Apple 2002 Annual Report Download - page 84

under the Plan, the following rules shall apply:
(i) The Section 3 Limit shall be reduced by the number of Shares of Optioned Stock subject to each outstanding Option or
freestanding SAR.
(ii) The Section 3 Limit shall be increased by the number of Shares of Optioned Stock subject to the portion of an Option
or SAR that expires unexercised or is forfeited for any reason.
(iii) The Section 3 Limit shall be increased by the number of Shares tendered to pay the exercise price of an Option or the
number of Shares of Optioned Stock withheld to satisfy an Optionee's tax liability in connection with the exercise of an Option
or SAR.
(iv) Option Stock subject to both an outstanding Option and SAR granted in connection with the Option shall be counted
only once in calculating the Section 3 Limit.
4. Administration of the Plan.
(a) Composition of Administrator. The Plan may be administered by (i) the Board or (ii) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the applicable securities laws, California corporate law and
the Code (collectively, " Applicable Laws ").
Once a Committee has been appointed pursuant to this Section 4(a), such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies
(however caused) and remove all members of the Committee and thereafter directly administer the Plan, all to the extent permitted by
the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of the Committee, subject to the
specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: (i) to determine
the Fair Market Value of the Common Stock in accordance with the Plan; (ii) to determine, in accordance with Section 8(a) of the Plan,
the exercise price per Share of Options and SARs to be granted; (iii) to determine the Employees to whom, and the time or times at
which, Options and SARs shall be granted and the number of Shares to be represented by each Option or SAR (including, without
limitation, whether or not a corporation shall be excluded from the definition of Affiliated Company); (iv) to construe and interpret the
provisions of the Plan and any agreements or certificates issued under or in connection with the Plan; (v) to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any Option or SAR granted hereunder (including, but not limited to, any
restriction or limitation, or any vesting acceleration or waiver of forfeiture restrictions regarding any Option or SAR or the Shares
relating thereto, based in each case on such factors as the Administrator shall determine, in its sole discretion); (vi) to approve forms of
agreement for use under the Plan; (vii) to prescribe, amend and rescind rules and regulations relating to the Plan; (viii) to modify or
amend each Option or SAR or accelerate the exercise date of any Option or SAR; (ix) to reduce the exercise price of any Option or
SAR to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option or SAR shall have
declined since the date the Option or SAR was granted; (x) to authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option or SAR previously granted by the Administrator; and (xi) to make all other determinations
deemed necessary or advisable for the administration of the Plan.
13
(c) Effect of Decisions by the Administrator. All decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees and any other holders of any Options.
5. Eligibility. The Administrator may grant Options and SARs only to individuals who are Employees or who are consultants to the
Company, or a Subsidiary or Affiliated Company. In no event may an Option or SAR be granted to any individual who, at the time of grant, is
an Officer or Director. An Employee who has been granted an Option or SAR may, if he or she is otherwise eligible, be granted an additional
Option or Options, SAR or SARs. Each Option shall be evidenced by a written Option agreement, which shall be in such form and contain such
provisions as the Administrator shall from time to time deem appropriate. Without limiting the foregoing, the Administrator may, at any time,
or from time to time, authorize the Company, with the consent of the respective recipients, to issue new Options or Options in exchange for the
surrender and cancellation of any or all outstanding Options, other options, SARs or other stock appreciation rights.
Neither the Plan nor any Option or SAR agreement shall confer upon any Optionee any right with respect to continuation of employment
by the Company (or any Parent, Subsidiary or Affiliated Company), nor shall it interfere in any way with the Optionee's right or the right of the
Company (or any Parent, Subsidiary or Affiliated Company) to terminate the Optionee's employment at any time or for any reason.