Apple 2005 Annual Report Download - page 124

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6.
No Employment Rights . Neither the Plan nor any Award shall confer upon a Participant any right with respect to
continuing the Participant’s relationship as an Employee with or Chairman of the Company, nor shall they interfere in any way with the
Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause.
7.
Code Section 162(m) Provisions .
(a)
Option and SAR Annual Share Limit . No Participant shall be granted, in any Fiscal Year, Options and Stock
Appreciation Rights to purchase more than 34,000,000 Shares.
(b)
Restricted Stock Subject to Stock Purchase Rights, Performance Share and Restricted Stock Unit Annual Limit .
No Participant shall be granted, in any Fiscal Year, more than 10,000,000 Shares in the aggregate of the following: (i) Restricted Stock subject
to Stock Purchase Rights, (ii) Performance Shares, or (iii) Restricted Stock Units.
(c)
Section 162(m) Performance Restrictions . For purposes of qualifying grants of Restricted Stock subject to Stock
Purchase Rights, Performance Shares or Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by
the Administrator on or before the latest date permissible to enable the Restricted Stock subject to Stock Purchase Rights, Performance Shares
or Restricted Stock Units to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Restricted Stock
subject to Stock Purchase Rights, Performance Shares or Restricted Stock Units which are intended to qualify under Section 162(m) of the
Code, the Administrator shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification
of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).
(d)
Changes in Capitalization . The numerical limitations in Sections 7(a) and (b) shall be adjusted proportionately in
connection with any change in the Company’s capitalization as described in Section 18(a).
8.
Term of Plan . Subject to Section 23 of the Plan, the Plan shall continue in effect until February 8, 2015.
9.
Stock Options .
(a)
Type of Option
. Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, not withstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 9(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.
(b)
Term . The term of each Option shall be seven (7) years from the date of grant or such shorter term as may be
provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of
8