SanDisk 2008 Annual Report Download - page 42

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SanDisk IL, Ltd. f/k/a msystems Ltd., No. 08 Civ. 8069 (AKH), SDIL petitioned to confirm the award pursuant
to the dispute resolution provisions of the Agreement and Section 207 of the Federal Arbitration Act, 9 U.S.C.
§ 207. On September 22, 2008, Samsung withdrew its petition for vacatur and asked the Court to immediately
enter judgment against itself with respect to SDIL’s petition to confirm. On September 24, 2008, the Court
entered judgment in favor of SDIL on SDIL’s petition to confirm the award. On October 7, 2008, SDIL filed a
motion for attorneys’ fees and expenses incurred in connection with Samsung’s withdrawn petition to vacate the
award. On October 20, 2008, after Samsung offered to pay in full the expenses claimed by SDIL, the motion for
attorneys’ fees and expenses was denied by the District Court.
On September 14, 2008, Daniel Harkabi and Gidon Elazar, former employees and founders of MDRM, Inc.,
filed a breach of contract action in the U.S. District Court for the Southern District of New York seeking earn-out
payments of approximately $3.8 million in connection with SanDisk’s acquisition of MDRM, Inc. in fiscal year
2004. A mediation was held in June 2007, as required by the acquisition agreement, but was unsuccessful. The
Company filed its answer on November 14, 2008 and discovery is proceeding.
On September 17, 2008, a purported shareholder class action, captioned McBride v. Federman, et al., Case
No. 1-08-CV-122921, was filed in the Superior Court of California in Santa Clara County. The lawsuit was
brought by a purported shareholder of the Company and names as defendants the Company and its directors,
Irwin Federman, Steven J. Gomo, Dr. Eli Harari, Eddy W. Hartenstein, Catherine P. Lego, Michael E. Marks,
and Dr. James D. Meindl. The complaint alleges breach of fiduciary duty by the Company and its directors in
rejecting Samsung Electronics Co., Ltd.’s non-binding proposal to acquire all of the outstanding common stock
of the Company for $26.00 per share. On September 29, 2008, plaintiff served his first request for production of
documents on the Company. On October 17, 2008, the Company and its directors filed a demurrer seeking
dismissal of the lawsuit, and plaintiff served his first requests for production of documents on the Company’s
directors. On November 4, 2008, the parties filed a stipulation to dismiss the litigation without prejudice, with
each party to bear its own costs. On November 11, 2008, the Court dismissed the case without prejudice.
On October 1, 2008, NorthPeak Wireless LLC (“NorthPeak”) filed suit against the Company and 30 other
named defendants including Dell, Inc., Fujitsu Computer Systems Corp., Gateway, Inc., Hewlett-Packard
Company and Toshiba America, Inc., in the United States District Court for the Northern District of Alabama,
Northeastern Division. The suit, Case No. CV-08-J-1813, alleges infringement of U.S. Patents 4,977,577 and
5,978,058 by certain of the Company’s discontinued wireless electronic products. On January 21, 2009, the Court
granted a motion by the defendants to transfer the case to the United States District Court for the Northern
District of California, where it is now Case No. 3:09-CV-01813.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2008.
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