3Ware 2002 Annual Report Download - page 32

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On May 9, 2002, the court granted the motion dismissing the complaint but giving plaintiffs 45 days to file an
amended complaint. No discovery has been conducted in this lawsuit.
In May 2001, a series of similar state derivative actions were filed against the directors and certain executive
officers of the Company. The state complaints have been coordinated and assigned to the Superior Court of
California in the County of San Diego, Applied Micro Circuits Shareholders Cases, No. JCCP No. 4193. In
November 2001, the court appointed liaison plaintiffs’ counsel in the coordinated proceeding, and plaintiffs filed
a consolidated state complaint in December 2001. The consolidated state complaint alleges overstatement of the
financial prospects of the Company, mismanagement, inflation of stock value and sale of stock at inflated prices
for personal gain during the period from November 2000 through February 2001. Defendants demurred to the
consolidated state complaint, which demurrer was partially granted and partially overruled in February 2002.
Defendants took a writ of mandate seeking review of the court’s order by the Court of Appeal of California,
which writ was dismissed in March 2002. Defendants have petitioned the Supreme Court of California for review
of the denied portion of the demurrer. The petition has not yet been granted or dismissed. In February 2002, the
Company’s board of directors formed a special litigation committee to evaluate the claims in the consolidated
state complaint. The special litigation committee has retained independent legal counsel. The San Diego Superior
Court has stayed discovery against the Company until July 2002 when the special litigation committee is
currently scheduled to deliver its report to the court. Limited discovery against the individual defendants in this
lawsuit and third parties has commenced.
The Company believes that the allegations in these lawsuits are without merit and intends to defend the
lawsuits vigorously. The Company cannot predict the likely outcome of these lawsuits, and an adverse result in
either lawsuit could have a material, adverse effect on the Company. The lawsuits have been tendered to the
Company’s insurance carriers.
In addition, from time to time, the Company may be involved in litigation relating to claims arising out of
its operations in the normal course of business. As of the date of this report, except as described in this report, the
Company is not engaged in any legal proceeding that is expected to have a material, adverse effect on its
business, financial condition or operating results.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the Company’s stockholders during the fourth quarter of the fiscal
year ended March 31, 2002.
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