Apple 1997 Annual Report Download - page 52

employment, and generally expire ten years after the grant date. In November 1997, the Company's Board of Directors passed a resolution
requiring all future option grants be vested over a period of four years. The 1990 Plan permits the granting of incentive stock options,
nonstatutory stock options, and stock appreciation rights.
In July 1997, the Board of Directors adopted a resolution allowing employees to exchange all (but not less than all) of their existing options
(vested and unvested) to purchase Apple common stock (other than options granted and assumed from NeXT) for options having an exercise
price of $13.25 and a new three year vesting period beginning in July of 1997. Approximately 7.9 million options were repriced under this
program.
On May 14, 1996, the Board of Directors adopted a resolution allowing employees up to and including the level of Vice President to exchange
1.25 options at their existing option price for 1.0 new options having an exercise price of $26.375 per share, the fair market value of the
Company's common stock at May 29, 1996. Options received under this program are subject to one year of additional vesting such that the new
vesting date for each vesting portion will be the later of May 29, 1997 or the original vesting date plus one year. Approximately 2.9 million
options were exchanged and repriced under this program.
In December 1996, the Board of Directors adopted an amendment to the 1990 Plan to increase the number of shares reserved for issuance by 1
million. The amendment was approved by the Company's shareholders in February 1997.
1997 EMPLOYEE STOCK OPTION PLAN
In August 1997, the Company's Board of Directors approved the 1997 Employee Stock Option Plan ("the 1997 Plan"), for grants of stock
options to employees who are not officers of the Company. Terms and conditions of the 1997 Plan are substantially the same as the 1990 Plan.
Options may be granted under the 1997 Plan to employees at not less than the fair market value on the date of grant. These options generally
become exercisable over a period of three years, based on continued employment, and generally expire ten years after the grant date. In
November 1997, the Company's Board of Directors passed a resolution requiring all future option grants be vested over a period of four years.
The Company's Board of Directors has reserved 5 million shares for issuance under the provisions of the 1997 Plan.
1990 STOCK OPTION PLAN OF NEXT
On February 4, 1997, the Company acquired all of the outstanding shares of NeXT. Under the terms of the acquisition agreement,
approximately 1.9 million options to purchase the Company's common stock were issued to the existing NeXT optionholders. The options have
the same terms and conditions as the options issued by NeXT. The NeXT options were granted under the NeXT Plan to employees, including
officers and directors who were employees, at not less than the fair market value on the date of grant. The options become exercisable over
various periods, as previously determined by the Board of Directors of NeXT at the time of issuance.
DIRECTOR STOCK OPTION PLAN
In August 1997, the Company's Board of Directors approved a Director Stock Plan ("DSOP") for which directors of the Company are eligible.
Options granted under the DSOP vest in three equal installments, on each of the first through third anniversaries of the date of grant. The
Company's Board of Directors has reserved 400,000 shares for issuance under the provisions of the DSOP. As of September 26, 1997, 150,000
options had been granted and were outstanding under the DSOP, subject to shareholder approval at the Annual Meeting of Shareholders
scheduled for February 1998. Supplementally and separate from the DSOP (the "Prior Plan"), 30,000 options had been granted in total to two
members of the Company's Board of Directors, and were outstanding as of September 26, 1997. These options are also subject to shareholder
approval at the Annual Meeting of Shareholders scheduled for February 1998. The
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