Home Depot 2007 Annual Report Download - page 28

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amended complaint seeking certification as a class action, unspecified damages, costs, attorneys' fees and equitable and injunctive relief. On
September 10, 2007, the Court granted the defendants' motion to dismiss and entered judgment for the defendants. The plaintiffs' appeal from the
dismissal is pending in the U.S. Court of Appeals for the Eleventh Circuit.
In the second and third quarters of fiscal 2006, six shareholder derivative actions were filed nominally on behalf of the Company against certain
current and former officers and directors in the Superior Court of Fulton County, Georgia, alleging breach of fiduciary duty, abuse of control,
gross mismanagement, waste of corporate assets, and unjust enrichment in connection with the Company's return-to-vendor, stock option, and
compensation practices. Relief sought in each action includes unspecified damages, injunctive relief, disgorgement of profits, benefits and
compensation obtained by the defendants, costs, and attorney's fees. Subsequently, one joint amended complaint was filed on behalf of all
plaintiffs encompassing all the various claims and seeking the same relief. The defendants have moved to dismiss or alternatively stay the
litigation.
In the first quarter of fiscal 2007, three additional shareholder derivative actions were filed nominally on behalf of the Company against certain
of the Company's current directors and its former chief executive officer in the U.S. District Court for the Northern District of Georgia in
Atlanta. The three actions have been consolidated, and plaintiffs have filed a consolidated amended complaint, alleging breach of fiduciary duty,
abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment in connection with the Company's stock option and
compensation practices. Relief sought in the action includes unspecified damages, injunctive relief, punitive damages, and costs and attorneys'
fees. The defendants have moved to dismiss the complaint.
In the fourth quarter of fiscal 2007, a purported shareholder of the Company filed a securities lawsuit in the U.S. District Court for the Northern
District of Georgia against the Company and certain of its current and former directors, alleging that the defendants violated Section 14(a) of the
Securities Exchange Act of 1934 and Rule 14a-9 thereunder in connection with the issuance of the Company's 2005 Proxy Statement.
Specifically, the complaint alleges that the 2005 Proxy was materially misleading because it did not disclose in connection with seeking
shareholder approval of a new stock incentive plan that the Company had granted backdated stock options under the old plan. The complaint
seeks to void the vote in favor of the new plan, cancel the new plan, and cancel or void any stock options or other awards made or issued under
the new plan. The defendants have moved to dismiss the complaint.
The parties to the derivative and Section 14(a) actions described above have entered into a Stipulation of Settlement dated March 28, 2008.
Pursuant to the stipulation, the Company will maintain or adopt certain corporate governance practices. The Company has also agreed to pay
plaintiff's counsel an award of attorneys fees and reimbursement of expenses in the amount of $14.5 million. The settlement, including the award
to plaintiff's counsel, is subject to the approval of the Superior Court of Fulton County, Georgia, among other conditions.
From the second quarter of 2001 through the third quarter of 2007, current and former hourly associates have filed eight current lawsuits in
multiple jurisdictions, containing multiple class-action allegations that the Company forced them to work "off the clock" or failed to provide
work breaks, or otherwise that they were not paid for work performed. The complaints generally seek unspecified monetary damages, injunctive
relief or both. Class or collective-
action certification has yet to be addressed in most of these cases. The Company cannot reasonably estimate the
possible loss or range of loss which may arise from these lawsuits. These matters, if decided adversely to or settled by the Company, individually
or in the aggregate, may have a material adverse effect on its consolidated financial condition or results of operations. The Company is
vigorously defending itself against these actions.
In compliance with SEC disclosure requirements, the environmental proceeding set forth below involves potential monetary sanctions of
$100,000 or more. Although the Company cannot predict the outcome
13