Apple 2009 Annual Report Download - page 82

Table of Contents
The tax effect related to the changes in fair value of derivatives was $(60) million, $(5) million and $1 million for 2009, 2008 and 2007,
respectively. The tax effect related to derivative gains/losses reclassified from other comprehensive income to net income was $54 million, $(9)
million and $2 million for 2009, 2008 and 2007, 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 equity grants to employees,
including executive officers. The 2003 Plan permits the granting of incentive stock options, nonstatutory stock options, RSUs, stock appreciation
rights, stock purchase rights and performance-
based awards. Based on the terms of individual option grants, options granted under the 2003 Plan
generally expire seven to ten years after the grant date and generally become exercisable over a period of four years, based on continued
employment, with either annual, semi-
annual or quarterly vesting. In general, RSUs granted under the 2003 Plan vest over two to four years, are
subject to the employees’
continued employment and do not have an expiration date. As of September 26, 2009, approximately 37 million shares
were reserved for future issuance under the 2003 Plan.
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 seven to ten years after the grant date. All stock options granted under the 1997 Plan are
fully vested. 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. Options granted under the Director Plan expire ten years after the grant date. As of September 26, 2009, approximately 240,000 shares
were reserved for future issuance under the Director Plan.
Rule 10b5
-1 Trading Plans
As of October 16, 2009, executive officers Timothy D. Cook, Ronald B. Johnson, Peter Oppenheimer, Philip W. Schiller and Bertrand Serlet
have entered into trading plans pursuant to Rule 10b5-1(c)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
A
trading plan is a written document that pre-
establishes the amounts, prices and dates (or formula for determining the amounts, prices and dates)
of future purchases or sales of the Company’
s stock including the exercise and sale of employee stock options and shares acquired pursuant to
the Company’s employee stock purchase plan and upon vesting of RSUs.
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
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