eTrade 2008 Annual Report Download - page 17

Attempts to acquire control of the Company may also be delayed or prevented by our stockholder rights plan,
which is designed to enhance the ability of our Board to protect shareholders against unsolicited attempts to acquire
control of the Company that do not offer an adequate price to all shareholders or are otherwise not in the best
interests of the Company and our shareholders. In addition, certain provisions of our stock incentive plans,
management retention and employment agreements (including severance payments and stock option acceleration),
and Delaware law may also discourage, delay or prevent someone from acquiring or merging with us.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
A summary of our significant locations at December 31, 2008 is shown in the following table. All facilities
are leased, except for 165,000 square feet of our office in Alpharetta, Georgia. Square footage amounts are net of
space that has been sublet or part of a facility restructuring.
Location Approximate Square Footage
Alpharetta, Georgia 260,000
Arlington, Virginia 140,000
Jersey City, New Jersey 107,000
Sandy, Utah 77,000
Menlo Park, California 69,000
New York, New York 53,000
All of our facilities are used by either our retail or institutional segments. All other leased facilities with
space of less than 25,000 square feet are not listed by location. In addition to the significant facilities above, we
also lease all of our 29 E*TRADE Financial Centers, ranging in space from approximately 2,500 to 13,000
square feet. We believe our facilities space is adequate to meet our needs in 2009.
ITEM 3. LEGAL PROCEEDINGS
On October 27, 2000, a complaint was filed in the Superior Court for the State of California, County of
Santa Clara, entitled, “Ajaxo, Inc., a Delaware corporation, Plaintiff, versus E*TRADE GROUP, INC., a
Delaware corporation; and Everypath, Inc., a California corporation; and Does 1 through 50, inclusively,
Defendants.” Through this complaint, Ajaxo sought damages and certain non-monetary relief for the Company’s
alleged breach of a non-disclosure agreement with Ajaxo pertaining to certain wireless technology offered to the
Company by Ajaxo as well as damages and other relief against both the Company and defendant Everypath, Inc.,
for their alleged misappropriation of Ajaxo’s trade secrets. Following a jury trial, a judgment was entered in 2003
in favor of Ajaxo against the Company for $1.3 million dollars for breach of the Ajaxo non-disclosure agreement.
Although the jury also found in favor of Ajaxo on its misappropriation of trade secrets claim against the
Company and defendant Everypath, the trial court subsequently denied Ajaxo’s requests for additional damages
and relief on these claims. Thereafter, all parties appealed, and on December 21, 2005, the California Court of
Appeal affirmed the above-described award against the Company for breach of the nondisclosure agreement but
remanded the case to the trial court for the limited purpose of determining what, if any, additional damages
Ajaxo may be entitled to as a result of the jury’s previous finding in favor of Ajaxo on its misappropriation of
trade secrets claim against the Company and defendant Everypath. Following the foregoing ruling by the Court
of Appeal, defendant Everypath ceased operations and made an assignment for the benefit of its creditors in
January, 2006. As a result, defendant Everypath is no longer defending the case. Although the Company paid
Ajaxo the full amount due on the judgment against it above, the case, consistent with the rulings issued by the
Court of Appeal, was remanded back to the trial court, and on May 30, 2008, a jury returned a verdict in favor of
E*TRADE denying all claims raised and demands for damages against the Company by Ajaxo. Following the
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