EXHIBIT 10.A.50
Apple Computer, Inc.
1997 Director Stock Option Plan
(Effective as of August 5, 1997)
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Apple Computer, Inc.
1997 Director Stock Option Plan
1. Purposes. The purposes of the Plan are to retain the services
of qualified individuals who are not employees of the Company to serve as
members of the Board and to secure for the Company the benefits of the
incentives inherent in increased Common Stock ownership by such individuals
by granting such individuals Options to purchase shares of Common Stock.
2. Administration. The Administrator will be responsible for
administering the Plan. The Administrator will have authority to adopt such
rules as it may deem appropriate to carry out the purposes of the Plan, and
shall have authority to interpret and construe the provisions of the Plan and
any agreements and notices under the Plan and to make determinations
pursuant to any Plan provision. Each interpretation, determination or other
action made or taken by the Administrator pursuant to the Plan shall be final
and binding on all persons. The Administrator shall not be liable for any
action or determination made in good faith, and shall be entitled to
indemnification and reimbursement in the manner provided in the Company's
Articles of Incorporation and By-Laws as such documents may be amended from
time to time.
3. Shares Available.
Subject to the provisions of Section 7(b) of the Plan, the maximum
number of shares of Common Stock which may be issued under the Plan shall
not exceed 400,000 shares (the "Section 3 Limit"'). Either authorized and
unissued shares of Common Stock or treasury shares may be delivered
pursuant to the Plan. For purposes of determining the number of shares that
remain available for issuance under the Plan, the following rules shall apply:
(a) the number of shares of Common Stock underlying Options
shall be charged against the Section 3 Limit; and
(b) the Section 3 Limit shall be increased by (i) the number of
shares subject to an Option which lapses, expires or is otherwise terminated
without the issuance of such shares, and (ii) the number of shares, if any,
tendered to pay the exercise price of an Option.
4. Options. Each Non-Employee Director shall receive grants of
Options under the Plan as follows
(a) Option Grants.
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(i) Initial Grants. Non-Employee Directors who were members
of the Board on the day prior to the Effective Date shall be granted an
Initial Option to purchase 15,000 shares of Common Stock as of August
14, 1997 ("Initial Grant Date"), provided that such individual continues to
serve as a Non-Employee Director through the Initial Grant Date. Non-
Employee Director who were elected or appointed to the Board on the
Effective Date an Initial Option to purchase 30,000 shares of Common
Stock on the Initial Grant Due, provided that such individual continues to
serve as a Non-Employee Director through the Initial Grant Date. Non-
Employee Directors who are elected or appointed to the Board after the
Effective Date shall be granted an Initial Option to purchase 30,000 shares
of Common Stock as of the date of their election or appointment to the
Board. The provisions of this Section 4(a)(i) shall not apply to any
member of the Board who first becomes a Non-Employee Director by
reason of such member's ceasing to be an employee of the Company and
its Subsidiaries.
(ii) Annual Grants. Each Non-Employee Director shall receive
an Annual Option to purchase 10,000 shares of Common Stock on the
fourth anniversary of the Non-Employee Director's initial election or
appointment to the Board and on each subsequent anniversary thereof,
provided that the individual has remained in continuous service as a
director of the Company through such anniversary date and is a Non-
Employee Director on the applicable anniversary date.
(b) Exercise Period. The per share exercise price of each Option
shall be the Fair Market Value of a share of Common Stock as of the date of
grant of the Option determined in accordance with the provisions of the Plan.
(c) Vesting. Initial Options shall vest and become exercisable in
annual installments on each of the first through third anniversaries of the
date of grant, provided that the Non-Employee Director has remained in
continuous service as a director of the Company through each such anniversary
date. Annual Options shall be fully vested and immediately exercisable on their
date of grant.
(d) Term of Options.
(i) Ten-Year Term. Each Option shall expire ten (10) years from
its date of grant, subject to earlier termination as provided herein.
(ii) Exercise Following Termination of Service Due to Death. If
a Non-Employee Director ceases to be a member of the Board by reason of
such Non-Employee Director's death, the Options granted to such Non-
Employee Director may be exercised by such Non-Employee Director's
Beneficiary, but only to the extent the Option was exercisable at the time
of the Non-Employee Director's death, at any time within three (3) years
alter the date of such termination of service, subject to the earlier
expiration of such Options as provided for in Section 4(d)(i) above. At the
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end of such three-year period, the vested portion of the Option shall
expire. The unvested portion of the Option shall expire on the date of the
Non-Employee Director's death.
(iii) Termination of Options if a Non-Employee Director is
Removed from the Board for Cause. In the event a Non-Employee
Director is removed from the Board for "cause," all Options granted to
such Non-Employee Director (whether or not then vested and
exercisable) shall immediately terminate and be of no further force and
effect as of the effective date of such removal from the Board. Whether a
Non-Employee Director is removed by the Board for "cause" shall be
determined by the Board in accordance with the By-Laws of the
Company.
(iv) Exercise Following Other Terminations of Service. If a Non-
Employee Director ceases to be a member of the Board for any reason
other than death or removal from the Board for cause, the Options
granted to such Non-Employee Director may be exercised by such Non-
Employee Director, but only to the extent the Option was exercisable at
the time of the Non-Employee Director's termination, at any time within
ninety (90) days after the date of such termination of service, subject to the
earlier expiration of such Options as provided for in Section 4(d)(i) above.
At the end of such ninety-day period, the vested portion of the Option
shall expire. The unvested portion of the Option shall expire on the date
of the Non-Employee Director's termination of service with the Board.
(e) Time and Manner of Exercise of Options.
(i) Notice of Exercise. Subject to the other terms and conditions
hereof, a Non-Employee Director may exercise any Option, to the extent
such Option is vested, by giving written notice of exercise to the
Company; provided, however, that in no event shall an Option be
exercisable for a fractional share. The date of exercise of an Option shall
be the later of (A) the date on which the Company receives such written
notice and (B) the date on which the conditions provided in Section
4(e)(ii) are satisfied.
(ii) Method of Payment. The consideration to be paid for the
shares to be issued upon exercise of an Option may consist of (A) cash, (B)
check, (C) 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
the Option shall be exercised and which have been owned by the Non-
Employee Director for at least six (6) months at the time of exercise, (D)
delivery of a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount
of proceeds required to pay the exercise price, or (E) any combination of
the foregoing methods of payment.
(iii) Stockholder Rights. A Non-Employee Director shall have
no rights as a stockholder with respect to any shares of Common Stock
issuable upon exercise of an Option until a certificate evidencing such
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shares shall have been issued to the Non-Employee Director pursuant to
Section 4(e)(v), and no adjustment shall be made for dividends or
distributions or other rights in respect of any share for which the record
date is prior to the date upon which the Non-Employee Director shall
become the holder of record thereof.
(iv) Limitation on Exercise. No Option shall be exercisable
unless the Common Stock subject thereto has been registered under the
Securities Act and qualified under applicable state "blue sky" laws in
connection with the offer and sale thereof, or the Company has
determined that an exemption from registration under the Securities Act
and from qualification wider such state "blue sky" laws is available.
(v) Issuance of Shares. Subject to the foregoing conditions, as
soon as is reasonably practicable after its receipt of a proper notice of
exercise and payment of the exercise price of the Option for the number of
shares with respect to which the Option is exercised, the Company shall
deliver to the Non-Employee Director (or following the Non-Employee
Director's death, the Beneficiary entitled to exercise the Option), at the
principal office of the Company or at such other location as may be
acceptable to the Company and the Non-Employee Director (or such
Beneficiary), one or more stock certificates for the appropriate number of
shares of Common Stock Issued in connection with such exercise. Shares
sold in connection with a "cashless exercise" described in clause C of
Section 4(e)(ii) shall be delivered to the broker referred to therein in
accordance with the procedures established by the Company from time to
time.
(f) Restrictions on Transfer. An Option may not be transferred,
pledged, assigned, or otherwise disposed of, except by will or by the laws of
descent and distribution; provided, however, that an Option may be
transferred to a Non-Employee Director's family members or to one or more
trusts established in whole or in part for the benefit of one or more of such
family members. The Option shall be exercisable, during the Non-Employee
Director's lifetime, only by the Non-Employee Director or by the individual or
entity to whom the Option has been transferred in accordance with the previous
sentence. No assignment or transfer of the Option, or of the rights
represented thereby, whether voluntary or involuntary, by operation of law or
otherwise, except by will or the laws of descent and distribution, shall vest
in the assignee or transferee any interest or right in the Option, but
immediately upon any attempt to assign or transfer the Option the same shall
terminate and be of no force or effect.
5. Designation of Beneficiary.
(a) Beneficiary Designations. Each Non-Employee Director
may designate a Beneficiary to exercise an Option upon the Non-Employee
Director's death by executing a Beneficiary Designation Form.
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(b) Change of Beneficiary Designation. A Non-Employee
Director may change an earlier Beneficiary designation by executing a later
Beneficiary Designation Form and delivering it to the Administrator. The
execution of a Beneficiary Designation Form and its receipt by the
Administrator will revoke and rescind any prior Beneficiary Designation Form.
6. Change in Control.
Anything in the Plan to the contrary notwithstanding, in the event
of a Change in Control of the Company, the following provisions shall apply:
(a) Any Options 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.
(b) The value of all outstanding Options (to the extent not
previously exercised) shall be cashed out on the date of the Change in
Control. The amount at which such Options shall be cashed out shall be equal
to the excess, if any, of (i) the Change in Control Price over (ii) the
exercise price of the Common Stock covered by the Option. The cash-out
proceeds shall be paid to the Non-Employee Director or, in the event of death
of the Non-Employee Director prior to payment, to the Beneficiary thereof.
(c) If the Administrator shall receive an opinion from a nationally
recognized firm of accountants to the Company that the cash-out provisions in
Section 6(b) above with respect to Options will prohibit the utilization of
"pooling of interests" accounting in connection with the transaction resulting
in the Change in Control of the Company, then the following shall apply, but
only to the extent necessary to permit such accounting treatment: (i) the
provisions of Section 6(b) shall not apply to the Options, (ii) each such
Option shall become immediately vested and exercisable as of the date such
opinion is received by the Administrator, and (iii) the Administrator shall
promptly inform each Non-Employee Director of such opinion and of the
accelerated vesting and exercisability of the Option sufficiently prior to the
anticipated date of the Change in Control, so as to permit the Option to be
exercised prior to the date of the Change in Control.
7. Recapitalization or Reorganization.
(a) Authority of the Company and Shareholders. The existence
of the Plan shall not affect or restrict in any way the right or power of the
Company or the shareholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, any merger or consolidation of the Company,
any issue of stock or of options, warrants or rights to purchase stock or of
bonds, debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which are
convertible into or exchangeable for Common Stock, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
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(b) Change in Capitalization. Notwithstanding any other
provision of the Plan, in the event of any change in the outstanding Common
Stock by reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares (a "change in
Capitalization"), (i) such proportionate adjustments as may be necessary (in
the form determined by the Administrator in its sole discretion) to reflect
such change shall be made to prevent dilution or enlargement of the rights of
Non-Employee Directors under the Plan with respect to tile aggregate number of
shares of Common Stock authorized to be awarded under the Plan, the number
of shares of Common Stock covered by each outstanding Option and the
exercise prices in respect thereof and the number of shares of Common Stock
covered by future Option grants and (ii) the Administrator may make such
other adjustments, consistent with the foregoing, as it deems appropriate in
its sole discretion.
(c) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, each outstanding Option will vest
and become exercisable on a date prior to the consummation of the proposed
action that is reasonably sufficient to enable the Non-Employee Directors to
exercise their Options.
8. Termination and Amendment of the Plan.
(a) Termination. The Plan shall terminate on the tenth
anniversary of the Effective Date, Following such date, no further grants of
Options shall be made pursuant to the Plan.
(b) General Power of Board. Notwithstanding anything herein
to the contrary, the Board may at any time and from time to time terminate,
modify, suspend or amend the Plan in whole or in part; provided, however, that
no such termination, modification, suspension or amendment shall be effective
without shareholder approval if such approval is required to comply with any
applicable law or stock exchange rule; and provided further, that the Board
may not, without shareholder approval, increase the maximum number of shares
issuable under the Plan except as provided in Section 7(b) above.
(c) When Non-Employee Directors' Consents Required. The
Board may not alter, amend, suspend, or terminate the Plan without the consent
of any Non-Employee Director to the extent that such action would adversely
affect his or her rights with respect to Options that have previously been
granted.
9. Miscellaneous.
(a) No Right to Reelection. Nothing in the Plan shall be deemed
to create any obligation on the part of the Board to nominate any of its
members for reelection by the Company's stockholders, nor confer upon any
Non-Employee Director the right to remain a member of the Board for any
period of time, or at any particular rate of compensation
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(b) Securities Law Restrictions. The Administrator may require
each Non-Employee Director purchasing or acquiring shares of Common Stock
pursuant to the Plan to agree with the Company in writing that such Non-
Employee Director is acquiring the shares for investment and not with a view
to the distribution thereof. All certificates for shares of Common Stock
delivered under the Plan shall be subject to such stock transfer orders and
other restrictions as the Administrator may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange
Commission or any exchange upon which the Common Stock is then listed,
and any applicable federal or state securities law, and the Administrator may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions. No shares of Common Stock shall be
issued hereunder unless the Company shall have determined that such
issuance is in compliance with, or pursuant to an exemption from, all
applicable federal and state securities laws.
(c) Expenses. The costs and expenses of administering the Plan
shall be borne by the Company.
(d) Applicable Law. Except as to matters of federal law, the Plan
and all actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of California without giving effect to
conflicts of law principles.
(e) Effective Date. The Plan shall be effective as of the Effective
Date, subject to the approval thereof by the stockholders of the Company by no
later than the next Annual Meeting to occur after the Effective Date. If such
stockholder approval is not obtained by the date of such Annual Meeting, all
prior Option grants shall be void ab initio and of no further force and
effect.
10. Definitions. Capitalized words not otherwise defined in the
Plan have the meanings set forth below:
"Administrator" means the Chief Executive Officer of the Company
or the individual appointed by the Chief Executive Officer of the
Company to administer the Plan.
"Annual Meeting" means an annual meeting of the Company's
stockholders.
"Annual Option" means an Option granted to a Non-Employee
Director pursuant to Section 4(a)(ii) of the Plan.
"Beneficiary" or "Beneficiaries" means an individual or entity
designated by a Non-Employee Director on a Beneficiary Designation
Form to exercise Options in the event of the Non-Employee Director's
death; provided, however, that, if no such individual or entity is designated
or if no such designated individual is alive at the time of the Non-
Employee Director's death, Beneficiary shall mean the Non-Employee
Director's estate.
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"Beneficiary Designation Form" means a document, in a form
approved by the Administrator to be used by Non-Employee Directors to
name their respective Beneficiaries. No Beneficiary Designation Form
shall be effective unless it is signed by the Non-Employee Director and
received by the Administrator prior to the date of death of the Non-
Employee Director.
"Board" means the Board of Directors of the Company.
"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.
"Change in Control Price" means, 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.
"Code," means the Internal Revenue Code of 1986, as amended,
and the applicable rules and regulations promulgated thereunder.
"Common Stock" means the common stock of the Company, no par
value per share.
"Company" means Apple Computer, Inc., a California corporation,
or any successor to substantially all of its business.
"Effective Date" means, subject to Section 9(e), August 5, 1997.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the applicable rules and relations promulgated thereunder.
"Fair Market Value" means the value of Common Stock determined
as follows:
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(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.
"Initial Option" means an Option granted to a Non-Employee Director
pursuant to Section 4(a)(i) of the Plan.
"Non-Employee Director" means a member of the Board who is not an
employee of the Company or any of its Subsidiaries.
"Option "means an option to purchase shares or Common Stock awarded to
a Non-Employee Director pursuant to the Plan and includes Initial Options and
Annual Options.
"Plan" means the Apple Computer, Inc. 1997 Director Stock Option Plan.
"Section 3 Limit " shall have the meaning set forth in Section 3 of the Plan.
"Subsidiary" means any corporation which is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code with respect to the Company.
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