EXHIBIT 10.A.5
APPLE COMPUTER, INC.
1990 STOCK OPTION PLAN
(as amended through 11/5/97)
1. Purposes of the Plan. The purposes of this 1990 Stock
Option Plan are to attract and retain high quality personnel for
positions of substantial responsibility, to provide additional
incentive to Employees of the Company, its Subsidiaries and its
Affiliated Companies and to promote the success of the Company's
business. This Plan succeeds to and replaces the Company's 1981
Stock Option Plan. Options granted under the Plan may be incentive
stock options (as defined under Section 422 of the Code) or non-
statutory stock options, as determined by the Administrator at the
time of grant of an option and subject to the applicable provisions of
Section 422 of the Code, and the regulations promulgated
thereunder. Stock appreciation rights ("SARs") may be granted
under the Plan in connection with Options or independently of
Options.
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 from time to time
pursuant to Section 4 of the Plan.
(b) "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 20% of the total
voting power, unless the Administrator determines in its discretion
that such corporation is not an Affiliated Company.
(c) "Board" means the Board of Directors of the Company.
(d) "Common Stock" means the Common Stock, no par
value, of the Company.
(e) "Company" means Apple Computer, Inc., a California
corporation, or its successor.
(f) "Committee" means a Committee, if any, appointed by
the Board in accordance with paragraph (a) of Section 4 of the Plan.
(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto.
(h) "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; or (ii) in the case of transfers
between locations of the Company or between the Company, its Subsidiaries,
its successor or its Affiliated Companies.
(i) "Director" means a member of the Board.
(j) "Employee" means any person, including Officers and
Directors, employed by and on the payroll of the Company, any Subsidiary or
any Affiliated Company. The payment of Directors' fees by the Company shall
not be sufficient to constitute "employment" by the Company.
(k) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
29
(l) "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.
(m) "Officer" means an officer of the Company within the meaning of Section
16 of the Exchange Act and the rules and regulations promulgated thereunder.
(n) "Nonstatutory Stock Option" means an Option that is not
an Incentive Stock Option.
(o) "Incentive Stock Option" means an Option that satisfies the provisions
of Section 422 of the Code and is expressly designated by the Administrator
at the time of grant as an incentive stock option.
(p) "Option" means an Option granted pursuant to the Plan.
(q) "Optioned Stock" means the Common Stock subject to an
Option or SAR.
(r) "Optionee" means an Employee who receives an Option
or SAR.
(s) "Parent" corporation shall have the meaning defined in
Section 424(e) of the Code.
(t) "Plan" means this 1990 Stock Option Plan.
(u) "SAR" means a stock appreciation right granted
pursuant to Section 9 below.
(v) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 12 of the Plan.
(w) "Subsidiary" corporation has the meaning defined in
Section 424(f) of the Code.
In addition, the terms "Rule 16b-3" and "Applicable Laws", the term
"Insiders", the term "Tax Date" and the terms "Change in Control" and "Change
in Control Price", shall have the meanings set forth, respectively, in
Sections 4, 9, 10 and 12 below.
3. Stock Subject to the Plan. 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
52,200,000 Shares (including Shares issued under the 1981 Stock Option Plan,
to which this Plan is a successor). 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.
30
If an Option or SAR issued under this Plan or under the Company's 1981 Stock
Option Plan should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless this Plan shall have been terminated, become available
for other Options or SARs under this Plan. 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.
Anything in the Plan to the contrary notwithstanding, no Employee may be
granted Options and SARs covering in the aggregate more than 1.5 million
shares of Common Stock (the "Limit") in a fiscal year beginning on or after
September 30, 1995. Each share underlying a SAR not granted in tandem with
an Option shall be applied against the Limit, regardless of the number of
shares deliverable or delivered upon exercise of the SAR; provided, however,
that shares of Common Stock underlying a tandem grant of Options and SARs
shall be counted only once in calculating the Limit. The Limit shall not
apply to grants of Options and SARs made prior to September 30, 1995."
4. Administration of the Plan.
(a) Composition of Administrator.
(1) 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 ("Rule 16b-3"), and by the
legal requirements relating to the administration of stock plans such
as the Plan, if any, of applicable securities laws, California corporate
law and the Code (collectively, "Applicable Laws"), 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.
(2) Administration with respect to
Directors and Officers. With respect to grants and awards to
Employees who are also Officers or Directors of the Company, the
Plan may be administered by (A) the Board, if the Board may
administer the Plan in compliance with Rule 16b-3 as it applies to
grants to Officers and Directors, or (B) a Committee designated by
the Board to administer the Plan, which Committee shall be
constituted (I) in such a manner as to permit the Plan and grants and
awards thereunder to comply with Rule 16b-3 as it applies to grants
to Officers and Directors and (II) in such a manner as to satisfy the
Applicable Laws.
(3) Administration with respect to Other
Persons. With respect to grants and awards to Employees who are
neither Directors nor Officers of the Company, the Plan may be
administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to
satisfy the Applicable Laws.
(4) General. Once a Committee has
been appointed pursuant to subsection (2) or (3) of 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 any 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 a Committee and
thereafter directly administer the Plan, all to the extent permitted by
the Applicable Laws and, in the case of a Committee appointed
under subsection (2) to the extent permitted by Rule 16b-3 as it
applies to grants to Officers and Directors.
(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 of the Common Stock in accordance
with Section 2(l) of 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 from the definition of Affiliated Company under Section
2(b)); (iv) to interpret 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 and/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 (with the consent of the
Optionee) 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.
31
(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.
(d) Anything in the Plan to the contrary
notwithstanding, on and after September 30, 1995, grants of Options
and SARs under the Plan to Officers shall be made only by a
Committee consisting of at least two directors of the Company who
qualify as "outside directors" within the meaning of Section 162(m)
of the Code, and such Committee shall exercise all of the authority
delegated under the Plan to the Administrator with respect to grants
to Officers made on and after that date.
5. Eligibility. Options and SARs may be granted only to
Employees. 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 expressly identify the
Options as Incentive Stock Options or as Nonstatutory Stock
Options, and which shall be in such form and contain such
provisions as the Administrator shall from time to time deem
appropriate. However, notwithstanding such designation, to the
extent that the aggregate Fair Market Value of the Shares with
respect to which Options designated as Incentive Stock Options and
options granted under other plans of the Company or any Parent or
Subsidiary that are designated as incentive stock options are
exercisable for the first time by an Optionee during any calendar
year exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of the preceding
sentence, (i) Options shall be taken into account in the order in which
they were granted, and (ii) the Fair Market Value of the Shares shall
be determined as of the time the Option or other incentive stock
option with respect to such Shares is granted. 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.
6. Term of Plan. The Plan shall become effective upon its
adoption by the Board or its approval by vote of the holders of a
majority of the outstanding Shares of the Company entitled to vote
on the adoption of the Plan, whichever is earlier. It shall continue in
effect for a term of ten (10) 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. However, 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 voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Option
shall be five (5) years from the date of grant thereof or such shorter
time as may be provided in the Option agreement.
32
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 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. In no
event shall the per Share exercise price be less than 110% of the Fair
Market Value per Share as of the date of grant in the case of an
Incentive Stock Option granted to an Optionee who, immediately
before the grant of such Option, owns Shares representing more than
10% of the voting power or value of all classes of stock of the
Company or any Parent or Subsidiary.
(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,
in the case of an Incentive Stock Option, shall be determined at the
time of grant) 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.
33
(ii) SARs shall be exercisable, in whole or in part, at
such times as the Administrator shall specify in the Optionee's
SAR agreement.
(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.
(d) Rule 16b-3. SARs granted to persons who are
subject to Section 16 of the Exchange Act ("Insiders") shall contain
such additional restrictions as may be required to be contained in the
plan or SAR agreement in order for the SAR to qualify for the
maximum exemption provided by Rule 16b-3.
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, in the case of an Incentive Stock Option,
determined at the time of grant) 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.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter shall be 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 an
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) Rule 16b-3. Options and SARs granted to
Insiders must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder
to be contained in the Plan or the agreement to qualify for the
maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
(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. In the event of the death of an
Optionee:
(1) 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
34
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
(2) Within ninety (90) 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.
(e) 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.
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 or SAR is exercised but such Optionee
shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
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 non-qualified 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
35
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 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 paragraph (d) hereof, 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 the 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 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:
(1) 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
(2) 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
36
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 12, "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.
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; provided that, to the extent necessary and desirable
to comply with Applicable Laws, regulations or rules, including
Section 422 of the Code, or, for periods on and after September 30,
1995, with Section 162(m) of the Code, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and
to such a degree as is required.
(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.
37