reported a net loss of $708 million, or $5.64 per share, for
the quarter ended March 28, 1997, and $828 million, or $6.62 per share, for
the six months ended March 28, 1997. These results include a $155 million
charge for supplemental restructuring actions, as described below, and a $375
million charge to operating results for in-process research and
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development acquired in the NeXT acquisition, as described in Note 3 to the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 28,
1997.
DECLINING SALES; LOSS OF MARKET SHARE; INDUSTRY TRENDS
During the last fiscal quarter, the Company continued to experience a
significant decline in both its unit shipments and its market share in the
overall personal computer industry. For the second fiscal quarter of 1997, the
number of the Company's Macintosh computers shipped worldwide declined by 33%
when compared with the corresponding quarter of 1996. Moreover, according to
industry sources, in the second fiscal quarter of 1997, as compared to the same
period in 1996, the Company's share of the worldwide and U.S. personal computer
markets declined to 3.1% from 5.8%, and to 4.0% from 7.3%, respectively. As
part of its new strategic direction, the Company intends, among other things, to
streamline its product line, which could result in a further decline in the
number of units shipped and the Company's share of the overall personal computer
market.
A consumer's decision to invest in a new computer product is often
influenced by the level of ongoing support he or she believes will be provided
by the manufacturer and third parties, including software developers. The
Company believes that extensive media coverage of the Company's financial losses
and speculation regarding the Company's financial position have raised concerns
with consumers and third-party resellers with respect to ongoing hardware and
software support for the Company's products. This in turn may have further
contributed to the decline in the Company's sales. Although the Company
believes that the actions it is taking under its restructuring plan should help
restore confidence in the Company and the Macintosh platform, there can be no
assurance that such actions will succeed or that further erosion in confidence
will not take place.
In addition to its own declining sales, the Company believes that the rate
of growth in overall worldwide personal computer unit sales has declined and may
remain below prior years' growth rates for the foreseeable future. This decline
in the rate of growth could further increase the competitive nature of the
environment in which the Company operates and negatively affect the Company's
unit shipments and, accordingly, its results of operations and financial
condition.
RESTRUCTURING OF OPERATIONS AND NEW BUSINESS MODEL
In the second quarter of 1996, the Company announced and began to
implement a restructuring plan aimed at reducing costs and restoring
profitability to the Company's operations. The restructuring plan was
necessitated by decreased demand for Company products and the Company's
adoption of a new strategic direction. These actions resulted in a net
charge of $179 million after subsequent adjustments recorded in the fourth
quarter of 1996. In the second quarter of 1997, the Company announced and
began to implement supplemental restructuring actions to meet the foregoing
objectives of the plan. The Company recognized a $155 million charge in the
second quarter of 1997 for the estimated costs of those actions. The
restructuring actions consist of terminating employees, canceling or vacating
facility leases, writing down operating assets to be sold, and canceling
contracts related to certain projects. The restructuring actions under the
plan have resulted in cash expenditures of $79 million and noncash asset
write-downs of $28 million from the second quarter of 1996 through March 28,
1997. The Company expects that the remaining $227 million accrued balance at
March 28, 1997 will result in cash expenditures of approximately $170 million
over the next twelve months and $11 million thereafter. There are several
risks inherent in the Company's efforts to transition to a new cost
structure. These include the risk that the Company will not be able to
reduce expenditures quickly enough to restore sustained profitability and the
risk that cost-cutting initiatives will impair the Company's ability to
innovate and remain competitive in the computer industry.
As part of its restructuring effort, the Company has been implementing a
new business model. Implementation of the new business model involves several
risks, including the risk that by simplifying its product line the Company will
increase its dependence on fewer products, potentially reduce overall sales, and
increase its reliance on unproven products and technology. Another risk of the
new business model is that by increasing the proportion of the Company's
products to be manufactured under outsourcing arrangements, the Company could
lose control of the quality or quantity of the products manufactured, or lose
the flexibility to make timely changes in production schedules in order to
respond to changing market conditions. In addition, the new business model
could adversely affect employee morale, thereby damaging the Company's ability
to retain and motivate employees. Also, because the new business model
contemplates that the Company will rely to a greater extent on collaboration and
licensing arrangements with third parties, the Company will have less direct
control over certain of its research and development efforts, and its ability to
create innovative new products may be reduced.
In addition, the new business model now includes the acquisition of NeXT.
There can be no assurance that the technologies acquired from NeXT will be
successfully exploited, or that key NeXT employees and processes will be
retained and successfully integrated with those at Apple. Finally, even if the
new business model is successfully implemented, there can be no assurance that
it will effectively resolve the various issues currently facing the Company. In
addition, although the Company believes that the actions it is taking and will
take under its restructuring plan and its acquisition of NeXT should help
restore marketplace confidence in the Macintosh platform, there can be no
assurance that such actions will be successful.
For the foregoing reasons, there can be no assurance that the new business
model, including the restructuring actions and the acquisition of NeXT, will
enable the Company to achieve its objectives of reducing its cost structure,
improving its competitiveness, and restoring sustained profitability. The
Company's future operating results and financial condition could be adversely
affected should it encounter difficulty in effectively managing the transition
to the new business model and cost structure.
RAPID TECHNOLOGICAL CHANGE; DEPENDENCE ON NEW PRODUCTS; UNCERTAINTIES ASSOCIATED
WITH THE INTERNET
Due to the highly volatile nature of the personal computer industry, the
Company frequently introduces new products and product enhancements, including
the recent introductions of certain PowerBook and Power Macintosh products. The
success of new product introductions is dependent on a number of factors,
including market acceptance, the Company's ability to manage the risks
associated with product transitions, the availability of application software
for new products, the effective management of inventory levels in line with
anticipated product demand, the availability of products in appropriate
quantities to meet anticipated demand, and the risk that new products may have
quality or other defects in the early stages of introduction. Accordingly, the
Company cannot determine the ultimate effect that new products will have on its
sales or results of operations. In addition, although the number of new product
introductions may decrease under the Company's new business model, the risks and
uncertainties associated with new product introductions may increase as the
Company refocuses its product offerings on key growth segments.
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The rate of product shipments immediately following introduction of a new
product is not necessarily an indication of the future rate of shipments for
that product, which depends on many factors, some of which are not under the
control of the Company. These factors may include initial large purchases by a
small segment of the user population that tends to purchase new technology prior
to its acceptance by the majority of users ("early adopters"); purchases in
satisfaction of pent-up demand by users who anticipated new technology and, as a
result, deferred purchases of other products; and overordering by dealers who
anticipate shortages due to the aforementioned factors. These factors may be
offset by others, such as the deferral of purchases by many users until new
technology is accepted as "proven" and for which commonly used software products
are available; and the reduction of orders by dealers once they believe they can
obtain sufficient supply of products previously in backlog.
Backlog is often volatile after new product introductions due to the
aforementioned demand factors, often increasing coincident with introduction,
and then decreasing once dealers and customers believe they can obtain
sufficient supply of the new products.
The measurement of demand for newly introduced products is further
complicated by the availability of different product configurations, which may
include various types of built-in peripherals and software. Configurations may
also require certain localization (such as language) for various markets and, as
a result, demand in different geographic areas may be a function of the
availability of third-party software in those localized versions. For example,
the availability of European-language versions of software products manufactured
by U.S. producers may lag behind the availability of U.S. versions by a quarter
or more. This may result in lower initial demand for the Company's new products
outside the United States, even though localized versions of the Company's
products may be available.
The increasing integration of functions and complexity of operations of the
Company's products also increase the risk that latent defects or other faults
could be discovered by customers or end-users after volumes of products have
been produced or shipped. If such defects were significant, the Company could
incur material recall and replacement costs under product warranties.
The Company recently announced a "dual track" approach to its OS
development. The Company plans to continue to introduce enhancements to the
current Mac OS and later introduce a new OS (code named "Rhapsody") which is
expected to offer advanced functionality based upon the Mac OS and NeXT software
technologies. However, the NeXT software technologies that the Company plans to
use in the development of Rhapsody were not originally designed to be compatible
with the Mac OS. As a result, there can be no assurance that the development of
Rhapsody will be successful. In addition, Rhapsody may not be fully
backward-compatible with all existing applications, which could result in a loss
of existing customers. Finally, it is uncertain whether Rhapsody or the planned
enhancements to the current Mac OS will gain developer support and market
acceptance. Inability to successfully develop and make timely delivery of a
substantially backward-compatible Rhapsody or of planned enhancements to the
current Mac OS, or to gain developer support and market acceptance for those
operating systems, may have an adverse impact on the Company's operating results
and financial condition.
The Company is integrating Internet capabilities into its new and existing
hardware and software platforms. There can be no assurance that the Company will
be able to continue to do so successfully. In addition, the Internet market is
rapidly evolving and is characterized by an increasing number of market entrants
who have introduced or developed products addressing access to, authoring for,
or communication over, the Internet. Many of these competitors have a
significant lead over the Company in developing products for the Internet, have
significantly greater financial, marketing, manufacturing, and technological
resources than the Company, or both. Finally, the hardware and software
industries addressing the accessing, authoring and electronic publishing
requirements of the Internet are young and have few proven products. Critical
issues concerning the commercial use of the Internet (including security,
reliability, cost, ease of use and access, and quality of service) remain
unresolved and may affect the growth of Internet use, together with the hardware
and software standards and electronic media employed in such markets. The
Company is devoting significant resources toward developing its Internet
strategy. There can be no assurance that such strategy will prove successful or
financially benefit the Company.
COMPETITION
The personal computer industry is highly competitive and is characterized
by aggressive pricing practices, downward pressure on gross margins, frequent
introduction of new products, short product life cycles, continual improvement
in product price/performance characteristics, price sensitivity on the part of
consumers, and a large number of competitors. The Company's results of
operations and financial condition have been, and in the future may continue to
be, adversely affected by industry-wide pricing pressures and downward pressures
on gross margins. The
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industry has also been characterized by rapid technological advances in software
functionality and hardware performance and features based on existing or
emerging industry standards. Many of the Company's competitors have greater
financial, marketing, manufacturing, and technological resources, broader
product lines and larger installed customer bases than those of the Company.
There can be no assurance that the Company will be able to compete successfully
in this environment.
The Company's future operating results and financial condition may be
affected by overall demand for personal computers and general customer
preferences for one platform over another or one set of product features over
another. The Company is currently the primary maker of hardware that uses the
Mac OS. The Mac OS has a minority market share in the personal computer market,
which is dominated by makers of computers that run the MS-DOS and Microsoft
Windows operating systems. The Company believes that the Mac OS, with its
perceived advantages over MS-DOS and Windows, has been a driving force behind
sales of the Company's personal computer hardware for the past several years.
Recent innovations in the Windows platform, including those included in Windows
95 and Windows NT, have added features to the Windows platform which make the
differences between the Mac OS and Microsoft operating systems less significant.
The Company is currently taking and will continue to take steps to respond to
the competitive pressures being placed on its personal computer sales as a
result of the recent innovations in the Windows platform. The Company's future
operating results and financial condition may be adversely affected if it is
unable to maintain and increase the installed base for the Macintosh platform.
As part of its efforts to increase the installed base for the Macintosh
platform, the Company announced the licensing of the Mac OS to other personal
computer vendors in 1995 and 1996. Several vendors currently sell products that
utilize the Macintosh operating system. The Company believes that licensing the
operating system will result in a broader installed base on which software
vendors can develop and provide technical innovations for the Macintosh
platform. However, there can be no assurance that the installed base will be
broadened by the licensing of the operating system or that licensing will result
in an increase in the number of application software titles or the rate at which
vendors will bring to market application software based on the Mac OS. In
addition, as a result of licensing its operating system, the Company competes
with other companies producing Mac OS-based computer systems. The benefits to
the Company from licensing the Mac OS to third parties may be more than offset
by the disadvantages of competing with them.
As a supplemental means of addressing the competition from MS-DOS and
Windows, the Company has devoted substantial resources toward developing
personal computer products capable of running application software designed for
the MS-DOS or Windows operating systems ("Cross-Platform Products"). These
products include the RISC-based PowerPC-TM- microprocessor and either include
the Pentium or 586-class microprocessor or can accommodate an add-on card
containing a Pentium or 586-class microprocessor. These products enable users
to run concurrently applications that require the Mac OS, MS-DOS, Windows 3.1,
or Windows 95 operating systems.
Depending on customer demand, the Company may supply customers who purchase
Cross-Platform Products with Windows operating system software under licensing
agreements with Microsoft. However, in order to do so, the Company will need to
enter into one or more agreements with certain Microsoft distributors. There
can be no assurance that the Company will be able to enter into such agreements
on terms acceptable to the Company, if at all. If the Company is unable to
enter into agreements with Microsoft distributors or renew the Microsoft
licenses upon their expiration, the Company's sales of Cross-Platform Products
could be adversely affected.
The Company, International Business Machines Corporation ("IBM") and
Motorola, Inc. have agreed upon and announced the availability of specifications
for a PowerPC microprocessor-based hardware reference platform. These
specifications define a "unified" personal computer architecture that gives
access to both the Power Macintosh platform and the PC environment and utilizes
standard industry components. The Company's future operating results and
financial condition may be affected by its ability to continue to implement this
agreement and to manage the risk associated with the transition to this new
hardware reference platform. Microsoft recently announced that it would no
longer adapt its Windows NT operating system software, which is being used more
by corporations, to run on the PowerPC microprocessor. This decision may
adversely affect revenues derived from this new hardware reference platform.
Several competitors of the Company, including Compaq, IBM, and Microsoft,
have either targeted or announced their intention to target certain of the
Company's key market segments, including education and publishing. Many of
these companies have greater financial, marketing, manufacturing, and
technological resources than the Company. There can be no assurance that the
Company will be able to maintain its position in these segments or that this
added competition will not have a material adverse effect on the Company's
results of operations or financial condition.
7
<PAGE>
NO ASSURANCE OF SUPPORT FROM THIRD-PARTY SOFTWARE DEVELOPERS;
MICROSOFT POTENTIAL CONFLICT OF INTEREST
Decisions by customers to purchase the Company's personal computers, as
opposed to MS-DOS or Windows-based systems, are often based on the availability
of third-party software for particular applications. The Company believes that
the availability of third-party application software for the Company's hardware
products depends in part on third-party developers' perception and analysis of
the relative benefits of developing, maintaining, and upgrading such software
for the Company's products versus software for the larger MS-DOS and Windows
market. This analysis is based on factors such as the perceived strength of the
Company and its products, the anticipated potential revenue that may be
generated, and the costs of developing such software products. To the extent
the Company's recent financial losses and declining demand for the Company's
products have caused software developers to question the Company's prospects in
the personal computer market, developers could be less inclined to develop new
application software or upgrade existing software for the Company's products and
more inclined to devote their resources to developing and upgrading software for
the larger MS-DOS and Windows market. Microsoft Corporation is an important
developer of application software for the Company's products. Accordingly,
Microsoft's interest in producing application software for the Company's
products may be influenced by Microsoft's perception of its interests as the
vendor of the Windows operating systems. There can be no assurance that
Microsoft or other third party developers will continue to produce application
software for the Company's products. If Microsoft or other significant third
party developers were to discontinue such production, the Company's results of
operations and financial condition could be adversely affected.
DEPENDENCE ON THIRD-PARTY SUPPLIERS; IBM POTENTIAL CONFLICT OF INTEREST
Although certain components essential to the Company's business are
generally available from multiple sources, other processes and key components
(including application specific integrated circuits ("ASICs")) are currently
obtained by the Company from single sources. If the supply of key
single-sourced components to the Company were to be delayed or curtailed, the
Company's ability to ship the related product utilizing such components in
desired quantities and in a timely manner could be adversely affected. The
Company's business and financial performance could also be adversely
affected, depending on the time required to obtain sufficient quantities from
the original source, or to identify and obtain sufficient quantities from an
alternate source.
The Company believes that the availability from suppliers to the personal
computer industry of microprocessors and ASICS presents the most significant
potential for constraining the Company's ability to manufacture products. Some
advanced microprocessors are currently in the early stages of ramp-up for
production and thus have limited availability. The Company and other producers
in the personal computer industry also compete for other semiconductor products
with other industries that have experienced increased demand for such products,
due to either increased consumer demand or increased use of semiconductors in
their products (such as the cellular phone and automotive industries). Finally,
the Company uses some components that are not common to the rest of the personal
computer industry (including certain microprocessors and ASICs). Continued
availability of these components may be affected if producers were to decide to
concentrate on the production of common components instead of components
customized to meet the Company's requirements. Such product supply constraints
and corresponding increased costs could decrease the Company's net sales and
adversely affect the Company's operating results and financial condition.
The Company's ability to produce and market competitive products is also
dependent on the ability and desire of IBM and Motorola, Inc., the suppliers of
the PowerPC RISC microprocessor for certain of the Company's products, to supply
to the Company in adequate numbers microprocessors that produce superior
price/performance results compared with those supplied to the Company's
competitors by Intel Corporation, the developer and producer of the
microprocessors used by most personal computers using the MS-DOS and Windows
operating systems. In addition, the desire of IBM and Motorola to continue
producing these microprocessors may be influenced by Microsoft's decision not to
adapt its Windows NT operating system software to run on the PowerPC
microprocessor. IBM produces personal computers based on Intel microprocessors
as well as workstations based on the PowerPC microprocessor, and is also the
developer of OS/2, a competing operating system to the Company's Mac OS.
Accordingly,IBM's interest in supplying the Company with microprocessors for the
Company's products may be influenced by IBM's perception of its interests as a
competing manufacturer of personal computers and as a competing operating system
vendor.
8
<PAGE>
GLOBAL MARKET RISKS
Net sales outside the United States represented approximately 54% and 53%
of the Company's consolidated net sales in the first six months
of 1996 and 1997, respectively. During these same periods, approximately 43% and
45% of the Company's central processing units were manufactured outside of the
United States. The Company currently sells its products in more than 140
countries. The success and profitability of international operations may be
adversely affected by risks associated with international activities, including
economic and labor conditions, political instability, tax laws (including U.S.
taxes on foreign subsidiaries), and changes in the value of the United States
dollar versus the local currency in which the products are sold. Changes in
exchange rates may adversely affect the Company's net consolidated sales (as
expressed in United States dollars) and gross profit margins from international
operations. Although the Company attempts to mitigate this exposure through
hedging transactions, the Company also enters into foreign exchange currency
transactions for the purpose of reducing its hedging costs, which exposes the
Company to further currency fluctuation risk. The Company's current financial
condition is expected to increase the costs of its hedging transactions, as well
as affect the nature of the hedging transactions that the Company's trading
partners are willing to enter.
INVENTORY SUPPLY
The Company provides reserves against any inventories of products that have
become obsolete or are in excess of anticipated demand, accrues for any
cancellation fees of orders for inventories that have been cancelled, and
accrues for the estimated costs to correct any product quality problems.
Although the Company believes its inventory and related reserves are adequate,
no assurance can be given that the Company will not incur additional inventory
and related charges. In addition, such charges have had, and may again have, a
material affect on the Company's financial position and results of operations.
The Company must order components for its products and build inventory well
in advance of product shipments. Because the Company's markets are volatile and
subject to rapid technology and price changes, there is a risk that the Company
will forecast incorrectly and produce excess or insufficient inventories of
particular products. The Company's operating results and financial condition
have been in the past and may in the future be materially adversely affected by
the Company's ability to manage its inventory levels and respond to short-term
shifts in customer demand patterns.
Certain of the Company's products are manufactured in whole or in part by
third-party manufacturers, either pursuant to design specifications of the
Company or otherwise. As a result of the Company's restructuring actions, which
included the sale of the Company's Fountain, Colorado, manufacturing facility to
SCI Systems, Inc. ("SCI") and a related manufacturing outsourcing agreement with
SCI, both in the second quarter of 1996, the proportion of the Company's
products produced and distributed under outsourcing arrangements will increase.
While outsourcing arrangements may lower the fixed cost of operations, they will
also reduce the direct control the Company has over production. It is uncertain
what effect such diminished control will have on the quality or quantity of the
products manufactured, or the flexibility of the Company to respond to changing
market conditions. Furthermore, any efforts by the Company to manage its
inventory under outsourcing arrangements could subject the Company to liquidated
damages or cancellation of the arrangement. Moreover, although arrangements
with such manufacturers may contain provisions for warranty expense
reimbursement, the Company remains at least initially responsible to the
ultimate consumer for warranty service. Accordingly, in the event of product
defects or warranty liability, the Company may remain primarily liable. Any
unanticipated product defect or warranty liability, whether pursuant to
arrangements with contract manufacturers or otherwise, could adversely affect
the Company's future operating results and financial condition.
MARKETING AND DISTRIBUTION
A number of uncertainties may affect the marketing and distribution of the
Company's products. Currently, the Company's primary means of distribution is
through third-party computer resellers. Such resellers include consumer channels
such as mass-merchandise stores, consumer electronics outlets, and computer
superstores. The Company's business and financial results could be adversely
affected if the financial condition of these resellers weakened or if resellers
within consumer channels were to decide not to continue to distribute the
Company's products.
Uncertainty over demand for the Company's products may cause resellers to
reduce their ordering and marketing of the Company's products. Under the
Company's arrangements with its resellers, resellers have the option to reduce
or eliminate unfilled orders previously placed, in most instances without
financial penalty. Resellers also have the option to return products to the
Company without penalty within certain limits, beyond which they
9
<PAGE>
may be assessed fees. The Company has experienced a reduction in ordering from
historical levels by resellers due to uncertainty concerning the Company's
condition and prospects.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent upon the continued
service of its key engineering, marketing, sales, manufacturing, support and
executive personnel, and on its ability to continue to attract, retain and
motivate qualified personnel. The competition for such employees is intense,
and the loss of the services of one or more of these key personnel could
adversely affect the Company. The Company believes that extensive media coverage
of the Company's financial losses and speculation regarding the Company's
financial position have encouraged its competitors and other technology
companies to actively recruit the Company's personnel. There can be no assurance
that the restructuring will not cause the Company to experience additional
difficulty in attracting, retaining and motivating the personnel needed to
implement the Company's new strategic direction. The Company does not maintain
key man life insurance on any of its key executives.
INTELLECTUAL PROPERTY RIGHTS
From time to time, other companies and individuals assert exclusive patent,
copyright, trademark and other intellectual property rights to technologies or
marks that are important to the personal computer industry or the Company's
business. The Company evaluates each claim relating to its products and, if
appropriate, seeks a license to use the protected technology. There can be no
assurance that the Company will be able to obtain licenses to intellectual
property of third parties on commercially reasonable terms, if at all. In
addition, the Company could be at a disadvantage if its competitors obtain
licenses for protected technologies with more favorable terms than does the
Company. If the Company or its suppliers are unable to license protected
technology used in the Company's products, the Company could be prohibited from
marketing those products or may have to market products without desirable
features. The Company could also incur substantial costs to redesign its
products or to defend any legal action taken against the Company. If the
Company's products should be found to infringe protected technology, the Company
could be enjoined from further infringement and required to pay damages to the
infringed party. Any of the foregoing could have a material adverse effect on
the results of operations and financial position of the Company.
10
<PAGE>
POSSIBLE VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock has been, and may
continue to be, extremely volatile. Factors such as new product announcements
by the Company or its competitors, the implementation of the Company's
restructuring plan, quarterly fluctuations in the operating results of the
Company, its competitors and other technology companies and general
conditions in the computer market may have a significant impact on the market
price of the Common Stock. In particular, if the Company were to report
operating results, product development progress or restructuring progress
that did not meet the expectations of research analysts, the market price of
the Common Stock could be materially adversely affected. The Company's stock
has experienced sharp declines in price and there can be no assurance that
such reductions in price will not recur. In addition, from time to time the
stock market has experienced extreme price and volume fluctuations, which
have particularly affected the market prices for many high technology
companies and which have often been unrelated to the operating performance of
specific companies.
IMPEDIMENTS TO CHANGES IN CONTROL
Certain provisions in the Certificate of Incorporation and Bylaws of the
Company and the shareholder rights plan, adopted by the Company's Board of
Directors in April 1989, may make more difficult or discourage attempts to
change the composition of the Board of Directors, may make more difficult or
discourage takeovers of the Company, including those in which holders of the
Company's Common Stock might receive a substantial premium for some or all of
their shares, and could potentially depress the market price of shares of Common
Stock. In addition, the ability of the Board of Directors to issue shares of
preferred stock or rights to purchase preferred stock and to fix the voting,
redemption, conversion and other rights thereof without shareholder approval
could hinder any proposed tender offer, merger or other attempt to gain control
of the Company.
OTHER FACTORS
The majority of the Company's research and development activities, its
corporate headquarters, and other critical business operations, including
certain major vendors, are located near major seismic faults. The Company's
operating results and financial condition could be materially adversely affected
in the event of a major earthquake.
Production and marketing of products in certain states and countries may
subject the Company to environmental and other regulations which include, in
some instances, the requirement that the Company provide consumers with the
ability to return to the Company product at the end of its useful life, and
leave responsibility for environmentally safe disposal or recycling with the
Company. It is unclear what effect such regulation will have on the Company's
future operating results and financial condition.
As part of the Company's restructuring plan, the Company entered into a
"Master Logistics Management Services" agreement with Ryder Integrated
Logistics, Inc. to outsource the Company's domestic operations transportation
and logistics management. While this outsourcing agreement, and other similar
agreements entered into to outsource the Company's European operations
transportation and logistics management, may lower the Company's fixed costs of
operations, it will also reduce the direct control the Company has over its
transportation and logistics management. It is uncertain what effect such
diminished control will have on the Company's transportation and logistics
management.
As part of the Company's restructuring plan, the Company sold its Napa,
California, data center to MCI Systemhouse ("MCI") and entered into a data
processing outsourcing agreement with MCI in the fourth quarter of 1996. While
this outsourcing agreement may lower the Company's fixed costs of operations, it
will also reduce the direct control the Company has over its data processing.
It is uncertain what effect such diminished control will have on the Company's
data processing.
11
<PAGE>
USE OF PROCEEDS
The Selling Shareholder will receive of all the net proceeds from the
offering of the Shares hereby. Accordingly, the Company will not receive any
proceeds from the sale of the Shares.
SELLING SHAREHOLDER
The following table sets forth certain information, with respect to the
beneficial ownership of the Common Stock by the Selling Shareholder as of April
12, 1997, as reported to the Company by the Selling Shareholder, the number of
Shares being offered by the Selling Shareholder and the amount and percentage of
the Common Stock to be owned beneficially by the Selling Shareholder following
this offering, assuming all Shares offered hereby are sold.
<TABLE>
<CAPTION>
Shares of Common Stock Shares of Common Stock
Beneficially Owned Beneficially Owned
Prior to the Offering After the Offering
---------------------- ----------------------
Number of
Shares of
Common
Name of Selling Shareholder Number Percentage(1) Stock Offered Number Percentage(1)
--------------------------- ------ ------------- ------------- ------ -------------
<S> <C> <C> <C> <C>
Steven P. Jobs . . . . . . 1,500,001 1.19% 1,500,000 1 *
</TABLE>
- ----------------
* Less than 1%
(1) Based on the number of shares of Common Stock outstanding on May 3, 1997.
The Selling Shareholder has served as an adviser to the Chief Executive
Officer and as a regular invitee of the Executive Committee of the Company
since February 6, 1997 and was Chief Executive Officer, Chairman of the Board
and a majority shareholder of NeXT, now a wholly-owned subsidiary of the
Company, prior to the acquisition of NeXT by the Company. Other than the
foregoing, the Selling Shareholder does not hold, and during the last three
years has not held, any other position, office or material relationship with
the Company or any affiliate of the Company.
12
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time to purchasers
directly by the Selling Shareholder. Alternatively, the Selling Shareholder may
from time to time offer the Shares in ordinary brokerage transactions or to or
through underwriters, broker/dealers or agents, who may receive compensation in
the form of underwriting discounts, concessions or commissions from the Selling
Shareholder or the purchasers of the Shares for whom they may act as agents.
The Selling Shareholder and any underwriters, broker/dealers or agents that
participate in the distribution of the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act and any profit on the sale of the
Shares by them and any discounts, commissions, concessions or other compensation
received by any such underwriter, broker/dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.
The sale of the Shares by the Selling Shareholder may be effected from time
to time in the over-the-counter market, in the Nasdaq National Market, in
privately negotiated transactions or otherwise at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. At the time a particular offering of the Shares is made, a
Prospectus Supplement, if required, will be distributed which will set forth the
amount of Shares being offered and the terms of the offering, including the name
or names of any underwriters, broker/dealers or agents, any discounts,
commissions and other terms constituting compensation from the Selling
Shareholder and any discounts, commissions or concessions allowed or reallowed
or paid to broker/dealers.
Any securities covered by this Prospectus which qualify for sale pursuant
to Rule 145 under the Securities Act may be sold under Rule 145 rather than
pursuant to this Prospectus.
All expenses of the registration of the Shares will be paid by the Company;
provided, however, that the Selling Shareholder will pay all underwriting
discounts and selling commissions, if any.
There can be no assurance that the Selling Shareholder will sell any or all
of the Shares offered hereby.
LEGAL MATTERS
The validity of the Shares being offered hereby will be passed upon for the
Company by Shearman & Sterling, San Francisco, California.
EXPERTS
The consolidated financial statements and schedule of Apple Computer, Inc.
included and/or incorporated by reference in Apple Computer, Inc.'s Annual
Report (Form 10-K) for the year ended September 29, 1996, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements and schedule have been incorporated herein by reference in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
13
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesman or other person has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
in connection with the offer made by this Prospectus, and, if given or made,
such information or representations must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create an implication that there
has been no change in the affairs of the Company since the date hereof. This
Prospectus does not constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not authorized to do so or to
anyone to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
TABLE OF CONTENTS
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain
Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The NeXT Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling Shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,500,000 SHARES
APPLE COMPUTER, INC.
COMMON STOCK
(NO PAR VALUE)
-----------
[ LOGO ]
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM NUMBER
ITEM 14. OTHER EXPENSES OF REGISTRATION AND DISTRIBUTION.
The following table sets forth the estimated expenses of the Registrant in
connection with the offering described in this Registration Statement.
Securities and Exchange Commission registration fee. . . . . 7,642.05
-------------
Accountants' fees and expenses . . . . . . . . . . . . . . . 5,000.00
-------------
Legal fees and expenses. . . . . . . . . . . . . . . . . . . 30,000.00
-------------
Printing and engraving expenses. . . . . . . . . . . . . . . 2,500.00
-------------
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 4,857.95
-------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . 50,000.00
-------------
-------------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California General Corporations Law (the "CGCL")
authorizes a court to award, or a corporation's board of directors to grant,
indemnity to directors and officers who are parties or are threatened to be made
parties to any proceeding (with certain exceptions) by reason of the fact that
the person is or was an agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with the proceeding if that person acted in good faith and in a
manner the person reasonably believed to be in the best interests of the
corporation. Section 204 of the CGCL provides that this limitation on liability
has no effect on a director's liability (i) for acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law, (ii) for acts
or omissions that a director believes to be contrary to the best interests of
the corporation or its shareholders or that involve the absence of good faith on
the part of the director, (iii) for any transaction from which a director
derived an improper personal benefit, (iv) for acts or omissions that show a
reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of a serious injury to the corporation or its shareholders, (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders, (vi)
under Section 310 of the CGCL (concerning contracts or transactions between the
corporation and a director) or (vii) under Section 316 of the CGCL (directors'
liability for improper dividends, loans and guarantees). Section 317 does not
extend to acts or omissions of a director in his capacity as an officer.
Further, Section 317 has no effect on claims arising under federal or state
securities laws and does not affect the availability of injunctions and other
equitable remedies available to the Company's shareholders for any violation of
a director's fiduciary duty to the Company or its shareholders. Although the
validity and scope of the legislation underlying Section 317 have not yet been
interpreted to any significant extent by the California courts,
<PAGE>
Section 317 may relieve directors of monetary liability to the Company for
grossly negligent conduct, including conduct in situations involving attempted
takeovers of the Company.
In accordance with Section 317, the Restated Articles of Incorporation, as
amended (the "Articles"), of the Company limit the liability of a director to
the Company or its shareholders for monetary damages to the fullest extent
permissible under California law. The Articles further authorize the Company to
provide indemnification to its agents (including officers and directors),
subject to the limitations set forth above. The Articles and the Company's By-
Laws further provide for indemnification of corporate agents to the maximum
extent permitted by the CGCL.
Pursuant to the authority provided in the Articles, the Company has
entered into indemnification agreements with each of its officers and directors,
indemnifying them against certain potential liabilities that may arise as a
result of their service to the Company, and providing for certain other
protection.
The Company also maintains insurance policies which insure its officers and
directors against certain liabilities.
The foregoing summaries are necessarily subject to the complete text of the
statute, the Articles, the By-Laws and the agreements referred to above and are
qualified in their entirety by reference thereto.
ITEM 16. EXHIBITS
Exhibit
Number Description
- ------ -----------
2.1 Agreement and Plan of Merger, among Apple Computer, Inc., Blackbird
Acquisition Corporation and NeXT Software, Inc., dated as of December
20, 1996. (Incorporated by reference to Exhibit 2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended December 27,
1996.)
3.1 Restated Articles of Incorporation, filed with the Secretary of State
of the State of California on January 27, 1988. (Incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-3 (file no. 33-23317) filed July 27, 1988.)
3.2 Amendment to Restated Articles of Incorporation, filed with the
Secretary of State of the State of California on February 5, 1990.
(Incorporated by reference to Exhibit 4.6 to the Company's
Registration Statement on Form S-3 (file no. 33-62310) filed with the
Securities and Exchange Commission on May 6, 1993.)
II-2
<PAGE>
3.3 By-Laws of the Company, as amended through April 4, 1997.
(Incorporated by reference to Exhibit 3.3 to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 28, 1997.)
4.1 Common Shares Rights Agreement dated as of May 15, 1989, between the
Company and The First National Bank of Boston, as Rights Agent,
including the form of Rights Certificate attached hereto.
(Incorporated by reference to Exhibit 1 to the Company's Registration
Statement on Form 8-A filed with the Securities and Exchange
Commission on May 26, 1989.)
4.2 Specimen Certificate of Common Stock of Apple Computer, Inc.
(Incorporated by reference to Exhibit 4.5 to the Company's
Registration Statement on Form S-3 (file no. 33-62310) filed with the
Securities and Exchange Commission on May 6, 1993.)
5.1 Opinion of Shearman & Sterling.
23.1 Consent of Ernst & Young, LLP independent auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1 hereto).
24.1 Power of Attorney (contained on Page II-5).
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum
II-3
<PAGE>
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference into the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that such a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in Act and will be
governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CUPERTINO, STATE OF CALIFORNIA, ON THE DAY
OF 1997.
APPLE COMPUTER, INC.
BY
-------------------------------------------
FRED D. ANDERSON
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Gilbert F. Amelio, Fred D. Anderson and
Robert M. Calderoni, his or her true and lawful attorney-in-fact and agent, with
full power of each to act alone, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, with full power of each to act alone, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully for all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------------- ----------------------------------- --------------------
<S> <C> <C>
Chairman of the Board and , 1997
- ----------------------------------- Chief Executive Officer
Gilbert F. Amelio Principal Executive Officer)
Executive Vice President and , 1997
- ----------------------------------- Chief Financial Officer
Fred D. Anderson (Principal Financial Officer)
Senior Vice President, Corporate , 1997
- ----------------------------------- Controller (Principal Accounting
Robert M. Calderoni Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Director , 1997
- -----------------------------------
Gareth C.C. Chang
Director ,1997
- -----------------------------------
Bernard Goldstein
Director , 1997
- -----------------------------------
Katherine M. Hudson
Director , 1997
- -----------------------------------
Delano E. Lewis
Director , 1997
- -----------------------------------
A. C. Markkula, Jr.
Director , 1997
- -----------------------------------
Edgar S. Woolard, Jr.
</TABLE>
II-6
<PAGE>
APPLE COMPUTER, INC.
REGISTRATION STATEMENT ON FORM S-3
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------------------------------------------------------------- ------------
<S> <C> <C>
2.1 Agreement and Plan of Merger, among Apple Computer, Inc.,
Blackbird Acquisition Corporation and NeXT Software, Inc.,
dated as of December 20, 1996. (Incorporated by reference
to Exhibit 2 to the Company's Quarterly Report on Form 10-Q
for the Quarter Ended December 27, 1996.) . . . . . . . . . . . .
3.1 Restated Articles of Incorporation, filed with the Secretary
of State of the State of California on January 27, 1988.
(Incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-3 (file no. 33-23317) filed
July 27, 1988.. . . . . . . . . . . . . . . . . . . . . . . . . .
3.2 Amendment to Restated Articles of Incorporation, filed with
the Secretary of State of the State of California on
February 5, 1990. (Incorporated by reference to Exhibit 4.6
to the Company's Registration Statement on Form S-3
(file no. 33-62310) filed with the Securities and Exchange
Commission on May 6, 1993.) . . . . . . . . . . . . . . . . . . .
3.3 By-Laws of the Company, as amended through April 4, 1997
(Incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 28, 1997.). . . . . . . . . . . . . . . . . . . . . . . . .
4.1 Common Shares Rights Agreement dated as of May 15, 1989,
between the Company and The First National Bank of Boston,
as Rights Agent, including the form of Rights Certificate
attached hereto. (Incorporated by reference to Exhibit 1
to the Company's Registration Statement on Form 8-A filed
with the Securities and Exchange Commission on May 26, 1989.) . .
4.2 Specimen Certificate of Common Stock of Apple Computer, Inc.
(Incorporated by reference to Exhibit 4.5 to the Company's
Registration Statement on Form S-3 (file no. 33-62310) filed
with the Securities and Exchange Commission on May 6, 1993.). . .
5.1 Opinion of Shearman & Sterling. . . . . . . . . . . . . . . . . .
23.1 Consent of Ernst & Young, LLP independent auditors. . . . . . . .
23.2 Consent of Counsel (contained in Exhibit 5.1 hereto). . . . . . .
24.1 Power of Attorney (contained on Page II-5). . . . . . . . . . . .
</TABLE>
<PAGE>
[Shearman $ Sterling Letterhead]
May 30, 1996
Apple Computer, Inc.
1 Infinite Loop
Cupertino, California 95014
Registration Statement on Form S-3
Filed on May 30, 1997
----------------------------------
Dear Sirs:
As counsel for Apple Computer, Inc., a California corporation (the
"Company"), we are rendering this opinion in connection with the registration
by the Company the above-referenced Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended, of up
to 1,500,000 shares of the Company's Common Stock, par value $.01 per share
(the "Shares"), to be offered for resale for the account of a selling
stockholder of the Company.
In acting as such counsel, we have examined and relied upon the
Registration Statement and the originals, or copies certified or otherwise
identified to our satisfaction, of such corporate records of the Company and
other documents and certificates of fact as we have deemed necessary or
advisable as a basis for the opinions hereinafter expressed. In our
examination, we have assumed the authenticity of all documents submitted to
us as originals, the genuineness of all signatures thereon, the legal
capacity of natural persons executing such documents and the conformity to
original documents of all documents submitted to us as copies. We express no
opinion with respect to any matters which may be, or purport to be, governed
by the laws of any state or other jurisdiction or country other than the
State of California and any federal law of the United States of America.
<PAGE>
Apple Computer, Inc. 2 May 30, 1997
Based upon the foregoing, and subject to the assumptions and limitations
set forth herein, we are of the opinion that the Shares have been duly
authorized and are validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the prospectuses forming a part of the Registration Statement.
Very truly yours,
/s/ SHEARMAN & STERLING
WHH/BRS
<PAGE>
Exhibit 23.1
CONSENT
We consent to the reference to our firm under the Caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Apple Computer,
Inc. for the registration of 1,500,000 shares of its common stock and to the
incorporation by reference therein of our report dated October 14, 1996, with
respect to the consolidated financial statements and schedule of
Apple Computer, Inc. included in its Annual Report (Form 10-K) for the year
ended September 27, 1996, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
San Jose, California
May 29, 1997
