(Copyright (c) 1986 by Apple Computer, Inc. and MCU, Inc.  All rights reserved.
Reproduction, in whole or in part, in any form (including electronic), without
the express WRITTEN permission of Apple Computer, Inc. and MCU, Inc. is
strictly prohibited.)

This is a transcript of the special AppleCO held on Wednesday, January 29th,
1986, on the Compuserve Information Service.  Apple Computer, Inc. graciously
allowed CIS subscribers to attend their annual Shareholders' Meeting
electronically.  Joe Hutsko of Apple typed what was being said as it
happened, changing his handle to reflect who was speaking.  Parenthetical
comments are Joe Hutsko's.  This is NOT an official transcript of the meeting,
and Apple Computer, Inc. and MCU, Inc. are not responsible for any errors of
fact or ommision which this unofficial transcript may contain.


(Joe Hutsko, APPLE) Lights are dimming...Music starting.

(Neil/Sysop) I just want to quickly welcome Apple to CompuServe for its annual
   meeting and, as far as I know, the world's first online stockholder's
   meeting!!  To quickly reiterate to all:  Remember that you cannot type while
   in this area.  So please treat this CO as being one of the best seats in the
   house but not completely participatory!!  OK...over to Joe Hutsko!
   Take it away Joe!!

(Joe Hutsko, APPLE) Starting.  Video is beginning. Screen shots of Mac and
   Apples.  Welcome all, its time to begin.  The video is telling all about our
   employees and the fun we have.  Dying and going to heaven to work for Apple.
   (ha ha ha)   Difference at Apple is the employees really love what they do.
   Its never boring at Apple.  Its like running your own business.
   And at 90 hours a week, its a kick.  (still showing employee video)
   (golly its dark out there)  "Changing the way people work, play and live,
   and incredible vision...Apple's in school hotel and business."  Al will be
   the first speaker.  Apple also wants to be an example of how to run a 
   company, leading edge.  People depend on people.  Again, welcome all of you 
   to the Apple Shareholders Meeting, we are still showing a video about 
   employees and where we are going.  It will then proceed into the speakers.  
   Neil, you may step in if needed at any time.

(Neil/Sysop) OK

(Joe Hutsko, APPLE) Great. The video is finishing, and speakers will start now.

(Neil/Sysop) Joe, can you give us a rundown on who the speakers will be?

(Joe Hutsko, APPLE) John Sculley is here.

(John Sculley) Good Morning, to the 1985 Shareholders Meeting.  Earlier this
   month at AppleWorld we introduced several new products.  Last week had 2500
   Apple employees at meeting for communication.  Unlike shareholder meetings 
   in the past we will now talk about the challenges ahead.  (John, just 
   introduced me, and said hello to MAUG.)

(Neil/Sysop) Hi, John!

(John Sculley) Welcome to the Online people of CIS! (John, is now introducing
   the board members. John also thanks all of you who participated in the
   AppleWorld CO.)  Al Eisenstat fills the Board position that Steve Jobs left
   with his resignation.  "There are probably more people signed on to CIS then
   in the audience" (ha ha ha)  Very dedicated board of directors.  Turn over 
   next portion of meeting to Senior VP Al Eisenstat.

(Al Eisenstat) Good Morning.  Welcome to the 5th annual meeting of Apple
   Shareholders.  I will cover the business part of the meeting, and John will
   return to discuss the past and present and future of Apple.  (Al is
   explaining the past events regarding documents and votes...etc.)
   47,900,000 votes for this meeting.

(Joe Hutsko, APPLE) (When Al is complete, the most interesting part will be
   John's)

(Al Eisenstat) Vote on four items...

(Joe Hutsko, APPLE) (Motion on procedure from Philadelphia shareholder.
   Shareholder would like meeting to be moved to major city.  Too difficult to
   get to Cupertino.  Making a point of AppleWorld being at SF and not in
   Cupertino.)

(Al Eisenstat) Mr. Ash, you are out of order.

(Neil/Sysop) (Give Mr. Ash a modem?)

(Joe Hutsko, APPLE) (It's quite heated with Al and Mr. Ash).

(Al Eisenstat) Meeting is noticed for this time and place.  If you have strong
   feeling about location of future meeting, it is important you bring this to
   the attention of the board.  (the location issue is noted in the minutes of
   the meeting.  Mr. Ash has been asked to sit down.)  Nomination of Michael C.
   Scott to be moved to board.  There is a second for that nomination.
   First Item of Business: Approval of 1984 minutes of meeting.  These minutes
   were available for your perusal.  Motion to move reading of minutes to be
   waived and approved as written.  Second the motion.  Approved as written.
   All in favor, raise hands.  (lotsa hands up)   Opposed? (not many)
   Approved, to waive.

(Joe Hutsko, APPLE) (waving)

(Al Eisenstat) Names of Directors... (check your annual report for that!)
   Continue to act as directors.

(Joe Hutsko, APPLE) Mr. Ash wants the lights up to see the people speaking.

(Al Eisenstat) Roy Weaver made motion and is shareholder of Apple.

(Joe Hutsko, APPLE) Mr. Ash is up again.

(Al Eisenstat) Motion to close the nomination.

(Joe Hutsko, APPLE) Mr. Ash is curious of the candidates who are being
   nominated.

(Al Eisenstat) Mr. Ash you are out of order, again,  you had a chance to voice
   your issue earlier.  Mr. Ash.  Mr. Ash, please sit down.  Mr. Ash, please.

(Joe Hutsko, APPLE) (Mr Ash wants to express the views of the meeting)

(Al Eisenstat) Mr. Ash, please do not disrupt the meeting.  I will not 
   recognize your request!

(Joe Hutsko, APPLE) (Ash claims that the people voting are all Apple employees.
   Mr. Ash is being booed by the shareholders in the audience.  They are 
   trying to get Mr. Ash to sit down.  Someone said "Go back to Philadelphia")

(Al Eisenstat) Please sit down, no discussion!  2 Million shares available to
   employee purchase.  Motion to ratify...(oops)  Jean Louis-Gasse moves to
   Apple Stock plan be moved from 1 million to 2 million shares.  Second?
   (Second.)  Adoption of Apple Savings and Investment plan.  Motion to 
   ratify? Motion, Mike Spindler moves to agree.  Second? (Second.) (lotsa
   seconds...)  Final, 4th item of business.  Arthur Young as accountants for 
   Apple?  Motion?  Martin Haberlli, moves to ratify motion of Arthur Young.  
   Second?  (Second.)  Thank you.

(Joe Hutsko, APPLE) (audience wants house lights brighter to mark cards.)

(Al Eisenstat) Any more discussion on Arthur Young?  Any other matters to be
   brought to the board?  Please fill in card if voting, and pass to monitor
   present in Flint Center.  Recess will take place afterword, and John 
   Sculley will give State of union.

(Joe Hutsko, APPLE)  (John Sculley comming back to stage...)

(John Sculley) Hello. 1985 Apple Grew Up. It was painful.  Challenges, well
   documented by business and national press.  We have emerged as a very
   powerful company.  New exec staff. (intro staff..).

      Product Operations, Executive VP, Del Yocum.
      Group Exec, Marketing/Sales/Customer Support, Bill Campbell

   Del and Bill relied on to demonstrate to the World great implementation.

      VP International, Mike Spindler, creative and insight.
      Dave Barram, joined last year, VP CFO [Chief Financial Officer].

   Far bigger role for finance.  Greatly improved process of planning and
   control.  More that reorg just last year with compassion...

      Jay Elliot, VP Human Resource.
      Jean Louis Gasse, VP Product Development
      VP Manufacturing, Debbie Coleman, youngest member of team
      Tom Marano, VP US Sales.
      Roy Weaver, long time veteran, VP of Distribution.

   Mike Muller, previously in Accessories Product Group and new future venture
   project, proven in the industry.  Able to start new activity to expand use 
   of personal computers.  Fiscal 1985 we came close to 2 Billion in revenue.
   Despite downturn, we showed profit of 99 cents [per share].  Review for you
   the Apple II family and Mac products.

   Apple II is still the most important revenue product.  Shipments were very
   strong.  Heavy discounting slowed down sales of Apple II products in 
   December last year.  High inventory in retail channel, not only for Apple 
   but others.  A year ago I pointed out how fragile the dealer situation 
   would be due to inventory.  4th quarter we went through consolidation and 
   made changes.  3 facilities, Fremont, Singapore and Cork.  Education was 
   our strength.  Last quarter, we introduced 8 new products for the Apple II 
   family, reduced prices, and [put an emphasis] on color solutions. THIS WAS 
   AN APPLE CHRISTMAS!

   Macintosh:  Back in 1st quarter of fiscal 85, consumers were confused.
   Effect on Mac, [we] found ourselves at price point 2 times greater than
   competition's.  We introducted Laserwriter last year this time, along with
   the Macintosh Office.  We underestimated the need of system products and
   customer solutions.  In 4th fiscal quarter, we put priority of relationship
   with dealers and developers.  In the past quarter we introduced the long
   needed 20 meg hard disk and more software introduced.  Macintosh Plus
   introduced in SF last week.  Met the needs of the customer for power,
   performance and storage.  The LaserWriter Plus also addressed customer 
   needs.

(Joe Hutsko, APPLE) (John is discussing earnings per share...)

(John Sculley) Keep in mind, months ago, there was worry of Apple breaking 
   even.  Now let's look at the balance sheet.  It has been my experience 
   that almost all of the losses in this industry can be attributed to 
   inventory.  The progress we have made to reduce our inventory gave us the 
   capability to increase our inventory terms.  Our reduction of force with 
   our employees, a year ago at this time we had over 7600, now we have over 
   4500.  Cash position has strength.  No confusion about strength of Apple 
   as opposed to home computer companies like Atari and Commodore.  Improved, 
   to 441 million in cash.  No debt on balance sheet.

   AppleWorld event that took place two weeks ago was the most important 
   single event in my career at apple.  Build confidence with dealers, 
   developers, user groups, VARs, and customers.  25,000 people passed through 
   the expo.  Conference had not only dealers, teleconference, 21 other 
   cities, telecom with Online CIS, VARS, K-12 education University, and User 
   Groups.  Security Analysts, too.  Hear it from the people who buy and use 
   our products.  7 meetings, most complex event Apple has ever put on.  
   Business...(Joe, your fingers look tired)... What do customers want from 
   Apple?  Powerful, expandable products, to grow to other products.  And they 
   want SYSTEMS!  Announcement in November of products that Apple will 
   introduce in next 18 months to help Mac and the Laserwriter communicate 
   with the world and bigger systems.  With the introduction of the Mac+ we 
   brought down the price of the Mac 512, to make it more affordable.  Mac+ 
   gave us alternatives to power and affordability.  Laserwriter+, more power. 
 
   Our product announcements, were able to offer 4 upgrade kits.  Mac to Mac+ 
   possible, not locked out of moving to higher level system.  Laserwriter 
   also offers upgrade for present owners to add new font families.

(Joe Hutsko, APPLE) (whew)

(John Sculley) This announcement represents, more than anything, our 
   commitment.  The trade in for Lisa And MAC/XL.  Owners can trade in their 
   system for a Mac Plus and 20 Meg HD for only 1498.  Demonstrates as Apple 
   grows up, [it is] responsible.

   Strategy for Business:  We have gone back to understand why the Mac office
   was not as successful as expected, and stand alone applications need to 
   work together.  SCSI port allows connect to new, faster products.  Key 
   account announcements were made.  Peat Marwick has 5500 macs and are 
   upgrading to Mac Plus.  Arthur Young is adopting Mac Plus, and wrote their 
   own software.  Desktop Publishing will be far more than a vertical market.  
   Improved page layout in LaserWriter Plus give Apple the edge in this 
   market. These are things to do now.  Desktop Communications involves 
   using Macintosh as a workstation in a system.

(Joe Hutsko, APPLE) (back needs rub-down)

(John Sculley) Northern Telecom alliance was introduced.  And GE Information
   Services involving AppleLink, to be marketed to the business world via GE 
   as BusinessTalk.

   Outlook for 86, expect to improve profit.  Good start in 1st quarter.
   Implementation is key.  Heroes who are implementors and not just individual
   players.  Must bring out great new products more often.  Position ourselves
   in Desktop Productivity, and Communications.  In 1987 the products we will
   introduce this year will put us in the position for good growth for the
   upcoming years.  We will still be bringing out new products.  Not just one
   big product year, but when needed in the marketplace.

   What kind of company do we want Apple to be?  Commited to being leader in
   education, consumer, and business!  Emphasis on small and medium business.
   And important in International.  Approximately 22% of Apples [are in]
   business.  Want to be the most exciting tech-based market-driven company
   in the WORLD!  50% increase in research and development.  Alternative tech
   company - great place to work and have chance to do great things.  
   Committed to being a great technological leader.

(Joe Hutsko, APPLE) (anyone have aspirin?)

(John Sculley) Committed to two technical themes, human interface and 
   graphics.  Integrating LSI chip design at Apple, must do custom chips to 
   compete.  Invest in future architectures more powerful than what is 
   available today!  Expand our pool of world-class computer scientists.  
   I'd like to share one last perspective.  In 1987 we will mark the 
   beginning of Apple's second decade.  First revolution changed our 
   understanding of computers.  I believe people manage information and go 
   far beyond making computers easy to use but expand the way people access 
   large data amounts and the worlds' information base doubles every 3 years, 
   but breakthroughs are still needed to make the industry a base for 
   information users.  As the alternative technology company, we have the 
   ability to shape that vision.  We will evolve our Apple ][ products with 
   shared peripherals with Mac and look and feel with Apple ][ to Macintosh 
   and we will evolve systems products to both products. These are our goals.  
   Thank you very MUCH!

(Joe Hutsko, APPLE) (clapping for John) (What a guy) (Back to Al Eisenstat)

(Bill C/Alt SYSOP) Is Mr. Ash re-appearing??

(Joe Hutsko, APPLE)  Mr. Ash has been quite quiet.

(Al Eisenstat) Questions and answers from audience...

(Joe Hutsko, APPLE) Re Mr. Ash, two points to suggest to change location and
  why Mr. Scully did not reply to his letter.

(John Sculley) Same keyboard for all computers is what we would like to offer.

(Joe Hutsko, APPLE) Mr. Ash sent letter to John and John did not reply.

(John Sculley) Regarding the meeting, this is the heart of Silicon Valley 
   since Apple is close to what this valley is all about.  I'm sorry for the 
   problem it may have caused a few.

(John Sculley) Question: In the event of takeover, what insures takeover?

   We are not expecting a takeover, but are of course interested in seeing
   all shareholders are taken care of the same.  The likelihood of an Apple
   takeover is not great!  To take over when management does not want takeover
   will cause conflict.  Don't expect a takeover.

(John Sculley) Question: Re WOZ - is he more active?  Does Apple plan to take
   over another company?  Plans for APPLE ][? and Woz.

   It's quite clear that Woz was upset and I take blame for lack of attention
   on Apple ][.  Since the reorg, Steve has spent more time with Apple, and 
   has never gone off the payroll, and while running his own company, he cares 
   about Apple!  We have a lot going on with the Apple ][.  Much in store for 
   Apple ][!  Steve is happy about Apple ][ and whats going on at Apple.  He 
   is participating in events that are important to Apple.  He even attended 
   the Christmas Bash and gave out awards!  All of our founders, including 
   Steve Jobs are not only welcome but allowed to be participate in Apple.  
   We have no plans on taking over another company at this time.  There may 
   be opportunity in the future to do that.

(John Sculley) Question: Market share.  What is Apple's position?

   First, Apple has been improving its share in K-12, we now have 72% of 
   market.  Market share for the Apple ][ was 46% this Christmas.  Most work 
   ahead of us for the business market.

(Joe Hutsko, APPLE) (Just resting for a second, as John explains the K-12
   share)

(John Sculley) Question: Recent settlement with Steve Jobs, closer 
   relationship with Apple and founders?

   This has been the most difficult experience for Apple. I hope in the 
   future,  Steve can feel that the seeds he planted at Apple that he should 
   feel as welcome as Steve Wozniak does at apple, and put out an invitiation 
   to Steve Jobs to see if we can build a relationship.

(Joe Hutsko, APPLE) Now back to Al Eisenstat.  Mr. Ash is back, complaining
   about dialog of shareholders and his interest in participation.

(Al Eisenstat) Mr. Ash you have disrupted the meeting.  You did not raise your
   hand so you could disrupt the meeting again.

(Joe Hutsko, APPLE) (crowd is asking Ash to sit down, yelling at him. Those
   booing me are wrong, claims ASH)

(Bill C/Alt SYSOP) Check spelling of name???

(Joe Hutsko, APPLE) Bill, he he he

(Al Eisenstat) Tally complete.  Votes cast have been counted.  Total shares 
   over 80 percent total shares voted.  Same board will be in place.  Votes 
   cast for 8th director were not enough to elect him to board.  Final tally 
   will be communicated to shareholders.

   Stock Purchase Plan -- in favor of motion.
   Savings and Investment Plan -- in favor of plan.
   Ratification of Arthur Young -- in favor of plan.

   Approved all items of vote. Thank all shareholder present and bring meeting
   to end.  Motion to end?  (Move that meeting adjourn.)  Second? (Second.)
   Say Aye!  Meeting over, thank you!

(Joe Hutsko) Hi guys, hope it was ok?>

(Neil/Sysop) Joe, great job!!!!  How are your fingers doing????

(Bill C/Alt SYSOP) Fine great job Joe thanks!!!

(Joe Hutsko) Neil, thanks, it went ok! Great, thanks!

(Neil/Sysop) For all who can't type just let me say... clapclapclapclap!!!

(Joe Hutsko) Neil, I will turn over to you?!

(Robert/AltSysop) Thanks, Joe.  Massage those fingers! clapclapclap!

(Neil/Sysop) Well, that concludes the Apple Stockholder Meeting and our online
   presentation of the event!

(Joe Hutsko) Well, again, thanks for attending, and it was fun! Thanks!
   Bye all, and have a great day!  See you at our next meeting! bye bye

(Neil/Sysop) Thanks to all for attending. A transcript of the meeting will be
   available in MAUG's PCS-23 Forum and in the PCS-14 Forum tomorrow morning 
   in the DL6 area as STOCK.CO.  Thanks very much to Apple, to Joe Hutsko and 
   to everyone who attended!!!  As always, feel free to leave comments and
   suggestions on the Forum. What will our next event be??? Welllllll, we have
   a few things planned (hehehe) that will be truly astounding so watch the
   short bulletins for announcements.  Bye All!!!