Apple 2003 Annual Report Download - page 71

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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
$25,000 in any calendar year. In the third quarter of 2003, the Company's shareholders also approved an amendment to the Employee Stock
Purchase Plan to increase the number of shares authorized for issuance by 4 million shares. Beginning with the six-month offering period that
started on June 30, 2003, the number of shares authorized for issuance is limited to a total of 1 million shares per offering period. During 2003,
2002, and 2001, 2.1 million, 1.8 million and 1.8 million shares, respectively, were issued under the Purchase Plan. As of September 27, 2003,
approximately 4.0 million shares were reserved for future issuance under the Purchase Plan.
89
Employee Savings Plan
The Company has an employee savings plan (the Savings Plan) qualifying as a deferred salary arrangement under Section 401(k) of the
Internal Revenue Code. Under the Savings Plan, participating U.S. employees may defer a portion of their pre-tax earnings, up to the Internal
Revenue Service annual contribution limit ($12,000 for calendar year 2003). The Company matches 50% to 100% of each employee's
contributions, depending on length of service, up to a maximum 6% of the employee's earnings. The Company's matching contributions to the
Savings Plan were approximately $21 million, $19 million, and $17 million in 2003, 2002, and 2001, respectively.
Stock Option Activity
A summary of the Company's stock option activity and related information for the years ended September 27, 2003, September 28, 2002 and
September 29, 2001 follows (option amounts are presented in thousands):
Total options outstanding at September 27, 2003 to purchase approximately 63 million shares do not include options to purchase approximately
6.7 million shares that were issued in October 2003 pursuant to the Exchange Program described above.
90
Outstanding Options
Shares
Available
for Grant
Number of
Shares
Weighted Average
Exercise Price
Balance at 9/30/00
11,530
70,758
$
34.01
Additional Options Authorized
27,000
—
—
Options Granted
(34,857
)
34,857
$
18.58
Options Cancelled
6,605
(6,605
) $
29.32
Options Exercised
—
(
1,831
) $
10.05
Plan Shares Expired
(203
)
—
—
Balance at 9/29/01
10,075
97,179
$
29.24
Additional Options Authorized
15,000
—
—
Options Granted
(23,239
)
23,239
$
19.89
Options Cancelled
4,737
(4,737
) $
30.98
Options Exercised
—
(
6,251
) $
11.99
Plan Shares Expired
(2
)
—
—
Balance at 9/28/02
6,571
109,430
$
28.17
Restricted Stock Granted
(5,000
)
—
$
14.95
Options Granted
(4,179
)
4,179
$
16.38
Options Cancelled
48,443
(48,443
) $
39.61
Options Exercised
—
(
2,154
) $
14.04
Plan Shares Expired
(5
)
—
—
Balance at 9/27/03
45,830
63,012
$
19.08