Exhibit
10.A.51


 


APPLE COMPUTER,
INC.

2003 Employee Stock Option Plan

(April 24, 2003)


 


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


 


•                  to attract and retain the best
available personnel


 


•                  to provide additional incentive to
Employees and the Chairman; 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.


 


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(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.


 


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(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.


 


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(o)                                 “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.


 


(p)                                 “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.


 


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


 


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


 


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


 


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


 


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


 


(v)                                 “Plan”  means this 2003 Employee Stock Option Plan.


 


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


 


(x)                                   “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.


 


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


 


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


 


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


 


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


 


(cc)                            “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


 


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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;


 


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


 


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(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;


 


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(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; however,
the Administrator may not “reprice” options, including 6-months-plus-1-day
option exchange programs, without shareholder approval.


 


(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 Employees and the Chairman or to such other
individuals as 


 


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determined
by the Administrator whom the Company has offered a position of Chairman or
Employee. Incentive Stock Options may be granted only to Employees.


 


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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 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


 


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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


 


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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;


 


(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.


 


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(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


 


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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


 


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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.


 


(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.


 


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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.


 


(c)                                  Termination of Continuous Employment.  Upon
termination of an Optionee’s Continuous Status as Employee (other than
termination by reason of


 


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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


 


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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


 


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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.


 


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”).


 


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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: 

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


 


(b)                                 ll 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


 


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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 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


 


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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


 


(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.


 


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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


 


23

















 


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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