To: Kashish King who wrote (27711 ) 2/6/1998 2:55:00 AM From: Marshall Respond to of 33268
Rod, although there were still some formalities involved I believe an agreed settlement of the November 28, 1995 shareholder lawsuit was reached last year. From the 10-K: <snip> ITEM 3. LEGAL PROCEEDINGS -------------------------- <snip> On July 29, 1997, the Company and the plaintiffs agreed to settle the In re Data Race Securities Litigation. If the lawsuit were settled in accordance with this agreement, the Company's insurance carrier would pay $800,000 in cash and the Company would contribute 10,000 shares of Common Stock. The Company believes that the case is absolutely without merit, and that neither the Company nor any of the other defendants committed any of the alleged wrongdoings. The Company decided to accept the settlement agreement based on the advice of counsel that the costs to the Company of defending the lawsuit could exceed the costs to the Company of the proposed settlement, and based on the unpredictable results of jury trials. The settlement is contingent upon execution of a definitive settlement agreement, U.S. District Court approval and certain other conditions. There can be no assurance, that all such conditions will be satisfied. In the event final settlement is not reached, the Company intends to continue to vigorously defend against the claims made in the lawsuit. The Company is unable, however, to predict the costs to be incurred to resolve the lawsuit in the event settlement is not reached on the terms set forth in the preliminary settlement agreement. The Company is required under certain circumstances to indemnify the named officers against losses incurred as a result of the lawsuit. <end snip> Incidentally - the company ended up delivering even more modems to IBM than were specified in the original contract in question.