Apple 2007 Annual Report Download - page 121

(11)
Consists of 12,284 shares of the Company's common stock that Dr. Schmidt holds indirectly. Dr. Schmidt has declined to participate in
the 1997 Director Stock Option Plan.
(12) Includes 40,000 shares of the Company's common stock that Mr. York holds jointly with his spouse and 50,000 shares of the Company's
common stock that Mr. York has the right to acquire by exercise of stock options.
(13)
Includes 2,146,546 shares of the Company's common stock that executive officers or directors have the right to acquire by exercise of
stock options and excludes 2,950,000 unvested restricted stock units.
* Represents less than 1% of the issued and outstanding shares of the Company's common stock on the Table Date.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Review, Approval or Ratification of Transactions with Related Persons
The Board of Directors has adopted a written policy for approval of transactions between the Company and its directors, director nominees,
executive officers, greater than five percent beneficial owners and their respective immediate family members, where the amount involved in the
transaction exceeds or is expected to exceed $120,000 in a single calendar year. A copy of this policy is available on the Company's website at
www.apple.com/investor.
The policy provides that the Audit Committee reviews certain transactions subject to the policy and determines whether or not to approve or
ratify those transactions. In doing so, the Audit Committee takes into account, among other factors it deems appropriate:
•
the related person's interest in the transaction;
•
the approximate dollar value of the amount involved in the transaction;
• the approximate dollar value of the amount of the related person's interest in the transaction without regard to the amount of any
profit or loss;
•
whether the transaction was undertaken in the ordinary course of business of the Company;
•
whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to the Company
than terms that could have been reached with an unrelated third party;
•
the purpose of, and the potential benefits to the Company of, the transaction; and
•
any other information regarding the transaction or the related person in the context of the proposed transaction that would be
material to investors in light of the circumstances of the particular transaction.
In addition, the Audit Committee has delegated authority to the Chair of the Audit Committee to pre-approve or ratify certain transactions. A
summary of any new transactions pre-approved or ratified by the Chair is provided to the full Audit Committee for its review in connection with
its next scheduled Audit Committee meeting.
The Audit Committee has considered and adopted standing pre-approvals under the policy for limited transactions with related persons. Pre-
approved transactions include:
•
employment of executive officers, subject to certain conditions;
•
any compensation paid to a director if the compensation is required to be reported in the Company's proxy statement under Item
402 of Regulation S-K promulgated by the SEC;
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