Crucial 2014 Annual Report Download - page 24

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Because the plans of reorganization of the MMJ Companies provide for ongoing payments to creditors following the
closing of the MMJ acquisition, the Japan Proceedings are continuing and the MMJ Companies remain subject to the oversight
of the Japan Court and of the trustees (including a trustee designated by us, who we refer to as the business trustee, and a
trustee designated by the Japan Court, who we refer to as the legal trustee), pending completion of the reorganization
proceedings. The business trustee will make decisions in relation to the operation of the businesses of the MMJ Companies,
other than decisions in relation to acts that need to be carried out in connection with the Japan Proceedings, which will be the
responsibility of the legal trustee. The Japan Proceedings and oversight of the Japan Court will continue until the final creditor
payment is made under the MMJ Companies' plans of reorganization, which is scheduled to occur in December 2019, but may
occur on a later date to the extent any claims of creditors remain unfixed on the final scheduled installment payment date. The
MMJ Companies may petition the Japan Court for an early termination of the Japan Proceedings once two-thirds of all
payments under the plans of reorganization are made. Although such early terminations are customarily granted, there can be
no assurance that the Japan Court will grant any such petition in these particular cases.
During the pendency of the Japan Proceedings, the MMJ Companies are obligated to provide periodic financial reports to
the Japan Court and may be required to obtain the consent of the Japan Court prior to taking a number of significant actions
relating to their businesses, including transferring or disposing of, or acquiring, certain material assets, incurring or
guaranteeing material indebtedness, settling material disputes, or entering into certain material agreements. The consent of the
legal trustee may also be required for matters that would likely have a material impact on the operations or assets of the MMJ
Companies and their subsidiaries or for transfers of material assets, to the extent the matters or transfers would reasonably be
expected to materially and adversely affect execution of the plans of reorganization of the MMJ Companies. Accordingly,
during the pendency of the Japan Proceedings, our ability to effectively integrate the MMJ Companies as part of our global
operations or to cause the MMJ Companies to take certain actions that we deem advisable for their businesses could be
adversely affected if the Japan Court or the legal trustee is unwilling to consent to various actions that we may wish to take
with respect to the MMJ Companies.
Rambus
On May 5, 2004, Rambus, Inc. ("Rambus") filed a complaint in the Superior Court of the State of California (San
Francisco County) against us and other DRAM suppliers which alleged that the defendants harmed Rambus by engaging in
concerted and unlawful efforts affecting Rambus DRAM by eliminating competition and stifling innovation in the market for
computer memory technology and computer memory chips. Rambus' complaint alleged various causes of action under
California state law including, among other things, a conspiracy to restrict output and fix prices, a conspiracy to monopolize,
intentional interference with prospective economic advantage, and unfair competition. Rambus sought a judgment for damages
of approximately $3.90 billion, joint and several liability, trebling of damages awarded, punitive damages, a permanent
injunction enjoining the defendants from the conduct alleged in the complaint, interest, and attorneys' fees and costs. Trial
began on June 20, 2011, and the case went to the jury on September 21, 2011. On November 16, 2011, the jury found for us on
all claims. On April 2, 2012, Rambus filed a notice of appeal to the California 1st District Court of Appeal.
We were engaged in litigation with Rambus relating to certain of Rambus' patents and certain of our claims and defenses.
Our lawsuits with Rambus related to patent matters were pending in the U.S. District Court for the District of Delaware, U.S.
District Court for the Northern District of California, Germany, France, and Italy.
In December 2013, we settled all pending litigation between us and Rambus, including all antitrust and patent matters. We
also entered into a seven-year term patent cross-license agreement with Rambus that allows us to avoid costs of patent-related
litigation during the term. We agreed to pay Rambus up to $10 million per quarter over seven years, for a total of $280 million,
beginning in the second quarter of 2014. The primary benefits we received from these arrangements were (1) the settlement
and termination of all existing litigation, (2) the avoidance of future litigation expenses and (3) the avoidance of future
management and customer disruptions. As a result, other operating expense for the first quarter of 2014 included a $233
million charge to accrue a liability, which reflects the discounted value of amounts due under this arrangement.