Intel 2003 Annual Report Download - page 28

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Table of Contents
Index to Financial Statements
express and implied licenses and patent exhaustion defenses Dell has raised to defend the Intergraph claims. Dell has also issued a request for
indemnity from Intel for any damages awarded against Dell, although this issue has not been made an element of the pending litigation. Intel
intends to participate vigorously in the defense of all relevant claims.
In re Intel Corporation Securities Litigation (Consolidated), U.S. Dist. Ct., Northern Calif.
Dr. Jayant S. Patel, et al. v. Gordon Moore, et al., Calif. Superior Ct., Santa Clara County
Howard Lasker, et al. v. Gordon Moore, et al., Del. Chancery Ct., New Castle County
In 2001, various plaintiffs filed five class-action lawsuits against Intel alleging violations of the Securities Exchange Act of 1934. These
complaints were consolidated in an amended complaint filed in the U.S. District Court for the Northern District of California. The lawsuit
alleged that purchasers of Intel stock between July 19, 2000 and September 29, 2000 were misled by false and misleading statements by Intel
and certain of its officers and directors concerning the company’s business and financial condition. In July 2003, the court granted Intel’s
motion to dismiss the plaintiffs’ second amended complaint in its entirety with prejudice, and the plaintiffs did not appeal the court’s dismissal
of the suit.
In addition, various plaintiffs filed stockholder derivative complaints in California Superior Court and Delaware Chancery Court against
the company’s directors and certain officers, alleging that they mismanaged the company and otherwise breached their fiduciary obligations to
the company. The plaintiffs in the California action filed the original and two successive amended complaints, and the California Superior
Court sustained Intel’s demurrers on each of these complaints. Following the court’s dismissal without prejudice of these complaints, the
plaintiffs notified the court and Intel in June 2003 that they would not file a fourth complaint, and they signed a stipulation withdrawing their
lawsuit with prejudice, which the court approved. In December 2003, the plaintiffs in the Delaware action withdrew their complaint and the
case was dismissed with prejudice.
Deanna Neubauer et al. v. Intel Corporation, Gateway Inc., Hewlett-Packard Co. and HPDirect, Inc.,
Third Judicial Circuit Court, Madison County, Illinois
In June 2002, various plaintiffs filed a lawsuit in the Third Judicial Circuit Court, Madison County, Illinois, against Intel, Hewlett-
Packard Company, HPDirect, Inc. and Gateway Inc., alleging that the defendants’ advertisements and statements misled the public by
suppressing and concealing the alleged material fact that systems that use the Intel
®
Pentium 4
®
processor are less powerful and slower than
systems using the Intel
®
Pentium
®
III processor and a competitor’s processors. The plaintiffs claim that their lawsuit should be treated as a
nationwide class action. The plaintiffs seek unspecified damages, and attorneys’ fees and costs. The company disputes the plaintiffs’
claims and
intends to defend the lawsuit vigorously.
C. Environmental Proceedings
Intel has been named to the California and U.S. Superfund lists for three of our sites and has completed, along with two other companies,
a Remedial Investigation/Feasibility study with the U.S. Environmental Protection Agency (EPA) to evaluate the groundwater in areas adjacent
to one of our former sites. The EPA has issued a Record of Decision with respect to a groundwater cleanup plan at that site, including expected
costs of completion. Under the California and U.S. Superfund statutes, liability for cleanup of this site and the adjacent area is joint and several.
The company, however, has reached agreement with those same two companies that significantly limits the company’s liabilities under the
proposed cleanup plan. Also, the company has completed extensive studies at our other sites and is engaged in cleanup at several of these sites.
In the opinion of management, the potential losses to the company in excess of amounts already accrued arising out of these matters would not
have a material adverse effect on the company’s financial position or overall trends in results of operations, even if joint and several liability
were to be assessed.
The estimate of the potential impact on the financial position or overall results of operations for the above legal and environmental
proceedings could change in the future.
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