Exhibit 10.A.51


APPLE COMPUTER, INC. 1998

EXECUTIVE OFFICER STOCK PLAN

(as amended through 4/24/02)


1.             Purposes of the Plan.  The
purposes of this Stock Plan are:


•           to attract and
retain the best available personnel for positions of substantial responsibility;


•              to provide additional incentive to
the Chairman and/or Executive Officers and other key employees; and


•              to promote the
success of the Company’s business.


Options granted under the Plan may be Incentive Stock Options (as
defined under Section 422 of the Code) or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant. Stock appreciation rights
(“SARs”) may be granted under the Plan in connection with Options or
independently of Options. Stock Purchase Rights may also be granted under the
Plan.


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, in accordance with
Section 4 of the Plan.


(b)           “Agreement” means an agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option, SAR or Stock Purchase Right grant. The Agreement is subject to the
terms and conditions of the Plan.


(c)           “Applicable Laws” means the requirements relating
to the administration of stock option plans under U.S. state corporate laws,
U.S. federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options, SARs or
Stock Purchase Rights are, or will be, granted under the Plan.


(d)           “Board” means the Board of Directors of
the Company.


(e)           “Chairman” means the Chairman of the
Board.


(f)            “Code” means the Internal Revenue Code of
1986, as amended.


(g)           “Committee” means a committee of Directors
appointed by the Board in accordance with Section 4 of the Plan.


(h)           “Common Stock” means the common stock of
the Company.


(i)            “Company” means Apple Computer, Inc.,
a California corporation.


(j)            “Continuous Status as Chairman” unless
determined otherwise by the Administrator, means the absence of any
interruption or termination as Chairman of the Board with the Company.
Continuous Status as Chairman shall not be considered interrupted in the case
of medical leave, military leave, family leave, or any other leave of absence
approved by the Administrator, provided, in each case, that such leave does not
result in termination as Chairman with the Company. Neither service as a
Director nor payment of a director’s fee by the Company shall be sufficient to
constitute status as “Chairman” by the Company.


(k)           “Continuous Status as an Employee” means
the absence of any interruption or termination of the employment relationship
with the Company or any Subsidiary. Continuous Status as an Employee shall not
be considered interrupted in the case of (i) medical leave, military
leave, family leave, or any other leave of absence approved by the
Administrator, provided, in each case, that such leave does not result in
termination of the employment relationship with the Company or any Subsidiary,
as the case may be, under the terms of the respective Company policy for such
leave; however, vesting may be tolled while an employee is on an approved leave
of absence under the


 

















 


terms of the
respective Company policy for such leave; or (ii) in the case of transfers
between locations of the Company or between the Company, its Subsidiaries, or
its successor. For purposes of Incentive Stock Options, no such leave may
exceed ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave
of absence approved by the Company is not so guaranteed, on the 91st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Chairman nor as a Director nor
payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.


(l)            “Director” means a member of the Board.


(m)          “Employee” means any person employed by
the Company or any Parent or Subsidiary of the Company subject to
(k) above.


(n)           “Exchange Act” means the Securities
Exchange Act of 1934, as amended.


(o)           “Executive Officer” means any person who
is an officer of the Company within the meaning of Section 16 of the
Exchange Act and the rules and regulations promulgated thereunder.


(p)           “Fair Market Value” means, as of any date,
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 Nasdaq National Market or The Nasdaq SmallCap
Market of The Nasdaq Stock Market, 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 exchange or system, on the date of determination or, if the date
of determination is not a trading day, the immediately preceding trading day,
as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;


(ii)           If the Common Stock
is regularly quoted by a recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of Common Stock shall be the
mean between the high bid and low asked prices for the Common Stock on the date
of determination or, if there are no quoted prices on the date of
determination, on the last day on which there are quoted prices prior to the
date of determination, as reported in The
Wall Street Journal or such other source as the Administrator deems
reliable; or


(iii)          In the absence of
an established market for the Common Stock, the Fair Market Value shall be determined
in good faith by the Administrator.


(q)           “Incentive Stock Option” means an Option
intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder and is
expressly designated by the Administrator at the time of grant as an incentive
stock option.


(r)            “Nonstatutory Stock Option” means an
Option not intended to qualify as an Incentive Stock Option.


(s)           “Option” means a stock option granted
pursuant to the Plan.


(t)            “Optioned Stock” means the Common Stock
subject to an Option, SAR or Stock Purchase Right.


(u)           “Optionee” means the holder of an
outstanding Option, SAR or Stock Purchase Right.


(v)           “Parent” means a “parent corporation,”
whether now or hereafter existing, as defined in Section 424(e) of the
Code.


(w)          “Plan” means this 1998 Executive Officer
Stock Plan.


(x)            “Restricted Stock” means shares of Common
Stock acquired pursuant to a grant of Stock Purchase Rights under
Section 12 of the Plan.


 


 


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(y)           “Rule 16b-3” means Rule 16b-3 of
the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.


(z)            “SAR” means a stock appreciation right
granted pursuant to Section 10 below.


(aa)         “Section 16(b)” means
Section 16(b) of the Exchange Act.


(bb)         “Share” means a share of the Common Stock,
as adjusted in accordance with Section 15 of the Plan.


(cc)         “Stock
Purchase Right” means the right to purchase Common Stock pursuant to
Section 12 of the Plan, as evidenced by an Agreement.


(dd)         “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code.


3.             Stock Subject To The Plan. 
Subject to the provisions of Section 15 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the Plan or for which
SARs or Stock Purchase Rights may be granted and exercised is 48,000,000
Shares. 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, SAR or Stock Purchase Right issued under the Plan should
expire or become unexercisable for any reason without having been exercised in
full, the unpurchased Shares which were subject thereto shall become available
for other Options, SARs or Stock Purchase Rights under this Plan (unless the
Plan has terminated); 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. If Shares of Restricted Stock
are repurchased by the Company at their original purchase price, such shares
shall become available for future grant under the Plan.


4.             Administration of the Plan.


(a)           Procedure.


(i)            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, and by the legal requirements of the
Applicable Laws relating to the administration of stock plans such as the Plan,
if any, 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.


(ii)           Section 162(m). To the extent that
the Administrator determines it to be desirable to qualify Options or SARs
granted hereunder as “performance-based compensation” within the meaning of
Section 162(m) of the Code, the Plan shall be administered by a Committee
of two or more “outside directors” within the meaning of Section 162(m) of
the Code.


(iii)          Rule 16b-3. To the extent desirable
to qualify transactions hereunder as exempt under Rule 16b-3, the
transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.


(iv)          Other Administration. Other than as
provided above, the Plan shall be administered by (A) the Board or
(B) a Committee, which committee shall be constituted to satisfy
Applicable Laws.


(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;


 


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(ii)           to select the
person(s) to whom Options, SARs and Stock Purchase Rights may be granted
hereunder;


(iii)          to determine the
number of shares of Common Stock to be covered by each Option, SAR or Stock
Purchase Right granted hereunder;


(iv)          to approve forms of
agreement for use under the Plan;


(v)           to determine the
terms and conditions, not inconsistent with the terms of the Plan, of any
Option, SAR or Stock Purchase Right granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the date of
grant, the time or times when Options, SARs or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option, SAR or Stock Purchase Right or the shares of
Common Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;


(vi)          to reduce the
exercise price of any Option, SAR or Stock Purchase Right to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option, SAR or Stock Purchase Right shall have declined since the date the
Option, SAR or Stock Purchase Right was granted;


(vii)         to construe and interpret
the terms of the Plan and awards granted pursuant to the Plan;


(viii)        to prescribe, amend
and rescind rules and regulations relating to the Plan, including rules and
regulations relating to sub-plans established for the purpose of qualifying for
preferred tax treatment under foreign tax laws;


(ix)           to modify or amend
each Option, SAR or Stock Purchase Right (subject to Section 17(c) of the
Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;


(x)            to allow Optionees
to satisfy withholding tax obligations by electing to have the Company withhold
from the Shares to be issued upon exercise of an Option, SAR or Stock Purchase
Right that number of Shares having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to be
determined. All elections by an Optionee to have Shares withheld for this
purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;


(xi)           to authorize any
person to execute on behalf of the Company any instrument required to effect
the grant of an Option, SAR or Stock Purchase Right previously granted by the
Administrator; and


(xii)          to make all other
determinations deemed necessary or advisable for administering the Plan.


(c)           Effect of Administrator’s Decision. The
Administrator’s decisions, determinations and interpretations shall be final
and binding on all Optionees and any other holders of Options, SARs or Stock
Purchase Rights.


5.             Eligibility. 
Nonstatutory Stock Options, SARs and Stock Purchase Rights may be granted to
the Chairman, Executive Officers and other key employees or to such other
individuals as determined by the Administrator whom the Company has offered a
position of Chairman or Executive Officer. Incentive Stock Options may be
granted only to Executive Officers and other key employees.


6.             Limitations.


(a)           Each Option shall be
designated in the Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to the
extent that the


 


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aggregate Fair
Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the
order in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.


(b)           Neither the Plan nor
any Option, SAR or Stock Purchase Right shall confer upon an Optionee any right
with respect to continuing the Optionee’s relationship as an Employee with or
Chairman of the Company, nor shall they interfere in any way with the
Optionee’s right or the Company’s right to terminate such relationship at any
time, with or without cause.


(c)           The following
limitations shall apply to grants of Options and SARs:


(i)            No participant
shall be granted, in any fiscal year of the Company, Options or SARs to
purchase more than 34,000,000 Shares;


(ii)           The foregoing
limitations shall be adjusted proportionately in connection with any change in
the Company’s capitalization as described in Section 15;


(iii)          If an Option or SAR
is canceled in the same fiscal year of the Company in which it was granted
(other than in connection with a transaction described in Section 15), the
canceled Option will be counted against the limits set forth in subsections (i) above.
For this purpose, if the exercise price of an Option or SAR is reduced, the
transaction will be treated as a cancellation of the Option or SAR and the
grant of a new Option or SAR.


7.             Term of Plan. 
Subject to Section 21 of the Plan, the Plan shall become effective upon
its adoption by the Board. It shall continue in effect for a term of ten
(10) years unless terminated earlier under Section 16 of the Plan.


8.             Term of Option. 
The term of each Option shall be stated in the Agreement. In the case of an Incentive
Stock Option, the term shall be ten (10) years from the date of grant or
such shorter term as may be provided in the Agreement. Moreover, 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 total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary, the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided
in the Agreement.


9.             Option Exercise Price and
Consideration.


(a)           Exercise Price. The per share exercise
price for the Shares to be issued pursuant to exercise of an Option shall be
determined by the Administrator, subject to the following:


(i)            In the case of an
Incentive Stock Option;


(A)          granted to an
Employee 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 per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant; or


(B)           granted to any
Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant;


(ii)           In the case of a
Nonstatutory Stock Option, the per Share exercise price shall be determined by
the Administrator. In the case of a Nonstatutory Stock Option intended to
qualify as “performance-based compensation” within the meaning of
Section 162(m) of the Code, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant;


 


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(iii)          Notwithstanding the
foregoing, Options may be granted with a per Share exercise price of less than
100% of the Fair Market Value per Share on the date of grant as determined by
the Administrator or pursuant to a merger or other corporate transaction.


(b)           Waiting Period and Exercise Dates. At the
time an Option is granted, the Administrator shall fix the period within which
the Option may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised.


(c)           Form of Consideration. The Administrator
shall determine the acceptable form of consideration for exercising an Option,
including the method of payment. In the case of an Incentive Stock Option, the
Administrator shall determine the acceptable form of consideration at the time
of grant. Such consideration may consist entirely of:


(i)            cash;


(ii)           check;


(iii)          promissory note;


(iv)          other Shares which
(A) in the case of Shares acquired upon exercise of an option, have been
owned by the Optionee for more than six months on the date of surrender, and
(B) 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)           consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan;


(vi)          a reduction in the
amount of any Company liability to the Optionee, including any liability
attributable to the Optionee’s participation in any Company-sponsored deferred
compensation program or arrangement;


(vii)         any combination of
the foregoing methods of payment; or


(viii)        such other
consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws.


10.           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:


(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 a SAR; provided, however, that such limit
shall not restrict the exercisability of the related Option;


(ii)           When a SAR is
exercised, the related Option, to the extent surrendered, shall no longer be
exercisable;


(iii)          A 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;
and


(iv)          A 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.


 


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(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 a SAR; and


(ii)           SARs shall be
exercisable, in whole or in part, at such times as the Administrator shall
specify in the Optionee’s Agreement.


(c)           Form of Payment. The Company’s obligation
arising upon the exercise of a 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 a SAR shall be
valued at their Fair Market Value as of the date of exercise.


(d)           Rule 16b-3. SARs granted hereunder
shall contain such additional restrictions as may be required to be contained
in the Plan or Agreement in order for the SAR to qualify for the maximum
exemption provided by Rule 16b-3.


11.           Exercise of Option or SAR.


(a)           Procedure for Exercise; Rights as a Shareholder.  Any
Option or SAR granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Agreement. An Option may not be exercised
for a fraction of a Share.


An Option or SAR shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the terms
of the Option or SAR) from the person entitled to exercise the Option or SAR,
and (ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Agreement and the Plan.
Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if requested by the Optionee, in the name of the Optionee and his
or her spouse. Until the Shares are issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), 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. The Company shall issue (or cause to be issued) such
Shares promptly after the Option is exercised. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the
Shares are issued, except as provided in Section 15 of the Plan.


Exercising an Option in any manner shall decrease the number of Shares
thereafter 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 a 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)           Termination of Continuous Status as Chairman.  Upon
termination of an Optionee’s Continuous Status as Chairman (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.


 


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(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.  If an
Optionee dies (i) while an Employee or Chairman, 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 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 (ii) within ninety
(90) days after the termination of Continuous Status as an Employee or
Chairman, 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 or SAR by bequest or inheritance, but only to the extent of
the right to exercise that had accrued at the date of termination. If the
Option or SAR is not so exercised within the time specified herein, the Option
or SAR shall terminate, and the Shares covered by such Option or SAR shall
revert to the Plan.


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)           Buyout Provisions.  The
Administrator may at any time offer to buy out for a payment in cash or Shares
an Option or SAR previously granted based on such terms and conditions as the
Administrator shall establish and communicate to the Optionee at the time that
such offer is made.


12.           Stock Purchase Rights.


(a)           Rights to Purchase.  Stock
Purchase Rights may be issued either alone, in addition to, or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the Optionee in writing or
electronically, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the Optionee shall be entitled to purchase,
the price to be paid, and the time within which the Optionee must accept such
offer. The offer shall be accepted by execution of an Agreement in the form
determined by the Administrator.


(b)           Repurchase Option.  Unless the
Administrator determines otherwise, the Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser’s service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the Administrator.


(c)           Other Provisions.  The Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.


(d)           Rights as a Shareholder.  Once
the Stock Purchase Right is exercised, the purchaser shall have the rights
equivalent to those of a shareholder, and shall be a shareholder when his or
her purchase is entered upon the records of the duly authorized transfer agent
of the Company. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Section 15 of the Plan.


 


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13.           Transferability of Options, SARs and
Stock Purchase Rights.  Unless determined otherwise by the
Administrator, an Option, SAR or Stock Purchase Right 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 1 of the Employee
Retirement Income Security Act, and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option, SAR or
Stock Purchase Right transferable, such Option, SAR or Stock Purchase Right
shall contain such additional terms and conditions as the Administrator deems
appropriate.


14.           Stock Withholding to Satisfy
Withholding Tax Obligations.  When an Optionee incurs tax
liability in connection with the exercise of an Option, SAR or Stock Purchase
Right, 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 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 or Stock Purchase Right, if any, that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the 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:


(c)           the election must be
made on or prior to the applicable Tax Date; and


(d)           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, SAR or
Stock Purchase Right is exercised but such Optionee shall be unconditionally
obligated to tender back to the Company the proper number of Shares on the Tax
Date.


15.           Adjustments Upon Changes in
Capitalization, Dissolution, Merger or Asset Sale.


(a)           Changes in Capitalization.  Subject
to any required action by the shareholders of the Company, the number of shares
of Common Stock covered by each outstanding Option, SAR or Stock Purchase
Right, and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options, SARs or Stock Purchase
Rights have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option, SAR or Stock Purchase Right, as well
as the price per share of Common Stock covered by each such outstanding Option,
SAR or Stock Purchase Right, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock 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
number of issued 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 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 of Common Stock subject to an Option,
SAR or Stock Purchase Right.


(b)           Dissolution or Liquidation.  In
the event of the proposed dissolution or liquidation of the Company, all
outstanding Options, SARs and Stock Purchase Rights 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, SAR or Stock Purchase
Right shall terminate as of a date fixed by the Administrator and give each
Optionee the right to exercise his or her Option, SAR or Stock


 


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Purchase Right as
to all or any part of the Optioned Stock, including Shares as to which the
Option, SAR or Stock Purchase Right would not otherwise be exercisable.


(c)           Merger or Asset Sale.  Unless
otherwise determined by the Administrator, in the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option, SAR and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option, SAR or Stock Purchase Right, the Optionee shall fully vest in and have
the right to exercise the Option, SAR or Stock Purchase Right as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested
or exercisable. If an Option, SAR or Stock Purchase Right becomes fully vested
and exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option, SAR or Stock Purchase Right shall be fully
vested and exercisable for a period of thirty (30) days from the date of
such notice, and the Option, SAR or Stock Purchase Right shall terminate upon
the expiration of such period. For the purposes of this paragraph, the Option,
SAR or Stock Purchase Right shall be considered assumed if, following the
merger or sale of assets, the option or right confers the right to purchase or
receive, for each Share of Optioned Stock subject to the Option, SAR or Stock
Purchase Right immediately prior to the merger or sale of assets, the
consideration (whether stock, cash, or other securities or property) received
in the merger or sale of assets by holders of Common Stock for each Share held
on the effective date of the transaction (and if 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 merger or sale of assets is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of
the successor corporation, provide for the consideration to be received upon
the exercise of the Option, SAR or Stock Purchase Right, for each Share of
Optioned Stock subject to the Option, SAR or Stock Purchase Right, 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
merger or sale of assets.


(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:


(i)            Any Options, SARs
and Stock Purchase Rights 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


(ii)           The value of all
outstanding Options, SARs and Stock Purchase Rights shall, unless otherwise
determined by the Administrator at or after grant, be cashed-out. The amount at
which such Options, SARs and Stock Purchase Rights 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, SAR
or Stock Purchase Right. 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, SAR or
Stock Purchase Right by bequest or inheritance.


(e)           Definition of “Change in Control”. 
For purposes of this Section 15, 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


 


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(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 15, “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.


16.           Date of Grant. 
The date of grant of an Option, SAR or Stock Purchase Right shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, SAR or Stock Purchase Right, or such other later date as is
determined by the Administrator. Notice of the determination shall be provided
to each Optionee within a reasonable time after the date of such grant.


17.           Amendment and Termination of the
Plan.


(a)           Amendment and Termination.  The Board
may at any time amend, alter, suspend or terminate the Plan.


(b)           Shareholder Approval.  The Company
shall obtain shareholder approval of any Plan amendment to the extent necessary
and desirable to comply with Applicable Laws.


(c)           Effect of Amendment or Termination. 
No amendment, alteration, suspension or termination of the Plan shall impair
the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed
by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Options, SARs or Stock Purchase Rights granted under the Plan prior
to the date of such termination.


18.           Conditions Upon Issuance of Shares.


(a)           Legal Compliance.  Shares shall not
be issued pursuant to the exercise of an Option, SAR or Stock Purchase Right
unless the exercise of such Option, SAR or Stock Purchase Right and the
issuance and delivery of such Shares shall comply with Applicable Laws and
shall be further subject to the approval of counsel for the Company with
respect to such compliance.


(b)           Investment Representations.  As a
condition to the exercise of an Option, SAR or Stock Purchase Right, the
Company may require the person exercising such Option, SAR or Stock Purchase
Right 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.


19.           Inability to Obtain Authority. 
The 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 failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.


20.           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.


21.           Shareholder Approval. 
The Plan shall be subject to approval by the shareholders of the Company within
twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the manner and to the degree required under
Applicable Laws.


22.           Non-U.S. Employees. 
Notwithstanding anything in the Plan to the contrary, with respect to any
employee who is resident outside of the United States, the Committee may, in
its sole discretion, amend the terms of the Plan in order to conform such terms
with the requirements of local law or to meet the objectives of the Plan. The
Committee may, where appropriate, establish one or more sub-plans for this
purpose.


 


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