No Criminal Complaint Filed against Symbol Technologies; Company Resolves Outstanding Investigation by Department of Justice, Reaches Settlement With SEC.

Business Editors/High-Tech Writers

HOLTSVILLE, N.Y.--(BUSINESS WIRE)--June 3, 2004

Symbol Also Announces Settlement of Class Action Lawsuits 

and Settlement With Jerome Swartz, Will Hold Teleconference

Symbol Technologies, Inc. (NYSE:SBL) today announced that it has resolved the investigation by the United States Attorney's Office for the Eastern District of New York (U.S. Attorney's Office) by executing a non-prosecution agreement with the U.S. Attorney's Office, and has reached an agreement with the Securities and Exchange Commission (SEC) regarding the settlement of allegations against Symbol that have been under investigation since May 2001. As a result, no criminal complaint will be filed against the Company.

The agreements with the U.S. Attorney's Office and SEC call for Symbol to pay $37 million in cash to a restitution fund for members of the class consisting of purchasers or acquirers of Symbol stock from February 15, 2000, to October 17, 2002, and $3 million to the U.S. Postal Inspection Service Consumer Fraud Fund. Also, as part of its settlement of private shareholder litigation, brought separately against the Company by this class, which is subject to court approval, Symbol will pay an additional $98 million, composed of $1.75 million in cash and $96.25 million in stock, to the class. Under that agreement, Symbol may elect to pay an additional $6 million in cash and reduce the amount of stock it pays by the same amount.

Following are Details of the Various Settlements

U.S. Attorney's Office

As part of its agreement with the U.S. Attorney's Office, Symbol acknowledged responsibility for previous misconduct by certain former employees. Symbol has agreed to establish for the shareholder class the $37 million payment. This payment will be distributed pursuant to an order of the court and is separate and in addition to the amount allocated for the settlement of the private class action lawsuits.

Symbol also agreed with the U.S. Attorney's Office to continue to cooperate with the U.S. Attorney's investigation, to retain an independent, government-approved examiner to review Symbol's internal controls, financial reporting practices and its compliance with the settlement agreement, and to establish and maintain an annual training and education program designed to diminish the possibility of future violations of the federal securities laws by Symbol. Should Symbol violate the Agreement or commit other crimes, Symbol shall be subject to prosecution for any offense, including any offense related to Symbol's past accounting practices.

SEC Agreement

Pursuant to the agreement with the SEC, the SEC has filed a proposed Final Consent Judgment in the Eastern District of New York for injunctive relief and a civil penalty amounting to the $37 million, to be distributed as mentioned above. The proposed Final Consent Judgment resolves the SEC's investigation of Symbol and the complaint the SEC filed against Symbol today. Pursuant to the proposed Final Consent Judgment, Symbol has agreed to a permanent injunction enjoining it from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13 and 14(a) of the Securities Exchange Act of 1934 and related rules. The proposed Final Consent Judgment contains terms similar to those in the Agreement with the U.S. Attorney's Office regarding cooperation, the appointment of an independent examiner and training.

Settlement of Class Action Lawsuits

Also announced today was Symbol's settlement of the Pinkowitz and Hoyle shareholder class action lawsuits against the Company. Under this settlement, Symbol has agreed that it will pay stock and cash totaling $98 million to the class. This settlement is subject to court approval. Separate class action claims filed against former employees Tomo Razmilovic, Kenneth Jaeggi, Brian Burke and Frank Borghese individually and two other former employees were not settled. Two other cases against the Company and certain former officers, the Gold and Bildstein cases, have not been settled. The plaintiff in Gold is seeking to compel Symbol to sue certain former directors and officers for their alleged violations of the securities laws. Bildstein alleges that the 2000-2002 proxy statements contained false financial statements and seeks the cancellation of awards under stock option plans approved by shareholders in those years. The Company currently has not provided any reserves for the Gold and Bildstein matters.

Settlement with Jerome Swartz

In addition, the Company has reached a settlement with Jerome Swartz, Symbol's co-founder and former chairman. The agreement calls for Swartz to pay $4 million in cash to the class to settle the Pinkowitz and Hoyle class action lawsuits. In addition, and subject to his dismissal from the Gold case, Swartz has agreed to pay $7.2 million in cash to Symbol and to forfeit stock options having a value of $2.9 million or to exercise those options and pay approximately $2.9 million in cash or stock to the Company. This settlement with Swartz is in addition to his agreement in July 2003 to relinquish approximately two years of salary, bonus and stock options remaining under his prior employment agreement. The class action claims against Swartz individually were settled subject to court approval.

CEO Summation 

"Symbol has worked tirelessly during the past two years to resolve problems created by the Company's former management," William Nuti, Symbol president and chief executive officer, said. "During the past two years, we have executed a remarkable change management program in an effort to dramatically improve our corporate culture, organizational structure, operational excellence and financial performance.

Today we are pleased to announce that we settled the grand jury and SEC investigations, as well as the preponderance of class action litigation against us. We have now succeeded in putting the vast majority of our problems behind us and have taken this opportunity to put in place a dramatically improved corporate governance infrastructure. Even as we worked through these challenges, we've remained focused on our business, our customers and partners, as well as our Company's future. With an improving balance sheet and new products gaining traction in the marketplace, we are extremely enthusiastic about the future of the Company and believe Symbol is strongly positioned to lead in the new age of enterprise mobility. Today is a very good day for the new Symbol Technologies - The Enterprise Mobility Company."

Background of the Investigations

The SEC formally investigated certain accounting matters, principally concerning the timing and amount of revenue recognized by Symbol during the period of January 1, 2000 through December 31, 2001, as well as the accounting for certain reserves, restructurings, certain option programs and several categories of cost of revenue and operating expenses. The United States Attorney's Office for the Eastern District of New York (part of the Department of Justice) commenced a related investigation.

The Company on February 25, 2004, filed with the SEC its 2002 Annual Report on Form 10-K/A, which includes a restatement for the years 1998 through 2001 as well as the first three quarters of 2002, known as the restatement period. The Company filed its Form 10-Q for 2003's first, second and third quarters on February 25, 2004. Symbol filed its 2003 Annual Report on Form 10-K on March 12, 2004.

The Company has implemented various initiatives intended to materially improve its internal controls and procedures, address the systems and personnel issues raised in the course of the restatement and help ensure a corporate culture that emphasizes integrity, honesty and accurate financial reporting. These initiatives address Symbol's control environment, organization, staffing, policies, procedures, documentation and information systems.

Symbol plans to hold a Conference Call to discuss the settlement. Details will be announced shortly.

About Symbol Technologies, Inc.

Symbol Technologies, Inc., The Enterprise Mobility Company(TM), is a recognized worldwide leader in enterprise mobility, delivering products and solutions that capture, move and manage information in real time to and from the point of business activity. Symbol enterprise mobility solutions integrate advanced data capture technology, mobile computing platforms, wireless infrastructure, mobility software and world-class services programs under the Symbol Enterprise Mobility Services brand. Symbol enterprise mobility products and solutions are proven to increase workforce productivity, reduce operating costs, drive operational efficiencies and realize competitive advantages for the world's leading retailers, transportation and logistics companies, manufacturers, warehouse and distribution, government agencies and healthcare. More information is available at www.symbol.com.

Safe Harbor 

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be regarded as forward-looking statements. Actual events may differ materially from statements made herein. Such forward-looking statements are qualified by factors discussed herein and in the filings that Symbol makes from time to time with the Securities and Exchange Commission and in news releases issued by Symbol. The risks, uncertainties and assumptions identified therein could cause actual results to differ materially from those contained in projections or forward-looking statements. Copies of the SEC filings are available from Symbol Technologies upon request or by accessing the Company Web site, www.symbol.com.