As filed with the Securities and Exchange Commission on March 21, 1997
Registration No. 333-
Form S-8
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON , D.C. 20549
APPLE COMPUTER, INC.
(Exact name of registrant as specified in its charter)
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
CALIFORNIA 94-2404110
(State of other I.R.S. Employer
jurisdiction of Identification No.
Incorporation or
Organization
One Infinite Loop
Cupertino, California 95014
(Address, including zip code, of principal executive offices)
1990 Stock Option Plan
Employee Stock Purchase Plan
NeXT Software, Inc. 1990 Stock Option Plan
(Full title of the plan)
SUSAN L. THORNER, ESQ.
Director, Corporate Law
Apple Computer, Inc.
One Infinite Loop, M/S 75-7CL
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, ESQ.
Shearman & Sterling
555 California Street, 20th Floor
San Francisco, California 94104
<PAGE> 1
<TABLE>
<CAPTION> CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C>
Title of Amount Proposed Proposed Amount of
Securities To To Be Maximum Maximum Registration
Be Registered Registered Average Aggregate Fee (4)
(1) Offering Offering
Price Per Price (2)
Share (2)
Common Stock,
no par value
- --Newly reserved 1,000,000 $16.5625 $16,562,500 $5,018.94
under 1990 Stock shares
Option Plan
- --Newly reserved 2,000,000 $16.5625 $33,125,000 $10,037.88
under Employee shares
Stock Purchase
Plan
- --Shares 1,900,000 $6.55 $12,445,000 $3,771.21
underlying shares (3) (3)
options
outstanding
under NeXT
Software, Inc.
1990 Stock
Option Plan
(1) Pursuant to Rule 429 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), the prospectus relating to this
Registration Statement also relates to shares registered under Form S-8
Registration Statements Nos. 2-70449, 2-85095, 33-866, 33-23650, 33-31075,
33-40877, 33-47596, 33-53895, 33-57092, 33-60279 and 333-07437. A total
of 13,000,000 shares issuable under the Employee Stock Purchase Plan
and a total of the 1981 Stock Option Plan, have previously been
registered under the Securities Act.
(2) Computed in accordance with Rule 457(h) solely for the purpose
of computing the amount of the registration fee based on the average of
the high and low sale price reported by the Nasdaq National Market for
March 7, 1997.
(3) Computed in accordance with Rule 457(h) solely for the purpose
of computing the amount of the registration fee based on the average of
the actual prices at which the options granted under the plan may be
exercised.
(4) 1/33 of 1% of the maximum aggregate offering price.
<PAGE> 2
INFORMATION REQUIRED IN THE SECTION 10(A)
PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan
Annual Information.*
* Information required by Part I to be contained in the
Section 10(a) prospectus is omitted from this Registration
Statement in accordance with Rule 428 under the Securities
Act and the "Note" to Part I of Form S-8.
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference into this
Registration Statement the following documents and
information heretofore filed with the Securities and
Exchange Commission (the "Commission"):
(a) The Registrant's annual report on Form
10-K for the fiscal year ended September 27, 1996;
(b) The Registrant's quarterly report on
Form 10-Q for the quarter ended December 27, 1996;
(c) All other reports filed by the Registrant
pursuant to Sections 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act"), since September 27, 1996; and
(d) The description of the Registrant's
common stock and associated common stock
purchase rights, contained in the Registrant's
Registration Statements on Form 8-A filed with the
Commission on October 30, 1981 and May 26, 1989,
respectively, registering such shares and associated
rights pursuant to Section 12 of the Exchange Act,
including any amendment or report updating such
descriptions.
All documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then
remaining unsold, also shall be deemed to be incorporated
by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
<PAGE> 4
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. 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 if (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
<PAGE> 5
0not 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,
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 7. Exemption from Registration Claimed.
Not Applicable.
<PAGE> 6
Item 8. Exhibits.
The following exhibits are filed as part of this
Registration Statement:
Exhibit No. Description
1(1) Common Shares Rights Agreement dated as
of May 15, 1989 between the Registrant and
the First National Bank of Boston, as Rights
Agent.
4.2 1990 Stock Option Plan, as amended through
December 1996
4.3 Employee Stock Purchase Plan, as amended
through December 1996
4.4 NeXT Software, Inc. 1990 Stock Option Plan
5.1 Opinion of counsel as to the legality of the
securities being registered hereby.
23.1 Consent of counsel (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, independent
auditors, with respect to the consolidated
financial statements of the Registrant.
24.1 Power of Attorney (included on page 11).
(1) Incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed
with the Commission on May 26, 1989.
<PAGE> 7
Item 9. Undertakings.
(a) The 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 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;
(2) That, for the purpose of determining
any liability under the Securities Act, 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, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act 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 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
Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
<PAGE> 8
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 the Securities Act,
and will be governed by the final adjudication of such issue.
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities
Act the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cupertino, County of Santa Clara,
State of California, on the 7th day of March, 1997.
APPLE COMPUTER, INC.
By /s/ Fred D. Anderson
Fred D. Anderson
Executive Vice President and
Chief Financial Officer
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS,
that each person whose signature appears below hereby
constitutes and appoints Gilbert F. Amelio, Fred D.
Anderson and Robert M. Calderoni, jointly and severally, his
attorneys-in-fact, each with the power of substitution, for
him in any and all capacities to sign any amendments to the
Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with
the Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes,
may 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.
Signature Title Date
Chairman and March 17,1997
/s/ Gilbert F. Amelio Chief Executive
Gilbert F. Amelio Officer and
Director (Principal
Executive Officer)
Executive Vice March 17,1997
/s/ Fred D. Anderson President and Chief
Fred D. Anderson Financial Officer
(Principal Financial
Officer)
Senior Vice March 17,1997
/s/ Robert M. Calderoni President, Finance
Robert M. Calderoni and Corporate
Controller
(Principal Accounting
Officer)
<PAGE> 11
/s/ Gareth C.C. Chang Director March 17, 1997
Gareth C.C. Chang
/s/Bernard Goldstein Director March 17, 1997
Bernard Goldstein
/s/Katherine M. Hudson Director March 17, 1997
Katherine M. Hudson
/s/ Delano E. Lewis Director March 17, 1997
Delano E. Lewis
/s/ A.C. Markkula, Jr. Director March 17, 1997
A.C. Markkula, Jr.
/s/Edgar S. Woolard,Jr. Director March 17, 1997
Edgar S. Woolard, Jr.
<PAGE> 12
EXHIBIT INDEX
Exhibit Page
No. Description No.
1 (1) Common Shares Rights Agreement
dated as of May 15, 1989 between the
Registrant and the First National
Bank of Boston, as Rights Agent.
4.2 1990 Stock Option Plan as amended 14
through December 1996
4.3 Employee Stock Purchase Plan as 33
amended through December 1996
4.4 NeXT Software, Inc. 1990 Stock 45
Option Plan
5.1 Opinion of counsel as to the legality 55
of the securities being registered
hereby.
23.1 Consent of counsel (included in 56
Exhibit 5.1).
23.2 Consent of Ernst & Young LLP, 57
independent auditors, with respect
to the consolidated financial
statements of Apple Computer, Inc.
24.1 Power of Attorney (included on page 11
11).
(1) Incorporated by reference to Exhibit 1 to the
Registrant's Registration Statement on Form 8-A filed
with the Commission on May 26, 1989.
<PAGE> 13
</TABLE>
[Exhibit 4.2]
APPLE COMPUTER, INC.
1990 STOCK OPTION PLAN
(as amended through 12/4/96)
1. Purposes of the Plan. The purposes of this 1990
Stock Option Plan are to attract and retain high quality
personnel for positions of substantial responsibility, to
provide additional incentive to Employees of the Company,
its Subsidiaries and its Affiliated Companies and to promote
the success of the Company's business. This Plan succeeds
to and replaces the Company's 1981 Stock Option Plan.
Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-
statutory stock options, as determined by the Administrator
at the time of grant of an option and subject to the applicable
provisions of Section 422 of the Code, and the regulations
promulgated thereunder. Stock appreciation rights ("SARs")
may be granted under the Plan in connection with Options
or independently of Options.
2. Definitions. As used herein, the following
definitions shall apply:
(a) "Administrator" means the Board or any of its
Committees, as shall be administering the Plan from time to
time pursuant to Section 4 of the Plan.
(b) "Affiliated Company" means a corporation
which is not a Subsidiary but with respect to which the
Company owns, directly or indirectly through one or more
Subsidiaries, at least 20% of the total voting power, unless
the Administrator determines in its discretion that such
corporation is not an Affiliated Company.
(c) "Board" means the Board of Directors of the
Company.
(d) "Common Stock" means the Common Stock, no
par value, of the Company.
(e) "Company" means Apple Computer, Inc., a
California corporation, or its successor.
<PAGE> 14
(f) "Committee" means a Committee, if any,
appointed by the Board in accordance with paragraph (a) of
Section 4 of the Plan.
(g) "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor
thereto.
(h) "Continuous Status as an Employee" means the
absence of any interruption or termination of the
employment relationship with the Company or any
Subsidiary or Affiliated Company. Continuous Status as an
Employee shall not be considered interrupted in the case of:
(i) medical leave, provided that such leave is for a period of
not more than four months; (ii) military leave; (iii) family
leave, provided that such leave is for a period of not more
than four months; (iv) any other leave of absence approved
by the Administrator, provided that such leave is for a
period of not more than four months, unless reemployment
upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to formal
policy adopted from time to time by the Company and
issued and promulgated to Employees in writing; or (v) in
the case of transfers between locations of the Company or
between the Company, its Subsidiaries,its successor or its
Affiliated Companies.
(i) "Director" means a member of the Board.
(j) "Employee" means any person, including
Officers and Directors, employed by and on the payroll of
the Company, any Subsidiary or any Affiliated Company.
The payment of Directors' fees by the Company shall not be
sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
(l) "Fair Market Value" means the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market
system (including without limitation the National
<PAGE> 15
Market System of the National Association of
Securities Dealers, Inc. Automated Quotation
("NASDAQ") System), its Fair Market Value shall be
the closing sales price for such stock or the closing bid
if no sales were reported, as quoted on such system or
exchange (or the exchange with the greatest volume
of trading in Common Stock) for the last market
trading day prior to the time of determination, as
reported in the Wall Street Journal or such other source
as the Administrator deems reliable.
(ii) If the Common Stock is regularly quoted
on the NASDAQ System (but not on the National
Market System) or quoted by a recognized securities
dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high and
low asked prices for the Common Stock for the last
day on which there are quoted prices prior to the time
of determination.
(iii) In the absence of an established market
for the Common Stock, the Fair Market Value thereof
shall be determined in good faith by the Administrator.
(m) "Officer" means an officer of the Company
within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.
(n) "Nonstatutory Stock Option" means an Option
that is not an Incentive Stock Option.
(o) "Incentive Stock Option" means an Option that
satisfies the provisions of Section 422 of the Code and is
expressly designated by the Administrator at the time of
grant as an incentive stock option.
(p) "Option" means an Option granted pursuant to
the Plan.
(q) "Optioned Stock" means the Common Stock
subject to an Option or SAR.
(r) "Optionee" means an Employee who receives
an Option or SAR.
<PAGE> 16
(s) "Parent" corporation shall have the meaning
defined in Section 424(e) of the Code.
(t) "Plan" means this 1990 Stock Option Plan.
(u) "SAR" means a stock appreciation right
granted pursuant to Section 9 below.
(v) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 12 of the Plan.
(w) "Subsidiary" corporation has the meaning
defined in Section 424(f) of the Code.
In addition, the terms "Rule 16b-3" and "Applicable
Laws", the term "Insiders", the term "Tax Date" and the terms
"Change in Control" and "Change in Control Price", shall have
the meanings set forth, respectively, in Sections 4, 9, 10 and
12 below.
3. Stock Subject to the Plan. Subject to the
provisions of Section 12 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under
the Plan or for which SARs may be granted and exercised is
52,200,000 Shares (including Shares issued under the 1981
Stock Option Plan, to which this Plan is a successor). The
Shares may be authorized but unissued or reacquired
Common Stock.
In the discretion of the Administrator, any or all of the
Shares authorized under the Plan may be subject to SARs
issued pursuant to the Plan.
If an Option or SAR issued under this Plan or under
the Company's 1981 Stock Option Plan should expire or
become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject
thereto shall, unless this Plan shall have been terminated,
become available for other Options or SARs under this Plan.
However, should the Company reacquire Shares which were
issued pursuant to the exercise of an Option or SAR, such
Shares shall not become available for future grant under the
Plan.
<PAGE> 17
Anything in the Plan to the contrary notwithstanding,
no Employee may be granted Options and SARs covering in
the aggregate more than 1.5 million shares of Common Stock
(the "Limit") in a fiscal year beginning on or after September
30, 1995. Each share underlying a SAR not granted in
tandem with an Option shall be applied against the Limit,
regardless of the number of shares deliverable or delivered
upon exercise of the SAR; provided, however, that shares of
Common Stock underlying a tandem grant of Options and
SARs shall be counted only once in calculating the Limit.
The Limit shall not apply to grants of Options and SARs
made prior to September 30, 1995."
4. Administration of the Plan.
(a) Composition of Administrator.
(1) Multiple Administrative
Bodies. If permitted by Rule 16b-3 promulgated under the
Exchange Act or any successor rule thereto, as in effect at the
time that discretion is being exercised with respect to the
Plan ("Rule 16b-3"), and by the legal requirements relating to
the administration of stock plans such as the Plan, if any, of
applicable securities laws, California corporate law and the
Code (collectively, "Applicable Laws"), the Plan may (but
need not) be administered by different administrative bodies
with respect to (A) Directors who are not Employees, (B)
Directors who are Employees, (C) Officers who are not
Directors and (D) Employees who are neither Directors nor
Officers.
(2) Administration with respect
to Directors and Officers. With respect to grants and awards
to Employees who are also Officers or Directors of the
Company, the Plan may be administered by (A) the Board, if
the Board may administer the Plan in compliance with Rule
16b-3 as it applies to grants to Officers and Directors, or (B) a
Committee designated by the Board to administer the Plan,
which Committee shall be constituted (I) in such a manner as
to permit the Plan and grants and awards thereunder to
comply with Rule 16b-3 as it applies to grants to Officers and
Directors and (II) in such a manner as to satisfy the
Applicable Laws.
<PAGE> 18
(3) Administration with respect
to Other Persons. With respect to grants and awards to
Employees who are neither Directors nor Officers of the
Company, the Plan may be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee
shall be constituted in such a manner as to satisfy the
Applicable Laws.
(4) General. Once a
Committee has been appointed pursuant to subsection (2) or
(3) of this Section 4(a), such Committee shall continue to
serve in its designated capacity until otherwise directed by
the Board. From time to time the Board may increase the
size of any Committee and appoint additional members
thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies
(however caused) and remove all members of a Committee
and thereafter directly administer the Plan, all to the extent
permitted by the Applicable Laws and, in the case of a
Committee appointed under subsection (2) to the extent
permitted by Rule 16b-3 as it applies to grants to Officers
and Directors.
(b) Powers of the Administrator. Subject to
the provisions of the Plan and, in the case of a Committee,
subject to the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its
discretion: (i) to determine the Fair Market Value of the
Common Stock in accordance with Section 2(l) of the Plan;
(ii) to determine, in accordance with Section 8(a) of the Plan,
the exercise price per Share of Options and SARs to be
granted; (iii) to determine the Employees to whom, and the
time or times at which, Options and SARs shall be granted
and the number of Shares to be represented by each Option
or SAR (including without limitation whether or not a
corporation shall be excluded from the definition of
Affiliated Company under Section 2(b)); (iv) to interpret the
Plan; (v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or SAR
granted hereunder (including, but not limited to, any
restriction or limitation, or any vesting acceleration or
waiver of forfeiture restrictions regarding any Option or
SAR and/or the Shares relating thereto, based in each case
on such factors as the Administrator shall determine, in its
<PAGE> 19
sole discretion); (vi) to approve forms of agreement for use
under the Plan; (vii) to prescribe, amend and rescind rules
and regulations relating to the Plan; (viii) to modify or
amend each Option or SAR (with the consent of the
Optionee) or accelerate the exercise date of any Option or
SAR; (ix) to reduce the exercise price of any Option or SAR
to the then current Fair Market Value if the Fair Market
Value of the Common Stock covered by such Option or SAR
shall have declined since the date the Option or SAR was
granted; (x) to authorize any person to execute on behalf of
the Company any instrument required to effectuate the grant
of an Option or SAR previously granted by the
Administrator; and (xi) to make all other determinations
deemed necessary or advisable for the administration of the
Plan.
(c) Effect of Decisions by the Administrator.
All decisions, determinations and interpretations of the
Administrator shall be final and binding on all Optionees
and any other holders of any Options.
(d) Anything in the Plan to the contrary
notwithstanding, on and after September 30, 1995, grants of
Options and SARs under the Plan to Officers shall be made
only by a Committee consisting of at least two directors of
the Company who qualify as "outside directors" within the
meaning of Section 162(m) of the Code, and such Committee
shall exercise all of the authority delegated under the Plan to
the Administrator with respect to grants to Officers made on
and after that date.
5. Eligibility. Options and SARs may be granted
only to Employees. An Employee who has been granted an
Option or SAR may, if he or she is otherwise eligible, be
granted an additional Option or Options, SAR or SARs. Each
Option shall be evidenced by a written Option agreement,
which shall expressly identify the Options as Incentive Stock
Options or as Nonstatutory Stock Options, and which shall
be in such form and contain such provisions as the
Administrator shall from time to time deem appropriate.
However, notwithstanding such designation, to the extent
that the aggregate Fair Market Value of the Shares with
respect to which Options designated as Incentive Stock
Options and options granted under other plans of the
<PAGE> 20
Company or any Parent or Subsidiary that are designated as
incentive stock options are exercisable for the first time by an
Optionee during any calendar year exceeds $100,000, such
excess Options shall be treated as Nonstatutory Stock
Options. For purposes of the preceding sentence, (i) Options
shall be taken into account in the order in which they were
granted, and (ii) the Fair Market Value of the Shares shall be
determined as of the time the Option or other incentive stock
option with respect to such Shares is granted. Without
limiting the foregoing, the Administrator may, at any time,
or from time to time, authorize the Company, with the
consent of the respective recipients, to issue new Options or
Options in exchange for the surrender and cancellation of
any or all outstanding Options, other options, SARs or other
stock appreciation rights.
Neither the Plan nor any Option or SAR agreement
shall confer upon any Optionee any right with respect to
continuation of employment by the Company (or any Parent,
Subsidiary or Affiliated Company), nor shall it interfere in
any way with the Optionee's right or the right of the
Company (or any Parent, Subsidiary or Affiliated Company)
to terminate the Optionee's employment at any time or for
any reason.
6. Term of Plan. The Plan shall become effective
upon its adoption by the Board or its approval by vote of the
holders of a majority of the outstanding Shares of the
Company entitled to vote on the adoption of the Plan,
whichever is earlier. It shall continue in effect for a term of
ten (10) years unless sooner terminated under Section 14 of
the Plan.
7. Term of Option. The term of each Option shall
be ten (10) years from the date of grant thereof or such
shorter term as may be provided in the Option agreement.
However, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof
or such shorter time as may be provided in the Option
agreement.
<PAGE> 21
8. Exercise Price and Consideration.
(a) Exercise Price. The per Share exercise
price for the Shares issuable pursuant to an Option shall be
such price as is determined by the Administrator, but shall
in no event be less than 100% of the Fair Market Value of
Common Stock, determined as of the date of grant of the
Option. In the event that the Administrator shall reduce the
exercise price, the exercise price shall be no less than 100% of
the Fair Market Value as of the date of that reduction. In no
event shall the per Share exercise price be less than 110% of
the Fair Market Value per Share as of the date of grant in the
case of an Incentive Stock Option granted to an Optionee
who, immediately before the grant of such Option, owns
Shares representing more than 10% of the voting power or
value of all classes of stock of the Company or any Parent or
Subsidiary.
(b) Method of Payment. The consideration to
be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be
determined by the Administrator (and, in the case of an
Incentive Stock Option, shall be determined at the time of
grant) and may consist of (i) cash, (ii) check, (iii) promissory
note, (iv) other Shares which have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised, (v)
delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds required
to pay the exercise price, or (vi) any combination of the
foregoing methods of payment and/or any other
consideration or method of payment as shall be permitted
under applicable corporate law.
9. Stock Appreciation Rights.
(a) Granted in Connection with Options. At
the sole discretion of the Administrator, SARs may be
granted in connection with all or any part of an Option,
either concurrently with the grant of the Option or at any
time thereafter during the term of the Option. The following
provisions apply to SARs that are granted in connection with
Options:
<PAGE> 22
(i) The SAR shall entitle the
Optionee to exercise the SAR by surrendering to the
Company unexercised a portion of the related Option. The
Optionee shall receive in exchange from the Company an
amount equal to the excess of (x) the Fair Market Value on
the date of exercise of the SAR of the Common Stock covered
by the surrendered portion of the related Option over (y) the
exercise price of the Common Stock covered by the
surrendered portion of the related Option. Notwithstanding
the foregoing, the Administrator may place limits on the
amount that may be paid upon exercise of an SAR; provided,
however, that such limit shall not restrict the exercisability of
the related Option.
(ii) When an SAR is exercised, the
related Option, to the extent surrendered, shall no
longer be exercisable.
(iii) An SAR shall be exercisable only
when and to the extent that the related Option is
exercisable and shall expire no later than the date on
which the related Option expires.
(iv) An SAR may only be exercised at
a time when the Fair Market Value of the Common Stock
covered by the related Option exceeds the exercise price of
the Common Stock covered by the related Option.
(b) Independent SARs. At the sole discretion
of the Administrator, SARs may be granted without related
Options. The following provisions apply to SARs that are
not granted in connection with Options:
(i) The SAR shall entitle the
Optionee, by exercising the SAR, to receive from the
Company an amount equal to the excess of (x) the Fair
Market Value of the Common Stock covered by
exercised portion of the SAR, as of the date of such
exercise, over (y) the Fair Market Value of the
Common Stock covered by the exercised portion of
the SAR, as of the date on which the SAR was
granted; provided, however, that the Administrator
may place limits on the amount that may be paid
upon exercise of an SAR.
<PAGE> 23
(ii) SARs shall be exercisable, in
whole or in part, at such times as the Administrator
shall specify in the Optionee's SAR agreement.
(c) Form of Payment. The Company's
obligation arising upon the exercise of an SAR may be paid
in Common Stock or in cash, or in any combination of
Common Stock and cash, as the Administrator, in its sole
discretion, may determine. Shares issued upon the exercise
of an SAR shall be valued at their Fair Market Value as of the
date of exercise.
(d) Rule 16b-3. SARs granted to persons
who are subject to Section 16 of the Exchange Act ("Insiders")
shall contain such additional restrictions as may be required
to be contained in the plan or SAR agreement in order for
the SAR to qualify for the maximum exemption provided by
Rule 16b-3.
10. Method of Exercise.
(a) Procedure for Exercise; Rights as a
Shareholder. Any Option or SAR granted hereunder shall be
exercisable at such times and under such conditions as
determined by the Administrator and as shall be permissible
under the terms of the Plan.
An Option or SAR shall be deemed to be
exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the
Option or SAR by the person entitled to exercise the Option
or SAR and full payment for the Shares with respect to
which the Option is exercised has been received by the
Company. Full payment may, as authorized by the
Administrator (and, in the case of an Incentive Stock Option,
determined at the time of grant) and permitted by the
Option agreement, consist of any consideration and method
of payment allowable under Section 8(b) of the Plan. Until
the issuance (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent
of the Company) of the stock certificate evidencing such
Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option.
<PAGE> 24
No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan. An
Option or SAR may not be exercised with respect to a
fraction of a Share.
Exercise of an Option in any manner shall
result in a decrease in the number of Shares which thereafter
shall be available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the
Option is exercised. Exercise of an SAR in any manner shall,
to the extent the SAR is exercised, result in a decrease in the
number of Shares which thereafter shall be available for
purposes of the Plan, and the SAR shall cease to be
exercisable to the extent it has been exercised.
(b) Rule 16b-3. Options and SARs granted
to Insiders must comply with Rule 16b-3 and shall contain
such additional conditions or restrictions as may be required
thereunder to be contained in the Plan or the agreement to
qualify for the maximum exemption from Section 16 of the
Exchange Act with respect to Plan transactions.
(c) Termination of Continuous Employment.
Upon termination of an Optionee's Continuous Status as
Employee (other than termination by reason of the
Optionee's death), the Optionee may, but only within ninety
(90) days after the date of such termination, exercise his or
her Option or SAR to the extent that it was exercisable at the
date of such termination. Notwithstanding the foregoing,
however, an Option or SAR may not be exercised after the
date the Option or SAR would otherwise expire by its terms
due to the passage of time from the date of grant.
(d) Death of Optionee. In the event of the
death of an Optionee:
(1) Who is at the time of death an
Employee and who shall have been in Continuous
Status as an Employee since the date of grant of the
Option, the Option or SAR may be exercised at any
time within six (6) months (or such other period of
time not exceeding twelve (12) months as determined
<PAGE> 25
by the Administrator) following the date of death by
the Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that
would have accrued had the Optionee continued
living and terminated his or her employment six (6)
months (or such other period of time not exceeding
twelve (12) months as determined by the
Administrator) after the date of death; or
(2) Within ninety (90) days after the
termination of Continuous Status as an Employee, the
Option or SAR may be exercised, at any time within
six (6) months (or such other period of time not
exceeding twelve (12) months as determined by the
Administrator) following the date of death by the
Optionee's estate or by a person who acquired the
right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that had
accrued at the date of termination.
Notwithstanding the foregoing, however, an
Option or SAR may not be exercised after the date the
Option or SAR would otherwise expire by its terms due to
the passage of time from the date of grant.
(e) Stock Withholding to Satisfy Withholding
Tax Obligations. When an Optionee incurs tax liability in
connection with the exercise of an Option or SAR, which tax
liability is subject to tax withholding under applicable tax
laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws,
the Optionee may satisfy the withholding tax obligation
(including, at the election of the Optionee, any additional
amount which the Optionee desires to have withheld in
order to satisfy in whole or in part the Optionee's full
estimated tax in connection with the exercise) by electing to
have the Company withhold from the Shares to be issued
upon exercise of the Option, or the Shares to be issued upon
exercise of the SAR, if any, that number of Shares having a
Fair Market Value equal to the amount required to be
withheld (and any additional amount desired to be
withheld, as aforesaid). The Fair Market Value of the Shares
to be withheld shall be determined on the date that the
<PAGE> 26
amount of tax to be withheld is to be determined (the "Tax
Date").
All elections by an Optionee to have Shares withheld
for this purpose shall be made in writing in a form
acceptable to the Administrator and shall be subject to the
following restrictions:
(i) the election must be made on or
prior to the applicable Tax Date; and
(ii) all elections shall be subject to the
consent or disapproval of the Administrator.
In the event the election to have Shares
withheld is made by an Optionee and the Tax Date is
deferred under Section 83 of the Code because no election is
filed under Section 83(b) of the Code, the Optionee shall
receive the full number of Shares with respect to which the
Option or SAR is exercised but such Optionee shall be
unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
11. Non-Transferability of Options. Options and
SARs may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner other than by will
or by the laws of descent or distribution or pursuant to a
qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or
the rules thereunder, provided, however, that the
Adminstrator may grant non-qualified stock options that are
freely transferable. The designation of a beneficiary by an
Optionee or holder of an SAR does not constitute a transfer.
An Option or an SAR may be exercised, during the lifetime
of the Optionee or SAR holder, only by the Optionee or SAR
holder or by a transferee permitted by this Section 11.
12. Adjustments Upon Changes in Capitalization or
Merger.
(a) Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the
number of Shares covered by each outstanding Option and
SAR, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options or
SARs have yet been granted or which have been returned to
<PAGE> 27
the Plan upon cancellation or expiration of an Option or
SAR, as well as the price per Share covered by each such
outstanding Option or SAR, shall be proportionately
adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the aggregate
number of issued Shares effected without receipt of
consideration by the Company; provided, however, that
conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be
final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares
subject to an Option or SAR.
(b) Dissolution or Liquidation. In the event of
the proposed dissolution or liquidation of the Company, all
outstanding Options and SARs will terminate immediately
prior to the consummation of such proposed action, unless
otherwise provided by the Administrator. The
Administrator may, in the exercise of its sole discretion in
such instances, declare that any Option or SAR shall
terminate as of a date fixed by the Administrator and give
each Optionee the right to exercise his or her Option or SAR
as to all or any part of the Optioned Stock or SAR, including
Shares as to which the Option or SAR would not otherwise
be exercisable.
(c) Sale of Assets or Merger. Subject to the
provisions of paragraph (d) hereof, in the event of a
proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into
another corporation, each outstanding Option and SAR shall
be assumed or an equivalent option or stock appreciation
right shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless
the Administrator determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution,
that the Optionee shall have the right to exercise the Option
<PAGE> 28
or SAR as to all of the Optioned Stock, including Shares as to
which the Option or SAR would not otherwise be
exercisable. If the Administrator makes an Option or SAR
fully exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Company shall notify
the Optionee that the Option or SAR shall be fully
exercisable for a period of thirty (30) days from the date of
such notice, and the Option or SAR will terminate upon the
expiration of such period. For purposes of this paragraph,
an Option granted under the Plan shall be deemed to be
assumed if, following the sale of assets or merger, the Option
confers the right to purchase, for each Share of Optioned
Stock subject to the Option immediately prior to the sale of
assets or merger, the consideration (whether stock, cash or
other securities or property) received in the sale of assets or
merger by holders of Common Stock for each Share held on
the effective date of the transaction (and if such holders were
offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration
received in the sale of assets or merger was not solely
Common Stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor
corporation and the participant, provide for the per share
consideration to be received upon exercise of the Option to
be solely Common Stock of the successor corporation or its
parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the
sale of assets or merger.
(d) Change in Control. In the event of a
"Change in Control" of the Company, as defined in
paragraph (e) below, unless otherwise determined by the
Administrator prior to the occurrence of such Change in
Control, the following acceleration and valuation provisions
shall apply:
(1) Any Options and SARs
outstanding as of the date such Change in Control is
determined to have occurred that are not yet
exercisable and vested on such date shall become
fully exercisable and vested; and
<PAGE> 29
(2) The value of all outstanding
Options and SARs shall, unless otherwise determined
by the Administrator at or after grant, be cashed-out.
The amount at which such Options and SARs shall be
cashed out shall be equal to the excess of (x) the
Change in Control Price (as defined below) over (y)
the exercise price of the Common Stock covered by
the Option or SAR. The cash-out proceeds shall be
paid to the Optionee or, in the event of death of an
Optionee prior to payment, to the estate of the
Optionee or to a person who acquired the right to
exercise the Option or SAR by bequest or inheritance.
(e) Definition of "Change in Control". For
purposes of this Section 12, a "Change in Control" means the
happening of any of the following:
( i ) When any "person", as such term
is used in Sections 13(d) and 14(d) of the Exchange
Act (other than the Company, a Subsidiary or a
Company employee benefit plan, including any
trustee of such plan acting as trustee) is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities
of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's
then 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.
(f) Change in Control Price. For purposes of
this Section 12, "Change in Control Price" shall be, as
determined by the Administrator, (i) the highest Fair Market
Value at any time within the 60-day period immediately
preceding the date of determination of the Change in
Control Price by the Administrator (the "60-Day Period"), or
(ii) the highest price paid or offered, as determined by the
Administrator, in any bona fide transaction or bona fide
offer related to the Change in Control of the Company, at
any time within the 60-Day Period.
<PAGE> 30
13. Time of Granting Options and SARs. The date of
grant of an Option or SAR shall, for all purposes, be the date
on which the Administrator makes the determination
granting such Option or SAR. Notice of the determination
shall be given to each Employee to whom an Option or SAR
is so granted within a reasonable time after the date of such
grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board
may at any time amend, alter, suspend or terminate the Plan,
as it may deem advisable; provided that, to the extent
necessary and desirable to comply with Applicable Laws,
regulations or rules, including Section 422 of the Code, or,
for periods on and after September 30, 1995, with Section
162(m) of the Code, the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to
such a degree as is required.
(b) Effect of Amendment or Termination. Any
such amendment, alteration, suspension or termination of
the Plan shall not impair the rights of any Optionee or SAR
holder under any grant theretofore made without his or her
consent. Such Options and SARs shall remain in full force
and effect as if this Plan had not been amended or
terminated.
15. Conditions Upon Issuance of Shares. Shares shall
not be issued with respect to an Option or SAR unless the
exercise of such Option or SAR and the issuance and
delivery of such Shares pursuant thereto shall comply with
all relevant provisions of law, including, without limitation,
the Securities Act of 1933, as amended, the Exchange Act, the
rules and regulations promulgated thereunder, and the
requirements of any stock exchange or quotation system
upon which the Shares may then be listed or quoted, and
shall be further subject to the approval of counsel for the
Company with respect to such compliance.
<PAGE> 31
As a condition to the exercise of an Option or
SAR or the issuance of Shares upon exercise of an Option or
SAR, the Company may require the person exercising such
Option or SAR to represent and warrant at the time of any
such exercise that the Shares are being purchased only for
investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required by any of the
aforementioned relevant provisions of law.
Inability of the Company to obtain authority
from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in
respect of the non-issuance or sale of such Shares as to which
such requisite authority shall not have been obtained.
16. Reservation of Shares. The Company, during the
term of this Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.
<PAGE> 32
[Exhibit 4.3]
APPLE COMPUTER, INC.
EMPLOYEE STOCK PURCHASE PLAN
(as amended through December 4, 1996)
The following constitute the provisions of the
Employee Stock Purchase Plan (herein called the "Plan") of
Apple Computer, Inc. (herein called the "Company").
1. Purpose. The purpose of the Plan is to
provide employees of the Company and its subsidiaries with
an opportunity to purchase Common Stock of the Company
through payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue
Code of 1986. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a
manner consistent with the requirements of that section of
the Code.
2. Definitions.
(a) "Board" shall mean the Board of
Directors of the Company.
(b) "Common Stock" shall mean the
Common Stock, no par value, of the Company.
(c) "Company" shall mean Apple
Computer, Inc., a California corporation.
(d) "Compensation" shall mean all regular
straight time earnings, payments for overtime, shift
premium, incentive compensation, incentive payments,
bonuses and commissions (except to the extent that the
exclusion of any such items is specifically directed by the
Board or its committee).
(e) "Designated Subsidiaries" shall mean
the Subsidiaries which have been designated by the Board
from time to time in its sole discretion as eligible to
participate in the Plan.
<PAGE> 33
(f) "Employee" means any person,
including an officer, who is customarily employed for at
least twenty (20) hours per week and more than five (5)
months in a calendar year by the Company or one of its
Designated Subsidiaries.
(g) "Plan" shall mean this Employee Stock
Purchase Plan.
(h) "Section 16 Person" shall mean any
person participating in the Plan who has been designated by
the Board of Directors as having authority to carry out
policy-making functions such that the person is subject to the
reporting and short-swing profit regulations of Section 16 of
the Securities Exchange Act of 1934.
(i) "Subsidiary" shall mean a corporation,
domestic or foreign, of which not less than 50% of the voting
shares are held by the Company or a Subsidiary, whether or
not such corporation now exists or is hereafter organized or
acquired by the Company or a Subsidiary.
(j) "1934 Act Section 16" shall mean Section
16 of the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder.
3. Eligibility.
(a) Any Employee as defined in Section 2
who shall be employed by the Company or one of its
Designated Subsidiaries on the date his or her participation
in the Plan is effective shall be eligible to participate in the
Plan, subject to the limitations imposed by Section 423(b) of
the Internal Revenue Code of 1986, as amended.
<PAGE> 34
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option
under the Plan (i) if, immediately after the grant, such
Employee would own shares and/or hold outstanding
options to purchase stock possessing five percent (5%) or
more of the total combined voting power or value of all
classes of shares of the Company or of any Subsidiary of the
Company, or (ii) which permits his or her rights to purchase
shares under all employee stock purchase plans of the
Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of the fair
market value of the shares (determined at the time such
option is granted) for each calendar year in which such stock
option is outstanding at any time.
4. Offering Dates. The Plan shall be implemented
by one offering during each six-month period of the Plan,
commencing on or about January 1, 1981 and continuing
thereafter until terminated in accordance with Section 19
hereof. The Board of Directors of the Company shall have
the power to change the duration of offering periods with
respect to future offerings without shareholder approval if
such change is announced at least fifteen (15) days prior to
the scheduled beginning of the first offering period to be
affected.
5. Participation.
(a) An eligible Employee may become a
participant in the Plan by completing a subscription
agreement authorizing payroll deductions on the form
provided by the Company and filing it with the Company's
payroll office prior to the applicable offering date. Once
filed, the subscription agreement shall remain effective for
all subsequent offering periods until the participant
withdraws from the Plan as provided in Section 10 hereof or
files another subscription agreement.
(b) Payroll deductions for a participant
shall commence on the first payroll following the
commencement offering date and shall continue at the same
rate until such time as the participant withdraws from the
Plan as provided in Section10 hereof or another subscription
agreement is filed which changes the rate of payroll
deductions.
<PAGE> 35
6. Payroll Deductions.
(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll
deductions made on each payday during subsequent
offering periods at a rate not exceeding ten percent (10%) of
the Compensation which he or she received on such payday,
and the aggregate of such payroll deductions during any
offering period shall not exceed ten percent (10%) of his or
her aggregate Compensation during said offering period.
(b) All payroll deductions made by a
participant shall be credited to his or her account under the
Plan. A participant may not make any additional payments
into such account.
(c) A participant may discontinue his or her
participation in the Plan as provided in Section 10, or may
lower, but not increase, the rate of his or her payroll
deductions (within the limitations set forth in subsection (a)
above) during an offering period by completing and filing
with the Company a new authorization for payroll
deductions. The change in rate shall be effective within
fifteen (15) days following the Company's receipt of the new
authorization.
(d) A participant may increase his or her
rate of payroll deductions (within the limitations set forth in
subsection (a) above) to be effective for the next offering
period by completing and filing with the Company a new
authorization for payroll deductions at least fifteen (15) days
before the beginning of said offering period.
7. Grant of Option.
(a) At the beginning of each six-month
offering period, each eligible Employee participating in the
Plan shall be granted an option to purchase (at the per share
option price) up to a number of shares of the Company's
Common Stock determined by dividing the Employee's
accumulated payroll deductions (not to exceed an amount
equal to ten percent (10%) of his or her Compensation
during the applicable offering period) by the lower of
<PAGE> 36
(i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the date of the
commencement of said offering period, or (ii) eighty-five
percent (85%) of the fair market value of a share of the
Company's Common Stock on the date of the expiration of
the offering period, subject to the limitations set forth in
Sections 3(b) and 12 hereof, and subject to the following
limitation: The number of shares of the Company's
Common Stock subject to any option granted to an
Employee pursuant to this Plan shall not exceed two
hundred percent (200%) of the number of shares of the
Company's Common Stock determined by dividing an
amount equal to ten percent (10%) of the Employee's semi-
annual Compensation as of the date of the commencement of
the applicable offering period by eighty-five percent (85%) of
the fair market value of a share of the Company's Common
Stock on the date of the commencement of said offering
period. Fair market value of a share of the Company's
Common Stock shall be determined as provided in Section
7(b) herein.
(b) The option price per share of such
shares shall be the lower of: (i) 85% of the fair market value
of a share of the Common Stock of the Company at the
commencement of the six-month offering period; or (ii) 85%
of the fair market value of a share of the Common Stock of
the Company at the time the option is exercised at the
termination of the six-month offering period. The fair
market value of the Company's Common Stock on a given
date shall be the mean of the reported bid and asked prices
for that date, or if the Common Stock is listed on an
exchange or quoted on the Nasdaq National Market, the
closing sale price on such exchange or quotation system for
that date.
8. Exercise of Option. Unless a participant
withdraws from the Plan as provided in Section 10, his or
her option for the purchase of shares will be exercised
automatically at the end of the offering period, and the
maximum number of full shares subject to option will be
purchased for him or her at the applicable option price with
the accumulated payroll deductions in his or her account.
During his or her lifetime, a participant's option to purchase
shares hereunder is exercisable only by him or her.
<PAGE> 37
9. Delivery; Roll-Over of Fractional Share
Interests.
As promptly as practicable after the
termination of each offering, the Company shall arrange for
the delivery to each participant, as appropriate, of a
certificate representing the number of full shares purchased
upon exercise of his or her option. No fractional shares shall
be issued. Any cash remaining to the credit of a participant's
account under the Plan after a purchase by him or her of
shares at the termination of each offering period which is
insufficient to purchase a full share of Common Stock of the
Company subject to option shall remain in such participant's
account and shall be applied to the next succeeding offering
period unless the participant has withdrawn as to future
offering periods, in which case such cash shall be returned to
said participant. Any cash attributable to shares in excess of
the number of shares subject to option to the participant (as
determined in accordance with Section 7(a) hereof) shall be
returned to the participant.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not
less than all the payroll deductions credited to his or her
account under the Plan at any time prior to the end of the
offering period by giving written notice to the Company. All
of the participant's payroll deductions credited to his or her
account will be paid to him or her promptly after receipt of
his or her notice of withdrawal and his or her option for the
current period will be automatically terminated, and no
further payroll deductions for the purchase of shares will be
made during the offering period.
(b) Upon termination of the participant's
employment prior to the end of the offering period for any
reason, including retirement or death, the payroll deductions
credited to his or her account will be returned to him or her
or, in the case of his or her death, to the person or persons
entitled thereto under Section 14, and his or her option will
be automatically terminated.
<PAGE> 38
(c) In the event an Employee fails to remain
in the continuous employ of the Company or one of its
Designated Subsidiaries for at least twenty (20) hours per
week during the offering period in which the employee is a
participant, he or she will be deemed to have elected to
withdraw from the Plan and the payroll deductions credited
to his or her account will be returned to him or her and his
or her option terminated.
(d) Except as provided in Section 3(a) with
respect to Section 16 Persons, a participant's withdrawal
from an offering will not have any effect upon his or her
eligibility to participate in a succeeding offering or in any
similar plan which may hereafter be adopted by the
Company. However, a new subscription agreement will
have to be filed in such case.
11. No Interest. No interest shall accrue on the
payroll deductions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the
Company's Common Stock which shall be made available
for sale under the Plan shall be fifteen million (15,000,000)
shares, subject to adjustment upon changes in capitalization
of the Company as provided in Section 18. The shares to be
sold to participants under the Plan may, at the election of the
Company, be either treasury shares or shares authorized but
unissued. If at the termination of any offering period the
total number of shares which would otherwise be subject to
options granted pursuant to Section 7(a) hereof exceeds the
number of shares then available under the Plan (after
deduction of all shares for which options have been
exercised or are then outstanding), the Company shall
promptly notify the participants, and shall, in its sole
discretion (i) make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner
as shall be practicable and as it shall determine to be
equitable, (ii) terminate the offering period without issuance
of any shares or (iii) obtain shareholder approval of an
increase in the number of shares authorized under the Plan
such that all options could be exercised in full.
<PAGE> 39
The Company may delay determining which of (i), (ii) or
(iii) above it shall decide to effect, and may accordingly
delay issuances of any shares under the Plan, for such time
as is necessary to attempt to obtain shareholder approval of
any increase in shares authorized under the Plan. The
Company shall promptly notify participants of its
determination to effect (i), (ii) or (iii) above upon making
such decision. A participant may withdraw all but not less
than all the payroll deductions credited to his or her account
under the Plan at any time prior to such notification from the
Company. In the event the Company determines to effect (i)
or (ii) above, it shall promptly upon such determination
return to each participant all payroll deductions not applied
towards the purchase of shares.
(b) The participant will have no interest or
voting right in shares covered by his or her option until such
option has been exercised.
(c) Shares to be delivered to a participant
under the Plan will be registered in the name of the
participant or in the name of the participant and the spouse
of the participant.
13. Administration. The Plan shall be
administered by a committee of members of the Board of
Directors, which committee shall be appointed by the Board.
The administration, interpretation or application of the Plan
by such committee shall be final, conclusive and binding
upon all participants. Members of the committee shall not
be permitted to participate in the Plan.
14. Designation of Beneficiary.
(a) A participant may indicate in his or her
subscription agreement, or may file a written designation of
beneficiary with respect to, a person who is to receive any
shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent
to the end of the offering period but prior to delivery to him
or her of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to
receive any cash from the participant's account under the
Plan in the event of such participant's death prior to the end
of the offering period.
<PAGE> 40
(b) Such designation of beneficiary may be
changed by the participant at any time by written notice. In
the event of the death of a participant and in the absence of a
beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or
administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion,
may deliver such shares and/or cash to the spouse or to any
one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions
credited to a participant's account nor any rights with regard
to the exercise of an option or to receive shares under the
Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of
descent and distribution or as provided in Section 14 hereof)
by the participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to
withdraw funds in accordance with Section 10.
16. Use of Funds. All payroll deductions received
or held by the Company under the Plan may be used by the
Company for any corporate purpose, and the Company shall
not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be
maintained for each participant in the Plan. Statements of
account will be given to participating Employees semi-
annually within a reasonable period of time following the
stock purchase date, which statements will set forth the
amounts of payroll deductions, the per share purchase price,
the number of shares purchased, the amount of cash rolled
over into the next offering period and the remaining cash
balance, if any.
<PAGE> 41
18. Adjustments Upon Changes in Capitalization.
Subject to any required action by the shareholders of the
Company, the number of shares of Common Stock covered
by each option under the Plan which has not yet been
exercised and the number of shares of Common Stock which
have been authorized for issuance under the Plan but have
not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet
been exercised, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of
Common Stock resulting from a stock split or the payment of
a stock dividend (but only on the Common Stock) or any
other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issue by
the Company of shares of stock of any class, or securities
convertible into or exercisable for shares of stock of any
class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of
Common Stock subject to an Option.
The Board may, if it so determines in the exercise of
its sole discretion, also make provision for adjusting the
Reserves, as well as the price per share of Common Stock
covered by each outstanding option under the Plan, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or
merged into any other corporation.
19. Amendment and Termination of the Plan.
(a) Amendment and Termination. The
Board may at any time amend, alter, suspend or discontinue
the Plan, but no amendment, alteration, suspension or
discontinuation shall be made which would impair the
rights of any participant under any option theretofore
granted without his or her consent.
<PAGE> 42
(b) Shareholder Approval. The Company
shall obtain shareholder approval of any Plan amendment to
the extent necessary and desirable to comply with Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as
amended, or with Section 423 of the Internal Revenue Code
of 1986, as amended (or any successor statute or rule or other
applicable law, rule or regulation), such shareholder
approval to be obtained in such a manner and to such a
degree as is required by the applicable law, rule or
regulation.
(c) Effect of Amendment or Termination.
Any such amendment or termination of the Plan shall not
affect options already granted hereunder and such options
shall remain in full force and effect as if this Plan had not
been amended or terminated.
20. Notices. All notices or other communications
by a participant to the Company under or in connection with
the Plan shall be deemed to have been duly given when
received in the form specified by the Company at the
location, or by the person, designated by the Company for
the receipt thereof. All notices or other communications to a
participant by the Company shall be deemed to have been
duly given when sent by the Company by regular mail to the
address of the participant on the human resources records of
the Company or when posted on AppleLink or any
substitute general electronic messaging and bulletin board
system utilized by the Company.
21. Conditions Upon Issuance of Shares. Shares
shall not be issued with respect to an option unless the
exercise of such option and the issuance and delivery of such
shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements
of any stock exchange or automated quotation system upon
which the shares may then be listed or quoted, and shall be
further subject to the approval of counsel for the Company
with respect to such compliance.
<PAGE> 43
As a condition to the exercise of an option, the
Company may require the person exercising such option to
represent and warrant at the time of any such exercise that
the shares are being purchased only for investment and
without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned
applicable provisions of law.
<PAGE> 44
NeXT Computer, Inc.
1990 STOCK OPTION PLAN, AS AMENDED
1 Purpose. The purpose of this Plan is to attract, retain and
reward persons providing services to NeXT and to motivate
such persons to contribute to the future growth and profits of
NeXT.
2 Definitions. In addition to the terms defined elsewhere
in this Plan, the following terms are defined as follows:
(a) "Board" means the Board of Directors of NeXT and/or
any duly appointed committee of the Board having such powers
to administer this Plan as may be specified by the Board of
Directors.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "disability" means "disability" as defined in section
22(e)(3) of the Code.
(d) "Immediate Sales Proceeds" has the meaning set forth in
Section 8(a)(iii)(C) of this Plan.
(e) "ISO" means an "incentive stock option" as defined in
section 422 of the Code.
(f) "NeXT" means NeXT Computer, Inc., and any present or
future parent or subsidiary corporations of NeXT Computer,
Inc. A parent corporation and a subsidiary corporation shall be
as defined in sections 424(e) and 424(f) of the Code.
(g) "NSO" means a non qualified stock option.
(h) "Option" means any option granted under this Plan.
(i) "Optionee" means a person who is granted an Option.
(j) "Plan" means this 1990 Stock Option Plan, as amended.
(k) "Purchase Plan" means NeXT's 1986 Stock Purchase Plan.
<PAGE> 45
(l) "retirement" means retirement in accordance with a
retirement plan, if and when adopted by NeXT, which
expressly refers to this Plan and specifies the effect of
retirement on Options under this Plan.
(m) "Stock" means the shares of common stock of NeXT
reserved pursuant to Section 5 of this Plan.
(n) "transfer of control" has the meaning set forth in
Section 10 of this Plan.
3 Administration. The Plan shall be administered by the
Board. All questions of interpretation of the Plan or of any
Options shall be determined by the Board, and such
determinations shall be final and binding upon all persons
having an interest in the Plan or any Option. Options may be
either ISOs or NSOs.
4 Eligibility. Options may be granted only to employees,
officers and directors of NeXT or to consultants, advisors, or
other independent contractors to NeXT. The Board shall, in its
sole discretion, determine which persons shall be granted
Options. A director of NeXT may only be granted a NSO
unless the director is also an employee of NeXT. A consultant,
advisor, or other independent contractor may only be granted
a NSO. Eligible persons may be granted more than one
Option. Notwithstanding the foregoing, no Option may be
granted to a person who then owns stock possessing more
than ten percent (10%) of the total combined voting power of
all classes of stock of NeXT within the meaning of section
422(b)(6) of the Code or ten percent (10%) of the total
combined value of all classes of stock of NeXT.
5 Share Reserve. Options shall be for the purchase of
shares of Stock, subject to adjustment as provided in Section 9
below. Subject to the limitations described in this Section 5,
the maximum number of shares of Stock that may be issued
under the Plan and the Purchase Plan shall be a total of ten
million fifty thousand (10,050,000) shares. The total number of
shares of Stock that may be issued or issuable pursuant to then
outstanding Options under the Plan may not exceed ten
million fifty thousand (10,050, 000) minus the number of
shares of Stock issued and then outstanding under the
<PAGE> 46
Purchase Plan. If any outstanding Option expires or is
terminated or canceled or if shares of Stock are repurchased by
NeXT under either the Plan or the Purchase Plan, the shares
allocable to the unexercised portion of such Option, or such
repurchased shares, may again be subject to an Option grant.
However, at no time shall the number of shares of Stock
covered by then-outstanding Options under the Plan and
shares of Stock issued and outstanding under the Plan and the
Purchase Plan exceed ten million fifty thousand (10,050,000).
6 Time for Granting Options. All Options shall be
granted, if at all, within ten (10) years from October 27, 1989.
7 Grant of Options and Forms of Stock Option
Agreement.
(a) Grant of Options. Subject to the provisions of
the Plan, the Board shall determine for each Option (which
need not be identical) the number of shares of Stock subject to
the Option, the option price, the timing and terms of
exercisability and vesting of the Option, whether the Option is
to be treated as an ISO or as a NSO and all other terms and
conditions of the Option consistent with the Plan. Options
granted pursuant to the Plan shall be evidenced by written
agreements specifying the number of shares of Stock covered
by the Option.
(b) Standard Forms of Stock Option Agreement.
The Board may, from time to time, adopt or amend standard
forms of stock option agreement. Unless otherwise provided
by the Board, Options shall be NSOs and shall comply with
and be subject to the terms and conditions set forth in the form
of NSO agreement attached as Exhibit A.
(c) Authority to Vary Terms. The Board may, from
time to time, vary the terms of the standard forms of stock
option agreements, either in connection with the grant of an
individual Option or in connection with the authorization of a
new standard form or forms; provided, however, that the
terms and conditions of such revised or amended standard
form or forms of stock option agreement shall be in
accordance with the terms of the Plan. Such authority shall
include, but not by way of limitation, (i) the authority to grant
Options which are immediately exercisable and subject to
<PAGE> 47
NeXT's right to repurchase any shares of Stock acquired by an
Optionee on exercise of an Option if the Optionee's
employment with NeXT is terminated for any reason, with or
without cause and (ii) the authority to adjust vesting schedules
for part-time employees or in other appropriate circumstances.
8 Terms and Conditions of Options.
(a) Required Terms of Options. Options granted
pursuant to the Plan shall comply with and be subject to the
following terms and conditions:
(i) Option Price. The option price for each
Option shall be established in the sole discretion of the Board;
provided, however, that (A) the option price per share for an
ISO shall not be less than the fair market value, as determined
by the Board, of a share of Stock on the date of grant of the
Option and (B) the option price per share for a NSO shall not
be less than eighty-five percent (85%) of the fair market value,
as determined by the Board, of a share of Stock on the date of
grant of the Option. Notwithstanding the foregoing, an
Option (whether an ISO or a NSO) may be granted with an
exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or
substitution for another option in a manner qualifying with
the provisions of section 424(a) of the Code.
(ii) Exercise Period of Options. The Board
shall have the power to set the time or times within which
each Option shall be exercisable or the event r events upon the
occurrence of which all or a portion of each Option shall be
exercisable and the term of each Option; provided, however,
that no Option shall have a term longer than ten (10) years and
provided further that no Option granted to a person who is
subject to section 16(b) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") shall be exercisable sooner
than six months after the date of grant of the Option.
(iii) Payment of Option Price. Payment of the
option price for the number of shares of Stock being
purchased pursuant to any Option shall be made (1) in cash or
by check, (2) by tender to NeXT of shares of NeXT stock
owned by the Optionee having a value not less than the option
price, (3) if permitted by the Board, by withholding from the
<PAGE> 48
number of shares of Stock issued upon exercise of an Option
that number of shares having a value not less than the option
price, (4) if permitted by the Board, by an Optionee's
promissory note, (5) by Immediate Sales Proceeds, as defined
below, or (6) by any combination thereof.
(A) Tender or Withholding of Shares
of Stock. The value of any shares of NeXT's stock tendered by
an Optionee or withheld from issuance as payment shall be
determined by the Board (but without regard to any
restrictions on transferability imposed by federal or state
securities laws or by agreements with an underwriter for
NeXT). Payment by tender or withholding of shares of
NeXT's stock shall not be permitted to the extent it would
violate any law, regulation or agreement restricting the
redemption of NeXT's stock. Unless otherwise agreed by
NeXT, an Option may not be exercised by tender of shares of
NeXT's stock unless such shares of NeXT's stock either have
been owned by the Optionee for more than six (6) months or
were not acquired, directly or indirectly, from NeXT.
(B) Payment by Promissory Note.
Payment by promissory note shall be permitted only if
authorized by the Board (which authorization, in the case of
an ISO, shall be at the time the Option is granted) and only if it
would not violate any law. The terms and conditions of any
permitted promissory note shall be determined by the Board
at the time it authorizes use of the note; provided, however,
that such promissory note shall be a full recourse note due and
payable not more than ten (10) years after the Option is
exercised, and interest shall be at least equal to the minimum
interest rate necessary to avoid imputed interest pursuant to
all applicable sections of the Code. The Board shall have the
authority to permit or require an Optionee to secure any
promissory note used to exercise an Option with the shares of
Stock acquired on exercise of the Option or with other
collateral acceptable to NeXT. Unless otherwise provided by
the Board, in the event NeXT at any time becomes subject to
the regulations promulgated from time to time by the Board of
Governors of the Federal Reserve System affecting the
extension of credit in connection with NeXT's securities, any
permitted promissory note shall comply with such applicable
regulations, and the Optionee shall pay the unpaid principal
and accrued interest, if any, to the extent necessary to comply
<PAGE> 49
with such applicable regulations. Except as NeXT in its sole
discretion shall determine, an Optionee shall pay the unpaid
principal balance of the promissory note and any accrued
interest thereon in the event such Optionee's employment
with NeXT is terminated for any reason, with or without
cause.
(C) Immediate Sales Proceeds.
"Immediate Sales Proceeds" shall mean the assignment in form
acceptable to NeXT of the proceeds of a sale of some or all of
the shares of Stock acquired upon the exercise of the Option
pursuant to a program or procedure approved by NeXT
(including, without limitation, through an exercise complying
with the provisions of Regulation T as promulgated from time
to time by the Board of Governors of the Federal Reserve
System). NeXT may, in its sole discretion, establish, decline to
approve, or terminate any such program or procedure.
(iv) Options Non-Transferable. During the
lifetime of an Optionee, an Option may be exercisable only by
the Optionee. No Option may be assigned or transferred by
an Optionee, except by will or by the laws of descent and
distribution.
(b) Optional Standard Terms of Options. Unless
otherwise provided by the Board at the time an Option is
granted, or unless otherwise provided in the standard form(s)
of stock option agreement(s) adopted from time to time, all
Options shall be subject to the following provisions (unless
subsequently amended by agreement of NeXT and the
Optionee):
(i) Termination of Employment.
(A) Termination of the Option. If an
Optionee ceases to be an employee of NeXT for any reason
(except death, disability or retirement), the Option, to the
extent unexercised and exercisable on the employment
termination date, may be exercised by the Optionee within
one (1) month after the employment termination date, but in
any event no later than the option term date as defined in the
Optionee's stock option agreement (the "Option Term Date").
If an Optionee's employment with NeXT is terminated because
of the death, disability or retirement of the Optionee, the
<PAGE> 50
Option, to the extent unexercised and exercisable on the
employment termination date, may be exercised by the
Optionee (or the Optionee's legal representative) at any time
prior to the Option Term Date (provided, however, that the
exercise of an ISO more than three (3) months after retirement
or more than twelve (12) months after termination of
employment because of disability may disqualify the Option
as an ISO). Except as NeXT and an Optionee otherwise agree,
exercise of an Option upon or after termination of
employment may not be made by delivery of a promissory
note.
(B) Extension if Exercise Prevented by
Law. Notwithstanding the foregoing, if the exercise of an
Option within the applicable time periods set forth above is
prevented because the issuance of shares of Stock upon such
exercise would constitute a violation of any applicable federal
or state securities law or other law or regulation (including if it
would subject the Optionee to suit under Section 16(b) of the
Exchange Act), the Option shall remain exercisable until three
(3) months after the date the Optionee is notified by NeXT that
the Option is exercisable, but in any event no later than the
Option Term Date.
(C) Leave of Absence. For purposes of
this Plan, an Optionee's employment with NeXT will not be
deemed to terminate if the Optionee takes any military leave,
sick leave, or other bona fide leave of absence approved by
NeXT. However, if the Option is an ISO and the leave of
absence is in excess of ninety (90) days, an Optionee's
employment with NeXT will be deemed to terminate on the
ninety-first (91st) day of the leave unless the Optionee's right
to reemployment with NeXT remains guaranteed by statute or
contract. Notwithstanding the foregoing, however, a leave of
absence will be treated as employment for purposes of
determining the portion of an Option that is exercisable by an
Optionee only if the leave of absence is designated by NeXT as
(or required by law to be) a leave for which vesting credit is
given.
(D) Application to Directors and
Consultants. If an Optionee is a director, consultant, or
advisor but not an employee of NeXT at the time an Option is
granted, termination of the Optionee's status as a director,
<PAGE> 51
consultant, or advisor of NeXT shall be deemed to be
termination of the Optionee's "employment" for purposes of
interpreting this Section 8(b)(i).
(ii) Right of First Refusal. The transfer,
assignment or other disposition of shares of Stock issued
pursuant to the exercise of an Option shall be subject to a right
of first refusal as set forth in the form of standard option
agreement attached as Exhibit A.
9 Effect of Change in Stock Subject to Plan. In the event
that the shares of Stock should, as a result of a stock split,
stock dividend, combination of shares, or any other change, or
exchange for or combination of shares or any other change, or
exchange for other securities, by reclassification,
reorganization, merger, consolidation, recapitalization, or
otherwise, be increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or
other securities of NeXT or of another corporation,
appropriate adjustments shall be made in the number and
class of shares of stock subject to the Plan and to any
outstanding Options and in the option price of any
outstanding Options. In the event a majority of the shares
which are of the same class as the shares that are subject to an
Option are exchanged for, converted into, or otherwise
become shares of another corporation (the "New Shares"),
NeXT may unilaterally amend each Option to provide that the
Option is exercisable for New Shares. In the event of any such
amendment, the number of shares and the option price shall
be adjusted in a fair and equitable manner.
10 Transfer of Control. A "transfer of control" shall mean
(a) any acquisition of the stock of NeXT or any reorganization
as defined in section 368(a)(1) of the Code to which NeXT is a
party as defined in section 368(b) of the Code and in which
NeXT is not the surviving corporation or is not immediately
after the reorganization engaged in the active conduct of a
trade or business or in which the shareholders of NeXT shall
own less than fifty percent (50%) of the voting securities of the
surviving corporation, or (b) any sale or conveyance of
substantially all of the assets of NeXT, unless immediately
after such sale NeXT is engaged in the active conduct of a
trade or business. In the event of a transfer of control, the
surviving, continuing, successor, or purchasing corporation, as
<PAGE> 52
the case may be (the "Acquiring Corporation"), shall assume
all outstanding Options or issue to the Optionees substitute
options of the Acquiring Corporation equivalent to the
outstanding Options. In the event the Acquiring Corporation
elects not assume the outstanding Options or to issue
substitute options for such outstanding Options, for options
granted before October 30, 1992, the Board shall provide that
any unexercisable and/or unvested portions for the
outstanding Options shall, subject to consummation of the
transfer of control, be immediately exercisable and vested as of
a time at or prior to the transfer of control, as the Board so
determines. Any Options not so assumed, substituted or
exercised at or prior to the transfer of control shall terminate
upon consummation of the transfer of control.
11 Provision of Information. Each Optionee shall be
given access to information concerning NeXT equivalent to
that information generally made available to NeXT's common
shareholders.
12 Transfer of Company's Rights. In the event NeXT
assigns, other than by operation of law, to a third person any
of NeXT's rights to repurchase any shares of Stock acquired on
the exercise of an Option, the assignee shall pay to NeXT in
cash the value of such right as determined by NeXT in NeXT's
sole discretion. In the event such right is exercisable at the
time of such assignment, the value of such right shall be not
less than the fair market value of the shares of Stock which
may be purchased under such right (as determined by NeXT)
minus the purchase price of such shares. The requirements of
this Section 12 regarding the minimum consideration to be
received by NeXT shall not inure to the benefit of the Optionee
whose shares of Stock are being repurchased. Failure of NeXT
to comply with the provisions of this Section 12 shall not
constitute a defense or otherwise prevent the exercise of the
repurchase right by the assignee of such right.
13 Termination or Amendment of Plan. The Board may
terminate or amend the Plan at any time. In any event, no
amendment may adversely affect any then outstanding
Option, or any unexercised portion of an Option, without the
consent of the Optionee, unless such amendment is required
to enable an Option designated as an ISO to qualify as an ISO.
<PAGE> 53
IN WITNESS WHEREOF, the undersigned Secretary
of NeXT certifies that the foregoing NeXT 1990 Stock Option
Plan, as amended was duly adopted by the Board of Directors
of NeXT on July 19, 1995.
__________________________________
Nancy R. Heinen, Assistant Secretary
<PAGE> 54
[Exhibit 5.1]
March 17, 1997
Apple Computer, Inc.
1 Infinite Loop
Cupertino, California 95014
RE: Registration Statement on Form S-8 for 1990 Stock
Option Plan, Employee Stock Purchase Plan and
NeXT Software, Inc. 1990 Stock Option Plan
Ladies and Gentlemen:
I have examined the Registration Statement on Form
S-8 to be filed with the Securities and Exchange Commission
on or about March 7, 1997 (the "Registration Statement") in
connection with the registration under the Securities Act of
1933, as amended, of (i) 1,000,000 additional shares of Apple
Computer, Inc.'s Common Stock, no par value, authorized
for issuance under the 1990 Stock Option Plan, as amended
(the "1990 Plan"); (ii) 2,000,000 additional shares of Apple
Computer, Inc.'s Common Stock, no par value, authorized
for issuance under the Employee Stock Purchase Plan, as
amended (the "Purchase Plan"); and (iii) 1,900,000 shares of
Apple Computer, Inc.'s Common Stock under the 1990 Stock
Option Plan of NeXT Software, Inc. (the "NeXT Plan"), as
assumed by Apple Computer, Inc. in connection with its
acquisition of NeXT Software, Inc., effective February 4,
1997. The shares of Apple Common Stock to be registered
under the Registration Statement are hereinafter referred to
collectively as the "Shares". As counsel in connection with
this transaction, I have examined the actions taken, and I am
familiar with the actions proposed to be taken, in connection
with the issuance and sale of the Shares pursuant to the 1990
Plan, the Purchase Plan and the NeXT Plan.
It is my opinion that, when issued and sold in the
manner described in the 1990 Plan, the Purchase Plan, and
the NeXT Plan, and pursuant to the agreements which
accompany each grant under the 1990 Plan and the NeXT
Plan, the Shares will be legally and validly issued, fully paid
and nonassessable.
<PAGE> 55
[Exhibit 23.1]
I consent to the use of this opinion as an exhibit to the
Registration Statement, and further consent to the use of my
name wherever appearing in the Registration Statement.
Very truly yours,
/s/ Susan L. Thorner
Susan L. Thorner
Director, Corporate Law
<PAGE> 56
[Exhibit 23.2]
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1990 Stock Option Plan, Employee Stock Purchase
Plan, and the NeXT Software, Inc. 1990 Stock Option Plan of Apple Computer,
Inc. of our report dated October 14, 1996, with respect to the consolidated
financial statements and schedule of Apple Computer, Inc. included and/or
incorporated by reference in its Annual Report (Form 10-K) for the year ended
September 27, 1996.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Jose, California
March 17, 1997
<PAGE> 57
