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0000320193
20071115
10-K
1,736
Mr. Gore was inaugurated as the 45th Vice President of the United States in 1993.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,737
He was re-elected in 1996 and served for a total of eight years as President of the Senate, a member of the Cabinet and the National Security Council.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,738
Prior to 1993, he served eight years in the U.S. Senate and eight years in the U.S. House of Representatives.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,739
Steven P. Jobs is one of the Company's co-founders and currently serves as its Chief Executive Officer.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,740
Mr. Jobs is also a director of The Walt Disney Company.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,741
Arthur D. Levinson, Ph.D. has been Chief Executive Officer and a Director of Genentech Inc. ("Genentech") since July 1995.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,742
Dr. Levinson has been Chairman of the Board of Directors of Genentech since September 1999.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,743
He joined Genentech in 1980 and served in a number of executive positions, including Senior Vice President of R&D from 1993 to 1995.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,744
Dr. Levinson also serves on the Board of Directors of Google.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,745
Eric E. Schmidt, Ph.D. has served as the Chief Executive Officer of Google since July 2001 and as a member of Google's Board of Directors since March 2001, where he served as Chairman of the Board from March 2001 to April 2004.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,746
In April 2004, Dr. Schmidt was named Chairman of the Executive Committee of Google's Board of Directors.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,747
From April 1997 to November 2001, Dr. Schmidt served as Chairman of the Board of Directors of Novell, Inc. ("Novell"), a computer networking company, and, from April 1997 to July 2001, as the Chief Executive Officer of Novell.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,748
Jerome B. York has been Chief Executive Officer of Harwinton Capital LLC (formerly Harwinton Capital Corporation), a private investment company that he controls, since September 2003.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,749
From January 2000 until September 2003, Mr. York was Chairman and Chief Executive Officer of MicroWarehouse, Inc., a reseller of computer hardware, software and peripheral products.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,750
From September 1995 to October 1999, he was Vice Chairman of Tracinda Corporation.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,751
From May 1993 to September 1995 he was Senior Vice President and Chief Financial Officer of IBM Corporation ("IBM"), and served as a member of IBM's Board of Directors from January 1995 to August 1995.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,752
Mr. York is also a director of Tyco International Ltd. Role of the Board; Corporate Governance Matters It is the paramount duty of the Company's Board of Directors (the "Board of Directors") to oversee the Chief Executive Officer and other senior management in the competent and ethical operation of the Company on a day...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,753
To satisfy this duty, the directors take a proactive, focused approach to their position, and set standards to ensure that the Company is committed to business success through maintenance of high standards of responsibility and ethics.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,754
Members of the Board of Directors bring a wide range of experience, knowledge and judgment to the Company.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,755
These varied skills mean that governance is far more than a "check the box" approach to standards or procedures.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,756
The governance structure in the Company is designed to be a working structure for principled actions, effective decision-making and appropriate monitoring of both compliance and performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,757
The key practices and procedures of the Board of Directors are outlined in the Corporate Governance Guidelines available on the Company's website at www.apple.com/investor.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,758
Board Committees The Board of Directors has a standing Compensation Committee, a Nominating and Corporate Governance Committee ("Nominating Committee") and an Audit and Finance Committee ("Audit Committee").
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,759
All committee members are independent under the listing standards of the NASDAQ Global Select Market.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,760
The members of the committees are identified in the table below.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,761
The Audit Committee is primarily responsible for overseeing the services performed by the Company's independent registered public accounting firm and internal audit department, evaluating the Company's accounting policies and its system of internal controls and reviewing significant financial transactions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,762
Members of the Audit Committee are Messrs. Campbell and York and Dr. Levinson.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,763
The Audit Committee met a total of 14 times during fiscal year 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,764
The Compensation Committee is primarily responsible for reviewing the compensation arrangements for the Company's executive officers, including the Chief Executive Officer, and for administering the Company's equity compensation plans.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,765
Members of the Compensation Committee are Messrs. Campbell, Drexler, and Gore.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,766
The Compensation Committee met a total of five (5) times during fiscal year 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,767
The Nominating Committee assists the Board of Directors in identifying qualified individuals to become directors, determines the composition of the Board of Directors and its committees, monitors the process to assess the Board of Directors' effectiveness and helps develop and implement the Company's corporate governan...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,768
The Nominating Committee also considers nominees proposed by shareholders.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,769
Members of the Nominating Committee are Messrs. Drexler and Gore and Dr. Levinson.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,770
The Nominating Committee met a total of three (3) times during fiscal year 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,771
The Audit, Compensation and Nominating Committees operate under written charters adopted by the Board of Directors.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,772
These charters are available on the Company's website at www.apple.com/investor.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,773
Audit Committee Financial Expert The Board of Directors has determined that all members of the Company's Audit Committee, Messrs. Campbell and York and Dr. Levinson, qualify as "audit committee financial experts" as defined by the Securities and Exchange Commission (the "SEC") and also meet the additional criteria for ...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,774
Code of Ethics The Company has a code of ethics that applies to all of the Company's employees, including its principal executive officer, principal financial officer and principal accounting officer, and the Board of Directors.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,775
A copy of this code, "Ethics: The Way We Do Business Worldwide," is available on the Company's website at www.apple.com/investor.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,776
The Company intends to disclose any changes in or waivers from its code of ethics by posting such information on its website or by filing a Form 8-K. Executive Officers of the Registrant The following sets forth certain information regarding executive officers of the Company.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,777
Information pertaining to Mr. Jobs, who is both a director and an executive officer of the Company, may be found in the section entitled "Directors."
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,778
Timothy D. Cook, Chief Operating Officer, joined the Company in March 1998.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,779
Mr. Cook also served in the position of Executive Vice President, Worldwide Sales and Operations from 2002 to 2005.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,780
In 2004, his responsibilities were expanded to include the Company's Macintosh hardware engineering.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,781
From 2000 to 2002, Mr. Cook served in the role of Senior Vice President, Worldwide Operations, Sales, Service and Support.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,782
From 1998 to 2000, Mr. Cook served in the position of Senior Vice President, Worldwide Operations.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,783
Prior to joining the Company, Mr. Cook held the position of Vice President, Corporate Materials for Compaq Computer Corporation ("Compaq").
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,784
Previous to his work at Compaq, Mr. Cook was the Chief Operating Officer of the Reseller Division at Intelligent Electronics.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,785
Mr. Cook also spent 12 years with IBM, most recently as Director of North American Fulfillment.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,786
Mr. Cook also serves as a member of the Board of Directors of Nike, Inc. Daniel Cooperman, Senior Vice President, General Counsel and Secretary, joined the Company in November 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,787
Prior to joining the Company, he served as Senior Vice President, General Counsel and Secretary of Oracle Corporation since February 1997.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,788
Prior to that, he had been associated with the law firm of McCutchen, Doyle, Brown & Enersen (which is now Bingham McCutchen LLP) since October 1977, and had served as a partner since June 1983.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,789
From September 1995 until February 1997, Mr. Cooperman was Chair of the law firm's Business and Transactions Group and from April 1989 through September 1995, he served as the Managing Partner of the law firm's San Jose office.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,790
Tony Fadell, Senior Vice President, iPod Division, joined the Company in 2001.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,791
From 2004 to April 2006, Mr. Fadell was Vice President of iPod Engineering.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,792
From 2001 to 2004, Mr. Fadell was the Senior Director of the Company's iPod Engineering Team.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,793
Prior to joining Apple, Mr. Fadell was a co-founder, CTO, and director of engineering of the Mobile Computing Group at Philips Electronics where he was responsible for all aspects of business and product development for a variety of products.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,794
Mr. Fadell later became VP of Business Development for Philips U.S. Strategy & Ventures, focusing on building the company's digital media strategy and investment portfolio.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,795
Ronald B. Johnson, Senior Vice President, Retail, joined the Company in January 2000.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,796
Prior to joining the Company, Mr. Johnson spent 16 years with Target Stores, most recently as Senior Merchandising Executive.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,797
Peter Oppenheimer, Senior Vice President and Chief Financial Officer, joined the Company in July 1996.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,798
Mr. Oppenheimer also served the Company in the position of Vice President and Corporate Controller, and as Senior Director of Finance for the Americas.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,799
Prior to joining the Company, Mr. Oppenheimer was CFO of one of the four business units for Automatic Data Processing, Inc. ("ADP").
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,800
Prior to joining ADP, Mr. Oppenheimer spent six years in the Information Technology Consulting Practice with Coopers and Lybrand.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,801
Philip W. Schiller, Senior Vice President, Worldwide Product Marketing, rejoined the Company in 1997.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,802
Prior to rejoining the Company, Mr. Schiller was Vice President of Product Marketing at Macromedia, Inc. from December 1995 to March 1997, and was Director of Product Marketing at FirePower Systems, Inc. from 1993 to December 1995.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,803
Prior to that, Mr. Schiller spent six years at the Company in various marketing positions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,804
Bertrand Serlet, Ph.D., Senior Vice President, Software Engineering, joined the Company in February 1997 upon the Company's acquisition of NeXT and also served the Company in the position of Vice President of Platform Technology.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,805
At NeXT, Dr. Serlet held several engineering and managerial positions, including Director of Web Engineering.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,806
Prior to NeXT, from 1985 to 1989, Dr. Serlet worked as a research engineer at Xerox PARC.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,807
Sina Tamaddon, Senior Vice President, Applications, joined the Company in September 1997.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,808
Mr. Tamaddon has also served with the Company in the position of Senior Vice President, Worldwide Service and Support, and Vice President and General Manager, Newton Group.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,809
Before joining the Company, Mr. Tamaddon held the position of Vice President, Europe with NeXT from September 1996 through March 1997.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,810
From August 1994 to August 1996, Mr. Tamaddon held the position of Vice President, Professional Services with NeXT.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,811
Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires the Company's executive officers and directors, and persons who own more than ten percent of a registered class of the Company's equity securities, to file reports of securities ownership and changes in such ownership wit...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,812
Executive officers, directors and greater than ten percent shareholders also are required by rules promulgated by the SEC to furnish the Company with copies of all Section 16(a) forms they file.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,813
Based solely upon a review of the copies of such forms furnished to the Company or written representations that no Forms 5 were required, the Company believes that all Section 16(a) filing requirements were met during fiscal year 2007, except that (i) one Form 4 was filed for William Campbell on October 26, 2007 with r...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,814
Item 11.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,815
Executive Compensation COMPENSATION DISCUSSION AND ANALYSIS A.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,816
EXECUTIVE SUMMARY This section explains Apple's executive compensation program as it relates to the following "named executive officers:" Apple's executive compensation program for the named executive officers consists of long-term equity awards in the form of restricted stock units ("RSUs") and cash compensation in th...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,817
Each year, the Compensation Committee, which is made up entirely of independent directors, determines the compensation for the named executive officers.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,818
Apple relies heavily on long-term equity awards to attract and retain an outstanding executive team and to ensure a strong connection between executive compensation and financial performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,819
An RSU award gives the named executive officer the right to receive, at no cost, a specified number of shares of Apple common stock when the award vests, typically at intervals of two to four years.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,820
Because the value of the RSUs depends on Apple's future share price, the award links compensation to future financial performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,821
The officer is generally not eligible to receive the shares if employment is terminated before the RSUs vest.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,822
The Compensation Committee reviews annually the outstanding, unvested equity awards of each named executive officer to determine, in the Committee's discretion, whether additional awards are warranted in light of the officer's performance, the competitive environment and the other factors discussed in Section D3 below.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,823
The performance-based cash incentives compensate the named executive officers for achieving specific financial goals established annually by the Compensation Committee, as described in Section D4.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,824
The Committee sets aggressive performance goals each year based on the revenue and operating income objectives in Apple's internal business plan.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,825
Payments are not automatic, however, because the Committee may exercise its discretion to reduce (but not increase) the amount of any incentive payment based on an officer's overall performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,826
Based on the factors discussed in Section D3 below and the Committee's belief that the outstanding, unvested equity awards still had significant retention value, the Committee made no new equity awards to the named executive officers in fiscal 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,827
The officers earned cash incentives in fiscal 2007 at the maximum amount allowed by the plan-100% of base salary-because Apple's financial performance significantly exceeded the annual performance goals set by the Committee.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,828
The Committee assessed both the amount and allocation of the compensation components for each officer based on Apple's overall annual financial performance and each officer's individual performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,829
The Committee did not increase base salaries for the named executive officers because it concluded that the total compensation for each officer was appropriate.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,830
Apple's shareholders have been generously rewarded for Apple's success, with a three-year annualized shareholder return of 101% through the end of fiscal 2007.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,831
The Committee believes the compensation of the named executive officers has been appropriate and fair in light of Apple's performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,832
B.
0001047469-07-009340/full-submission.txt
0000320193
20071115
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1,833
EXECUTIVE COMPENSATION OBJECTIVES Apple's goal for executive compensation is simple: attract and retain an exceptionally talented, entrepreneurial and creative team of executives who will provide the leadership for Apple's success in dynamic, highly-competitive markets.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,834
C. EXECUTIVE COMPENSATION OVERVIEW 1.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
1,835
Three Components The compensation program for the named executive officers consists of the following three components, in order of their importance: •Long-term equity awards in the form of RSUs under the shareholder-approved Employee Stock Plan •Annual performance-based cash incentives under the shareholder-approved Pe...
0001047469-07-009340/full-submission.txt