According to the Company’s FORM 10-Q For The Quarterly Period Ended September 24, 2000, the individual action, captioned Ora v. Iomega Corporation, et al., originally filed in Superior Court of the State of California for the County of Los Angeles was removed the action to the United States District Court for the Central District of California. On April 12, 2000, the Court dismissed the amended complaint in its entirety, entering judgment in the Company’s favor. On May 7, 2000, the plaintiff filed a notice of appeal to the Ninth Circuit Court of Appeals. On September 29, 2000, the Company entered into a settlement agreement with Ora resolving all claims between the parties, dismissing Ora’s appeal and providing for a minimal payment by the Company.
According to the Company’s FORM 10-Q For The Quarterly Period Ended June 27, 1999, as previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 1998, on February 10, 1998, several purported class action complaints were filed in the United States District Courts for the District of Utah and the Southern District of New York, against the Company and certain of its former officers on behalf of certain persons who purchased the Company's common stock during the period from September 22, 1997 to January 22, 1998. These cases were consolidated in the District of Utah and a consolidated class action complaint, Karacand v. Kim B. Edwards, Leonard C. Purkis and Iomega Corporation, was filed on July 8, 1998. The Karacand complaint alleges that the Company and certain of its former officers violated certain federal securities laws and seeks an unspecified amount of damages. On June 11, 1999, the Company prevailed on its motion to dismiss in the Karacand matter. Pursuant to the Order, the complaint was dismissed with prejudice and the plaintiffs' motion for leave to amend was denied. The plaintiffs filed a motion for reconsideration which was denied by the Court on August 4, 1999.
A separate individual suit, Ora v. Iomega Corporation, et al., was filed on May
27, 1998, in Superior Court of the State of California for the County of Los Angeles. The Ora complaint alleges that the Company and certain of its former officers violated certain federal and state securities laws and alleges that Mr. Edwards breached his duties as a director of the Company.
The original Complaint asserts that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuit alleges that during the Class Period, plaintiffs and the Class were injured as a result of defendants' misrepresentations and/or omissions concerning, inter alia, one of Iomega's principal products -- the Jaz 2 drive. As a result, the price of Iomega stock soared to a record high during the Class Period. During the Class Period, defendants (senior officers of Iomega) were unloading millions of dollars of their own stock at inflated prices, while the company was continuing to represent that the Jaz 2 product would be available in the fourth quarter of 1997. Yet, just one month later, defendants suddenly announced that the Jaz 2 product would not be released in the fourth quarter of 1997, and would be delayed at least until the end of the first quarter of 1998.