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From: Steve Jobs
To: Apple employees
Subject: A More Entrepreneurial Apple
Date: August 12, 1997, 8:20 a.m.

Renewing Apple is a journey, and we have begun that journey during the past four weeks by taking some decisive first steps—a new Board of Directors, a new product strategy and product roadmap, a decision to really focus on two market segments (education and creative content), a new advertising agency, and a detente and working partnership with Microsoft. Last week we announced some of these steps at MacWorld, and so far our shareholders and the public seem to approve.

Today we are taking a few more steps which will begin to take Apple back to its roots as a more egalitarian, entrepreneurial company. They are:

  1. Stock Options: From now on, we will be using stock options as a primary form of “beyond-salary” compensation. Stock options are egalitarian (when anyone’s stock goes up $1 per share, everyone’s stock goes up $1 per share) and they are the best way to give our employees a true stake in the company’s future success. And, we want our employees to be rewarded by the company’s success in the same way that our public shareholders are: through stock appreciation. To lead the way, the Executive Team has agreed to forfeit their current and future cash bonus plans in exchange for more stock options.As you know, we repriced all stock options to $13.25 on July 11th. In addition, I am pleased to announce that on August 5th our Board approved new stock option grants totaling six million shares at the price of $19.75. Those receiving these new grants will get the good news later this week.Apple has granted stock options for over 10 million shares since the beginning of this calendar year, and employees now hold stock options for over 20 million shares - which is more than 16% of Apple’s total outstanding shares. This is a very high percentage for a company of Apple’s size, and comparable to many valley start-ups. As we restore Apple’s fortunes, our public shareholders and our employee stock option holders will all benefit in harmony.
  2. New Severance Plan: Effective today, we are changing our severance plan for all employees to be more in line with an entrepreneurial company. There will now be only one severance plan for all employees. This plan, like the previous plans, will provide a 60 day notice period, with full pay and benefits. In addition, employees will be eligible to receive one additional week of severance pay for each full year of service. For example, if you have worked at the company for more than three but less than four years, you will receive your pay and benefits during the 60 day notice period plus severance payments equal to three weeks of pay. This new severance plan applies to all employees of Apple, Claris, and Newton in the US - there is no longer a separate executive severance plan.We will be changing our international severance policies to be in line with this new plan to the extent permitted under local laws.
  3. Sabbatical Program: Apple needs all hands on deck for the foreseeable future as we turn our company’s fortunes around. We are therefore discontinuing the sabbatical program at the end of our current fiscal year. Employees who have earned their sabbatical as of September 26, 1997, will be eligible to take their sabbatical at a mutually agreeable time during fiscal year 1998. This applies to all employees of Apple, Claris, and Newton worldwide.
  4. Corporate Travel: Corporate travel will continue to be constrained to essential trips. Our egalitarian travel policy specifies coach class travel for everyone on trips lasting less than 10 hours, and business class travel for everyone on trips of 10 hours or longer. Of course individuals may use their personal funds or mileage awards to upgrade their seating class. For clarification, flights between San Francisco and Tokyo (either direction) are eligible for business class travel.
  5. Facilities: We will continue to move as many employees as possible onto our R&D Campus site. We will greatly benefit by the resulting “beehive” effects, including faster communication paths and more unplanned interactions between the various groups. Reflecting this consolidation, we are renaming the R&D Campus to the Apple Campus, beginning today.Thank you for your support as we work together to renew Apple.

Steve and the Executive Team