Citrix 2007 Annual Report Download - page 37

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begin June 15, 2009. In addition, the United States Patent and Trademark Office has decided to reexamine the
patent at issue in the Southern District of Florida case. We believe that we have meritorious defenses to the
allegations made in each of the complaints and intend to vigorously defend these lawsuits; however, we are
unable to currently determine the ultimate outcome of these matters or the potential exposure to loss, if any.
On March 6, 2007, a purported stockholder derivative action entitled Sheet Metal Workers Local 28 Pension
Fund v. Roger W. Roberts et al. (C.A. No. 07-60316), was filed in the US District Court for the Southern District
of Florida against certain of our current and former directors and officers, and against us as a nominal defendant.
The lawsuit asserts, among other things, that certain stock option grants made by us were dated and accounted for
inappropriately. The lawsuit seeks the recovery of monetary damages and other relief for damage allegedly
caused to us. An amended complaint, which changed the plaintiff in the action, named additional defendants and
included additional allegations concerning our stock option granting practices, was filed on January 15, 2008
under the caption Rappaport v. Roberts, et al. (CA No. 07-60316).
We also received a demand letter dated March 15, 2007 from a purported stockholder with respect to certain
stock option grants made to our current and former directors and officers during the years 1996 through 2003.
That demand letter asserted, among other things, that certain stock option grants made by us were dated and
accounted for inappropriately. The demand letter sought, among other things, the commencement by our Board
of Directors of an action against our directors and officers from 1996 forward for alleged breaches of fiduciary
duties in connection with the granting of the options. A special committee of independent directors was
appointed to review and consider the assertions contained in the demand letter. The special committee has
completed its work and has determined that it would not be in the best interests of the company to pursue the
claims referred to in the demand letter.
In July 2007, two additional purported stockholder derivative actions entitled Ekas v. Citrix, et al. (Case
No. 07-16114-11) and Crouse v. Citrix, et al. (Case No. 07-16249-03) were filed in the Circuit Court for Broward
County, Florida state court against certain of our current and former directors and officers, and against us as a
nominal defendant. These actions assert, among other things, that certain stock option grants made by us were
dated and accounted for inappropriately. As with the Sheet Metal Workers’ action, both the Ekas and Crouse
actions seek the recovery of monetary damages and other relief for damages allegedly caused to us. Neither the
purported stockholder derivative actions nor the demand letter described above seeks to recover amounts from
us. An amended complaint in the Ekas action, which contains additional allegations concerning our stock option
granting practices was filed on December 14, 2007.
During the course of our stock option investigation, we have periodically met and discussed the results of
this investigation with the staff of the Securities and Exchange Commission, or SEC. On January 30, 2008, we
received a letter from the SEC Staff stating that the Staff has completed its investigation and does not intend to
recommend any enforcement action by the SEC against us.
In addition, we are a defendant in various litigation matters generally arising out of the normal course of
business. Although it is difficult to predict the ultimate outcome of these cases, we believe that the ultimate
outcome will not materially affect our business, financial position, results of operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company’s annual meeting of stockholders held on October 18, 2007, the Company’s stockholders
took the following actions:
The Company’s stockholders elected Mark B. Templeton, Stephen M. Dow and Godfrey R. Sullivan, each
as a Class III director, to serve for a three-year term expiring at the Company’s annual meeting of stockholders in
2010 or until his successor has been duly elected and qualified or until his earlier resignation or removal. The
directors were elected by a plurality of the votes cast at the 2007 annual meeting as follows: 144,751,442 shares
31