Apple 1995 Annual Report Download - page 36

Employee Savings Plan
The Company has an employee savings plan (the "Savings Plan") that qualifies 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 pretax earnings, up to the Internal
Revenue Service annual contribution limit ($9,240 for calendar year 1995). Effective October 1, 1995, 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 earnings. Prior to October 1, 1995, the
Company matched 30% to 70% of each employee's contributions, depending on length of service, up to a maximum 6% of the employee's
earnings. The Company's matching contributions to the Savings Plan were approximately $14.6 million, $10.7 million, and $11.1 million in
1995, 1994, and 1993, respectively.
Preferred Stock
Five million shares of preferred stock have been authorized for issuance in one or more series. The Board of Directors is authorized to fix the
number and designation of any such series and to determine the rights, preferences, privileges, and restrictions granted to or imposed on any
such series.
Commitments and Contingencies
Lease Commitments
The Company leases various facilities and equipment under noncancelable operating lease arrangements. The major facilities leases are for
terms of 5 to 10 years and generally provide renewal options for terms of up to 5 additional years. Rent expense under all operating leases was
approximately $127 million, $122 million, and $170 million in 1995, 1994, and 1993, respectively. Future minimum lease payments under
these noncancelable operating leases having remaining terms in excess of one year as of September 29, 1995, are as follows:
(In millions)
Apple v. Microsoft Corporation and Hewlett-Packard Company In March 1988, the Company filed suit in the U.S. District Court for the
Northern District of California (the "Court") against Microsoft Corporation ("Microsoft") and Hewlett
-Packard Company ("HP") alleging that
their Microsoft Windows and HP NewWave computer programs infringe the Company's audiovisual copyrights protecting the Macintosh user
interface. On August 24, 1993, the district court entered final judgment for Microsoft and HP, dismissing the Company's action.
On September 21, 1993, the Court denied defendants' motions for an award of full defense costs and attorneys' fees under 17 U.S.C. Section
505, but allowed defendants to renew their motions should the Supreme Court alter the standard for the award of attorneys' fees in copyright
cases in the case of Fogerty v. Fantasy, Inc., 114 S. Ct. 1023 (1994).
On September 20, 1993, the Company appealed the case to the U.S. Court of Appeals for the Ninth Circuit. On September 24, 1994, the Court
of Appeals issued its decision affirming the district court judgment on the merits but remanding the case on the issue of attorneys' fees in light
of the Fogerty decision. The Company filed a petition for a writ of
certiorari in the Supreme Court of the United States on December 19, 1994.
The Company's petition for a writ of certiorari was denied by the Supreme Court of the United States on February 21, 1995. Accordingly, the
decision of the appellate court affirming the dismissal of the Company's copyright infringement case against Microsoft and HP is now final.
The requests of Microsoft and HP for attorneys' fees have been resolved by settlement agreements. Accordingly, the matter has been entirely
resolved.
34
1996 $ 71
1997 62
1998 38
1999 21
2000 17
Later years 36
Total minimum lease payments $ 245
Litigation