{"id":38447,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/2003-employee-stock-option-plan.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"2003-employee-stock-option-plan","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/2003-employee-stock-option-plan.html","title":{"rendered":"2003 Employee Stock Option Plan"},"content":{"rendered":"
APPLE COMPUTER,\nINC.<\/b>
\n2003 Employee Stock Option Plan<\/b>
\n(April 24, 2003)<\/b><\/p>\n\n\n\n
1.                                       Purposes of\nthe Plan<\/i>.<\/b>  The purposes of this Stock Plan are:<\/p>\n\n\n\n
\u0095                  to attract and retain the best\navailable personnel<\/p>\n\n\n\n
\u0095                  to provide additional incentive to\nEmployees and the Chairman; and<\/p>\n\n\n\n
\u0095                  to promote the success of the\nCompany\u0092s business.<\/p>\n\n\n\n
Options\ngranted under the Plan may be Incentive Stock Options (as defined under Section\n422 of the Code) or Nonstatutory Stock Options, as determined by the\nAdministrator at the time of grant. Stock appreciation rights (\u0093SARs\u0094) may be\ngranted under the Plan in connection with Options or independently of Options.\nStock Purchase Rights may also be granted under the Plan.<\/p>\n\n\n\n
2.                                       Definitions.<\/i><\/b>  As\nused herein, the following definitions shall apply:<\/p>\n\n\n\n
(a)                                  \u0093Administrator\u0094<\/i>  means the Board or any of its\nCommittees as shall be administering the Plan, in accordance with Section 4 of\nthe Plan.<\/p>\n\n\n\n
(b)                                 \u0093Agreement\u0094<\/i>  means an agreement between the Company and\nan Optionee evidencing the terms and conditions of an individual Option, SAR or\nStock Purchase Right grant. The Agreement is subject to the terms and\nconditions of the Plan.<\/p>\n\n\n\n
(c)                                  \u0093Applicable Laws\u0094<\/i>  means the requirements relating\nto the administration of stock option plans under U.S. state corporate laws,\nU.S. federal and state securities laws, the Code, any stock exchange or\nquotation system on which the Common Stock is listed or quoted and the\napplicable laws of any foreign country or jurisdiction where Options, SARs or\nStock Purchase Rights are, or will be, granted under the Plan.<\/p>\n\n\n\n
(d)                                 \u0093Board\u0094<\/i>  means the Board of Directors of the Company.<\/p>\n\n\n\n
1\n<\/p>\n\n\n
(e)                                  \u0093Chairman\u0094<\/i>  means the Chairman of the Board.<\/p>\n\n\n\n
(f)                                    \u0093Code\u0094<\/i>  means the Internal Revenue Code of 1986, as\namended.<\/p>\n\n\n\n
(g)                                 \u0093Committee\u0094<\/i>  means a committee of Directors appointed by\nthe Board in accordance with Section 4 of the Plan.<\/p>\n\n\n\n
(h)                                 \u0093Common Stock\u0094 <\/i>means the common stock of the Company.<\/p>\n\n\n\n
(i)                                     \u0093Company\u0094<\/i>\nmeans Apple Computer, Inc., a California corporation.<\/p>\n\n\n\n
(j)                                     \u0093Continuous Status as Chairman\u0094<\/i>  unless\ndetermined otherwise by the Administrator, means the absence of any\ninterruption or termination as Chairman of the Board with the Company.\nContinuous Status as Chairman shall not be considered interrupted in the case\nof medical leave, military leave, family leave, or any other leave of absence\napproved by the Administrator, provided, in each case, that such leave does not\nresult in termination as Chairman with the Company. Neither service as a\nDirector nor payment of a director\u0092s fee by the Company shall be sufficient to\nconstitute status as \u0093Chairman\u0094 by the Company.<\/p>\n\n\n\n
(k)                                  \u0093Continuous Status as an Employee\u0094<\/i> means the absence of any interruption or\ntermination of the employment relationship with the Company or any Subsidiary. Continuous\nStatus as an Employee shall not be considered interrupted in the case of (i)\nmedical leave, military leave, family leave, or any other leave of absence\napproved by the Administrator, provided, in each case, that such leave does not\nresult in termination of the employment relationship with the Company or any\nSubsidiary, as the case may be, under the terms of the respective Company\npolicy for such leave; however, vesting may be tolled while an employee\nis on an approved leave of absence under the terms of the respective Company\npolicy for such leave; or (ii) in the case\nof transfers between locations of the Company or between the Company, its\nSubsidiaries, or its successor. For purposes of Incentive Stock Options,\nno such leave may exceed ninety days, unless reemployment upon expiration of\nsuch leave is guaranteed by statute or contract. If reemployment upon\nexpiration of a leave of absence approved by the Company is not so guaranteed,\non the 91st<\/sup> day of such leave any Incentive Stock Option held by the\nOptionee shall cease to be treated as an Incentive Stock Option and shall be\ntreated for tax purposes as a Nonstatutory Stock Option. Neither service as a\nChairman nor as a Director nor payment of a director\u0092s fee by the Company shall\nbe sufficient to constitute \u0093employment\u0094 by the Company.<\/p>\n\n\n\n
(l)                                     \u0093Director\u0094<\/i>  means a member of the Board.<\/p>\n\n\n\n
2<\/p>\n\n\n\n
(m)                               \u0093Employee\u0094<\/i>  means any person employed by the Company or\nany Parent or Subsidiary of the Company subject to (k) above.<\/p>\n\n\n\n
(n)                                 \u0093Exchange Act\u0094<\/i>  means the Securities Exchange Act of 1934,\nas amended.<\/p>\n\n\n\n
3\n<\/p>\n\n\n
(o)                                 \u0093Fair Market Value\u0094<\/i>  means, as of any date, the value\nof Common Stock determined as follows:<\/p>\n\n\n\n
(i)                                     If the Common Stock is listed on any established\nstock exchange or a national market system, including without limitation the\nNasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock\nMarket, its Fair Market Value shall be the closing sales price for such stock\n(or the closing bid, if no sales were reported) as quoted on such exchange or\nsystem, on the date of determination or, if the date of determination is not a\ntrading day, the immediately preceding trading day, as reported in The Wall\nStreet Journal<\/i> or such other source as the Administrator deems\nreliable;<\/p>\n\n\n\n
(ii)                                  If the Common Stock is regularly quoted by a\nrecognized securities dealer but selling prices are not reported, the Fair\nMarket Value of a Share of Common Stock shall be the mean between the high bid\nand low asked prices for the Common Stock on the date of determination or, if\nthere are no quoted prices on the date of determination, on the last day on\nwhich there are quoted prices prior to the date of determination, as reported\nin The\nWall Street Journal<\/i> or such other source as the Administrator deems\nreliable; or<\/p>\n\n\n\n
(iii)                               In the absence of an established market for the Common Stock, the Fair\nMarket Value shall be determined in good faith by the Administrator.<\/p>\n\n\n\n
(p)                                 \u0093Incentive Stock Option\u0094<\/i>  means an Option intended to\nqualify as an incentive stock option within the meaning of Section 422 of the\nCode and the regulations promulgated thereunder and is expressly designated by\nthe Administrator at the time of grant as an incentive stock option.<\/p>\n\n\n\n
(q)                                 \u0093Nonstatutory Stock Option\u0094<\/i>  means an\nOption not intended to qualify as an Incentive Stock Option.<\/p>\n\n\n\n
(r)                                    \u0093Option\u0094<\/i>  means a stock option granted pursuant to the\nPlan.<\/p>\n\n\n\n
(s)                                  \u0093Optioned Stock<\/i>\u0094 means the Common Stock subject to an Option, SAR or Stock Purchase\nRight.<\/p>\n\n\n\n
(t)                                    \u0093Optionee\u0094<\/i>  means the holder of an outstanding Option,\nSAR or Stock Purchase Right.<\/p>\n\n\n\n
4\n<\/p>\n\n\n
(u)                                 \u0093Parent\u0094<\/i>  means a \u0093parent corporation,\u0094 whether now or\nhereafter existing, as defined in Section 424(e) of the Code.<\/p>\n\n\n\n
(v)                                 \u0093Plan\u0094<\/i>  means this 2003 Employee Stock Option Plan.<\/p>\n\n\n\n
(w)                               \u0093Restricted Stock\u0094<\/i>  means shares of Common Stock\nacquired pursuant to a grant of Stock Purchase Rights under Section 12 of the\nPlan.<\/p>\n\n\n\n
(x)                                   \u0093Rule 16b-3\u0094<\/i>  means Rule 16b-3 of the Exchange Act or any\nsuccessor to Rule 16b-3, as in effect when discretion is being exercised with\nrespect to the Plan.<\/p>\n\n\n\n
(y)                                 \u0093SAR\u0094<\/i>  means a stock appreciation right granted\npursuant to Section 10 below.<\/p>\n\n\n\n
(z)                                   \u0093Section 16(b)\u0094<\/i>  means Section 16(b) of the Exchange Act.<\/p>\n\n\n\n
(aa)                            \u0093Share\u0094<\/i>  means a share of the Common Stock, as\nadjusted in accordance with Section 15 of the Plan.<\/p>\n\n\n\n
(bb)                          \u0093Stock Purchase Right\u0094<\/i>  means the right to purchase\nCommon Stock pursuant to Section 12 of the Plan, as evidenced by an Agreement.<\/p>\n\n\n\n
(cc)                            \u0093Subsidiary\u0094<\/i>  means a \u0093subsidiary corporation\u0094, whether now\nor hereafter existing, as defined in Section 424(f) of the Code.<\/p>\n\n\n\n
3.                                       Stock Subject\nTo The Plan.<\/i><\/b>  Subject\nto the provisions of Section 15 of the Plan, the maximum aggregate number of\nShares which may be optioned and sold under the Plan or for which SARs or Stock\nPurchase Rights may be granted and exercised is 48,000,000 Shares. The Shares\nmay be authorized, but unissued, or reacquired Common Stock.<\/p>\n\n\n\n
In\nthe discretion of the Administrator, any or all of the Shares authorized under\nthe Plan may be subject to SARs issued pursuant to the Plan.<\/p>\n\n\n\n
If\nan Option, SAR or Stock Purchase Right issued under the Plan should expire or\nbecome unexercisable for any reason without having been exercised in full, the\nunpurchased Shares which were subject thereto shall become available for other\nOptions, SARs or Stock Purchase Rights under this Plan (unless the Plan has\nterminated); however, should the Company reacquire Shares which were issued\npursuant to the exercise of an Option or SAR, such Shares shall not become\navailable for future grant under the Plan. If Shares of Restricted Stock are\nrepurchased by the Company at their original purchase price, such shares<\/p>\n\n\n\n
5\n<\/p>\n\n\n
shall\nbecome available for future grant under the Plan.<\/p>\n\n\n\n
4.                                       Administration\nof the Plan<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Procedure<\/i>.<\/p>\n\n\n\n
(i)                                     Multiple Administrative Bodies<\/i>.  If\npermitted by Rule 16b-3 promulgated under the Exchange Act or any successor\nrule thereto, as in effect at the time that discretion is being exercised with\nrespect to the Plan, and by the legal requirements of the Applicable Laws\nrelating to the administration of stock plans such as the Plan, if any, the\nPlan may (but need not) be administered by different administrative bodies with\nrespect to (A) Directors who are not Employees, (B) Directors who are\nEmployees, (C) Officers who are not Directors and (D) Employees who are neither\nDirectors nor Officers.<\/p>\n\n\n\n
(ii)                                  Section 162(m)<\/i>.  To the\nextent that the Administrator determines it to be desirable to qualify Options\nor SARs granted hereunder as \u0093performance-based compensation\u0094 within the\nmeaning of Section 162(m) of the Code, the Plan shall be administered by a\nCommittee of two or more \u0093outside directors\u0094 within the meaning of Section 162(m)\nof the Code.<\/p>\n\n\n\n
(iii)                               Rule 16b-3<\/i>.  To the\nextent desirable to qualify transactions hereunder as exempt under Rule 16b-3,\nthe transactions contemplated hereunder shall be structured to satisfy the\nrequirements for exemption under Rule 16b-3.<\/p>\n\n\n\n
(iv)                              Other Administration<\/i>.  Other\nthan as provided above, the Plan shall be administered by (A) the Board or (B)\na Committee, which committee shall be constituted to satisfy Applicable Laws.<\/p>\n\n\n\n
(b)                                 Powers of the Administrator<\/i>.  Subject\nto the provisions of the Plan, and in the case of a Committee, subject to the\nspecific duties delegated by the Board to such Committee, the Administrator\nshall have the authority, in its discretion:<\/p>\n\n\n\n
(i)                                     to determine the Fair Market Value;<\/p>\n\n\n\n
(ii)                                  to\nselect the person(s) to whom Options, SARs and Stock Purchase Rights may be\ngranted hereunder;<\/p>\n\n\n\n
6<\/p>\n\n
(iii)                               to determine the number of shares of Common Stock to be covered by each\nOption, SAR or Stock Purchase Right granted hereunder;<\/p>\n\n\n\n
(iv)                              to approve forms of agreement for use under the Plan;<\/p>\n\n\n\n
(v)                                 to determine the terms and conditions, not\ninconsistent with the terms of the Plan, of any Option, SAR or Stock Purchase\nRight granted hereunder. Such terms and conditions include, but are not limited\nto, the exercise price, the date of grant, the time or times when Options, SARs\nor Stock Purchase Rights may be exercised (which may be based on performance\ncriteria), any vesting acceleration or waiver of forfeiture restrictions, and\nany restriction or limitation regarding any Option, SAR or Stock Purchase Right\nor the shares of Common Stock relating thereto, based in each case on such\nfactors as the Administrator, in its sole discretion, shall determine;<\/p>\n\n\n\n
7<\/p>\n\n
(vi)                              to reduce the exercise price of any Option, SAR or Stock Purchase Right\nto the then current Fair Market Value if the Fair Market Value of the Common\nStock covered by such Option, SAR or Stock Purchase Right shall have declined\nsince the date the Option, SAR or Stock Purchase Right was granted; however,\nthe Administrator may not \u0093reprice\u0094 options, including 6-months-plus-1-day\noption exchange programs, without shareholder approval.<\/p>\n\n\n\n
(vii)                           to construe and interpret the terms of the Plan and awards granted pursuant\nto the Plan;<\/p>\n\n\n\n
(viii)                        to prescribe, amend and rescind rules and regulations relating to the\nPlan, including rules and regulations relating to sub-plans established for the\npurpose of qualifying for preferred tax treatment under foreign tax laws;<\/p>\n\n\n\n
(ix)                                to modify or amend each Option, SAR or Stock Purchase Right (subject to\nSection 17(c) of the Plan), including the discretionary authority to extend the\npost-termination exercisability period of Options longer than is otherwise\nprovided for in the Plan;<\/p>\n\n\n\n
(x)                                   to allow Optionees to satisfy withholding tax\nobligations by electing to have the Company withhold from the Shares to be\nissued upon exercise of an Option, SAR or Stock Purchase Right that number of\nShares having a Fair Market Value equal to the amount required to be\nwithheld.  The Fair Market Value of the\nShares to be withheld shall be determined on the date that the amount of tax to\nbe withheld is to be determined. All elections by an Optionee to have Shares\nwithheld for this purpose shall be made in such form and under such conditions\nas the Administrator may deem necessary or advisable;<\/p>\n\n\n\n
(xi)                                to authorize any person to execute on behalf of the Company any\ninstrument required to effect the grant of an Option, SAR or Stock Purchase\nRight previously granted by the Administrator; and<\/p>\n\n\n\n
(xii)                             to make all other determinations deemed necessary or advisable for\nadministering the Plan.<\/p>\n\n\n\n
(c)                                  Effect of Administrator\u0092s Decision<\/i>.  The\nAdministrator\u0092s decisions, determinations and interpretations shall be final\nand binding on all Optionees and any other holders of Options, SARs or Stock\nPurchase Rights.<\/p>\n\n\n\n
5.                                       Eligibility<\/i>.<\/b>  Nonstatutory Stock Options, SARs and Stock\nPurchase Rights may be granted to Employees and the Chairman or to such other\nindividuals as <\/p>\n\n\n\n
8<\/p>\n\n\n
determined\nby the Administrator whom the Company has offered a position of Chairman or\nEmployee. Incentive Stock Options may be granted only to Employees.<\/p>\n\n\n\n
9<\/p>\n\n\n
6.                                       Limitations<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Each Option shall be designated in the Agreement\nas either an Incentive Stock Option or a Nonstatutory Stock Option. However,\nnotwithstanding such designation, to the extent that the aggregate Fair Market\nValue of the Shares with respect to which Incentive Stock Options are\nexercisable for the first time by the Optionee during any calendar year (under\nall plans of the Company and any Parent or Subsidiary) exceeds $100,000, such\nOptions shall be treated as Nonstatutory Stock Options. For purposes of this\nSection 6(a), Incentive Stock Options shall be taken into account in the order\nin which they were granted. The Fair Market Value of the Shares shall be\ndetermined as of the time the Option with respect to such Shares is granted.<\/p>\n\n\n\n
(b)                                 Neither the Plan nor any Option, SAR or Stock\nPurchase Right shall confer upon an Optionee any right with respect to\ncontinuing the Optionee\u0092s relationship as an Employee with or Chairman of the\nCompany, nor shall they interfere in any way with the Optionee\u0092s right or the\nCompany\u0092s right to terminate such relationship at any time, with or without\ncause.<\/p>\n\n\n\n
(c)                                  The following limitations shall apply to grants\nof Options and SARs:<\/p>\n\n\n\n
(i)                                     No participant shall be granted, in any fiscal\nyear of the Company, Options or SARs to purchase more than 34,000,000 Shares;<\/p>\n\n\n\n
(ii)                                  The foregoing limitations shall be adjusted\nproportionately in connection with any change in the Company\u0092s capitalization\nas described in Section 15;<\/p>\n\n\n\n
(iii)                               If an Option or SAR is canceled in the same fiscal year of the Company in\nwhich it was granted (other than in connection with a transaction described in\nSection 15), the canceled Option will be counted against the limits set forth\nin subsections (i) above. For this purpose, if the exercise price of an Option\nor SAR is reduced, the transaction will be treated as a cancellation of the\nOption or SAR and the grant of a new Option or SAR.<\/p>\n\n\n\n
7.                                       Term of Plan<\/i>.<\/b>  Subject to Section 21 of the Plan, the Plan\nshall become effective upon its adoption by the Board. It shall continue in\neffect for a term of ten (10) years unless terminated earlier under Section 16\nof the Plan.<\/p>\n\n\n\n
8.                                       Term of Option<\/i>.<\/b>  The term of each Option shall be stated in\nthe Agreement. In the case of an Incentive Stock Option, the term shall be ten\n(10) years from the date of grant or such shorter term as may be provided in\nthe<\/p>\n\n\n\n
10<\/p>\n\n\n
Agreement.\nMoreover, in the case of an Incentive Stock Option granted to an Optionee who,\nat the time the Incentive Stock Option is granted, owns stock representing more\nthan ten percent (10%) of the total combined voting power of<\/p>\n\n\n\n
11<\/p>\n\n\n
all\nclasses of stock of the Company or any Parent or Subsidiary, the term of the\nIncentive Stock Option shall be five (5) years from the date of grant or such\nshorter term as may be provided in the Agreement.<\/p>\n\n\n\n
9.                                       Option\nExercise Price and Consideration<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Exercise Price<\/i>.  The per share exercise price for the Shares\nto be issued pursuant to exercise of an Option shall be determined by the\nAdministrator, subject to the following:<\/p>\n\n\n\n
(i)                                     In the case of an Incentive Stock Option;<\/p>\n\n\n\n
(A)                              granted to an Employee who, at the time the Incentive Stock Option is\ngranted, owns stock representing more than ten percent (10%) of the voting\npower of all classes of stock of the Company or any Parent or Subsidiary, the\nper Share exercise price shall be no less than 110% of the Fair Market Value\nper Share on the date of grant; or<\/p>\n\n\n\n
(B)                                granted to any Employee other than an Employee described in paragraph (A)\nimmediately above, the per Share exercise price shall be no less than 100% of\nthe Fair Market Value per Share on the date of grant;<\/p>\n\n\n\n
(ii)                                  In the case of a Nonstatutory Stock Option, the\nper Share exercise price shall be determined by the Administrator. In the case\nof a Nonstatutory Stock Option intended to qualify as \u0093performance-based\ncompensation\u0094 within the meaning of Section 162(m) of the Code, the per Share\nexercise price shall be no less than 100% of the Fair Market Value per Share on\nthe date of grant;<\/p>\n\n\n\n
(iii)                               Notwithstanding the foregoing, Options may be granted with a per Share\nexercise price of less than 100% of the Fair Market Value per Share on the date\nof grant as determined by the Administrator or pursuant to a merger or other\ncorporate transaction.<\/p>\n\n\n\n
(b)                                 Waiting Period and Exercise Dates<\/i>.  At the\ntime an Option is granted, the Administrator shall fix the period within which\nthe Option may be exercised and shall determine any conditions which must be\nsatisfied before the Option may be exercised.<\/p>\n\n\n\n
12<\/p>\n\n\n
(c)                                  Form of Consideration<\/i>.  The Administrator shall\ndetermine the acceptable form of consideration for exercising an Option,\nincluding the method of payment. In the case of an Incentive Stock Option, the\nAdministrator shall determine the acceptable form of consideration at the time\nof grant. Such consideration may consist entirely of:<\/p>\n\n\n\n
(i)                                     cash;<\/p>\n\n\n\n
(ii)                                  check;<\/p>\n\n\n\n
(iii)                               promissory note;<\/p>\n\n\n\n
(iv)                              other Shares which (A) in the case of Shares acquired upon exercise of an\noption, have been owned by the Optionee for more than six months on the date of\nsurrender, and (B) have a Fair Market Value on the date of surrender equal to\nthe aggregate exercise price of the Shares as to which said Option shall be\nexercised;<\/p>\n\n\n\n
(v)                                 consideration received by the Company under a\ncashless exercise program implemented by the Company in connection with the\nPlan;<\/p>\n\n\n\n
(vi)                              a reduction in the amount of any Company liability to the Optionee,\nincluding any liability attributable to the Optionee\u0092s participation in any\nCompany-sponsored deferred compensation program or arrangement;<\/p>\n\n\n\n
(vii)                           any combination of the foregoing methods of\npayment; or<\/p>\n\n\n\n
(viii)                        such other consideration and method of payment for the issuance of Shares\nto the extent permitted by Applicable Laws.<\/p>\n\n\n\n
10.                                 Stock\nAppreciation Rights<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Granted in Connection with Options<\/i>.  At the\nsole discretion of the Administrator, SARs may be granted in connection with\nall or any part of an Option, either concurrently with the grant of the Option\nor at any time thereafter during the term of the Option. The following\nprovisions apply to SARs that are granted in connection with Options:<\/p>\n\n\n\n
(i)                                     The SAR shall entitle the Optionee to exercise\nthe SAR by surrendering to the Company unexercised a portion of the related\nOption.  The Optionee shall receive in\nexchange from the Company an amount equal to the excess of (x) the Fair Market\nValue on the date of exercise of<\/p>\n\n\n\n
13<\/p>\n\n\n
the\nSAR of the Common Stock covered by the surrendered portion of the related\nOption over (y) the exercise price of the Common Stock covered<\/p>\n\n\n\n
14<\/p>\n\n\n
by\nthe surrendered portion of the related Option. Notwithstanding the foregoing,\nthe Administrator may place limits on the amount that may be paid upon exercise\nof a SAR; provided, however, that such limit shall not restrict the\nexercisability of the related Option;<\/p>\n\n\n\n
(ii)                                  When a SAR is exercised, the related Option, to\nthe extent surrendered, shall no longer be exercisable;<\/p>\n\n\n\n
(iii)                               A SAR shall be exercisable only when and to the extent that the related\nOption is exercisable and shall expire no later than the date on which the\nrelated Option expires; and<\/p>\n\n\n\n
(iv)                              A SAR may only be exercised at a time when the Fair Market Value of the\nCommon Stock covered by the related Option exceeds the exercise price of the\nCommon Stock covered by the related Option.<\/p>\n\n\n\n
(b)                                 Independent SARs.<\/i>  At the sole discretion of the\nAdministrator, SARs may be granted without related Options. The following\nprovisions apply to SARs that are not granted in connection with Options:<\/p>\n\n\n\n
(i)                                     The SAR shall entitle the Optionee, by exercising\nthe SAR, to receive from the Company an amount equal to the excess of (x) the\nFair Market Value of the Common Stock covered by exercised portion of the SAR,\nas of the date of such exercise, over (y) the Fair Market Value of the Common\nStock covered by the exercised portion of the SAR, as of the date on which the\nSAR was granted; provided, however, that the Administrator may place limits on\nthe amount that may be paid upon exercise of a SAR; and<\/p>\n\n\n\n
(ii)                                  SARs shall be exercisable, in whole or in part,\nat such times as the Administrator shall specify in the Optionee\u0092s Agreement.<\/p>\n\n\n\n
(c)                                  Form of Payment<\/i>. The Company\u0092s obligation arising upon the exercise of a SAR may be paid\nin Common Stock or in cash, or in any combination of Common Stock and cash, as\nthe Administrator, in its sole discretion, may determine. Shares issued upon\nthe exercise of a SAR shall be valued at their Fair Market Value as of the date\nof exercise.<\/p>\n\n\n\n
(d)                                 Rule 16b-3<\/i>.\nSARs granted hereunder shall contain such additional restrictions as may be\nrequired to be contained in the Plan or Agreement in order for the SAR to\nqualify for the maximum exemption provided by Rule 16b-3.<\/p>\n\n\n\n
15<\/p>\n\n\n
11.                                 Exercise of\nOption or SAR.<\/i><\/b><\/p>\n\n\n\n
(a)                                  Procedure for Exercise; Rights as a Shareholder<\/i>.  Any\nOption or SAR granted hereunder shall be exercisable according to the terms of\nthe Plan and at such times and under such conditions as determined by the\nAdministrator and set forth in the Agreement. An Option may not be exercised\nfor a fraction of a Share.<\/p>\n\n\n\n
An\nOption or SAR shall be deemed exercised when the Company receives: (i) written\nor electronic notice of exercise (in accordance with the terms of the Option or\nSAR) from the person entitled to exercise the Option or SAR, and (ii) full\npayment for the Shares with respect to which the Option is exercised. Full\npayment may consist of any consideration and method of payment authorized by\nthe Administrator and permitted by the Agreement and the Plan. Shares issued\nupon exercise of an Option shall be issued in the name of the Optionee or, if\nrequested by the Optionee, in the name of the Optionee and his or her spouse.\nUntil the Shares are issued (as evidenced by the appropriate entry on the books\nof the Company or of a duly authorized transfer agent of the Company), no right\nto vote or receive dividends or any other rights as a shareholder shall exist\nwith respect to the Optioned Stock, notwithstanding the exercise of the Option.\nThe Company shall issue (or cause to be issued) such Shares promptly after the\nOption is exercised.  No adjustment will\nbe made for a dividend or other right for which the record date is prior to the\ndate the Shares are issued, except as provided in Section 15 of the Plan.<\/p>\n\n\n\n
Exercising\nan Option in any manner shall decrease the number of Shares thereafter\navailable, both for purposes of the Plan and for sale under the Option, by the\nnumber of Shares as to which the Option is exercised.  Exercise of a SAR in any manner shall, to the extent the SAR is\nexercised, result in a decrease in the number of Shares which thereafter shall\nbe available for purposes of the Plan, and the SAR shall cease to be\nexercisable to the extent it has been exercised.<\/p>\n\n\n\n
(b)                                 Termination of Continuous Status as Chairman<\/i>.  Upon\ntermination of an Optionee\u0092s Continuous Status as Chairman (other than\ntermination by reason of the Optionee\u0092s death), the Optionee may, but only\nwithin ninety (90) days after the date of such termination, exercise his or her\nOption or SAR to the extent that it was exercisable at the date of such\ntermination.  Notwithstanding the\nforegoing, however, an Option or SAR may not be exercised after the date the\nOption or SAR would otherwise expire by its terms due to the passage of time\nfrom the date of grant.<\/p>\n\n\n\n
(c)                                  Termination of Continuous Employment<\/i>.  Upon\ntermination of an Optionee\u0092s Continuous Status as Employee (other than\ntermination by reason of<\/p>\n\n\n\n
16<\/p>\n\n\n
the\nOptionee\u0092s death), the Optionee may, but only within ninety (90) days after the\ndate of such termination, exercise his or her Option or SAR to the extent that<\/p>\n\n\n\n
17<\/p>\n\n\n
it\nwas exercisable at the date of such termination.  Notwithstanding the foregoing, however, an Option or SAR may not\nbe exercised after the date the Option or SAR would otherwise expire by its\nterms due to the passage of time from the date of grant.<\/p>\n\n\n\n
(d)                                 Death of Optionee<\/i>.  If an Optionee dies (i) while\nan Employee or Chairman, the Option or SAR may be exercised at any time within\nsix (6) months (or such other period of time not exceeding twelve (12) months as\ndetermined by the Administrator) following the date of death by the Optionee\u0092s\nestate or by a person who acquired the right to exercise the Option by bequest\nor inheritance, but only to the extent of the right to exercise that would have\naccrued had the Optionee continued living and terminated his or her employment\nsix (6) months (or such other period of time not exceeding twelve (12) months\nas determined by the Administrator) after the date of death; or (ii) within\nninety (90) days after the termination of Continuous Status as an Employee or\nChairman, the Option or SAR may be exercised, at any time within six (6) months\n(or such other period of time not exceeding twelve (12) months as determined by\nthe Administrator) following the date of death by the Optionee\u0092s estate or by a\nperson who acquired the right to exercise the Option or SAR by bequest or\ninheritance, but only to the extent of the right to exercise that had accrued\nat the date of termination. If the Option or SAR is not so exercised within the\ntime specified herein, the Option or SAR shall terminate, and the Shares\ncovered by such Option or SAR shall revert to the Plan.<\/p>\n\n\n\n
Notwithstanding\nthe foregoing, however, an Option or SAR may not be exercised after the date\nthe Option or SAR would otherwise expire by its terms due to the passage of\ntime from the date of grant.<\/p>\n\n\n\n
(e)                                  Buyout Provisions<\/i>.  The Administrator may at any\ntime offer to buy out for a payment in cash or Shares an Option or SAR\npreviously granted based on such terms and conditions as the Administrator\nshall establish and communicate to the Optionee at the time that such offer is\nmade.<\/p>\n\n\n\n
12.                                 Stock Purchase\nRights<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Rights to Purchase<\/i>.  Stock Purchase Rights may be\nissued either alone, in addition to, or in tandem with other awards granted\nunder the Plan and\/or cash awards made outside of the Plan. After the\nAdministrator determines that it will offer Stock Purchase Rights under the\nPlan, it shall advise the Optionee in writing or electronically, of the terms,\nconditions and restrictions related to the offer, including the number of\nShares that the Optionee shall be entitled to purchase, the price to be paid,\nand the time within which the Optionee must accept such offer. The offer shall\nbe accepted by execution of an<\/p>\n\n\n\n
18<\/p>\n\n\n
Agreement\nin the form determined by the Administrator.<\/p>\n\n\n\n
(b)                                 Repurchase Option<\/i>.  Unless the Administrator\ndetermines otherwise, the Agreement shall grant the Company a repurchase option\nexercisable upon the voluntary or involuntary termination of the purchaser\u0092s\nservice with the Company for any reason (including death or Disability). The\npurchase price for Shares repurchased pursuant to the Agreement shall be the\noriginal price paid by the purchaser and may be paid by cancellation of any\nindebtedness of the purchaser to the Company. The repurchase option shall lapse\nat a rate determined by the Administrator.<\/p>\n\n\n\n
(c)                                  Other Provisions<\/i>.  The Agreement shall contain\nsuch other terms, provisions and conditions not inconsistent with the Plan as\nmay be determined by the Administrator in its sole discretion.<\/p>\n\n\n\n
(d)                                 Rights as a Shareholder<\/i>.  Once the Stock Purchase Right\nis exercised, the purchaser shall have the rights equivalent to those of a\nshareholder, and shall be a shareholder when his or her purchase is entered\nupon the records of the duly authorized transfer agent of the Company. No\nadjustment will be made for a dividend or other right for which the record date\nis prior to the date the Stock Purchase Right is exercised, except as provided\nin Section 15 of the Plan.<\/p>\n\n\n\n
13.                                 Transferability\nof Options, SARs and Stock Purchase Rights<\/i>.<\/b>  Unless determined otherwise by the\nAdministrator, an Option, SAR or Stock Purchase Right may not be sold, pledged,\nassigned, hypothecated, transferred, or disposed of in any manner other than by\nwill or by the laws of descent or distribution or pursuant to a qualified\ndomestic relations order as defined by the Code or Title 1 of the Employee\nRetirement Income Security Act, and may be exercised, during the lifetime of\nthe Optionee, only by the Optionee. If the Administrator makes an Option, SAR\nor Stock Purchase Right transferable, such Option, SAR or Stock Purchase Right\nshall contain such additional terms and conditions as the Administrator deems\nappropriate.<\/p>\n\n\n\n
14.                                 Stock\nWithholding to Satisfy Withholding Tax Obligations<\/i>.<\/b>  When an Optionee incurs tax liability in\nconnection with the exercise of an Option, SAR or Stock Purchase Right, which\ntax liability is subject to tax withholding under applicable tax laws, and the\nOptionee is obligated to pay the Company an amount required to be withheld\nunder applicable tax laws, the Optionee may satisfy the withholding tax\nobligation by electing to have the Company withhold from the Shares to be\nissued upon exercise of the Option, or the Shares to be issued upon exercise of\nthe SAR or Stock Purchase Right, if any, that number of Shares having a Fair\nMarket Value equal to the amount required to be withheld. The Fair Market Value\nof the Shares to be withheld shall be determined on the date that the amount of\ntax to be withheld is to be determined (the \u0093Tax Date\u0094).<\/p>\n\n\n\n
19<\/p>\n\n
All elections by an\nOptionee to have Shares withheld for this purpose shall be made in writing in a\nform acceptable to the Administrator and shall be subject to the following\nrestrictions: 
\n(a)                                  the\nelection must be made on or prior to the applicable Tax Date; and<\/p>\n\n\n\n
(b)                                 ll elections shall be subject to the consent or\ndisapproval of the Administrator.<\/p>\n\n\n\n
In the event the election\nto have Shares withheld is made by an Optionee and the Tax Date is deferred\nunder Section 83 of the Code because no election is filed under Section 83(b)\nof the Code, the Optionee shall receive the full number of Shares with respect\nto which the Option, SAR or Stock Purchase Right is exercised but such Optionee\nshall be unconditionally obligated to tender back to the Company the proper\nnumber of Shares on the Tax Date.<\/p>\n\n\n\n
15.                                 Adjustments\nUpon Changes in Capitalization, Dissolution, Merger or Asset Sale.<\/i><\/b><\/p>\n\n\n\n
(a)                                  Changes in Capitalization<\/i>.  Subject to any required action\nby the shareholders of the Company, the number of shares of Common Stock\ncovered by each outstanding Option, SAR or Stock Purchase Right, and the number\nof shares of Common Stock which have been authorized for issuance under the\nPlan but as to which no Options, SARs or Stock Purchase Rights have yet been\ngranted or which have been returned to the Plan upon cancellation or expiration\nof an Option, SAR or Stock Purchase Right, as well as the price per share of\nCommon Stock covered by each such outstanding Option, SAR or Stock Purchase\nRight, shall be proportionately adjusted for any increase or decrease in the\nnumber of issued shares of Common Stock resulting from a stock split, reverse\nstock split, stock dividend, combination or reclassification of the Common\nStock, or any other increase or decrease in the number of issued shares of\nCommon Stock effected without receipt of consideration by the Company;\nprovided, however, that conversion of any convertible securities of the Company\nshall not be deemed to have been \u0093effected without receipt of consideration.\u0094\n\nSuch adjustment shall be made by the Board, whose determination in that respect\nshall be final, binding and conclusive. Except as expressly provided herein, no\nissuance by the Company of shares of stock of any class, or securities\nconvertible into shares of stock of any class, shall affect, and no adjustment\nby reason thereof shall be made with respect to, the number or price of shares\nof Common Stock subject to an Option, SAR or Stock Purchase Right.<\/p>\n\n\n\n
(b)                                 Dissolution or Liquidation<\/i>.  <\/b>In the event of the proposed dissolution or liquidation of the Company,\nall outstanding Options, SARs and Stock Purchase Rights will terminate\nimmediately prior to the consummation of such<\/p>\n\n\n\n
20<\/p>\n\n\n
proposed\naction, unless otherwise provided by the Administrator. The Administrator may,\nin the exercise of its sole discretion in such instances, declare that any\nOption, SAR or Stock Purchase Right shall terminate as of a date fixed by the\nAdministrator and give each Optionee the right to exercise his or her Option,\nSAR or Stock Purchase Right as to all or any part of the Optioned Stock,\nincluding Shares as to which the Option, SAR or Stock Purchase Right would not\notherwise be exercisable.<\/p>\n\n\n\n
(c)                                  Merger or Asset Sale<\/i>.<\/b>  Unless\notherwise determined by the Administrator, in the event of a merger of the\nCompany with or into another corporation, or the sale of substantially all of the\nassets of the Company, each outstanding Option, SAR and Stock Purchase Right\nshall be assumed or an equivalent option or right substituted by the successor\ncorporation or a Parent or Subsidiary of the successor corporation. In the\nevent that the successor corporation refuses to assume or substitute for the\nOption, SAR or Stock Purchase Right, the Optionee shall fully vest in and have\nthe right to exercise the Option, SAR or Stock Purchase Right as to all of the\nOptioned Stock, including Shares as to which it would not otherwise be vested\nor exercisable. If an Option, SAR or Stock Purchase Right becomes fully vested\nand exercisable in lieu of assumption or substitution in the event of a merger\nor sale of assets, the Administrator shall notify the Optionee in writing or\nelectronically that the Option, SAR or Stock Purchase Right shall be fully\nvested and exercisable for a period of thirty (30) days from the date of such\nnotice, and the Option, SAR or Stock Purchase Right shall terminate upon the\nexpiration of such period. For the purposes of this paragraph, the Option, SAR\nor Stock Purchase Right shall be considered assumed if, following the merger or\nsale of assets, the option or right confers the right to purchase or receive,\nfor each Share of Optioned Stock subject to the Option, SAR or Stock Purchase\nRight immediately prior to the merger or sale of assets, the consideration\n(whether stock, cash, or other securities or property) received in the\nmerger or sale of assets by holders of Common Stock for each Share held on the\neffective date of the transaction (and if holders were offered a choice of\nconsideration, the type of consideration chosen by the holders of a majority of\nthe outstanding Shares); provided, however, that if such consideration received\nin the merger or sale of assets is not solely common stock of the successor\ncorporation or its Parent, the Administrator may, with the consent of the\nsuccessor corporation, provide for the consideration to be received upon the\nexercise of the Option, SAR or Stock Purchase Right, for each Share of Optioned\nStock subject to the Option, SAR or Stock Purchase Right, to be solely common\nstock of the successor corporation or its Parent equal in fair market value to\nthe per share consideration received by holders of Common Stock in the merger\nor sale of assets.<\/p>\n\n\n\n
(d)                                 Change in Control<\/i>.  In the event of a \u0093Change in\nControl\u0094 of the Company, as defined in paragraph (e) below, unless otherwise\ndetermined by<\/p>\n\n\n\n
21<\/p>\n\n\n
the\nAdministrator prior to the occurrence of such Change in Control, the following\nacceleration and valuation provisions shall apply:<\/p>\n\n\n\n
(i)                                     Any Options, SARs and Stock Purchase Rights\noutstanding as of the date such Change in Control is determined to have\noccurred that are not yet exercisable and vested on such date shall become\nfully exercisable and vested; and<\/p>\n\n\n\n
(ii)                                  The value of all outstanding Options, SARs and\nStock Purchase Rights shall, unless otherwise determined by the Administrator\nat or after grant, be cashed-out. The amount at which such Options, SARs and\nStock Purchase Rights shall be cashed out shall be equal to the excess of (x)\nthe Change in Control Price (as defined below) over (y) the exercise price of\nthe Common Stock covered by the Option, SAR or Stock Purchase Right. The\ncash-out proceeds shall be paid to the Optionee or, in the event of death of an\nOptionee prior to payment, to the estate of the Optionee or to a person who\nacquired the right to exercise the Option, SAR or Stock Purchase Right by bequest\nor inheritance.<\/p>\n\n\n\n
(e)                                  Definition of \u0093Change in Control\u0094<\/i>.  For purposes of this Section 15, a \u0093Change\nin Control\u0094 means the happening of any of the following:<\/p>\n\n\n\n
(i)                                     When any \u0093person\u0094, as such term is used in\nSections 13(d) and 14(d) of the Exchange Act (other than the Company, a\nSubsidiary or a Company employee benefit plan, including any trustee of such\nplan acting as trustee) is or becomes the \u0093beneficial owner\u0094 (as defined in\nRule 13d-3 under the Exchange Act), directly or indirectly, of securities of the\nCompany representing fifty percent (50%) or more of the combined voting power\nof the Company\u0092s then outstanding securities; or<\/p>\n\n\n\n
(ii)                                  The occurrence of a transaction requiring\nshareholder approval, and involving the sale of all or substantially all of the\nassets of the Company or the merger of the Company with or into another\ncorporation.<\/p>\n\n\n\n
(f)                                    Change in Control Price<\/i>.  For purposes of this Section\n15, \u0093Change in Control Price\u0094 shall be, as determined by the Administrator, (i)\nthe highest Fair Market Value at any time within the 60-day period immediately\npreceding the date of determination of the Change in Control Price by the\nAdministrator (the \u009360-Day Period\u0094), or (ii) the highest price paid or offered,\nas determined by the Administrator, in any bona fide transaction or bona fide\noffer related to the Change in Control of the Company, at any time within the\n60-Day Period.<\/p>\n\n\n\n
22<\/p>\n\n\n
16.                                 Date of Grant<\/i>.<\/b>  The date of grant of an Option, SAR or Stock\nPurchase Right shall be, for all purposes, the date on which the Administrator\nmakes the determination granting such Option, SAR or Stock Purchase Right, or\nsuch other later date as is determined by the Administrator. Notice of the\ndetermination shall be provided to each Optionee within a reasonable time after\nthe date of such grant.<\/p>\n\n\n\n
17.                                 Amendment and\nTermination of the Plan<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Amendment and Termination<\/i>.  The Board may at any time\namend, alter, suspend or terminate the Plan.<\/p>\n\n\n\n
(b)                                 Shareholder Approval<\/i>.  The Company shall obtain\nshareholder approval of any Plan amendment to the extent necessary and\ndesirable to comply with Applicable Laws.<\/p>\n\n\n\n
(c)                                  Effect of Amendment or Termination<\/i>.  No\namendment, alteration, suspension or termination of the Plan shall impair the\nrights of any Optionee, unless mutually agreed otherwise between the Optionee\nand the Administrator, which agreement must be in writing and signed by the\nOptionee and the Company. Termination of the Plan shall not affect the\nAdministrator\u0092s ability to exercise the powers granted to it hereunder with\nrespect to Options, SARs or Stock Purchase Rights granted under the Plan prior\nto the date of such termination.<\/p>\n\n\n\n
18.                                 Conditions\nUpon Issuance of Shares<\/i>.<\/b><\/p>\n\n\n\n
(a)                                  Legal Compliance<\/i>.  Shares shall not be issued\npursuant to the exercise of an Option, SAR or Stock Purchase Right unless the\nexercise of such Option, SAR or Stock Purchase Right and the issuance and\ndelivery of such Shares shall comply with Applicable Laws and shall be further\nsubject to the approval of counsel for the Company with respect to such\ncompliance.<\/p>\n\n\n\n
(b)                                 Investment Representations<\/i>.  As a condition to the exercise\nof an Option, SAR or Stock Purchase Right, the Company may require the person\nexercising such Option, SAR or Stock Purchase Right to represent and warrant at\nthe time of any such exercise that the Shares are being purchased only for\ninvestment and without any present intention to sell or distribute such Shares\nif, in the opinion of counsel for the Company, such a representation is\nrequired.<\/p>\n\n\n\n
19.                                 Inability to\nObtain Authority<\/i>.<\/b>  The\ninability of the Company to obtain authority from any regulatory body having\njurisdiction, which authority is deemed by the Company\u0092s counsel to be\nnecessary to the lawful issuance and sale of any Shares hereunder, shall\nrelieve the Company of any liability in<\/p>\n\n\n\n
23<\/p>\n\n
respect\nof the failure to issue or sell such Shares as to which such requisite\nauthority shall not have been obtained.<\/p>\n\n\n\n
20.                                 Reservation of\nShares.<\/i><\/b>  The Company, during the term of this Plan,\nwill at all times reserve and keep available such number of Shares as shall be\nsufficient to satisfy the requirements of the Plan.<\/p>\n\n\n\n
21.                                 Shareholder\nApproval.<\/i><\/b>  The Plan\nshall be subject to approval by the shareholders of the Company within twelve\n(12) months after the date the Plan is adopted. Such shareholder approval shall\nbe obtained in the manner and to the degree required under Applicable Laws.<\/p>\n\n\n\n
22.<\/i><\/b>                                 Non-U.S.\nEmployees.<\/i><\/b>  Notwithstanding anything in the Plan to the\ncontrary, with respect to any employee who is resident outside of the United\nStates, the Committee may, in its sole discretion, amend the terms of the Plan\nin order to conform such terms with the requirements of local law or to meet\nthe objectives of the Plan.  The\nCommittee may, where appropriate, establish one or more sub-plans for this\npurpose.<\/p>\n\n\n\n
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