Apple 2008 Annual Report Download - page 28

Download and view the complete annual report

Please find page 28 of the 2008 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 103

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103

Table of Contents
Sacramento, California that include warehousing and distribution operations, as well as a customer support call center. In addition, the Company
owned approximately 2.3 million square feet of facilities for research and development and corporate functions in Cupertino, California,
including approximately 1.0 million square feet purchased in 2007 and 2006 for the future development of the Company’s second corporate
campus in Cupertino, California, and approximately 107,000 square feet for a data center in Newark, California. Outside the U.S., the Company
owned additional facilities totaling approximately 129,000 square feet as of September 27, 2008. The Company believes its existing facilities
and equipment are well maintained and in good operating condition.
The Company has invested in internal capacity and strategic relationships with outside manufacturing vendors, and therefore believes it has
adequate manufacturing capacity for the foreseeable future. The Company continues to make investments in capital equipment as
needed to meet
anticipated demand for its products.
Item 3. Legal Proceedings
As of September 27, 2008, the end of the annual period covered by this report, the Company is subject to the various legal proceedings and
claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the
ordinary course of business. In the opinion of management, the Company does not have a potential liability related to any current legal
proceedings and claims that would individually or in the aggregate have a material adverse effect on its financial condition or operating results.
However, the results of legal proceedings cannot be predicted with certainty. Should the Company fail to prevail in any of these legal matters or
should several of these legal matters be resolved against the Company in the same reporting period, the operating results of a particular reporting
period could be materially adversely affected. The Company settled certain matters during the fourth quarter of 2008 that did not individually or
in the aggregate have a material impact on the Company’s results of operations.
Bader v. Anderson, et al.
Plaintiff filed this purported shareholder derivative action against the Company and each of its then current executive officers and members of its
Board of Directors on May 19, 2005 in Santa Clara County Superior Court asserting claims for breach of fiduciary duty, material misstatements
and omissions and violations of California Business & Professions Code §17200 (unfair competition). The complaint alleged that the Company’
s
March 14, 2005, proxy statement was false and misleading for failure to disclose certain information relating to the Apple Computer, Inc.
Performance Bonus Plan, which was approved by shareholders at the annual meeting held on April 21, 2005. Plaintiff, who ostensibly brought
suit on the Company’s behalf, made no demand on the Board of Directors and alleged that such demand was excused. The complaint sought
injunctive and other relief for purported injury to the Company. On July 27, 2005, plaintiff filed an amended complaint alleging that, in addition
to the purported derivative claims, adoption of the bonus plan and distribution of the proxy statement describing that plan also inflicted injury on
her directly as an individual shareholder. On January 10, 2006, the Court sustained defendants’ demurrer to the amended complaint, with leave
to amend. Plaintiff filed a second amended complaint on February 7, 2006, and the Company filed a demurrer. After a hearing on June 13, 2006,
the Court sustained the demurrer without leave to amend as to the non-director officers and with leave to amend as to the directors. On July 24,
2006, plaintiff filed a third amended complaint, which purported to bring claims derivatively as well as directly on behalf of a class of common
stockholders who have been or will be harmed by virtue of the allegedly misleading proxy statement. In addition to reasserting prior causes of
action, the third amended complaint included a claim that the Company violated the terms of the plan, and a claim for waste related to restricted
stock unit grants to certain officers in 2003 and 2004 and an option grant to the Company’s CEO in January 2000. The Company filed a
demurrer to the third amended complaint. On January 30, 2007, the Court sustained the Company’s demurrer with leave to amend. On May 8,
2007, plaintiff filed a fourth amended complaint. The Company filed a demurrer to the fourth amended complaint, which the Court sustained,
without leave to amend, on October 12, 2007. On October 25, 2007, the Court entered a final judgment in favor of defendant and ordered the
case dismissed with prejudice. On November 26, 2007, plaintiff filed a notice of appeal. Plaintiffs’ appeal is pending.
25