Apple 2010 Annual Report Download - page 75

Table of Contents
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. 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 Plan
In August 1997, the Company’s Board of Directors (the “Board”)
adopted a Director Stock Option Plan, which was subsequently renamed the
1997 Director Stock Plan (the “Director Plan”)
and has been approved by shareholders. As amended, the Director Plan (i) permits the Company
to grant awards of RSUs or stock options to the Company’s non-
employee directors, (ii) beginning February 25, 2010, provides for automatic
initial grants of RSUs upon a non-
employee director joining the Board and automatic annual grants of RSUs at each annual meeting of
shareholders, and (iii) permits the Board to prospectively change the relative mixture of stock options and RSUs for the initial and annual award
grants and the methodology for determining the number of shares of the Company’
s common stock subject to these grants without shareholder
approval. Each share issued with respect to RSUs granted under the plan reduces the number of shares available for grant under the plan by two
shares. The Director Plan expires November 9, 2019. As of September 25, 2010, approximately 199,000 shares were reserved for future issuance
under the Director Plan.
Rule 10b5
-1 Trading Plans
During the fourth quarter of 2010, executive officers Timothy D. Cook, Peter Oppenheimer, D. Bruce Sewell, Philip W. Schiller and Bertrand
Serlet had 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 the Company’
s common stock through payroll deductions at a price equal to 85% of the lower of the fair market values of the stock as
of the beginning and end of six-month offering periods. An employee’
s payroll deductions under the Purchase Plan are limited to 10% of the
employee’s compensation and employee’
s may not purchase more than $25,000 of stock for any calendar year. Additionally, no more than
1,000,000 shares may be purchased in the aggregate in any one offering period. As of September 25, 2010, approximately 3.8 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 2010). 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 $72
million, $59 million and $50 million in 2010, 2009 and 2008, respectively.
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