In re Apple Inc. Securities Litigation

Filing 139

AMENDED ORDER PRELIMINARILY APPROVING SETTLEMENT, DIRECTING NOTICE OF SETTLEMENT, AND SCHEDULING SETTLEMENT FAIRNESS HEARING. Signed by Judge Jeremy Fogel on 11/22/2010. (jflc2, COURT STAFF) (Filed on 11/22/2010)

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In re Apple Inc. Securities Litigation Doc. 139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF Dockets.Justia.com **E-Filed 11/22/2010** UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION IN RE APPLE INC. SECURITIES LITIGATION THIS DOCUMENTS RELATES TO: ALL ACTIONS Case No. C-06-5208-JF CLASS ACTION [PROPOSED] AMENDED ORDER -----------------PRELIMINARILY APPROVING SETTLEMENT, DIRECTING NOTICE OF SETTLEMENT, AND SCHEDULING SETTLEMENT FAIRNESS HEARING 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 WHEREAS, on September 28, 2010, Lead Plaintiff, the New York City Employees' Retirement System, plaintiffs Martin Vogel and Kenneth Mahoney, and defendants Apple Inc., Steven P. Jobs, Fred D. Anderson, Nancy R. Heinen, William V. Campbell, Millard S. Drexler, Arthur D. Levinson, and Jerome B. York,1 entered into a Stipulation and Agreement of Settlement setting forth the terms and conditions for the proposed settlement of the Released Claims (the "September 28 Stipulation");2 WHEREAS, the Court held a hearing on October 7, 2010 and entered the Preliminary Approval Order; WHEREAS, on November 12, 2010, the Settling Parties entered into an Amended Stipulation and Agreement of Settlement (the "Stipulation") restructuring Apple's payment obligations under the Settlement so that, instead of paying $14 million into the Settlement Fund and donating $2.5 million to certain corporate governance programs, Apple will pay $16.5 million into the Settlement Fund, and any funds remaining after payment of Class Member claims will be donated to corporate governance programs; WHEREAS, the Settling Parties have requested the Court enter this Amended Preliminary Approval Order to (1) preliminarily approve the Settlement as amended, (2) set forth a revised schedule for the Settlement, and (3) approve the revised Notice, Publication Notice, and Proof of Claim reflecting the terms of the Stipulation and specifying that Proofs of Claim may be submitted online and by nominees; WHEREAS, the Court having read and considered the Stipulation and the exhibits thereto, and finding that substantial and sufficient grounds exist for entering this Order; NOW, THEREFORE, IT IS HEREBY ORDERED THAT: 1. For the purposes of this Order, the Court adopts all defined terms as set forth in the Stipulation. Any inconsistencies between the Stipulation and Notice will be controlled by the language of the Stipulation. Mr. York died on March 18, 2010. Except as defined below, all capitalized terms contained herein shall have the same meanings as set forth in the Amended Stipulation and Agreement of Settlement dated as of November 12, 2010. 2 1 -1- [PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. The Court preliminarily approves the Settlement, as reflected in the Stipulation, as being fair, reasonable and adequate, pending a final hearing on the Settlement. 3. Pending a final determination of whether the Settlement should be approved and the proposed Order and Final Judgment entered, Plaintiffs and all Class Members, whether directly, representatively, or in any other capacity, shall not commence or prosecute, or cause anyone to commence or prosecute, any action or proceeding asserting any of the Released Claims against any of the Released Parties in any court or tribunal. CLASS CERTIFICATION 4. The Action is conditionally certified for settlement purposes as a class action pursuant to Rules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure on behalf of a class consisting of all persons and entities that purchased Apple common stock during the Class Period. Excluded from the Class are Defendants, all current and former directors and officers of Apple, and all employees of Apple and/or its subsidiaries during the Class Period, and any family member, trust, company, entity, or affiliate controlled or owned by any of the excluded persons and entities referenced above. Also excluded from the Class are any persons and entities that exclude themselves by filing a request for exclusion in accordance with the requirements set forth in the Notice. 5. The Court has determined preliminarily and for purposes of the Settlement that (a) the Class is so numerous that joinder of all members is impracticable; (b) there are questions of law and fact common to the Class that, as to the Settlement and related matters, predominate over individual questions; (c) Lead Plaintiff's claims are typical of the claims of the Class; (d) Lead Plaintiff will fairly and adequately protect and represent the interests of the Class; and (e) a class action is superior to other available methods for the fair and efficient adjudication of this controversy. 6. Certification of the Class for purposes of the Settlement shall not constitute certification of the Class for any other purpose. NOTICE 7. The Court approves the form and content of the Notice and Publication Notice -2[PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 attached hereto as Exhibits 1 and 2, respectively, and the Proof of Claim attached hereto as Exhibit 3. Further, the Court finds that the form and content of the Notice, Publication Notice, and Proof of Claim, and the procedures for publication, mailing, and distribution thereof substantially in the manner and form set forth in paragraphs 9 and 10 of this Order, satisfy the requirements of Rule 23 of the Federal Rules of Civil Procedure, 15 U.S.C. 78u-4(a)(7), and due process, and constitute the best notice practicable under the circumstances. 8. The Court approves the appointment of Epiq Class Action & Claims Solutions, Inc. as the Claims Administrator. As provided in the Stipulation, Apple shall reimburse the Claims Administrator for the reasonable costs incurred to mail and publish the Notice and Publication Notice, respectively. 9. 12/8/2010 Within ten (10) business days of the date of this Order (______________), the Claims Administrator shall commence sending copies of the Notice and Proof of Claim by firstclass mail, postage pre-paid, to all Class Members at the address of each such person or entity as set forth in the records of Apple or its transfer agent, or who otherwise may be identified through further reasonable effort. The Claims Administrator shall use reasonable efforts to give notice to nominee purchasers such as brokerage firms and other persons and entities who purchased Apple common stock during the Class Period as record owners but not beneficial owners. Such nominee purchasers are directed within fourteen (14) days of their receipt of the Notice, to either forward copies of the Notice and Proof of Claim to their beneficial owners, or to provide the Claims Administrator with lists of the names and addresses of the beneficial owners. The Claims Administrator is ordered to send the Notice and Proof of Claim promptly to such identified beneficial owners. Nominee purchasers who elect to forward the Notice and Proof of Claim to their beneficial owners shall send a statement to the Claims Administrator confirming that the mailing was made as directed. At or before the Settlement Fairness Hearing, Plaintiffs' Lead Counsel shall file with the Court proof of mailing of the Notice and Proof of Claim to Class Members. 10. 12/8/2010 Within ten (10) business days of the date of this Order (_____________), the Claims Administrator shall cause the Publication Notice to be published in Investor's Business -3[PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Daily and transmitted over Business Wire. At or before the Settlement Fairness Hearing, Plaintiffs' Lead Counsel shall file with the Court proof of publication of the Publication Notice. SETTLEMENT FAIRNESS HEARING 11. The Settlement Fairness Hearing before this Court is hereby scheduled for February 18, 2011, at 9:00 a.m., in the U.S. District Court for the Northern District of California, 280 South 1st Street, San Jose, California 95113: a. to finally determine whether this Action satisfies the applicable prerequisites for class action treatment under Rules 23(a) and (b) of the Federal Rules of Civil Procedure; b. c. to determine whether the Settlement is fair, reasonable, and adequate; to determine whether the Order and Final Judgment as provided in the Stipulation should be entered, dismissing the Action with prejudice; d. to determine whether the release of the Released Claims, as set forth in the Stipulation, should be provided to the Released Parties; e. to determine whether the proposed Plan of Allocation for the distribution of the Net Settlement Fund is fair and reasonable; f. to consider the application of Plaintiffs' Lead Counsel for an award of Attorneys' Fees and Expenses; and g. 12. to hear and rule on such other matters as the Court may deem appropriate. The Court reserves the right to continue the Settlement Fairness Hearing and its consideration of the matters listed above without further notice to Class Members. 13. The Court reserves the right to approve the Settlement at or after the Settlement Fairness Hearing with such modifications as may be consented to by the Settling Parties without further notice to the members of the Class. The Court further reserves the right to enter its Order and Final Judgment approving the Stipulation regardless of whether the Court has approved the Plan of Allocation or awarded Attorneys' Fees and Expenses. 14. Any Class Member who desires to do so may object to the Settlement or any of its terms, the Plan of Allocation, and/or Plaintiffs' Lead Counsel's application for Attorneys' Fees -4[PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and Expenses by submitting a written objection that (i) includes the Class Member's name, address, telephone number, and signature; (ii) identifies the date(s), price(s), and number of shares of all purchases and sales of Apple common stock made during the Class Period; (iii) states the reason(s) why the Class Member objects; and (iv) attaches any other documents and writings that the Class Member wants the Court to consider. The objection must be filed with the Clerk's Office at the U.S. District Court for the Northern District of California, 280 South 1st Street, San Jose, CA, 95113, by no later than January 21, 2011, and served on the same day by first-class mail postage pre-paid to each of the following counsel: George A. Riley, Esq. O'MELVENY & MYERS LLP Two Embarcadero Center, 28th Floor San Francisco, CA 94111 Attorneys for Defendant Apple Inc. Jay W. Eisenhofer, Esq. Michael J. Barry, Esq. GRANT & EISENHOFER P.A. 1201 N. Market Street Wilmington, DE 19801 Attorneys for Lead Plaintiff New York City Employees' Retirement System Class Members also wishing to attend the Settlement Fairness Hearing and speak in opposition to the Settlement, the Plan of Allocation, and/or Plaintiffs' Lead Counsel's application for Attorneys' Fees and Expenses must state in their written objection(s) that they intend to appear at the Settlement Fairness Hearing. Any such Class Member may appear in person or arrange, at his, her, or its own expense, for a lawyer to represent them at the Settlement Fairness Hearing. 15. Any person or entity who fails to object in the manner prescribed above in paragraph 14 shall be deemed to have waived such objection in this Action or any related action or proceeding, unless otherwise ordered by the Court. 16. Any Class Member who wishes to be excluded from the Class must set forth in writing his, her or its name, address, and telephone number, state that the Class Member "request[s] exclusion from the Class in In re Apple Inc. Securities Litigation, Case No. C-065208-JF," and sign the writing. The Class Member must also provide in the writing the date(s), -5- [PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 price(s), and number(s) of shares of all purchases and sales of Apple common stock during the Class Period. Any request for exclusion must be sent by first-class mail postage pre-paid to the Claims Administrator and the counsel for the parties as set forth in paragraph 14 above, postmarked no later than January 21, 2011. 17. Any Class Member who does not timely and validly request exclusion from the Class shall be bound by all determinations and judgments in the Action, whether favorable or unfavorable, and regardless of whether such Class Member executes and submits a Proof of Claim, unless otherwise ordered by the Court. 18. All motions and papers in support of final approval of the Settlement, the Plan of Allocation, and Plaintiffs' Counsel's application for Attorneys' Fees and Expenses shall be filed by January 7, 2011. All reply papers shall be filed by February 4, 2011. OTHER MATTERS 19. Any Class Member who wishes to participate in the Settlement must complete and submit a Proof of Claim in accordance with the instructions contained therein. Unless otherwise ordered by the Court, all Proofs of Claim must be completed and submitted no later than March 15, 2011. Any Class Member who does not complete and submit a valid Proof of Claim within the time provided by this Order or further order of the Court shall be barred from sharing in the distribution of the Net Settlement Fund. 20. Any order or proceedings relating to the Plan of Allocation or any rulings the Court may make regarding the amount of Attorneys' Fees and Expenses to be awarded, or any appeal from any orders relating thereto or reversal or modification thereof, shall not operate to terminate or cancel the Stipulation, or affect or delay the finality of the Order and Final Judgment approving the Stipulation and the Settlement of the Action. 21. Upon the Effective Date, all Released Claims shall be fully, finally, and forever resolved, discharged and settled on the merits and with prejudice, except as otherwise set forth herein. 22. If the Settlement provided for in the Stipulation is approved by the Court following the Settlement Fairness Hearing, an Order and Final Judgment shall be entered as described in the -6[PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Stipulation. 23. If the Stipulation is not approved by the Court, is terminated or cancelled by any of the Settling Parties in accordance with the Stipulation, or fails to become effective for any other reason, this Action shall proceed without prejudice to any Settling Party as to any matter of law or fact, as if the Stipulation had not been made and had not been submitted to the Court (except as provided in the Stipulation). The Stipulation, any provision contained in the Stipulation, or any action undertaken pursuant thereto or the negotiation thereof by any Settling Party shall not be deemed a presumption, concession, or admission by any Settling Party of any fault, liability, or wrongdoing as to the facts or claims alleged or asserted in the Action, or any other actions or proceedings, and shall not be offered or received in evidence or otherwise used by any person in the Action or interpreted, construed, deemed, or invoked in any other action or proceeding, whether civil, criminal, or administrative. 24. The Stipulation, the Settlement, and any act performed or document executed pursuant to or in furtherance of the Stipulation or the Settlement (a) is not and may not be deemed to be and may not be used as an admission of, or evidence of, the validity of any Released Claims, or of any wrongdoing or liability of the Released Parties and (b) is not and may not be deemed to be and may not be used as an admission of, or evidence of, any fault or omission of any Released Party in any civil, criminal, or administrative proceeding in any court, administrative agency, or other tribunal. 25. All funds held by the Escrow Agent shall be deemed to be in the custody of the Court and shall remain subject to the Court's jurisdiction until such time as the funds shall be distributed or returned to the parties who deposited such funds pursuant to the Stipulation, the Plan of Allocation, and/or further order(s) of the Court. The costs of providing notice to the Class and administering the Settlement Fund, as provided for in the Stipulation, shall be non-refundable in the event the Settlement is not approved. -7- [PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26. The Court hereby retains exclusive jurisdiction to consider all further matters arising out of or connected with the Settlement. IT IS SO ORDERED. 11/22/2010 DATED: _________________ The Honorable Jeremy Fogel United States District Judge Submitted by: GEORGE A. RILEY (S.B. #118304) O'MELVENY & MYERS LLP Two Embarcadero Center 28th Floor San Francisco, California 94111-3828 Telephone: (415) 984-8700 Facsimile: (415) 984-8701 E-Mail: griley@omm.com Attorneys for Defendant APPLE INC. DOUGLAS R. YOUNG (S.B. #73248) FARELLA BRAUN & MARTEL LLP Russ Building 235 Montgomery Street, 17th floor San Francisco, California 94104 Telephone: (415) 954-4400 Facsimile: (415) 954-4480 E-Mail: dyoung@fbm.com Attorneys for Defendants STEVEN P. JOBS, WILLIAM V. CAMPBELL, MILLARD S. DREXLER, ARTHUR D. LEVINSON and JEROME B. YORK JEROME C. ROTH (S.B. #159483) YOHANCE C. EDWARDS (S.B. #237244) MUNGER, TOLLES & OLSON LLP 560 Mission Street, 27th Floor San Francisco, California 94105 Telephone: (415) 512-4000 Facsimile: (415) 512-4077 E-Mail: Jerome.Roth@mto.com Yohance.Edwards@mto.com Attorneys for Defendants FRED D. ANDERSON and NANCY R. HEINEN -8[PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JAY W. EISENHOFER (admitted pro hac vice) MICHAEL J. BARRY (admitted pro hac vice) GRANT & EISENHOFER P.A. Chase Manhattan Centre 1201 N. Market Street Wilmington, Delaware 19801 Telephone: (302) 622-7000 Facsimile: (302) 622-7100 E-Mail: jeisenhofer@gelaw.com mbarry@gelaw.com MERRILL GLEN EMERICK (SB# 117248) ANDERLINI & EMERICK LLP 411 Borel Avenue, Suite 501 San Mateo, California 94402 Telephone: (650) 242-4884 Facsimile: (650) 212-0081 Attorneys for Lead Plaintiff THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM PATRICE L. BISHOP (S.B. #182256) HOWARD T. LONGMAN STULL, STULL & BRODY 10940 Wilshire Boulevard, Suite 2300 Los Angeles, California 90024 Telephone: (310) 209-2468 Facsimile: (310) 209-2087 Email: pbishop@ssbla.com GARY S. GRAIFMAN KANTROWITZ, GOLDHAMER & GRAIFMAN 747 Chestnut Ridge Road Chestnut Ridge, New York 10977 Telephone: (845) 356-2570 Facsimile: (845) 356-4335 Attorneys for Plaintiffs MARTIN VOGEL and KENNETH MAHONEY -9- [PROP] AM. PRELIM. APPROVAL ORDER C-06-5208-JF Exhibit A-1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA, SAN JOSE DIVISION INREAPPLEINC.SECURITIESLITIGATION THISDOCUMENTSRELATESTO: ALLACTIONS CaseNo.C-06-5208-JF CLASSACTION NOTICE OF PROPOSED SETTLEMENT, SETTLEMENT FAIRNESS HEARING, AND MOTION FOR ATTORNEYS' FEES AND EXPENSES A FEDERAL COURT AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION FROM A LAWYER. PLEASEREADTHISNOTICECAREFULLY! This Notice relates to a proposed settlement of a class action lawsuit (the "Action") filed by the Cour t-appointed "Lead Plaintiff," the New York City Employees' Retirement System ("NYCERS"), and plaintiffs Mar tin Vogel and Kenneth Mahoney(togetherwithNYCERS,"Plaintiffs"),againstAppleInc.("Apple")andthefollowingcurrentorformerofficersand directors:StevenP Jobs,FredD.Anderson,NancyR.Heinen,WilliamV.Campbell,MillardS.Drexler,Ar thurD.Levinson, . andJeromeB.York(togetherwithApple,"Defendants"). If you purchased Apple common stock between August 24, 2001, and June 29, 2006, both dates inclusive (the "Class Period"), you may be a "Class Member" and may be eligible for a payment from the proposed settlement described below (the "Settlement"). Payments will be made if the Cour t approves the Settlement and Plan of Allocation(asdefinedbelow)andafteranyappealsareresolvedandcompletionof claimsprocessing. ThisNoticeexplainsimpor tantlegalrightsyoumayhave.Yourlegalrightswillbeaffectedregardlessof whetheryou doordonotact.Theserights,andthedeadlinestoexercisethem,areexplainedbelow. 1. Statement of Plaintiffs' Recovery: Pursuant to the Settlement, Apple will pay $16.5 million in cash into an interest bearing escrow account (the "Settlement Fund"). Apple also has agreed to implement cer tain corporate governance measures. The Settlement Fund, less taxes (the "Net Settlement Fund"), will be used to pay the authorized claims of persons and entities that purchased Apple common stock during the Class Period ("Authorized Claimant"). The terms outlined herein are amended from the terms initially presented to the Cour t on October 7, 2010. Apple's payment obligationsundertheSettlementhavebeenrestructuredsothat,insteadof paying$14millionintotheSettlementFund and donating $2.5 million to the twelve corporate governance programs at universities located throughout the United States, Apple will pay $16.5 million into the Settlement Fund. Any funds remaining in the Net Settlement Fund after paymentof ClassMembers'claimswillbedonatedinaccordancewiththePlanof Allocationonpage6toninecorporate governanceprograms,whichwereamongthetwelveprogramsdesignatedpreviously. Plaintiffs' Lead Counsel estimates that owners of approximately 234.8 million shares of Apple common stock may be eligible for potential recovery, with an average per share recovery from the Net Settlement Fund of approximately $0.07.Basedonitsexperiencewithothercases,Plaintiffs'LeadCounselbelievesthattheaveragepersharerecovery willbegreaterthan$0.07becausetypicallyfewerthan100%of eligibleshareholderselecttopar ticipateinsecurities class action settlements. The Plan of Allocation on page 6 has information about an Authorized Claimant's potential recoveryandhowtheNetSettlementFundwillbedistributed. 2. Statement of Potential Outcome of Action:Thepartiesdisagreeonbothliabilityanddamagesandtheaverageamount of damages that would be recoverable if Plaintiffs prevailed. Defendants deny that they are liable to Plaintiffs or the ClassanddenythatPlaintiffsortheClasshavesufferedanydamage.Theissuesonwhichthepar tiesdisagreeinclude: (a) whether the complaint's allegations suppor t a federal securities law claim; (b) whether Defendants acted with the requisitestateof mind,orscienter;(c)whetherDefendants'allegedmisstatementsoromissionsharmedClassMembers; (d) whether Defendants' alleged misstatements or omissions were material to investors; (e) the extent to which factors otherthantheallegedmisstatementsoromissionsaffected(if atall)Apple'sstockpriceduringtheClassPeriod. 3. Statement of Attorneys' Fees and Expenses Sought:Plaintiffs'Counsel(asdefinedbelow)intendtoapplyforanaward of feesincurredbyPlaintiffs'CounselinconnectionwiththeActionintheamountof $2,000,000,plusexpensesnotto exceed$450,000.Of thisamount,Plaintiffs'LeadCounsel,thelawfirmof Grant&EisenhoferPA.,intendstoapplyforan . awardforfeesintheamountof $1,533,750,whichrepresents7.5%of thetotaleconomicvalueof theSettlement,plusout of pocketexpenses;thelawfirmof Stull,Stull&Brody,counselforplaintiffsinVogel,etal.v.AppleInc.,etal.,CaseNo. C-08-3123-JF(N.D.Cal.)("VogelII"),intendstoapplyforanawardof feesintheamountof $466,250,whichrepresents 2.28%of thetotaleconomicvalueof theSettlement,plusoutof pocketexpenses.ApplehasagreedtopayPlaintiffs'Lead Counsel the amount of reasonable attorneys' fees and expenses as may be awarded by the Cour t ("Attorneys' Fees and Expenses").ApplewillpaytheseAttorneys'FeesandExpensesseparately,andsuchpaymentwillnotaffecttheamountof theNetSettlementFund.Theterm"totaleconomicvalueof theSettlement,"asusedherein,includesallpaymentsApple has agreed to make under the Settlement, including Apple's payment to establish the Settlement Fund, reimbursement of thecostsof administeringanddistributingtheNetSettlementFund,andpaymentof Attorneys'FeesandExpenses. 4. Identification of Attorneys' Representatives:QuestionsregardingtheSettlementmaybedirectedtoPlaintiffs'Lead Counsel: Jay W. Eisenhofer and Michael J. Barry, Grant & Eisenhofer P A., 1201 N. Market Street, Wilmington, DE . 19801,(302)622-7000. In Re Apple Inc. Securities Litigation Page1of 8 Notice of Proposed Settlement 5. Reasons for the Settlement: Plaintiffs believe that the Settlement provides substantial and immediate benefits to the Class. These benefits must be compared to the risk that the Class may recover a lower amount or nothing after a contested trial and possible appeals that are likely to require several years of expensive litigation.Plaintiffs have fur ther considered the uncer tain outcome, risks, difficulties, and delays inherent in any litigation and are mindful of theproblemsof proof andpossibledefensestotheclaimsasser tedintheAction. Defendantsdenyallallegationsof wrongdoingorliabilitywhatsoeverandmaintainthattheyhavemeritoriousdefenses toallclaimsallegedintheAction.Defendantsbelievethatfur therlitigationwouldbeprotracted,burdensome,expensive, and distracting. Defendants have also determined that fur ther litigation would diver t resources and attention from otheractivitiesthatareimpor tanttoApple'sbusinessanditsshareholders'interests. SUMMARY OF YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT Submit a Proof of Claim by March 15, 2011. Exclude yourself from the Class by January 21, 2011. Object to the Settlement by January 21, 2011. Attend the Settlement Fairness Hearing on February 18, 2011. Do nothing. TheonlywaytopotentiallyreceiveapaymentfromtheSettlement. ReceivenopaymentfromtheSettlement.Thisistheonlyoption thatallowsyoutoretainyourrighttofileaseparatelawsuitagainst DefendantsrelatedtotheclaimsatissueintheAction. WritetotheCour texplainingwhyyoudonotthinktheSettlement shouldbeapprovedand,if youwishtoattendandspeakatthe SettlementFairnessHearing,indicatingyourintentiontodoso. Submitavalidwrittenobjectionindicatingyourintentiontoattendthe SettlementFairnessHearingandspeakinCour taboutthefairnessof theSettlement. ReceivenopaymentfromtheSettlement.Giveupyourrights. WHAT THIS NOTICE CONTAINS WHYDIDIGETTHISNOTICE?......................................................................................................... 3 WHATISTHISCASEABOUT?WHATHASHAPPENEDSOFAR?........................................................ 3 WHATRECOVERYDOESTHESETTLEMENTPROVIDE?..................................................................... 3 HOWDOIKNOWIFIAMPARTOFTHISSETTLEMENT?................................................................... 3 WHYHAVEPLAINTIFFSAGREEDTOTHESETTLEMENT?................................................................. 4 WHYHAVEDEFENDANTSAGREEDTOTHESETTLEMENT?.............................................................. 4 HOWDOIGETAPAYMENT?............................................................................................................ 4 WHENWOULDIGETMYPAYMENT?................................................................................................ 4 HOWMUCHWILLMYPAYMENTBE? ............................................................................................... 4 . WHATRIGHTSAMIGIVINGUPBYAGREEINGTOTHESETTLEMENT?............................................. 4 DOIHAVEALAWYERINTHISCASE?.............................................................................................. 5 HOWWILLTHELAWYERSBEPAID?................................................................................................ 5 . IFIDON'TWANTTOPARTICIPATEINTHESETTLEMENT,HOWDOIEXCLUDEMYSELF?.................. 5 HOWDOITELLTHECOURTTHATIDONOTLIKETHEPROPOSEDSETTLEMENT?.......................... 5 WHENANDWHEREWILLTHECOURTDECIDEWHETHERTOAPPROVETHESETTLEMENT?............ 6 WHATHAPPENSIFIDONOTHINGATALL?..................................................................................... 6 PLANOFALLOCATION.................................................................................................................... 6 CORPORATEREFORMMEASURES .................................................................................................. 8 . SPECIALNOTICETOBROKERS,BANKSANDOTHERNOMINEES..................................................... 8 CANISEETHECOURTFILE?WHOMSHOULDICONTACTIFIHAVEQUESTIONS?.......................... 8 In Re Apple Inc. Securities Litigation Page2of 8 Notice of Proposed Settlement WHY DID I GET THIS NOTICE? 1. YouarebeingsentthisNoticebecauseyouorsomeoneinyourfamilymayhaveacquiredApplecommonstockduring the Class Period. As a potential Class Member, you have a right to know about the proposed Settlement and your optionsbeforetheCour tdecideswhethertoapprovetheSettlement. 2. ThisNoticeexplainsthelawsuit,theSettlement,yourlegalrights,whatbenefitsareavailable,whoiseligibleforthem, and how to get them. This Notice also is intended to inform you of a hearing at which the Cour t will consider the Settlement, the Plan of Allocation, the application for Attorneys' Fees and Expenses, and other related matters (the "SettlementFairnessHearing"). THE ISSUANCE OF THIS NOTICE IS NOT AN EXPRESSION OF THE COURT'S OPINION ON THE MERITS OF ANY CLAIM IN THE LAWSUIT, AND THE COURT STILL HAS TO DECIDE WHETHER TO APPROVE THE SETTLEMENT. WHAT IS THIS CASE ABOUT? WHAT HAS HAPPENED SO FAR? 3. OnAugust24,2006,plaintiffsMar tinVogelandKennethMahoneyfiledaclassactionlawsuitallegingfederalsecurities laws violations against Apple and cer tain other defendants in the U.S. District Cour t for the Nor thern District of California,captionedVogel,etal.v.Jobs,etal.,CaseNo.C-06-5208-JF("VogelI"). 4. OnJanuary19,2007,theCour tappointedNYCERSasLeadPlaintiff andapprovedNYCERS'sselectionof thelawfirm Grant&EisenhoferP A.asPlaintiffs'LeadCounsel. . 5. OnMarch23,2007,NYCERSfiledaconsolidatedclassactioncomplaint(the"ConsolidatedComplaint").OnNovember 14, 2007, the Cour t dismissed the Consolidated Complaint. On December 14, 2007, NYCERS filed a motion to file anamended complaint.On May 14, 2008,the Cour t denied NYCERS's motion. On June 12,2008, theCour t entered judgmentanddismissedNYCERS'sclaimswithprejudice. 6. OnJune17,2008,NYCERSfiledanoticeof appealbeforetheU.S.Courtof AppealsfortheNinthCircuit(the"NinthCircuit"). 7. On June 27, 2008, plaintiffs Vogel and Mahoney filed another class action lawsuit in the U.S. District Cour t for the Nor thernDistrictof California,captionedVogel,etal.v.AppleInc.,etal.,CaseNo.C-08-3123-JF(VogelII). 8. OnJanuary28,2010,theNinthCircuitinVogelIaffirmedtheCour t'sdismissalof NYCERS'sclaimsintheConsolidated Complaint,butgrantedNYCERSleavetofileitsamendedcomplaint. 9. OnMarch22,2010,NYCERSfiledaFirstAmendedConsolidatedClassActionComplaintinVogelI. 10.OnApril8,2010,theCour tenteredanorderconsolidatingVogelIandVogelII,designatingNYCERSasLeadPlaintiff andGrant&EisenhoferP A.asPlaintiffs'LeadCounselfortheconsolidatedaction.Theconsolidatedactioniscaptioned . InreAppleInc.SecuritiesLitigation,CaseNo.C-06-5208-JF . 11.OnMay14,2010,PlaintiffsfiledtheoperativecomplaintintheAction,theCorrectedFirstAmendedClassActionComplaint. 12.Plaintiffs allege that Apple issued false and misleading financial statements regarding the amount of compensation paidtoAppleexecutivesanditsaccountingforcer tainpaststockoptiongrants.Theseallegedmisstatements,Plaintiffs claim, ar tificially inflated Apple's stock price during the Class Period. Plaintiffs seek money damages for alleged violationsof federalsecuritieslaws.Defendantsdenyallallegationsof wrongdoingorliabilitywhatsoeverandmaintain thattheyhavemeritoriousdefensestoeachclaim. WHAT RECOVERY DOES THE SETTLEMENT PROVIDE? 13.TheNetSettlementFundconsistsof $16.5millionincash,plusinterest,lesstaxes.Applehasalsoagreedtoimplement cer tain corporate governance measures. Attorneys' Fees and Expenses, notification costs, and costs to administer and distributetheNetSettlementFundwillbepaidseparatelybyAppleandwillnotbedeductedfromtheNetSettlementFund. 14.Plaintiffs' Lead Counsel estimates that owners of approximately 234.8 million shares of Apple common stock may be eligible for potential recovery, with an average per share recovery from the Net Settlement Fund of approximately $0.07.Basedonitsexperiencewithothercases,Plaintiffs'LeadCounselbelievesthattheaveragepersharerecovery willbegreaterthan$0.07becausetypicallyfewerthan100%of eligibleshareholderselecttopar ticipateinsecurities classactionsettlements.ThePlanof Allocationonpage6hasinformationaboutanAuthorizedClaimant'spotential recoveryandhowtheNetSettlementFundwillbedistributed. HOW DO I KNOW IF I AM PART OF THIS SETTLEMENT? 15.TheClasscoveredbythisSettlementconsistsof allpersonsandentitiesthatpurchasedApplecommonstockduring the Class Period. Excluded from the Class are Defendants, all current and former directors and officers of Apple, all employees of Apple and/or its subsidiaries during the Class Period, and any family member, trust, company, entity, or affiliate controlled or owned by any of the excluded persons and entities referenced above. Also excluded are any personsandentitiesthatexcludethemselvesbyfilingarequestforexclusioninaccordancewiththerequirementsset for thonpage5("If IDoNotWanttoPar ticipateintheSettlement,HowDoIExcludeMyself ?"). 16.CheckyourinvestmentrecordsorcontactyourbrokertodeterminewhetheryoupurchasedApplecommonstockduring theClassPeriod.If yousoldApplecommonstockduringtheClassPeriod,orif oneof yourmutualfundspurchased ApplecommonstockduringtheClassPeriod,thatalonedoesnotmakeyouaClassMember. 17.If youarestillnotsurewhetheryouareincluded,youmaycall1-888-760-4869orvisitwww.AppleSecuritiesSettlement.com. YoualsomayfilloutandreturntheProof of ClaimasdescribedinSections20,2325&4353belowtodeterminewhether youqualify. In Re Apple Inc. Securities Litigation Page3of 8 Notice of Proposed Settlement RECEIPT OF THIS NOTICE DOES NOT NECESSARILY MEAN YOU ARE A CLASS MEMBER OR ARE ENTITLED TO RECEIVE PROCEEDS FROM THE SETTLEMENT. IF YOU WISH TO PARTICIPATE IN THE SETTLEMENT, YOU MUST EITHER SUBMIT YOUR COMPLETED AND SIGNED PROOF OF CLAIM ONLINE AT WWW.APPLESECURITIESSETTLEMENT.COM BY NO LATER THAN MARCH 15, 2011, OR SEND IT TO THE CLAIMS ADMINISTRATOR BY FIRST-CLASS MAIL POSTAGE PREPAID POSTMARKED NO LATER THAN MARCH 15, 2011. WHY HAVE PLAINTIFFS AGREED TO THE SETTLEMENT? 18.Plaintiffs believe that the claims alleged in the Action have merit. Never theless, Plaintiffs recognize that significant expense and prolonged proceedings will be necessary to prosecute the Action through trial and, potentially, through appeals. Plaintiffs have also taken into account the uncer tain outcome, risks, difficulties and delays inherent in any litigation.Plaintiffsaremindfulof theproblemsof proof andpossibledefensestotheclaimsasser tedintheAction. Basedonacarefulevaluation,PlaintiffsandPlaintiffs'Counselhavedeterminedthatthetermsandconditionsof the Settlementarefair,reasonableandadequate,andinthebestinterestsof theClass. WHY HAVE DEFENDANTS AGREED TO THE SETTLEMENT? 19.Defendants deny all allegations of wrongdoing or liability whatsoever and maintain they have meritorious defenses to each claim. Defendants also deny that Plaintiffs or the Class have suffered any harm as a result of the alleged conduct. In par ticular, Defendants deny that any harm allegedly suffered by Plaintiffs or the Class was caused by any misrepresentations or omissions or that Apple's share price was ar tificially inflated by reason of any alleged misrepresentations or omissions. Nonetheless, Defendants believe that fur ther litigation would be protracted, burdensome,expensive,anddistracting.Defendantshavealsodeterminedthatfur therlitigationwoulddiver tresources andattentionfromotheractivitiesthatareimpor tanttoApple'sbusinessanditsshareholders'interests. HOW DO I GET A PAYMENT? 20.To qualify for a payment, you must submit the Proof of Claim that accompanies this Notice. You may also get a Proof of Claim by calling 1-888-760-4869 or visiting www.AppleSecuritiesSettlement.com. Read the instructions carefully, fill out the Proof of Claim, include all the documents it asks for, sign it, and either submit it online at www.AppleSecuritiesSettlement.com no later than March 15, 2011, or send it by first-class mail postage pre-paid postmarkednolaterthanMarch15,2011. 21.Each Class Member who submits a Proof of Claim shall be deemed to have submitted to the jurisdiction of the U.S. DistrictCour tfortheNor thernDistrictof CaliforniawithrespecttothatProof of Claim. WHEN WOULD I GET MY PAYMENT? 22.TheCour twillholda"SettlementFairnessHearing"onFebruary18,2011.TheSettlementFairnessHearingisdescribed in more detail on page 6. If the Cour t approves the Settlement, there may be appeals. It is uncer tain whether the appeals (if any) will be resolved, and resolving them can take time, perhaps more than a year. It also takes time for allProofsof Claimtobeprocessed.AfteranyappealsareresolvedandallProofsof Claimareprocessed,Authorized Claimantswillbepaid.Pleasebepatient. HOW MUCH WILL MY PAYMENT BE? 23.Youcancalculateyour"RecognizedClaim"inaccordancewiththePlanof Allocationonpage6. 24.If youqualifyforapayment,theamountwilldependonanumberof factors,including(i)whenduringtheClassPeriod youpurchasedsharesof Applecommonstock;(ii)thepurchasepricepaidfortheshares;(iii)whethertheshareswere held at the end of the Class Period or sold during the Class Period; (iv) if sold, when the shares were sold and the amountreceived;and(v)thenumberof RecognizedClaims(discussedbelow). 25.The Court may disallow or adjust any Class Member's claim. The Court also may modify the Plan of Allocation without furthernoticetotheClass.PaymentspursuanttothePlanof Allocation,asapprovedbytheCourt,willbeconclusiveagainst allAuthorizedClaimants.NopersonshallhaveanyclaimagainstDefendants,Plaintiffs'Counsel,theClaimsAdministrator, orotheragentdesignatedbyPlaintiffs'LeadCounselbasedonthedistributionsmadesubstantiallyinaccordancewithany Settlementand/orPlanof AllocationapprovedbytheCourt. WHAT RIGHTS AM I GIVING UP BY AGREEING TO THE SETTLEMENT? 26.If theSettlementisapproved,theCour twillenteranOrderandFinalJudgmentdismissingtheActionwithprejudice.The OrderandFinalJudgmentshall,upontheEffectiveDate,fully,finally,andforeverresolve,dischargeandsettleallReleased Claimsonthemeritsandwithprejudice.ExceptforthoseClassMemberswhovalidlyandtimelyrequesttobeexcluded fromtheClass,theOrderandFinalJudgmentwillalsoforeverbarandenjoinClassMembersandtheReleasedPar ties frominstituting,continuing,orprosecutinganyactionasser tinganyReleasedClaimsagainstanyReleasedPar ty. 27.Theprecisedefinitionsof thecapitalizedtermsintheparagraphaboveareintheAmendedStipulationandAgreement of Settlementdatedasof November12,2010,whichisavailableatwww.AppleSecuritiesSettlement.com.Ingeneral, thetermReleasedClaimsincludes,butisnotlimitedto,allclaimsthatwereorcouldbeasser tedagainstAppleandits currentandformerofficersanddirectorsbyPlaintiffsandanyClassMemberbasedontheallegationsinthisActionor similarproceedings.ThetermReleasedPar tiesgenerallyincludes,butisnotlimitedto,Plaintiffs,Apple,andApple's currentandformerofficersanddirectors. In Re Apple Inc. Securities Litigation Page4of 8 Notice of Proposed Settlement DO I HAVE A LAWYER IN THIS CASE? 28.TheCour thasorderedthatthelawfirmof Grant&EisenhoferP A.,inWilmington,Delaware,willrepresenttheinterests . of allClassMembers.Youwillnotbeseparatelychargedfortheselawyers.If youwanttoberepresentedbyyourown lawyer,youmayhireoneatyourownexpense. HOW WILL THE LAWYERS BE PAID? 29.OnJanuary7,2011,oratsuchothertimeastheCour tmaydirect,"Plaintiffs'Counsel"intendtoapplyforanaward of feesincurredbyPlaintiffs'CounselinconnectionwiththeActionintheamountof $2,000,000,plusexpensesnot toexceed$450,000.Of thisamount,Plaintiffs'LeadCounselintendstoapplyforanawardforfeesintheamountof $1,533,750, which represents 7.5% of the total economic value of the Settlement, plus out of pocket expenses; the lawfirmof Stull,Stull&Brody,counselforplaintiffsinVogelII,intendstoapplyforanawardof feesintheamountof $466,250,whichrepresents2.28%of thetotaleconomicvalueof theSettlement,plusoutof pocketexpenses.Afterit isfiled,Plaintiffs'Counsel'sapplicationforfeesandexpenseswillbemadeavailableatwww.AppleSecuritiesSettlement. com.ApplehasagreedtopayPlaintiffs'LeadCounseltheamountof reasonableattorneys'feesandexpensesasmay beawardedbytheCour t(Attorneys'FeesandExpenses).ApplewillpaytheseAttorneys'FeesandExpensesseparately, and such payment will not affect the amount of the Net Settlement Fund. The term "total economic value of the Settlement,"asusedherein,includesallpaymentsApplehasagreedtomakeundertheSettlement,includingApple's payment to establish the Settlement Fund, reimbursement of the costs of administering and distributing the Net SettlementFund,andpaymentof Attorneys'FeesandExpenses."Plaintiffs'Counsel"includesPlaintiffs'LeadCounsel, andthelawfirmsof Anderlini&EmerickLLP Stull,Stull&Brody,andKantrowitz,Goldhamer&Graifman. , 30.The fees requested by Plaintiffs' Counsel will compensate them for their effor ts in achieving the Settlement for the benefitof theClass,andfortheirriskinunder takingthisrepresentationonacontingencybasis. THE ISSUANCE OF THIS NOTICE IS NOT AN EXPRESSION OF THE COURT'S OPINION ON ANY AWARD FOR ATTORNEYS' FEES AND EXPENSES. IF I DON'T WANT TO PARTICIPATE IN THE SETTLEMENT, HOW DO I EXCLUDE MYSELF? 31.If the Cour t approves the Settlement and enters an Order and Final Judgment, each Class Member will be bound by thetermsthereof unlesssuchpersonorentitysendsacopyof awrittenrequestforexclusionfromtheClassbyfirstclassmailpostagepre-paid,postmarkednolaterthanJanuary21,2011,to(1)ClaimsAdministrator,InreAppleInc. SecuritiesLitigation,POBox6809,Por tland,OR,97228-6809,and(2)thefollowingcounsel: Plaintiffs'LeadCounsel: JayW.Eisenhofer MichaelJ.Barry Grant&EisenhoferP A. . 1201N.MarketStreet Wilmington,DE19801 CounselforApple: GeorgeA.Riley O'Melveny&MyersLLP TwoEmbarcaderoCtr.,28thFloor SanFrancisco,CA94111 32.Tobevalid,awrittenrequestforexclusionMUST(i)includeyourname,address,telephonenumber,andyoursignature, (ii)statethatyou"requestexclusionfromtheClassinInreAppleInc.SecuritiesLitigation,CaseNo.C-06-5208-JF";and (iii) identify the date(s), price(s), and number of shares of all purchases and sales of Apple common stock you made during the Class Period. Requests for exclusion will not be accepted if the requests do not include all of this required informationorif therequestsarenotsentinaccordancewithSection31above,unlessotherwiseorderedbytheCour t. 33.If you are a Class Member and you, or someone acting on your behalf, does not submit a timely and valid written request for exclusion, and the Cour t approves the Settlement and enters an Order and Final Judgment, you will be boundbythetermsthereof. 34.If youareaClassMemberandyou,orsomeoneactingonyourbehalf,submitsavalidwrittenrequesttobeexcluded fromtheClass,youwillnotreceiveanybenefitsprovidedforintheSettlement. HOW DO I TELL THE COURT THAT I DO NOT LIKE THE PROPOSED SETTLEMENT? 35.If you are a Class Member, you may object to the Settlement or any of its terms, the Plan of Allocation, and/or the application for Attorneys' Fees and Expenses. You may write to the Cour t setting out your objection. You may give reasonswhyyouthinktheCour tshouldnotapprovetheSettlementtermsorarrangements. 36.Toobject,youmustsendasignedletterstatingyouobjecttotheSettlement.Tobevalid,anobjectionMUST(i)include your name, address, telephone number, and signature; (ii) identify the date(s), price(s), and number of shares of all purchases and sales of Apple common stock you made during the Class Period; and (iii) state the reason(s) why you object. If you wish to attend the Settlement Fairness Hearing and speak in opposition to the Settlement, the Plan of Allocation,and/ortheapplicationforAttorneys'FeesandExpenses,youmustalsostateinyourwrittenobjectionthat youintendtoappearattheSettlementFairnessHearing.Theobjectionmayincludeanyotherdocumentsandwritings you want the Cour t to consider. Your objection must be filed with the Clerk's Office at the U.S. District Cour t for the Nor thern District of California, 280 South 1st Street, San Jose, CA, 95113, by no later than January 21, 2011, and servedonthesamedaybyfirst-classmailpostagepre-paidtoeachof thefollowingcounsel: In Re Apple Inc. Securities Litigation Page5of 8 Notice of Proposed Settlement Plaintiffs'LeadCounsel: JayW.Eisenhofer MichaelJ.Barry Grant&EisenhoferP A. . 1201N.MarketStreet Wilmington,DE19801 CounselforApple: GeorgeA.Riley O'Melveny&MyersLLP TwoEmbarcaderoCtr.,28thFloor SanFrancisco,CA94111 Only valid objection(s) submitted in this manner will be considered at the Settlement Fairness Hearing, unless the Cour tordersotherwise. 37.YourattendanceattheSettlementFairnessHearingisnotnecessarytohaveyourwrittenobjectionconsideredbythe Cour t.However,if youwishtoattendtheSettlementFairnessHearingandspeakinoppositiontotheSettlement,the Planof Allocation,and/ortheapplicationforAttorneys'FeesandExpenses,youmuststatesoinyourwrittenobjection, filed and served as specified in Section 36 above. You may appear in person or arrange, at your own expense, for a lawyertorepresentyouattheSettlementFairnessHearing. UNLESS OTHERWISE ORDERED BY THE COURT, ANY CLASS MEMBER WHO DOES NOT OBJECT IN THE MANNER DESCRIBED HEREIN WILL BE DEEMED TO HAVE WAIVED ANY OBJECTION AND SHALL BE FOREVER FORECLOSED FROM MAKING ANY OBJECTION TO THE SETTLEMENT, THE PLAN OF ALLOCATION, AND THE APPLICATION FOR ATTORNEYS' FEES AND EXPENSES. WHEN AND WHERE WILL THE COURT DECIDE WHETHER TO APPROVE THE SETTLEMENT? 38.TheCour twillholdtheSettlement FairnessHearingat9:00a.m.on February18,2011,attheU.S.DistrictCour tfor theNor thernDistrictof California,280South1stStreet,SanJose,CA,95113.Atthishearing,theCour twill: a. FinallydeterminewhetherthisActionsatisfiestheapplicableprerequisitesforclassactiontreatmentunderRules 23(a)and(b)of theFederalRulesof CivilProcedure; b. DeterminewhethertheSettlementisfair,reasonable,andadequate; c. DeterminewhetheranOrderandFinalJudgmentshouldbeentered,dismissingtheActionwithprejudice; d. Determinewhetherthereleaseof theReleasedClaimsshouldbeprovidedtotheReleasedPar ties; e. DeterminewhetherthePlanof Allocationforthedistributionof theNetSettlementFundisfairandreasonable;and f. ConsidertheapplicationforAttorneys'FeesandExpenses. 39.TheSettlementFairnessHearingmaybedelayedfromtimetotimebytheCourtwithoutfurtherwrittennoticetotheClass. If youintendtoattendtheSettlementFairnessHearing,youshouldconfirmthedateandtimewithPlaintiffs'LeadCounsel. 40.You cannot speak at the Settlement Fairness Hearing if you previously excluded yourself from the Class (as provided in Section 31 above), or if you have not provided notice in your written objection(s) of your intention to speak at the SettlementFairnessHearinginaccordancewiththeproceduressetfor thinSection36above. WHAT HAPPENS IF I DO NOTHING AT ALL? 41.If you do nothing, you will get no money from the Settlement. You must submit a valid and timely Proof of Claim in ordertopossiblyshareintheNetSettlementFund. 42.As discussed in Section 26 above, the Order and Final Judgment approving the Settlement will dismiss the Action with prejudiceandfully,finally,andforeverresolve,dischargeandsettleallReleasedClaimsonthemeritsandwithprejudice. Unless you validly and timely exclude yourself from the Class, you will be forever barred and enjoined from instituting, continuing,orprosecutinganyactionasser tinganyReleasedClaimsagainstanyReleasedPar ty. PLAN OF ALLOCATION GENERAL PROVISIONS 43.TheNetSettlementFundshallbedistributedtoAuthorizedClaimants. 44.TheClaimsAdministratorshalldetermineeachAuthorizedClaimant'sproratashareof theNetSettlementFundbased uponeachAuthorizedClaimant's"RecognizedClaim."TheRecognizedClaimformulaisnotintendedtobeanestimate of theamountof whataClassMembermighthavebeenabletorecoverafteratrial.Norisitanestimateof theamount thatwillbepaidtoAuthorizedClaimantspursuanttotheSettlement.TheRecognizedClaimformulaisthebasisupon whichtheNetSettlementFundwillbepropor tionatelyallocatedtoAuthorizedClaimants. 45.Federal securities law provides that Authorized Claimants who sold all of their shares of Apple common stock on or beforeJune29,2006,arenoteligibleforanyrecovery. 46.Federal securities law also limits the amount of potential recovery for Authorized Claimants who held their shares of ApplecommonstockafterJune29,2006.Thelimitationisbasedonthemeantradingpriceof Applecommonstock overorwithinthe90-dayperiodafterJune29,2006.Themeantradingpriceof Applecommonstockoverthe90-day periodbetweenJune30,2006,andSeptember27,2006,bothdatesinclusive,is$65.71.Themeantradingpriceof ApplecommonstockoneachtradingdaybetweenJune30,2006,andSeptember27,2006,isspecifiedinSection52. below. Authorized Claimants who held their shares of Apple common stock after June 29, 2006, are not eligible for anyrecoveryif theypurchasedthesharesataprice(adjustedforstocksplits)equaltoorbelowtheapplicablemean tradingprice.AuthorizedClaimantswhoheldtheirsharesof ApplecommonstockafterJune29,2006,areeligiblefor potentialrecoveryif theypurchasedthesharesataprice(adjustedforstocksplits)greaterthantheapplicablemean tradingprice. In Re Apple Inc. Securities Litigation Page6of 8 Notice of Proposed Settlement 47.TheCour thasreservedjurisdictiontoallow,disallow,oradjusttheclaimof anyClassMember. 48.Class Members who do not submit a valid Proof of Claim will not share in the Settlement. Except for those Class MemberswhovalidlyandtimelyrequesttobeexcludedfromtheClass,ClassMemberswhodonotsubmitavalidProof of Claimwillnever thelessbeboundbytheSettlementandtheOrderandFinalJudgmententeredbytheCour t. 49.DistributionswillbemadetoAuthorizedClaimantsafterallclaimshavebeenprocessedandaftertheCour thasfinally approvedtheSettlement.If anyfundsremainintheNetSettlementFundbyreasonof un-cashedchecksorotherwise, then,aftertheClaimsAdministratorhasmadereasonableanddiligenteffor tstohaveClassMemberswhoareentitled topar ticipateinthedistributionof theNetSettlementFundcashtheirdistributions,anybalanceremainingintheNet SettlementFundone(1)yearaftertheinitialdistributionof suchfundsshallbere-distributedtoClassMemberswho have cashed their initial distributions, after payment of any unpaid costs or fees incurred in administering the Net SettlementFundforsuchre-distribution,uptoamaximumdistributionof $1.70pershare(thedifferencebetweenthe closingpriceof ApplecommonstockonJune29,2006($58.97)andJune30,2006($57.27)).If aftersixmonthsafter suchre-distributionanyfundsshallremainintheNetSettlementFund,thensuchbalanceshallbecontributedinnine equalpaymentstothefollowingninecorporategovernanceprograms: Baruch College, City University of New York Stanford Law School & the Graduate School of Business Robert Zicklin Center for Corporate Integrity Rock Center for Corporate Governance Indiana University, Kelly School of Business University of Texas, Dallas, School of Management Institute for Corporate Governance Institute for Excellence in Corporate Governance Kennesaw State University College of Business Vanderbilt University Law School Corporate Governance Center Law & Business Program Northwestern University, Kellogg School of Management Yale School of Management Corporate Governance Program Millstein Center for Corporate Governance & Performance San Diego State University Corporate Governance Institute 50.Plaintiffs, Defendants, their respective counsel, and all other Released Par ties, shall have no responsibility for or liability whatsoever for the investment or distribution of the Net Settlement Fund; the determination, administration, calculation, or payment of any Proof of Claim or non-performance of the Claims Administrator; or the payment or withholdingof taxesowedbytheNetSettlementFundoranylossesincurredinconnectiontherewith. CALCULATION OF RECOGNIZED CLAIM 51.Forpurposesof calculatingaRecognizedClaim,thefollowingtermsshallapply: a. Thedateof thepurchaseorsaleof Applecommonstockisthetradedate,notthesettlementdate. b. Thefirst-in,first-outbasiswillbeappliedtobothpurchasesandsales. c. Thepricepaidorreceivedshallexcludeallcommissions,taxes,andfees. d. Sharesoriginallysoldshor tshallhaveaRecognizedClaimof zero($0.00). e. NocashpaymentwillbemadeonaRecognizedClaimwherethedistributionamountislessthan$5.00. 52.RecognizedClaimsshallbecalculatedasfollows: a. If anAuthorizedClaimantpurchasedsharesof ApplecommonstockduringtheClassPeriodandsoldsuchshares onorbeforeJune29,2006,thentheRecognizedClaimforsuchsharesshallbezero($0.00). b. If anAuthorizedClaimantpurchasedsharesof ApplecommonstockduringtheClassPeriodandsoldsuchshares betweenJune30,2006,andSeptember27,2006,bothdatesinclusive,then: i. For shares purchased at a price (adjusted for stock splits) equal to or less than the applicable mean trading priceonthedateonwhichsuchsharesweresold(the"SellDate"),theRecognizedClaimshallbezero($0.00): Mean Mean Mean Mean Mean SaleDate Trading SaleDate Trading SaleDate Trading SaleDate Trading SaleDate Trading Price Price Price Price Price 6/30/06 $57.27 7/20/06 $54.98 8/8/06 $59.99 8/24/06 $61.90 9/12/06 $63.75 7/3/06 $57.61 7/21/06 $55.36 8/9/06 $60.12 8/25/06 $62.07 9/13/06 $63.96 7/5/06 $57.40 7/24/06 $55.74 8/10/06 $60.26 8/28/06 $62.19 9/14/06 $64.15 7/6/06 $56.99 7/25/06 $56.10 8/11/06 $60.37 8/29/06 $62.29 9/15/06 $64.33 7/7/06 $56.67 7/26/06 $56.54 8/14/06 $60.48 8/30/06 $62.40 9/18/06 $64.51 7/10/06 $56.39 7/27/06 $56.90 8/15/06 $60.67 8/31/06 $62.53 9/19/06 $64.67 7/11/06 $56.29 7/28/06 $57.33 8/16/06 $60.89 9/1/06 $62.66 9/20/06 $64.86 7/12/06 $55.87 7/31/06 $57.84 8/17/06 $61.09 9/5/06 $62.85 9/21/06 $65.03 7/13/06 $55.47 8/1/06 $58.26 8/18/06 $61.28 9/6/06 $63.00 9/22/06 $65.16 7/14/06 $54.99 8/2/06 $58.69 8/21/06 $61.43 9/7/06 $63.21 9/25/06 $65.34 7/17/06 $54.75 8/3/06 $59.15 8/22/06 $61.60 9/8/06 $63.40 9/26/06 $65.54 7/18/06 $54.59 8/4/06 $59.51 8/23/06 $61.75 9/11/06 $63.58 9/27/06 $65.71 7/19/06 $54.56 8/7/06 $59.81 In Re Apple Inc. Securities Litigation Page7of 8 Notice of Proposed Settlement ii. For shares purchased at a price (adjusted for stock splits) greater than the applicable mean trading price on theSellDate,theRecognizedClaimshallbethelesserof (a)$1.70pershareor(b)thedifferencebetweenthe purchaseprice(adjustedforstocksplits)andtheapplicablemeantradingpriceontheSellDate. c. If anAuthorizedClaimantpurchasedsharesof ApplecommonstockduringtheClassPeriodandsuchshareswere stillheldasof thecloseof tradingonSeptember27,2006,then: i. For shares purchased at a price (adjusted for stock splits) equal to or less than the mean trading price of Apple common stock over the 90-day period between June 30, 2006, and September 27, 2006 ($65.71), the RecognizedClaimshallbezero($0.00). ii. Forsharespurchasedataprice(adjustedforstocksplits)greaterthanthemeantradingpriceof Applecommon stockoverthe90-dayperiodbetweenJune30,2006,andSeptember27,2006($65.71),theRecognizedClaim shallbethelesserof (a)$1.70pershareor(b)thedifferencebetweenthepurchaseprice(adjustedforstock splits)and$65.71. 53.Examplecalculationsof theRecognizedClaimforAuthorizedClaimantsmaybeviewedatwww.AppleSecuritiesSettlement.com. CORPORATE REFORM MEASURES 54.Pursuant to the Settlement, Apple has agreed to implement corporate governance measures, including amending its Insider Trading Policy, corporate Bylaws, and the char ter of the Board's Compensation Committee. Apple has also agreed to extend to at least May 1, 2013, the term of measures it adopted in 2008 after settling derivative litigation relatingtoitspaststockoptionpractices.Thesemeasuresinclude:(1)implementinganEquityAwardGrantPractices Policy; (2) appointing a Trading Compliance Committee; (3) amending the char ter of the Board's Compensation Committee;(4)amendingitsCorporateGovernanceGuidelines;(5)implementingaCorporateMinutesProcedure;and (6)implementingaUnanimousWrittenConsentProcedure.Thedetailsof thesemeasuresaresetfor thintheStipulation. SPECIAL NOTICE TO BROKERS, BANKS AND OTHER NOMINEES 55.FinancialinstitutionsandothernomineeswhopurchasedorsoldApplecommonstockonbehalf of beneficialowners are directed within four teen (14) days of their receipt of this Notice to: (a) send a copy of this Notice and Proof of Claim to such beneficial owners; or (b) provide contact information for such beneficial owners to the Claims Administrator,preferablyinaMicrosoftExceldatatablesettingfor th:(a)title/registration,(b)streetaddress,(c)city/ state/zip. Any nominee may also submit a Master Proof of Claim on behalf of multiple clients who are beneficial owners of Apple common stock. The Master Proof of Claim and related instructions are posted on the "Nominees" pageatwww.AppleSecuritiesSettlement.com.MasterProofsof Claimmustbecompletedandeithersubmittedonline at www.AppleSecuritiesSettlement.com by no later than March 15, 2011, or sent by first-class mail postage pre-paid postmarkednolaterthanMarch15,2011.QuestionsabouttheSettlementandrequestsforcopiesof thedocuments shouldbedirectedtotheClaimsAdministratorat1-888-760-4869. CAN I SEE THE COURT FILE? WHOM SHOULD I CONTACT IF I HAVE QUESTIONS? 56.ForadditionaldetailsabouttheActionandtheSettlement,youmayvisitwww.AppleSecuritiesSettlement.comand/or inspectthepapersonfileintheAction,includingtheStipulation,duringregularofficehoursattheOfficeof theClerk, U.S.DistrictCour tfortheNor thernDistrictof California,280South1stStreet,SanJose,CA95113. 57.AnyinquiriesconcerningthisNoticeortheProof of Claimmaybedirectedto: ClaimsAdministrator Plaintiffs'LeadCounsel InreAppleInc.SecuritiesLitigation POBox6809 Por tland,OR97228-6809 1-888-760-4869 www.AppleSecuritiesSettlement.com JayW.Eisenhofer MichaelJ.Barry Grant&EisenhoferP A. . 1201N.MarketStreet Wilmington,DE19801 DO NOT CALL OR WRITE THE COURT OR THE OFFICE OF THE CLERK OF THE COURT REGARDING THIS NOTICE Dated:November__,2010 ByOrderof theClerkof theCour t U.S.DistrictCour tfortheNor thernDistrictof California In Re Apple Inc. Securities Litigation Page8of 8 Notice of Proposed Settlement Exhibit A-2 LegaL Notice UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION LegaL Notice IN RE APPLE INC. SECURITIES LITIGATION THIS DOCUMENTS RELATES TO: ALL ACTIONS Case No. C-06-5208-JF CLASS ACTION SUMMARY NOTICE OF PROPOSED SETTLEMENT, SETTLEMENT FAIRNESS HEARING, AND MOTION FOR ATTORNEYS' FEES AND EXPENSES TO: ALL PERSONS OR ENTITIES THAT PURCHASED APPLE INC. ("APPLE") COMMON STOCK DURING THE PERIOD BETWEEN AUGUST 24, 2001, AND JUNE 29, 2006, BOTH DATES INCLUSIVE (THE "CLASS"; MEMBERS OF THE CLASS ARE REFERRED TO AS "CLASS MEMBERS"). YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure and a Court Order, that the above-captioned action has been certified as a class action for purposes of a proposed settlement for $16.5 million in cash, plus interest. In addition, Apple has agreed to implement certain corporate governance measures. Apple also has agreed to pay the reasonable costs of administering and distributing the settlement fund and the reasonable attorneys' fees and expenses as may be awarded by the Court to compensate plaintiffs' counsel. A hearing will be held before the Honorable Jeremy Fogel in the U.S. District Court for the Northern District of California, located at 280 South 1st Street, San Jose, CA, at 9:00 a.m., on February 18, 2011, to determine whether the proposed settlement is fair, reasonable, and adequate, to consider the proposed plan of allocation, and to consider the application for attorneys' fees and expenses. IF YOU ARE A CLASS MEMBER, YOUR RIGHTS MAY BE AFFECTED BY THE SETTLEMENT, AND YOU MAY BE ENTITLED TO SHARE IN THE SETTLEMENT FUND. If you have not yet received the full printed Notice of Proposed Settlement, Settlement Fairness Hearing, and Motion for Attorneys' Fees and Expenses (the "Notice"), you may obtain a copy of this document by contacting the Claims Administrator: In re Apple Inc. Securities Litigation P.O. Box 6809 Portland, OR 97228-6809 1-888-760-4869 www.AppleSecuritiesSettlement.com To participate in the settlement, you must submit your completed and signed Proof of Claim either online at www.AppleSecuritiesSettlement.com by no later than March 15, 2011, or send it by first-class mail postage prepaid postmarked no later than March 15, 2011, in the manner and form explained in the Notice. Unless you submit a valid Proof of Claim, you cannot participate in the settlement. If you desire to be excluded from the Class, you must submit a request for exclusion by firstclass mail postage prepaid postmarked no later than January 21, 2011, in the manner and form explained in the Notice. Unless you validly exclude yourself from the Class, you will be bound by any judgment entered in this action whether or not you submit a Proof of Claim. If you want to object to the proposed settlement, plan of allocation, or the application for attorneys' fees and expenses, you must file your objection with the Court no later than January 21, 2011, and send a copy of it on the same day to the parties' counsel by first-class mail postage prepaid, in the manner and form set forth in the Notice. DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING THIS NOTICE. Inquiries, other than requests for the Notice, may be made to Plaintiffs' Lead Counsel: Michael J. Barry Grant & Eisenhofer P.A. 1201 N. Market Street Wilmington, DE 19801 Phone: (302) 622-7000 Dated: Month DD, 20YY By Order of the Court Exhibit A-3 Type or print in the boxes below in CAPITAL LETTERS; do not use red ink, pencil or staples. CLAIMANT INFORMATION Beneficial Owner's First Name Joint Beneficial Owner's First Name Beneficial Owner's Last Name as it appears on your brokerage statement Joint Beneficial Owner's Last Name as it appears on your brokerage statement PROOF OF CLAIM Mailing Address, including apartment, unit or box number City Foreign Province Social Security Number State Zip Code Foreign Country Taxpayer Identification Number Primary Telephone Number Email Address OR Name of Custodian if applicable CLAIMANT TYPE Specify one Individual(s) Partnership Corporation Estate UGMA Custodian Trust IRA, Keogh (specify) ___________________ Other _________________________________ Individual(s), answer the following. If either question applies, state the position(s) held and dates of employment or affiliation. Yes Yes Positions(s) No No Were you an employee of Apple Inc. at any time from August 24, 2001 through June 29, 2006, both dates inclusive? Were you or are you an officer or director of Apple Inc.? Dates of Employment / Affiliation to MM Y Y MM Y Y CLAIMANT CERTIFICATION 1. I have read and understand the contents of the Notice and the Proof of Claim. 2. I purchased share(s) of Apple common stock between August 24, 2001, and June 29, 2006, both dates inclusive. 3. I (a) am not a Defendant, (b) am not a current or former director or officer of Apple, (c) was not an employee of Apple and/or its subsidiaries during the Class Period, and (d) am not a family member, trust, company, entity, or affiliate controlled or owned by any of those categories of persons or entities. I also have not filed a request to be excluded from the Class and do not know of any request to be excluded from the Class that was filed on my behalf. 4. I want to participate in the Settlement described in the Notice, and I agree to the terms and conditions thereof. 5. I have attached copies of sufficient supporting documentation for all transactions listed in the Schedule of Transactions in Apple Common Stock, in accordance with the instructions in this Proof of Claim and the Notice. 6. I understand and acknowledge that the information contained in this Proof of Claim is subject to verification by the Claims Administrator and the Court. I agree to furnish such additional information with respect to this Proof of Claim as the Claims Administrator or the Court may require. 7. I submit to the jurisdiction of the United States District Court for the Northern District of California with respect to this Proof of Claim. I understand that this Proof of Claim will be subject to investigation and discovery under the Federal Rules of Civil Procedure, provided that such investigation and discovery shall be limited to my status as a Class Member and the validity and amount of this Proof of Claim. 8. I agree to be bound by the Orders of this Court and the Court's summary determination of the validity and amount of this Proof of Claim. 9. I am NOT subject to backup withholding under the provisions of Section 3406(a)(1)(c) of the Internal Revenue Code. Note: If you have been notified by the Internal Revenue Service (IRS) that you are subject to backup withholding, please strike out the word "NOT" . 10. I understand and acknowledge that if the Settlement is approved, the Court will enter an Order and Final Judgment dismissing the Action with prejudice. I further understand and acknowledge that, on and after the Effect

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