<PAGE>
As filed with the Securities and Exchange Commission on May 12, 2000
Registration No. _______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Apple Computer, Inc.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2404110
(State of other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
One Infinite Loop
Cupertino, California 95014
(Address, including zip code, of principal executive offices)
1997 EMPLOYEE STOCK OPTION PLAN
1998 EXECUTIVE OFFICER STOCK PLAN
(Full title of the plan)
MICHAEL C. WYATT, ESQ.
Associate General Counsel
Apple Computer, Inc.
One Infinite Loop, M/S 301-4CL
Cupertino, California 95014
(408) 996-1010
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
AVERAGE MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE PRICE PER OFFERING REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (1) SHARE (2) PRICE (3) FEE (3)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, NO PAR VALUE
- -----------------------------------------------------------------------------------------------------------------------
- --NEWLY RESERVED UNDER 1997 EMPLOYEE STOCK 3,500,000 $101.625 $355,687,500 $93,902
OPTION PLAN SHARES
- -----------------------------------------------------------------------------------------------------------------------
- -- NEWLY RESERVED UNDER THE 1998 2,000,000 $101.625 $203,250,000 $53,658
EXECUTIVE OFFICER STOCK PLAN SHARES
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 429 promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), the prospectus relating to this Registration
statement also relates to shares registered under Form S-8 Registration
Statements Nos. 2-70449, 2-85095, 33-866, 33-23650, 333-23725, 33-31075,
33-47596, 33-53895, 333-07437, 333-6045, 333-82603 and 333-93471. A total of
18,000,000 shares issuable under the 1997 Employee Stock Option Plan have been
previously registered under the Securities Act. A total of 17,000,000 shares
issuable under the 1998 Executive Officer Stock Plan and its predecessors, the
1990 Stock Option Plan and the 1981 Stock Option Plan, have been previously
registered under the Securities Act.
(2) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the filing fee on the basis of $101.625 per share, which
represents the average of the high and low prices of the Common Stock
reported on the NASDAQ National Market for May 12, 2000.
(3) Estimated pursuant to Rule 457 solely for purposes of calculating the
registration fee. Amount of the Registration Fee was calculated pursuant to
Section 6(b) of the Securities Act of 1933, as amended, and was determined by
multiplying the aggregate offering amount by .000264.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
There are hereby incorporated by reference into this Registration
Statement the following documents and information heretofore filed with the
Securities and Exchange Commission (the "Commission"):
(a) The Registrant's annual report on Form 10-K for the fiscal
year ended September 25, 1999;
(b) All other reports filed by the Registrant pursuant to
Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), since September 25, 1999; and
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which de-registers all securities then remaining unsold, also shall
be deemed to be incorporated by reference in this Registration Statement and to
be part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California General Corporations Law (the "CGCL")
authorizes a court to award, or a corporation's board of directors to grant,
indemnity to directors and officers who are parties or are threatened to be made
parties to any proceeding (with certain exceptions) by reason of the fact that
the person is or was an agent of the corporation, against expenses, judgments,
fines, settlements and other amounts actually and reasonably incurred in
connection with the proceeding if that person acted in good faith and in a
manner the person reasonably believed to be in the best interests of the
corporation. Section 204 of the CGCL provides that this limitation on liability
has no effect on a director's liability if (i) for acts or omissions that
involve intentional misconduct or a knowing and culpable violation of law, (ii)
for acts or omissions that a director believes to be contrary to the best
interests of the corporation or its shareholders or that involve the absence of
good faith on the part of the director, (iii) for any transaction from which a
director derived an improper personal benefit, (iv) for acts or omissions that
show a reckless disregard for the director's duty to the corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of a serious injury to the corporation or its shareholders, (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the corporation or its shareholders, (vi)
under Section 310 of the CGCL (concerning contracts or transactions between the
corporation and a director) or (vii) under Section 316 of the CGCL (directors'
liability for improper dividends, loans and guarantees). Section 317 does not
extend to acts or omissions of a director in his capacity as an officer.
Further, Section 317 has no effect on claims arising under federal or state
securities laws and does not affect the availability of injunctions and other
equitable remedies available to the Company's shareholders for any violation of
a director's fiduciary duty to the Company or its shareholders.
In accordance with Section 317, the Restated Articles of Incorporation,
as amended (the "Articles"), of the Company limit the liability of a director to
the Company or its shareholders for monetary damages to the fullest extent
permissible under California law. The Articles further authorize the Company to
provide indemnification to its agents (including officers and directors),
subject to the limitations set forth above. The Articles and the Company's
By-Laws further provide for indemnification of corporate agents to the maximum
extent permitted by the CGCL.
Pursuant to the authority provided in the Articles, the Company has
entered into indemnification agreements with each of its executive officers and
directors, indemnifying them against certain potential liabilities that may
arise as a result of their service to the Company, and providing for certain
other protection.
II-2
<PAGE>
The Company also maintains insurance policies which insure its officers
and directors against certain liabilities.
The foregoing summaries are necessarily subject to the complete text of
the statute, the Articles, the By-Laws and the agreements referred to above and
are qualified in their entirety by reference thereto.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.11 Form of Option Agreement.
5.1 Opinion of counsel as to the legality of the securities
being registered hereby.
10.A.49 1997 Employee Stock Option Plan, as amended through
May 3, 2000.
10.A.51 1998 Executive Officer Stock Plan, as amended through
May 3, 2000.
23.1 Consent of counsel (included in Exhibit 5.1).
23.3 Consent of KPMG LLP, independent auditors, with respect to
the consolidated financial statements of the Registrant.
24.1 Power of Attorney (included on page II-5).
</TABLE>
II-3
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement
to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
and
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act, and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cupertino, County of Santa Clara,
State of California, on the 12th day of May, 2000.
APPLE COMPUTER, INC.
By /s/ Fred D. Anderson
Fred D. Anderson
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Steven P. Jobs, Fred D.
Anderson, Nancy R. Heinen and Michael C. Wyatt, and each of them individually
and without the others, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities to sign any amendments to the
Registration Statement, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Steven P. Jobs Chief Executive Officer and Director May 12, 2000
- ------------------------------ (Principal Executive Officer)
Steven P. Jobs
/s/ Fred D. Anderson
- ------------------------------ Executive Vice President and Chief May 12, 2000
Fred D. Anderson Financial Officer (Principal Financial
Officer)
/s/ Gareth C. C. Chang
- ------------------------------
Gareth C. C. Chang Director May 12, 2000
/s/ William V. Campbell
- ------------------------------
William V. Campbell Director May 12, 2000
/s/ Millard S. Drexler
- ------------------------------
Millard S. Drexler Director May 12, 2000
/s/ Lawrence J. Ellison
- ------------------------------
Lawrence J. Ellison Director May 12, 2000
/s/ Jerome B. York
- ------------------------------
Jerome B. York Director May 12, 2000
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
No. Description No.
------- ----------- ------
<S> <C>
4.11 Form of Option Agreement. 1
5.1 Opinion of counsel as to the legality of the securities
being registered hereby. 3
10.A.49 1997 Employee Stock Option Plan, as amended through May 3, 2000. 4
10.A.51 1998 Executive Officer Stock Plan, as amended through May 3, 2000. 13
23.1 Consent of Counsel (included in Exhibit 5.1). 3
23.3 Consent of KPMG LLP, independent auditors, with respect to
the consolidated financial statements of the Registrant. 25
24.1 Power of Attorney (included on Page II-5). II-5
</TABLE>
<PAGE>
EXHIBIT 4.11
NON-STATUTORY STOCK OPTION AGREEMENT RE: 1997 Employee Stock Option Plan
On the Date of Grant shown above, Apple Computer, Inc. (the "Company"), a
California corporation, granted to you (the "Optionee") an option to purchase
shares of Common Stock, no par value, of the Company, in the number and at
the price as shown above, and in all respects subject to the terms,
definitions and provisions of the 1997 Employee Stock Option Plan, as amended
(the "Plan") of the Company, which is incorporated herein by reference, as
follows:
1. NATURE OF THE OPTION. This option is intended to be a non-statutory option
and NOT an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the Code).
2. OPTION PRICE. The Option price indicated above for each share of Common
Stock, is not less than the fair market value per share of Common Stock on the
date of grant of this option, as determined by the Administrator in accordance
with Section 8(a) of the Plan.
3. EXERCISE OF OPTION. This option shall be exercisable in accordance with
Section 10 of the Plan as follows:
(i) RIGHT TO EXERCISE. This option shall be exercisable, cumulatively,
as follows:
Number of Shares Can be Exercised On Must be Exercised Before
(ii) METHOD OF EXERCISE. This option shall be exercisable by the
submission of a Notice of Exercise form which may be obtained from the
Company and shall state the election to exercise this option, the number of
shares in respect of which this option is being exercised, and such other
representations and agreements as to the holder's investment intent with
respect to such shares of Common Stock as may be required by the Company.
Such Notice of Exercise form shall be signed by the Optionee and shall be
delivered in person or by mail or by facsimile to the Company. When
exercising an option, the Notice of Exercise form shall be accompanied by
payment of the purchase price. Payment of the purchase price shall be by
cash, check, or other means as determined by the Administrator pursuant to
Section 8(b) of the Plan. When executing a same-day-sale, the Notice of
Exercise form must be submitted to Shareholder Relations by 3:00 PM the next
business day following the day of sale. The certificate or certificates for
shares of Common Stock as to which this option shall be exercised shall be
registered in the name of the Optionee.
1
<PAGE>
(iii) RESTRICTIONS ON EXERCISE. This option may not be exercised if the
issuance of such shares upon such exercise would constitute a violation of any
applicable federal or state securities law or other law or regulation. As a
condition to the exercise of this option, the Company may require the Optionee
to make such representations, and warranties to the Company as may be required
by any applicable law or regulation, including the execution and delivery of a
representation letter at the time of exercise of this option.
4. NON-TRANSFERABILITY OF OPTION. This option may not be transferred in any
manner otherwise 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
I of the Employee Retirement Income Security Act or the rules thereunder. This
option may be exercised during the lifetime of the Optionee only by the
Optionee. The terms of this option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. TERMINATION OF EMPLOYMENT - Except as expressly provided in the Plan, this
Option shall terminate 90 days following the date of termination of employment
and may be exercised during such 90-day period only to the extent vested and
exercisable as of the date of termination of employment.
6. MISCELLANEOUS. This Option (a) shall be binding upon and inure to the benefit
of any successor of the Company, (b) shall be governed by the laws of the State
of California, and any applicable laws of the United States, and (c) may not be
amended except in writing. No contract or right of employment shall be implied
by this Agreement, nor shall this Agreement in any way interfere with Optionee's
right or the Company's or, where applicable, a Subsidiary's or Affiliated
Company's right to terminate Optionee's employment at any time.
2
<PAGE>
EXHIBIT 5.1
May 12, 2000
Apple Computer, Inc.
1 Infinite Loop
Cupertino, California 95014
RE: REGISTRATION STATEMENT ON FORM S-8 FOR THE 1997 EMPLOYEE STOCK OPTION PLAN
AND 1998 EXECUTIVE OFFICER STOCK PLAN
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission on or about May 12, 2000 (the "Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended, of 3,500,000 additional shares authorized for issuance under
the 1997 Employee Stock Option Plan, as amended (the "1997 Plan") and 2,000,000
additional shares authorized for issuance under the 1998 Executive Officer Stock
Plan, as amended (the "1998 Plan"), of Apple Computer, Inc.'s Common Stock, no
par value. The shares of Apple Common Stock to be registered under the
Registration Statement are hereinafter referred to as the "Shares". As counsel
in connection with this transaction, I have examined the actions taken, and I am
familiar with the actions proposed to be taken, in connection with the issuance
and sale of the Shares pursuant to the 1997 Plan and the 1998 Plan.
It is my opinion that, when issued and sold in the manner described in the 1997
Plan and 1998 Plan and pursuant to the agreements which accompany each grant,
the Shares will be legally and validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in the
Registration Statement.
Very truly yours,
/s/ Nancy R. Heinen
Nancy R. Heinen
General Counsel
3
<PAGE>
EXHIBIT 10.A.49
APPLE COMPUTER, INC.
1997 EMPLOYEE STOCK OPTION PLAN
(AS AMENDED THROUGH 5/3/00)
1. PURPOSES OF THE PLAN. The purposes of this 1997 Employee Stock
Option Plan are to assist the Company in attracting and retaining high quality
personnel, to provide additional incentive to Employees who are not Directors or
Officers of the Company and to promote the success of the Company's business.
Options granted under the Plan shall be Nonstatutory Stock Options. SARs
granted under the Plan may be granted in connection with Options or
independently of Options.
2. DEFINITIONS. As used herein, the following definitions shall
apply:
"ADMINISTRATOR" means the Board or any of its Committees, as shall
be administering the Plan from time to time pursuant to Section 4 of the Plan.
"AFFILIATED COMPANY" means a corporation which is not a Subsidiary
but with respect to which the Company owns, directly or indirectly through one
or more Subsidiaries, at least twenty percent of the total voting power, unless
the Administrator determines in its discretion that such corporation is not an
Affiliated Company.
"APPLICABLE LAWS" shall have the meaning set forth in Section 4 of
the Plan.
"BOARD" means the Board of Directors of the Company.
"CHANGE IN CONTROL" shall have the meaning set forth in Section 10
of the Plan.
"CHANGE IN CONTROL PRICE" shall have the meaning set forth in
Section 12 of the Plan.
"COMMON STOCK" means the common stock, no par value, of the
Company.
"COMPANY" means Apple Computer, Inc., a California corporation, or
its successor.
"COMMITTEE" means a Committee, if any, appointed by the Board in
accordance with Section 4(a) of the Plan.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
"Continuous Status as an Employee" means the absence of any
interruption or termination of the employment relationship with the Company or
any Subsidiary or Affiliated Company. 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 or Affiliated
Company, 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, its successor or its Affiliated
Companies;
4
<PAGE>
"DIRECTOR" means a member of the Board.
"EMPLOYEE" means any person, employed by and on the payroll of the
Company, any Subsidiary or any Affiliated Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FAIR MARKET VALUE" means 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 National
Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System), 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 system or exchange (or the exchange with
the greatest volume of trading in the Common Stock) for 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 on the NASDAQ System (but
not on the National Market System) or quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value shall
be the mean between the high 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.
(iii) In the absence of an established market for the Common Stock, the Fair
Market Value thereof shall be determined in good faith by the
Administrator.
"NONSTATUTORY STOCK OPTION" means an Option that is not intended
to be an incentive stock option within the meaning of Section 422 of the Code.
"OFFICER" means any individual designated by the Board as an
elected officer of the Company.
"OPTION" means an option granted pursuant to the Plan.
"OPTIONED STOCK" means the Common Stock subject to an Option or
SAR.
"OPTIONEE" means an Employee who receives an Option or SAR.
"PARENT" corporation shall have the meaning defined in Section
424(e) of the Code.
"PLAN" means this Apple Computer, Inc. 1997 Employee Stock Option
Plan.
"SAR" means a stock appreciation right granted pursuant to Section
9 below.
"SECTION 3 LIMIT" shall have the meaning set forth in Section 3 of
the Plan.
"SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.
5
<PAGE>
"SIXTY-DAY PERIOD " shall have the meaning set forth in Section
12(f) of the Plan.
"SUBSIDIARY" corporation has the meaning defined in Section 424(f)
of the Code.
"TAX DATE" shall have the meaning set forth in Section 9 of the
Plan.
3. STOCK SUBJECT TO THE PLAN.
(a) LIMIT. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan or for which SARs may be granted and exercised is 21,500,000
Shares (the "SECTION 3 LIMIT"). 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.
(b) RULES APPLICABLE TO THE CALCULATION OF THE SECTION 3 LIMIT.
In calculating the number of Shares available for issuance under the Plan, the
following rules shall apply:
(i) The Section 3 Limit shall be reduced by the number of
Shares of Optioned Stock subject to each outstanding Option or
freestanding SAR.
(ii) The Section 3 Limit shall be increased by the number of
Shares of Optioned Stock subject to the portion of an Option or SAR that
expires unexercised or is forfeited for any reason.
(iii) The Section 3 Limit shall be increased by the number of
Shares tendered to pay the exercise price of an Option or the number of
Shares of Optioned Stock withheld to satisfy an Optionee's tax liability
in connection with the exercise of an Option or SAR.
(iv) Option Stock subject to both an outstanding Option and SAR
granted in connection with the Option shall be counted only once in
calculating the Section 3 Limit.
4. ADMINISTRATION OF THE PLAN.
(a) COMPOSITION OF ADMINISTRATOR. The Plan may be administered
by (i) the Board or (ii) a Committee designated by the Board, which Committee
shall be constituted in such a manner as to satisfy the applicable securities
laws, California corporate law and the Code (collectively, "APPLICABLE LAWS").
Once a Committee has been appointed pursuant to this
Section 4(a), such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefor, fill
vacancies (however caused) and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan and, in the case of the 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 of the
Common Stock in accordance with the Plan; (ii) to determine, in accordance with
Section 8(a) of the Plan, the exercise price per Share of Options and SARs to be
granted; (iii) to determine the Employees to whom, and the time or times at
which, Options and SARs shall be granted and the number of Shares to be
represented by each Option or SAR (including, without limitation, whether or not
a corporation shall be excluded
6
<PAGE>
from the definition of Affiliated Company); (iv) to construe and interpret
the provisions of the Plan and any agreements or certificates issued under or
in connection with the Plan; (v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or SAR granted
hereunder (including, but not limited to, any restriction or limitation, or
any vesting acceleration or waiver of forfeiture restrictions regarding any
Option or SAR or the Shares relating thereto, based in each case on such
factors as the Administrator shall determine, in its sole discretion); (vi)
to approve forms of agreement for use under the Plan; (vii) to prescribe,
amend and rescind rules and regulations relating to the Plan; (viii) to
modify or amend each Option or SAR or accelerate the exercise date of any
Option or SAR; (ix) to reduce the exercise price of any Option or SAR to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option or SAR shall have declined since the date the Option
or SAR was granted; (x) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Option or SAR
previously granted by the Administrator; and (xi) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
(c) EFFECT OF DECISIONS BY THE ADMINISTRATOR. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options.
5. ELIGIBILITY. The Administrator may grant Options and SARs only to
individuals who are Employees or who are consultants to the Company, or a
Subsidiary or Affiliated Company. In no event may an Option or SAR be granted
to any individual who, at the time of grant, is an Officer or Director. An
Employee who has been granted an Option or SAR may, if he or she is otherwise
eligible, be granted an additional Option or Options, SAR or SARs. Each Option
shall be evidenced by a written Option agreement, which shall be in such form
and contain such provisions as the Administrator shall from time to time deem
appropriate. Without limiting the foregoing, the Administrator may, at any
time, or from time to time, authorize the Company, with the consent of the
respective recipients, to issue new Options or Options in exchange for the
surrender and cancellation of any or all outstanding Options, other options,
SARs or other stock appreciation rights.
Neither the Plan nor any Option or SAR agreement shall confer upon any
Optionee any right with respect to continuation of employment by the Company (or
any Parent, Subsidiary or Affiliated Company), nor shall it interfere in any way
with the Optionee's right or the right of the Company (or any Parent, Subsidiary
or Affiliated Company) to terminate the Optionee's employment at any time or for
any reason.
If an Option or SAR is granted to an individual who is a consultant to
the Company or any Subsidiary or Affiliate, all references in the Plan to
"Employee" shall be deemed to include the term "consultant" and all references
in the Plan to "employment," "Continuous Status as an Employee" and
"termination of employment" shall be deemed to refer to the individual's
consultancy or status as a consultant.
6. TERM OF PLAN. The Plan shall become effective upon its adoption
by the Board. It shall continue in effect for a term of ten years unless sooner
terminated under Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
Option agreement.
8. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per Share exercise price for the
Shares issuable pursuant to an Option shall be such price as is determined by
the Administrator, but shall in no event be less than 100% of the Fair Market
7
<PAGE>
Value of Common Stock, determined as of the date of grant of the Option. In
the event that the Administrator shall reduce the exercise price, the exercise
price shall be no less than 100% of the Fair Market Value as of the date of
that reduction.
(b) METHOD OF PAYMENT. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator and may consist of (i) cash, (ii)
check, (iii) promissory note, (iv) other Shares which 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) delivery of a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds required to pay the
exercise price, or (vi) any combination of the foregoing methods of payment
and/or any other consideration or method of payment as shall be permitted under
applicable corporate law.
9. 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 an SAR; PROVIDED, HOWEVER, that such limit shall
not restrict the exercisability of the related Option.
(ii) When an SAR is exercised, the related Option, to the extent
surrendered, shall no longer be exercisable.
(iii) An 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.
(iv) An 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 an SAR.
(ii) SARs shall be exercisable, in whole or in part, at such times as
the Administrator shall specify in the Optionee's SAR agreement.
8
<PAGE>
(c) FORM OF PAYMENT. The Company's obligation arising upon the
exercise of an 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 an SAR shall be valued at their
Fair Market Value as of the date of exercise.
10. METHOD OF EXERCISE.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option or SAR granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator and as shall be permissible
under the terms of the Plan.
An Option or SAR shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option or SAR by the person entitled to exercise the Option or SAR
and full payment for the Shares with respect to which the Option is exercised
has been received by the Company. Full payment may, as authorized by the
Administrator and permitted by the Option agreement, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, 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. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 12 of the Plan. An Option
or SAR may not be exercised with respect to a fraction of a Share.
(b) 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 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) DEATH OF OPTIONEE. In the event of the death of an
Optionee:
(i) Who is at the time of death an Employee and who shall have been in
Continuous Status as an Employee since the date of grant of the Option,
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 days after the termination of Continuous Status as
an Employee, 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 had accrued at the date of 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.
9
<PAGE>
(d) STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS.
When an Optionee incurs tax liability in connection with the exercise of an
Option or SAR, 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 (including, at the election of the Optionee, any
additional amount which the Optionee desires to have withheld in order to
satisfy in whole or in part the Optionee's full estimated tax in connection with
the exercise) 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, if any, that number of Shares having a Fair Market Value equal to the
amount required to be withheld (and any additional amount desired to be
withheld, as aforesaid). 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:
(i) the election must be made on or prior to the applicable Tax
Date; and
(ii) all elections shall be subject to the consent or
disapproval of the Administrator.
11. NON-TRANSFERABILITY OF OPTIONS. Options and SARs 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 I of the
Employee Retirement Income Security Act, or the rules thereunder; PROVIDED,
HOWEVER, that the Administrator may grant Nonstatutory Stock Options that are
freely transferable. The designation of a beneficiary by an Optionee or holder
of an SAR does not constitute a transfer. An Option or an SAR may be exercised,
during the lifetime of the Optionee or SAR holder, only by the Optionee or SAR
holder or by a transferee permitted by this Section 11.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of Shares covered by each
outstanding Option and SAR, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options or SARs have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Option or SAR, as well as the price per Share covered by each such
outstanding Option or SAR, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares 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 aggregate number of issued
Shares 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 Administrator, 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 subject to an Option or SAR.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Options and SARs will
terminate immediately prior to the consummation of such proposed action, unless
10
<PAGE>
otherwise provided by the Administrator. The Administrator may, in the
exercise of its sole discretion in such instances, declare that any Option or
SAR shall terminate as of a date fixed by the Administrator and give each
Optionee the right to exercise his or her Option or SAR as to all or any part
of the Optioned Stock or SAR, including Shares as to which the Option or SAR
would not otherwise be exercisable.
(c) SALE OF ASSETS OR MERGER. Subject to the provisions of
Section 12(d), in the event of a proposed sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation, each outstanding Option and SAR shall be assumed or an equivalent
option or stock appreciation right shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Administrator determines, in the exercise of its sole discretion and in lieu of
such assumption or substitution, that the Optionee shall have the right to
exercise the Option or SAR as to all of the Optioned Stock, including Shares as
to which the Option or SAR would not otherwise be exercisable. If the
Administrator makes an Option or SAR fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Company shall
notify the Optionee that the Option or SAR shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option or SAR
will terminate upon the expiration of such period. For purposes of this
paragraph, an Option granted under the Plan shall be deemed to be assumed if,
following the sale of assets or merger, the Option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the sale of assets or merger, the consideration (whether stock, cash or
other securities or property) received in the sale of assets or merger by
holders of Common Stock for each Share held on the effective date of the
transaction (and if such 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 sale of
assets or merger was not solely Common Stock of the successor corporation or its
parent, the Administrator may, with the consent of the successor corporation and
the participant, provide for the per share consideration to be received upon
exercise of te Option 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 sale of assets or merger.
(d) CHANGE IN CONTROL. In the event of a "Change in Control"
of the Company, as defined in Section 12(e), 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 and SARs 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 and SARs shall, unless
otherwise determined by the Administrator at or after grant, be
cashed-out. The amount at which such Options and SARs 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 or SAR. 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 or SAR by bequest or inheritance.
(e) "DEFINITION OF "CHANGE IN CONTROL". For purposes of this
Section 12, 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
11
<PAGE>
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 12,
"Change in Control Price" shall be, as determined by the Administrator, (i) the
highest Fair Market Value at any time within the sixty-day period immediately
preceding the date of determination of the Change in Control Price by the
Administrator (the "SIXTY-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 Sixty-Day Period.
13. TIME OF GRANTING OPTIONS AND SARS. The date of grant of an Option
or SAR shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option or SAR. Notice of the determination shall be
given to each Employee to whom an Option or SAR is so granted within a
reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time
amend, alter, suspend or terminate the Plan, as it may deem advisable.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment,
alteration, suspension or termination of the Plan shall not impair the rights of
any Optionee or SAR holder under any grant theretofore made without his or her
consent. Such Options and SARs shall remain in full force and effect as if this
Plan had not been amended or terminated.
15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
with respect to an Option or SAR unless the exercise of such Option or SAR and
the issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange or quotation system upon
which the Shares may then be listed or quoted, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option or SAR or the issuance
of Shares upon exercise of an Option or SAR, the Company may require the person
exercising such Option or SAR 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 by any of the
aforementioned relevant provisions of law.
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 non-issuance or sale of
such Shares as to which such requisite authority shall not have been obtained.
16. 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.
17. 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.
12
<PAGE>
EXHIBIT 10.A.51
APPLE COMPUTER, INC.
1998 EXECUTIVE OFFICER STOCK PLAN
(AS AMENDED THROUGH 5/3/00)
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
13
<PAGE>
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.
14
<PAGE>
(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.
(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 19,000,000 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.
15
<PAGE>
(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;
(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
16
<PAGE>
(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 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 17,000,000 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.
17
<PAGE>
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.
(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.
18
<PAGE>
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.
(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.
19
<PAGE>
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 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.
20
<PAGE>
(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.
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 (including, at the election of the Optionee, any
additional amount which the Optionee desires to have withheld in order to
satisfy in whole or in part the Optionee's full estimated tax in connection with
the exercise) 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 (and any additional
amount desired to be withheld, as aforesaid). 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:
(i) the election must be made on or prior to the applicable Tax Date;
and
21
<PAGE>
(ii) 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 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
22
<PAGE>
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
succesor 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
(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.
23
<PAGE>
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.
24
<PAGE>
Exhibit 23.3
Consent of Independent Auditors
The Board of Directors
Apple Computer, Inc.:
We consent to incorporation by reference in the registration statement on
Form S-8 of Apple Computer, Inc. of our report dated October 11, 1999,
relating to the consolidated balance sheets of Apple Computer, Inc. and
subsidiaries as of September 25, 1999 and 1998, and the related consolidated
statements of operations, shareholders equity, and cash flows for each of the
years in the three-year period ended September 25, 1999, and the related
schedule, which report appears in the September 25, 1999, annual report on
Form 10-K of Apple Computer, Inc.
/S/ KPMG LLP
Mountain View, California
May 12, 2000
25
