Apple 1996 Annual Report Download - page 47

Litigation
Abraham and Evelyn Kostick Trust v. Peter Crisp et al.
In January 1996, a purported shareholder class action was filed in the California Superior Court for Santa Clara County naming the Company
and its directors as defendants. The complaint sought injunctive relief and damages and alleged that acts of mismanagement resulted in a
depressed price for the Company. In February 1996, the complaint was amended to add a former director as a defendant and to add purported
class and derivative claims based on theories such as breach of fiduciary duty, misrepresentation, and insider trading. In July 1996, the Court
sustained defendants' demurrer and dismissed the amended complaint on a variety of grounds and granted plaintiffs leave to amend the
complaint. In October 1996, the plaintiffs filed a second amended complaint naming the Company's directors and certain former directors as
defendants and again alleging purported class and derivative claims, seeking injunctive relief and damages (compensatory and punitive) based
on theories such as breach of fiduciary duty, misrepresentation, and insider trading. In November 1996, the Company filed a demurrer seeking
dismissal of the second amended complaint.
Derek Pritchard v. Michael Spindler et al.
In March 1996, a purported shareholder class action was filed in the California Superior Court for Santa Clara County naming certain current
and former directors of the Company as defendants. The complaint sought damages and alleged that the defendants breached their fiduciary
duty by allegedly rejecting an offer from a computer company (not named in the complaint) to acquire the Company at a price in excess of $50
per share. In August 1996, the Court sustained defendants' demurrer and dismissed the complaint on a variety of grounds, and granted plaintiff
leave to amend the complaint. In October 1996, the plaintiff filed his first amended complaint in which he asserted the same purported cause of
action as the original complaint, alleged additional facts purportedly in support thereof, and added the Company as a defendant. The Company
intends to file a demurrer seeking dismissal of the first amended complaint.
LS Men's Clothing Defined Benefit Pension Fund v. Michael Spindler et al. In May 1996, an action was filed in the California Superior Court
for Alameda County naming as defendants the Company and certain of its current and former officers and directors. The complaint seeks
compensatory and punitive damages and generally alleges that the defendants misrepresented or omitted material facts about the Company's
operations and financial results, which plaintiff contends artificially inflated the price of the Company's stock. The case has been transferred to
the California Superior Court for Santa Clara County. None of the defendants has yet responded to the complaint.
"Repetitive Stress Injury" Litigation
The Company is named in numerous lawsuits (fewer than 100) alleging that the plaintiff incurred so-called "repetitive stress injury" to the
upper extremities as a result of using keyboards and/or mouse input devices sold by the Company. On October 4, 1996, in a trial of one of these
cases (Dorsey v. Apple) in the United States District Court for the Eastern District of New York, the jury rendered a verdict in favor of the
Company, and final judgement in favor of the Company has been entered. The other cases are in various stages of pretrial activity. These suits
are similar to those filed against other major suppliers of personal computers. Ultimate resolution of the litigation against the Company may
depend on progress in resolving this type of litigation in the industry overall.
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