Apple 2009 Annual Report Download - page 83

Table of Contents
under the Purchase Plan are limited to 10% of an employee’
s compensation, up to a maximum of $25,000 in any calendar year. The number of
shares authorized to be purchased in any calendar year is limited to a total of 3 million shares. As of September 26, 2009, approximately
4.7 million shares were reserved for future issuance under the Purchase Plan.
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 IRS annual
contribution limit ($16,500 for calendar year 2009). 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 eligible earnings. The Company’
s matching contributions to the Savings Plan were $59
million, $50 million and $39 million in 2009, 2008 and 2007, respectively.
Restricted Stock Units
Historically, the Company used equity awards in the form of stock options as one of the means for recruiting and retaining highly skilled talent.
In conjunction with the Company’
s 2009 equity compensation program changes, it began issuing primarily RSUs rather than stock options for
eligible employees as the primary type of long-term equity-based award. A summary of the Company’
s RSU activity and related information for
the three years ended September 26, 2009, is as follows (in thousands, except per share amounts):
The fair value as of the vesting date of RSUs that vested was $221 million, $320 million and $6 million for 2009, 2008 and 2007, respectively.
Upon vesting, the RSUs are generally net share-
settled to cover the required withholding tax and the remaining amount is converted into an
equivalent number of shares of common stock. The majority of RSUs vested in 2009, 2008 and 2007, were net-
share settled such that the
Company withheld shares with value equivalent to the employees’
minimum statutory obligation for the applicable income and other
employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares withheld were approximately 707,000, 857,000
and 20,000 for 2009, 2008 and 2007, respectively, and were based on the value of the RSUs on their vesting date as determined by the
Company’s closing stock price. Total payments for the employees’
tax obligations to the taxing authorities were $82 million, $124 million and
$3 million in 2009, 2008 and 2007, respectively, and are reflected as a financing activity within the Consolidated Statements of Cash
Flows. These net-
share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that
would have otherwise been issued as a result of the vesting and did not represent an expense to the Company.
80
Number of
Shares
Weighted-
Average
Grant Date
Fair Value
Aggregate
Intrinsic
Value
Balance at September 30, 2006
3,410
$
39.62
Restricted stock units granted
1,320
$
88.51
Restricted stock units vested
(45
)
$
46.57
Restricted stock units cancelled
(10
)
$
86.14
Balance at September 29, 2007
4,675
$
52.98
Restricted stock units granted
4,917
$
162.61
Restricted stock units vested
(2,195
)
$
25.63
Restricted stock units cancelled
(357
)
$
119.12
Balance at September 27, 2008
7,040
$
134.91
Restricted stock units granted
7,786
$
111.80
Restricted stock units vested
(1,935
)
$
124.87
Restricted stock units cancelled
(628
)
$
121.28
Balance at September 26, 2009
12,263
$
122.52
$
2,236,305