HP 2007 Annual Report Download - page 154

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 17: Litigation and Contingencies (Continued)
• Beginning in September 2006, HP has received requests from the Committee on Energy and Commerce of the U.S.
House of Representatives (the “Committee”) for records and information concerning the leak investigation,
securities transactions by HP officers and directors, including an August 25, 2006 securities transaction by Mark
Hurd, HP’ s Chairman and Chief Executive Officer, and related matters. HP has responded to those requests. In
addition, Mr. Hurd voluntarily gave testimony before the Committee regarding the leak investigation on
September 28, 2006.
• In September 2006, HP was informally contacted by the U.S. Attorney for the Northern District of California
requesting similar information concerning the processes employed in the leak investigation. HP is responding to that
request.
• Beginning in September 2006, HP has received requests from the Division of Enforcement of the Securities and
Exchange Commission for records and information and interviews with current and former HP directors and officers
relating to the leak investigation, the resignation of Thomas J. Perkins from HP’ s Board of Directors, HP’ s May 22,
2006 and September 6, 2006 filings with the SEC on Form 8-K, stock repurchases by HP and securities transactions
by its officers and directors that occurred between May 1 and October 1, 2006, and HP’ s policies, practices and
approval of securities transactions. In May 2007, HP consented to the entry of an order by the SEC ordering HP to
cease and desist from committing or causing violations of the public reporting requirements of the Securities
Exchange Act of 1934, as amended. HP has been advised by the staff of the Division of Enforcement that the staff
has completed its investigation and does not intend to recommend that any other SEC enforcement action be brought
in connection with these matters.
• In September 2006, HP received a request from the U.S. Federal Communications Commission for records and
information relating to the processes employed in the leak investigation. HP has responded to that request.
HP is continuing to cooperate fully with all ongoing inquiries and investigations.
In addition, four stockholder derivative lawsuits have been filed in California purportedly on behalf of HP stockholders
seeking to recover damages for alleged breach of fiduciary duty and to require HP to improve its corporate governance and
internal control procedures as a result of the activities of the leak investigation: Staehr v. Dunn, et al. was filed in Santa Clara
County Superior Court on September 18, 2006; Worsham v. Dunn, et al. was filed in Santa Clara County Superior Court on
September 14, 2006; Tansey v. Dunn, et al. was filed in Santa Clara County Superior Court on September 20, 2006; and Hall
v. Dunn, et al. was filed in Santa Clara County Superior Court on September 25, 2006. On October 19, 2006, the Santa Clara
County Superior Court consolidated the four California cases under the caption In re Hewlett-Packard Company Derivative
Litigation. The consolidated complaint filed on November 19, 2006 also seeks to recover damages in connection with sales of
HP stock alleged to have been made by certain current and former HP officers and directors while in possession of material
non-public information. Two additional stockholder derivative lawsuits, Pifko v. Babbio, et al., filed on September 19, 2006,
and Gross v. Babbio, et al., filed on November 21, 2006, were filed in Chancery Court, County of New Castle, Delaware,
both of which seek to recover damages for alleged breaches of fiduciary duty and to obtain an order instructing the
defendants to refrain from further breaches of fiduciary duty and to implement corrective measures that will prevent future
occurrences of the alleged breaches of fiduciary duty. On January 24, 2007, the Delaware court
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