Apple 2005 Annual Report Download - page 109

Options Exercised and Year-End Option Holdings
The following table provides information about stock option exercises by the Named Executive Officers during fiscal year 2005 and stock
options held by each of them at fiscal year-end. The table has been adjusted to reflect the Company’s two-for-one stock split in February 2005.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
(1)
Market value of securities underlying in-the-money options at the end of fiscal year 2005 (based on $53.20 per share, the closing price of
Common Stock on the NASDAQ National Market on September 23, 2005), minus the exercise price.
(2) Consists of 120,000 options granted to Mr. Jobs in his capacity as a director pursuant to the 1997 Director Stock Option Plan. Since
accepting the position of CEO, Mr. Jobs is no longer eligible to receive option grants under the Director Plan. In March 2003, Mr. Jobs
voluntarily cancelled all of his outstanding options, excluding those granted to him in his capacity as a director.
(3)
This does not include 10 million restricted shares granted to Mr. Jobs, 600,000 restricted stock units granted to Mr. Cook, and 500,000
restricted stock units granted to each of Messrs. Johnson, Oppenheimer, and Rubinstein.
Director Compensation
The form and amount of director compensation is determined by the Board after a review of recommendations made by the Nominating
Committee. The current practice of the Board is to base a substantial portion of a director’s annual retainer on equity. In 1998, shareholders
approved the 1997 Director Stock Option Plan (the “ Director Plan” ) and 1,600,000 shares were reserved for issuance thereunder. Pursuant to
the Director Plan, the Company’s non-employee directors are granted an option to acquire 30,000 shares of Common Stock upon their initial
election to the Board (“ Initial Options” ). The Initial Options vest and become exercisable in three equal annual installments on each of the
first through third anniversaries of the grant date. On the fourth anniversary of a non-employee director’s initial election to the Board and on
each subsequent anniversary thereafter, the director will be entitled to receive an option to acquire 10,000 shares of Common Stock (“ Annual
Options” ). Annual Options are fully vested and immediately exercisable on their date of grant. As of the end of the fiscal year, there were
options for 740,000 shares outstanding under the Director Plan. Since accepting the position of CEO, Mr. Jobs is no longer eligible for grants
under the Director Plan. Non-employee directors also receive a $50,000 annual retainer paid in quarterly increments. In addition, directors
receive up to two free computer systems per year and are eligible to purchase additional equipment at a discount. Directors do not receive any
additional consideration for serving on committees or as committee chairperson.
Compensation Committee Interlocks and Insider Participation
The current members of the Compensation Committee are Messrs. Campbell, Drexler and Gore, none of whom are employees of the Company
and all of whom are considered “independent” directors under the
107
Shares
Acquired on
Exercise
Value
Realized
Number of Securities
Underlying Unexercised
Options at Fiscal
Year
-
End (#)
Value of Unexercised
In-the-Money Options at
Fiscal Year
-
End ($)(1)
Name
(#)
($)
Exercisable
Unexercisable
Exercisable
Unexercisable
Steven P. Jobs
—
—
120,000
(2)
—
(
3)
$
5,694,000
(2)
—
Timothy D. Cook
500,000
$
13,329,677
—
—
(
3)
—
—
Ronald B. Johnson
1,350,000
$
32,257,127
2,100,000
150,000
(3)
$
61,910,625
$
6,220,500
Peter Oppenheimer
—
—
1,107,500
37,500
(3)
$
45,994,859
$
1,560,062
Jonathan Rubinstein
1,800,000
$
31,012,815
—
—
(
3)
—
—