Banana Republic 2006 Annual Report Download - page 29

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Item 3. Legal Proceedings
As a multinational company, we are subject to various proceedings, lawsuits, disputes and claims
(“Actions”) arising in the ordinary course of our business. Many of these Actions raise complex factual and legal
issues and are subject to uncertainties. Actions filed against us include commercial, intellectual property,
customer, and employment and securities related claims, including class action lawsuits in which plaintiffs allege
that we violated federal and state wage and hour and other laws. The plaintiffs in some Actions seek unspecified
damages or injunctive relief, or both. Actions are in various procedural stages, and some are covered in part by
insurance.
We cannot predict with assurance the outcome of Actions brought against us. Accordingly, adverse
developments, settlements or resolutions may occur and negatively impact earnings in the quarter of such
development, settlement or resolution. However, we do not believe that the outcome of any current Action would
have a material adverse effect on our results of operations, liquidity or financial position taken as a whole.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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