HP 2010 Annual Report Download - page 154

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
members of the HP Board of Directors in which the plaintiffs are seeking to recover certain
compensation paid by HP to the defendants and other damages:
•Henrietta Klein v. Mark V. Hurd, et al., is a lawsuit filed on September 24, 2010 in California
Superior Court alleging the individual defendants wasted corporate assets and breached their
fiduciary duties by failing to implement and oversee HP’s compliance with the FCPA.
•Saginaw Police & Fire Pension Fund v. Marc L. Andreessen, et al., is a lawsuit filed on October 19,
2010 in United States District Court for the Northern District of California alleging, among
other things, that the defendants breached their fiduciary duties and were unjustly enriched by
consciously disregarding HP’s alleged violations of the FCPA.
Leak Investigation Proceedings. As described below, HP is or has been the subject of various
governmental inquiries concerning the processes employed in an investigation into leaks of HP
confidential information to members of the media that concluded in May 2006:
• In August 2006, HP was informally contacted by the Attorney General of the State of California
requesting information concerning the processes employed in the leak investigation. On
December 7, 2006, HP announced that it entered into an agreement with the California
Attorney General to resolve civil claims arising from the leak investigation, including a claim
made by the California Attorney General in a Santa Clara County Superior Court action filed
on December 7, 2006, that HP committed unfair business practices under California law in
connection with the leak investigation. As a result of this agreement, which includes an
injunction, the California Attorney General will not pursue civil claims against HP or its current
and former directors, officers and employees. Under the terms of the agreement, HP paid a
total of $14.5 million and agreed to implement and maintain for five years a series of measures
designed to ensure that HP’s corporate investigations are conducted in accordance with
California law and the company’s high ethical standards. Of the $14.5 million, $13.5 million has
been used to create a Privacy and Piracy Fund to assist California prosecutors in investigating
and prosecuting consumer privacy and information piracy violations, $650,000 was used to pay
statutory damages and $350,000 reimbursed the California Attorney General’s office for its
investigation costs. There was no finding of liability against HP as part of the settlement.
• Beginning in September 2006, HP 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 former Chairman and Chief
Executive Officer, and related matters. HP has responded to those requests. In addition,
Mr. Hurd voluntarily gave testimony to 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 has responded to that request.
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