Apple 2007 Annual Report Download - page 82

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 changes in fair value of derivatives was $1 million, $(8) million, and $(3) million for 2007, 2006, and 2005,
respectively. The tax effect related to derivative gains/losses reclassified from other comprehensive income to net income was $2 million,
$8 million, and $(2) million for 2007, 2006, and 2005, respectively.
Employee Benefit Plans
2003 Employee Stock Plan
The 2003 Employee Stock Plan (the "2003 Plan") is a shareholder approved plan that provides for broad-based grants to employees, including
executive officers. Based on the terms of individual option grants, options granted under the 2003 Plan generally expire 7 to 10 years after the
grant date and generally become exercisable over a period of four years, based on continued employment, with either annual or quarterly vesting.
The 2003 Plan permits the granting of incentive stock options, nonstatutory stock options, RSUs, stock appreciation rights, stock purchase rights
and performance-based awards. During 2007, the Company's shareholders approved an amendment to the 2003 Plan to increase the number of
shares authorized for issuance by 28 million shares.
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. Based on the terms of individual option grants,
options granted under the 1997 Plan generally expire 7 to 10 years after the grant date and generally become exercisable over a period of four
years, based on continued employment, with either annual or quarterly vesting. In October 2003, the Company terminated the 1997 Plan and no
new options can be granted from this plan.
1997 Director Stock Option Plan
In August 1997, the Company's Board of Directors adopted a Director Stock Option Plan (the "Director Plan") for non-employee directors of the
Company, which was approved by shareholders in 1998. 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.
Rule 10b5
-1 Trading Plans
Certain of the Company's executive officers, including Mr. Timothy D. Cook, Mr. Peter Oppenheimer, Mr. Philip W. Schiller, and Dr. Bertrand
Serlet, have entered into trading plans pursuant to
78
2007
2006
2005
Changes in fair value of derivatives
$
(1
)
$
11
$
7
Adjustment for net (losses)/gains realized and included in net income
(2
)
(12
)
1
Change in unrealized gains on derivative instruments
$
(3
)
$
(1
)
$
8