Apple 2007 Annual Report Download - page 30

device" and U.S. Patent No. 6,762,584 entitled "Recharger for use with a portable electronic device and which includes a connector terminus for
communicating with rechargeable batteries contained within the device." The complaint seeks unspecified damages and other relief. The
Company filed an answer on October 12, 2007 denying all material allegations and asserting numerous affirmative defenses. The Company also
asserted counterclaims for declaratory judgment of noninfringement and invalidity.
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 liquid crystal
display 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. The
actions were filed after the Company's announcement on June 29, 2006 that an internal investigation had discovered irregularities related to the
issuance of certain stock option grants made between 1997 and 2001, that a special committee of the Company's outside directors had retained
independent counsel to perform an investigation and that the Company had informed the Securities and Exchange Commission. 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. A Consolidated Shareholder Derivative Complaint was filed on December 18,
2006, and a First Amended Shareholder Derivative Complaint was filed on March 6, 2007. Defendants filed a motion to dismiss on April 20,
2007, which was heard on September 7, 2007.
On June 12, 2007, the Company's Board of Directors approved a resolution appointing a Special Litigation Committee to make all decisions
relating to options litigation.
In re Apple Computer, Inc. Derivative Litigation (formerly Plumbers and Pipefitters v. Jobs, et al. and Related Actions) (State Action); Boston
Retirement Board v. Apple Computer, Inc.
On July 5, 2006, a putative derivative action captioned Plumbers and Pipefitters v. Jobs, et. al. , was filed in California Superior Court for the
County of Santa Clara. 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 , No. 1:06CV066692, assigned to the Hon. Joseph Huber. These actions purport 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
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