The company agreed to settle this case to avoid the time, expense and uncertainty of litigation. Xerox did not admit to any wrongdoing as part of the settlement, which is subject to final court approval and other conditions.
"Our strong financial position gives us the flexibility to resolve this issue while continuing to deliver shareholder value through share repurchase, dividends and acquisitions," said Anne Mulcahy, Xerox chairman and chief executive officer.
The case, Carlson v. Xerox Corporation, is on behalf of purchasers of Xerox common stock and bonds during the period from February 17, 1998, through June 27, 2002.
Xerox will take an after-tax charge of $491 million in the first-quarter of 2008 to cover the settlement and adequately reserve for other pending securities-related cases. The charge factors in expected recovery from Xerox's insurance carriers.
Under the proposed agreement, Xerox will make cash payments totalling $670 million and KPMG, LLP, Xerox's former outside auditor and a co-defendant, will pay $80 million into the settlement fund. Xerox expects to make its payments in five instalments during this year.
Xerox generated $1.9 billion in operating cash flow last year and repurchased $631 million in Xerox stock. In addition to paying a quarterly dividend, the company plans to continue its share repurchase program. Since the beginning of 2008, Xerox has bought back 22 million shares with a remaining $1 billion authorized for share repurchase.
For information about the administration of the settlement, contact the Claims Administrator at 1-800-708-4103, write to Gilardi & Co. LLC, P.O. Box 808003, Petaluma, CA 94975-8003, or visit www.gilardi.com/xeroxsettlement.
Laura Mergelas, Xerox Canada, 416-733-6216, email@example.com
Mike Moeller, Xerox Canada, 203-849-2469, firstname.lastname@example.org
This release contains forward-looking information that is subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in, or implied by, such forward-looking information.
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