Apple 2006 Annual Report Download - page 41

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and the matter is concluded. The settlement of this matter did not have a material effect on the Company’s financial position or results of
operations.
Gordon v. Apple Computer, Inc.
Plaintiff filed this purported class action on August 31, 2006 in the United States District Court for the Northern District of California, San Jose
Division, on behalf of a purported nationwide class of consumers who purchased 65W Power Adapters for iBooks and Powerbooks between
November 2002 and the present. The complaint alleges various problems with the 65W Adapter, including fraying, sparking and premature
failure. Plaintiffs allege violations of California Business & Professions Code §
17200 (unfair competition), the Consumer Legal Remedies Act,
the Song-Beverly Consumer Warranty Act and breach of warranties. The complaint seeks damages and equitable relief. The Company filed an
answer on October 20, 2006 denying the material allegations and asserting numerous affirmative defenses. Mediation is set for March 13,
2007.
Greaves v. Apple Computer, Inc.
On June 30, 2006 Plaintiff filed this purported class action in San Diego Superior Court on behalf of a purported class of California purchasers
alleging discoloration of the MacBook case. Plaintiff asserts claims under California Business & Professions Code §17500 (false advertising),
California Business & Professions Code §17200 (unfair competition), the Consumer Legal Remedies Act and misrepresentation. Plaintiff’s
complaint seeks damages and equitable relief. Plaintiff filed a First Amended Complaint on August 16, 2006. The Company filed an answer on
October 3, 2006 denying all allegations and asserting numerous affirmative defenses.
Honeywell International, Inc., et al. v. Apple Computer, Inc., et al.
Plaintiffs Honeywell International, Inc. and Honeywell Intellectual Properties, Inc. filed this action on October 6, 2004 in the United States
District Court in Delaware alleging infringement by the Company and other defendants of U.S. Patent 5,280,371 entitled “Directional Diffuser
for a Liquid Crystal Display.” Plaintiffs seek unspecified damages and other relief. The Company filed an answer on December 21, 2004
denying all material allegations and asserting numerous affirmative defenses. The Company has tendered the case to several LCD manufacturer
suppliers. On May 18, 2005 the Court stayed the case against the Company and the other non-manufacturer defendants. Plaintiffs filed an
amended complaint on November 7, 2005 adding additional defendants and expanding the scope of the accused products. Given the stay, the
Company’s response to the amended complaint is not yet due.
In re Apple Computer, Inc. Derivative Litigation (formerly Karant v. Jobs, et al. and Related Actions) (Federal Action)
On June 30, 2006, a putative derivative action captioned Karant v. Jobs, et. al. , was filed in the United States District Court for the Northern
District of California, San Jose Division. A number of related actions were filed in the subsequent weeks and have been consolidated into a
single action captioned In re Apple Computer, Inc. Derivative Litigation , Master File No. C-06-04128-JF before the Hon. Jeremy Fogel. A
Consolidated Shareholder Derivative Complaint was filed on December 18, 2006. The action purports to assert claims on behalf of the
Company against several current and former executive officers and members of the Board of Directors alleging improper backdating of stock
option grants to maximize certain defendants’ profits, failing to properly account for and take tax deductions for those grants, insider trading
and issuing false financial statements. The Company is named as a nominal defendant. The consolidated complaint alleges various causes of
action under federal and California law, including claims for unjust enrichment, breach of fiduciary duty, violation of the California
Corporations Code, abuse of control, gross mismanagement, rescission, constructive fraud and waste of corporate assets, as well as claims
under Sections 10(b), 14(a) and 20(a) of the Securities Exchange Act. Plaintiffs seek damages, disgorgement, restitution and imposition of a
constructive trust. The actions were filed after the Company’s
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