Apple 2012 Annual Report Download - page 66

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. 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, based on continued
employment and are settled upon vesting in shares of the Company’s common stock on a one-for-one basis. Each
share issued with respect to an award granted under the 2003 Plan (other than a stock option or stock appreciation
right) reduces the number of shares available for grant under the plan by two shares, whereas shares issued in
respect of an option or stock appreciation right count against the number of shares available for grant on a
one-for-one basis. All RSUs, other than RSUs held by the Chief Executive Officer, granted under the 2003 Plan
have dividend equivalent rights (“DER”), which entitle holders of RSUs to the same dividend value per share as
holders of common stock. DER are subject to the same vesting and other terms and conditions as the corresponding
unvested RSUs. DER are accumulated and paid when the underlying shares vest. As of September 29, 2012,
approximately 37.1 million shares were reserved for future issuance under the 2003 Plan.
1997 Director Stock Plan
The 1997 Director Stock Plan (the “Director Plan”) is a shareholder approved plan that (i) permits the Company
to grant awards of RSUs or stock options to the Company’s non-employee directors, (ii) provides for automatic
initial grants of RSUs upon a non-employee director joining the Board of Directors and automatic annual grants
of RSUs at each annual meeting of shareholders, and (iii) permits the Board of Directors 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 Director Plan reduces the number of shares
available for grant under the plan by two shares. The Director Plan expires November 9, 2019. All RSUs granted
under the Director Plan are entitled to DER. As of September 29, 2012, approximately 184,000 shares were
reserved for future issuance under the Director Plan.
Rule 10b5-1 Trading Plans
During the fourth quarter of 2012, executive officers Timothy D. Cook, Peter Oppenheimer, D. Bruce Sewell,
Phillip W. Schiller and Jeffrey E. Williams, and directors William V. Campbell and Arthur D. Levinson had
equity trading plans adopted in accordance with Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). An equity trading plan is a written document that pre-establishes the amounts,
prices and dates (or a formula for determining the amounts, prices and dates) of future purchases or sales of the
Company’s stock, including shares acquired pursuant to the Company’s employee and director equity plans.
Employee Stock Purchase Plan
The Employee Stock Purchase Plan (the “Purchase Plan”) is a shareholder approved 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 or the 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 employees may not purchase more than $25,000 of stock during any calendar
year. As of September 29, 2012, approximately 2.5 million shares were reserved for future issuance under the
Purchase Plan.
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