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