Apple 1996 Annual Report Download - page 73

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 Adminstrator 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 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
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