EMC 2004 Annual Report Download - page 92

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We have procurement or license agreements with respect to technology that is used in our products and agreements in which we obtain rights to a product
from an OEM. Under some of these agreements, we have agreed to indemnify the supplier for certain claims that may be brought against such party with
respect to our acts or omissions relating to the supplied products or technologies.
We have agreed to indemnify the directors and executive officers of EMC and our subsidiaries, to the extent legally permissible, against all liabilities
reasonably incurred in connection with any action in which such individual may be involved by reason of such individual being or having been a director or
executive officer.
In connection with certain acquisitions, we have agreed to indemnify the current and former directors, officers and employees of the acquired company in
accordance with the acquired company's by-laws and charter in effect immediately prior to the acquisition or in accordance with indemnification or similar
agreements entered into by the acquired company and such persons. In a substantial majority of instances, we have maintained the acquired company's
directors' and officers' insurance, which should enable us to recover a portion of any future amounts paid. In connection with certain dispositions, we have
agreed to indemnify the buyer for certain matters, such as breaches of representations and warranties. These indemnities vary in length of time.
Based upon our historical experience and information known as of December 31, 2004, we believe our liability on the above guarantees and indemnities at
December 31, 2004 is immaterial.
Litigation
On September 30, 2002, Hewlett-Packard Company ("HP") filed a complaint against us in the United States Federal District Court for the Northern
District of California alleging that certain of our products infringe seven HP patents (the "First HP Lawsuit"). HP seeks a permanent injunction as well as
unspecified monetary damages for patent infringement. We believe that HP's claims are without merit. On July 21, 2003, we answered the complaint and filed
counterclaims alleging that certain HP products infringe six EMC patents. We seek a permanent injunction as well as unspecified monetary damages for
patent infringement. On February 16, 2005, summary judgment motions were heard. The court's ruling on such motions is currently pending.
On October 27, 2004, a second complaint was filed by HP against us in the same court based on six of the seven patents asserted in the First HP Lawsuit
(the "Second HP Lawsuit"). The Second HP Lawsuit was filed shortly after the court had denied HP's motion for leave to amend its infringement contentions
in the First HP Lawsuit to add certain EMC products. In the Second HP Lawsuit, HP alleges patent infringement by the same EMC products that they
attempted to add to the First HP Lawsuit. On February 3, 2005, the court stayed the Second HP Lawsuit.
We are a party (either as plaintiff or defendant) to various other patent litigation matters, including certain matters which we assumed in connection with
our acquisitions of LEGATO and VMware.
We are a party to other litigation which we consider routine and incidental to our business.
Management does not expect the results of any of these actions to have a material adverse effect on our business, results of operations or financial
condition.
N. Stockholders' Equity
Common Stock Repurchase Program
Our Board of Directors has authorized the repurchase of up to 300.0 million shares of our common stock. The purchased shares will be available for
various corporate purposes, including our stock option and 89