Apple 2002 Annual Report Download - page 87

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
Nonstatutory Stock Options that are freely transferable. The designation of a
16
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 Section 12(d), 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
17
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 Section 12(e), unless otherwise
determined by the Administrator prior to the occurrence of such Change in Control, the following acceleration and valuation provisions
shall apply:
(i) 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