Apple 2002 Annual Report Download - page 60

The tax effect related to the change in unrealized gain on available-for-sale securities was $10 million, $157 million, $(91) million for fiscal
2002, 2001, and 2000, respectively. The tax effect on the reclassification adjustment for net gains included in net income was $10 million,
$35 million and $94 million for fiscal 2002, 2001, and 2000, respectively.
The following table summarizes activity in other comprehensive income related to derivatives, net of taxes, held by the Company (in millions):
The tax effect related to the cumulative effect of adopting SFAS No. 133 was $(5) as of September 29, 2001. The tax effect related to the
changes in fair value of derivatives was $(2) million and $(19) million for fiscal 2002 and 2001, respectively. The tax effect related to
derivative gains reclassified from OCI was $8 million and $23 million for fiscal 2002 and 2001, respectively.
Note 8—Employee Benefit Plans
1998 Executive Officer Stock Plan
The 1998 Executive Officer Stock Plan (the 1998 Plan) is a shareholder approved plan which replaced the 1990 Stock Option Plan terminated
in April 1998, the 1981 Stock Option Plan terminated in October 1990, and the 1987 Executive Long Term Stock Option Plan terminated in
July 1995. Options granted before these plans' termination dates remain outstanding in accordance with their terms. Options may be granted
under the 1998 Plan to the Chairman of the Board of Directors, executive officers of the Company at the
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level of Senior Vice President and above, and other key employees. These options generally become exercisable over a period of 4 years, based
on continued employment, and generally expire 10 years after the grant date. The 1998 Plan permits the granting of incentive stock options,
nonstatutory stock options, stock appreciation rights, and stock purchase rights.
1997 Employee Stock Option Plan
In August 1997, the Company's Board of Directors approved the 1997 Employee Stock Option Plan (the 1997 Plan), a non-shareholder
approved plan for grants of stock options to employees who are not officers of the Company. Options may be granted under the 1997 Plan to
employees at not less than the fair market value on the date of grant. These options generally become exercisable over a period of 4 years,
based on continued employment, and generally expire 10 years after the grant date.
1997 Director Stock Option Plan
In August 1997, the Company's Board of Directors adopted a shareholder approved Director Stock Option Plan (DSOP) for non-employee
directors of the Company. Initial grants of 30,000 options under the DSOP vest in three equal installments on each of the first through third
anniversaries of the date of grant, and subsequent annual grants of 10,000 options are fully vested at grant. Prior to adoption of the DSOP,
60,000 options were granted in total to two then-current members of the Company's Board of Directors.
Employee Stock Purchase Plan
The Company has a shareholder approved employee stock purchase plan (the Purchase Plan), under which substantially all employees may
purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market values as of the beginning and end of
six
-
month offering periods. Stock purchases under the Purchase Plan are limited to 10% of an employee's compensation, up to a maximum of
2002 2001 2000
Change in fair value of available
-
for
-
sale securities
$
(49
)
$
(183
)
$
427
Less: adjustment for net (gains) losses realized and included in net income
32
(84
)
(272
)
Change in unrealized gain on available
-
for
-
sale securities
$
(17
)
$
(267
)
$
155
2002 2001
Cumulative effect of adopting SFAS No. 133
$
—
$
12
Changes in fair value of derivatives
4
45
Less: adjustment for net gains realized and included in net income
(19
)
(53
)
Change in unrealized gain on derivatives
$
(15
)
$
4