SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report
(Date of earliest event reported): September 17, 2003
Symbol Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-9802 11-2308681
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(State or other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
One Symbol Plaza
Holtsville, New York 11742
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including
area code: (631) 738-2400
Former name or former address, if changed
since last report: Not Applicable
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE
The Registrant issued a press release dated October 10, 2003 which
updates the status of the litigation between its wholly owned subsidiary,
Telxon Corporation, and Smart Media. A copy of the press release is attached
as Exhibit 99.1 hereto, and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYMBOL TECHNOLOGIES, INC.
Date: October 10, 2003 By: /s/ Mark T. Greenquist
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Name: Mark T. Greenquist
Title: Senior Vice President
and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Description
Exhibit 99.1 Press release updating the status of the Smart Media
litigation.
Exhibit 99.1
Status of Telxon Litigation Updated
HOLTSVILLE, N.Y., Oct. 10, 2003, -- Symbol Technologies, Inc.
(NYSE:SBL) today provided an update to the status of the case involving
Telxon Corporation, a wholly owned subsidiary of Symbol, and Smart Media
of Delaware, Inc.
The Summit County Court of Common Pleas in Ohio held a status
conference on October 9, 2003, and, as a result, Symbol expects that the
briefing on post judgment motions will take at least a month, and may take
longer. No judgment has yet been entered in the case, and Telxon has filed a
motion for judgment notwithstanding the verdicts and for a new trial.
The following addresses the status of the Telxon case:
Q1: What is the background of the litigation between Telxon and Smart
Media, et al.?
A1: The litigation between Telxon and Smart Media began in
December 1, 1998, prior to Symbol's acquisition of Telxon, when
Telxon filed suit against Smart Media in the Court of Common
Pleas for Summit County, Ohio. The suit filed by Telxon was for a
declaratory judgment that, contrary to the position of Smart Media
and several of its shareholders, Telxon neither agreed with nor
promised Smart Media to develop a product or to provide financial
support for the development of a product. Smart Media denied
Telxon's suit for declaratory judgment and claimed that it suffered
substantial damages because of Telxon's alleged failure to provide
funding of several million dollars. The damages claimed by Smart
Media are for allegedly lost profits.
Q2: Is there a judgment against Telxon at this point?
A2: No. No judgment has been entered at this time.
Q3: What are the next procedural steps, and the timing, relating to the
case?
A3: The parties had a conference with the judge on October 9, 2003,
that addressed, among other matters, the next steps in the case.
Symbol and Telxon believe that post trial motion practice will take
at least a month and that no judgment will be entered until the
Court rules on the parties' post trial motions. Symbol and Telxon
cannot predict when the Court will render its decision.
Q4: Has Telxon made any post trial motions?
A4: On October 7, 2003, Telxon made a motion to impound and secure
the trial record of certain exhibits, and on October 8, 2003, Telxon
made motions for judgment in its favor notwithstanding the jury's
verdicts, and for a new trial. In the event this relief is not granted,
Telxon requested that the amount of the jury's verdicts be reduced.
Also, Telxon requested that the execution of any judgment against
Telxon entered by the Court be stayed without the posting of a
bond, or in the alternative, that a bond be set at a maximum of $3.7
million.
Q5: What arguments has Telxon made to support its motion?
A5: Telxon, among other arguments, has argued that the jury's verdicts
were based upon inadmissible evidence being improperly provided
to the jury during its deliberations; that the absence of liability on
the part of Telxon was conclusively established by the documents
in evidence; and that the amounts awarded to Smart Media were
based on legally irrelevant projections, and are wildly speculative,
particularly given that Smart Media never had any revenue or
profits. In addition, Telxon argued that the jury verdicts
incorrectly awarded damages more than once for the same alleged
injury by adding together two separate awards for lost profits, and
by improperly combining different measures of damages.
Q6: Has Smart Media made any post trial motions?
A6: As previously reported, Smart Media made a motion to join or
substitute Symbol as a defendant. In addition on October 7, 2003,
Smart Media made a motion for prejudgment interest in the
amount of approximately $146 million based upon a 10 percent per
annum rate on the aggregate amounts of the jury's verdicts from
October 23, 1996, to September 17, 2003. Symbol and Telxon
believe these motions are without merit and intend to oppose them
vigorously.
Q7: If the Ohio trial court judge enters a judgment on the jury's
verdicts, would Telxon have a right to appeal?
A7: Yes, Telxon may appeal the jury's verdicts as a matter of right to
the Ohio Court of Appeals for the 9th District. Following that
appeal, any party could petition the Ohio Supreme Court to hear
the case, but Ohio Supreme Court review is not an appeal as a
matter of right.
Q8: How long could the appeal process last?
A8: The length of the appeals process is uncertain. It could last a
number of months, and perhaps more than a year.
Q9: Pending the appeal, can Telxon stay execution of any judgment
against it?
A9: Yes, if Telxon posts a bond, if one is required, as determined by
the Ohio trial court.
Q10: In the event of an enforceable judgment against Telxon that it was
unable to satisfy, could Symbol be responsible for the judgment?
A10: Under such circumstances, Smart Media may pursue various legal
theories and tactics to try to recover from Symbol or otherwise
obligate Symbol to provide funds to Telxon to satisfy a judgment
against Telxon. While Symbol will vigorously oppose such
efforts, there can be no assurance that Symbol will not be liable for
or otherwise be obligated to provide funds to Telxon to satisfy any
judgment against Telxon.
Q11: Could the litigation between Smart Media and Telxon, or even a
bankruptcy of Telxon, have an impact on Symbol's credit facility?
A11: The credit facility remains in place at this time. Whether the credit
facility could be impacted will depend on developments in the
litigation. At the present time, Symbol is not borrowing under its
credit facility.
Q12: Will the amount of the jury verdicts be reserved against on
Symbol's balance sheet?
A12: At this time, Symbol believes that the amounts indicated in the jury
verdicts are not probable and estimable. Therefore, Symbol has
not recorded any reserves in its balance sheets.
Q13: Ultimately, if Symbol were found liable for the entire amount of the
verdicts, does Symbol have adequate liquidity and capital
resources to satisfy that amount?
A13: Symbol believes that it could satisfy the entire amount with a
combination of internal funds and funds obtained from the public
and/or private capital markets, although access to the public
markets will be subject to Symbol completing the pending
restatement of its financial statements. In addition, Symbol's
ability to access the capital markets would be subject to market
conditions, industry conditions and the financial condition and
prospects of Symbol at the time the capital markets are accessed.
About Symbol Technologies
Symbol Technologies, founded in 1975, is a global leader in secure
mobile information systems that integrate application-specific hand-held
computers with wireless networks for data and voice and bar code data
capture. Symbol products and services increase productivity and reduce costs
for the world's leading retailers, logistics and transportation companies,
government agencies, manufacturers and providers of healthcare, hospitality
and security. More information is available at www.symbol.com and 1-800-
722-6234 or 631-738-2400.
This news release contains forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially. These risks
and uncertainties include litigation developments, price and product
competition, dependence on new product development, reliance on major
customers, customer demand for our products and services, control of costs
and expenses, international growth, general industry and market conditions
and growth rates and general domestic and international economic conditions
including interest rate and currency exchange rate fluctuations. For a further
list and description of such risks and uncertainties, see the reports filed by
Symbol with the Securities and Exchange Commission. Symbol disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
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For financial information: For press information:
Nancy Tully Doug Picker
Symbol Technologies, Inc. Symbol Technologies, Inc.
631-738-5050 631-738-4699