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NIALL E. LYNCH (State Bar No. 157959)
Attorneys for the United StatesUNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION
The United States of America and SAMSUNG ELECTRONICS COMPANY, LTD., ("SEC") a corporation organized and existing under the laws of the Republic of Korea ("Korea"), and SAMSUNG SEMICONDUCTOR, INC., ("SSI") a corporation organized and existing under the laws of California, (hereinafter referred to collectively as "Defendants") hereby enter into the following Plea Agreement pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANTS
1. The Defendants understand their rights:
AND WAIVE CERTAIN RIGHTS
2. The Defendants knowingly and voluntarily waive the rights set out in Paragraph 1(b)-(g) above, including all jurisdictional defenses to the prosecution of this case, and agree voluntarily to consent to the jurisdiction of the United States to prosecute this case against them in the United States District Court for the Northern District of California. The Defendants also knowingly and voluntarily waive the right to file any appeal, any collateral attack, or any other writ or motion, including but not limited to an appeal under 18 U.S.C. § 3742, that challenge the sentence imposed by the Court if that sentence is consistent with or below the recommended sentence in Paragraph 8 of this Plea Agreement, regardless of how the sentence is determined by the Court. This agreement does not affect the rights or obligations of the United States as set forth in 18 U.S.C. § 3742(b) and (c). Further, pursuant to Fed. R. Crim. P. 7(b), the Defendants will waive indictment and plead guilty at arraignment to a one-count Information to be filed in the United States District Court for the Northern District of California. The Information will charge the Defendants with participating in a conspiracy in the United States and elsewhere to suppress and eliminate competition by fixing the prices of Dynamic Random Access Memory ("DRAM") to be sold to certain original equipment manufacturers of personal computers and servers ("OEMs") from on or about April 1, 1999, to on or about June 15, 2002, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
3. The Defendants, pursuant to the terms of this Plea Agreement, will plead guilty to the criminal charge described in Paragraph 2 above and will make a factual admission of guilt to the Court in accordance with Fed. R. Crim. P. 11, as set forth in Paragraph 4 below.FACTUAL BASIS FOR OFFENSE CHARGED
4. Had this case gone to trial, the United States would have presented evidence sufficient to prove the following facts:
5. The Defendants understand that the statutory maximum penalty which may be imposed against them upon conviction for a violation of Section One of the Sherman Antitrust Act is a fine in an amount equal to the greatest of:
6. In addition, the Defendants understand that:
7. The Defendants understand that the Sentencing Guidelines are advisory, not mandatory, but that the Court must consider the Guidelines in effect on the day of sentencing, along with the other factors set forth in 18 U.S.C. § 3553(a), in determining and imposing sentence. The Defendants understand that the Guidelines determinations will be made by the Court by a preponderance of the evidence standard. The Defendants understand that although the Court is not ultimately bound to impose a sentence within the applicable Guidelines range, its sentence must be reasonable based upon consideration of all relevant sentencing factors set forth in 18 U.S.C. § 3553(a). Pursuant to U.S.S.G. § 1B1.8, the United States agrees that self-incriminating information that the Defendants and their cooperating officers and employees provide to the United States will not be used to increase the volume of affected commerce attributable to the Defendants or in determining the Defendants' applicable Guidelines range, except to the extent provided in U.S.S.G. § 1B1.8(b).
8. Pursuant to Fed. R. Crim. P. 11(c)(1)(C), the United States and Defendants agree that the appropriate disposition of this case is, and agree to recommend jointly that the Court impose a sentence requiring payment to the United States of a single criminal fine of $300 million, pursuant to 18 U.S.C. § 3571(d), payable in installments as set forth below with interest accruing under 18 U.S.C. § 3612(f)(1)-(2), with no term of probation ("the recommended sentence"). The parties agree that there exists no aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the U.S. Sentencing Commission in formulating the Guidelines justifying a departure pursuant to U.S.S.G. § 5K2.0. The parties agree not to seek or support any sentence outside of the Guidelines range nor any Guidelines adjustment for any reason that is not set forth in this Plea Agreement. The parties further agree that the recommended sentence set forth in this Plea Agreement is reasonable.
9. The United States and the Defendants agree that the applicable Sentencing Guidelines fine range exceeds the fine contained in the recommended sentence set out in Paragraph 8 above. Subject to the full and continuing cooperation of the Defendants, as described in Paragraph 13 of this Plea Agreement, and prior to sentencing in this case, the United States agrees that it will make a motion, pursuant to U.S.S.G. § 8C4.1, for a downward departure from the Guidelines fine range and will request that the Court impose the recommended sentence set out in Paragraph 8 of this Plea Agreement based on Defendants' substantial assistance to the government in investigating and prosecuting violations of federal criminal law in the DRAM industry.
10. Subject to the ongoing, full, and truthful cooperation of the Defendants described in Paragraph 13 of this Plea Agreement, and before sentencing in the case, the United States will fully advise the Court and the Probation Office as to: (i) the fact, manner, and extent of the Defendants' cooperation and their commitment to prospective cooperation with the United States' investigation and prosecutions; (ii) all material facts relating to the Defendants' involvement in the charged offense; and (iii) all other relevant conduct.
11. The United States and the Defendants understand that the Court retains complete discretion to accept or reject the recommended sentence provided for in Paragraph 8 of this Plea Agreement.
12. In light of the civil class action cases filed against Defendants, including In re DRAM Antitrust Litigation, No. M-02-1486PJH, MDL No. 1486, in the United States District Court, Northern District of California, and DRAM Cases, No. CJC-03-004265, in the Superior Court, San Francisco, California, and others which potentially provide for a recovery of a multiple of actual damages, the United States agrees that it will not seek a restitution order for the offense charged in the Information.DEFENDANTS' COOPERATION
13. The Defendants and their subsidiaries that are engaged in the sale or production of DRAM (collectively, "Related Entities") will cooperate fully and truthfully with the United States in: (i) the prosecution of this case; (ii) the current federal investigation of violations of federal antitrust and related criminal laws involving the production orsale of DRAM in the United States and elsewhere; and (iii) any litigation or other proceedings relating to any such investigation to which the United States is a party (collectively i-iii, "Federal Proceeding"). The ongoing, full, and truthful cooperation of the Defendants shall include, but not be limited to:
14. The ongoing, full, and truthful cooperation of each person described in Paragraph 13(b) above will be subject to the procedures and protections of this Paragraph, and shall include, but not be limited to:
15. Upon acceptance of the guilty plea called for by this Plea Agreement and the imposition of the recommended sentence, and subject to the cooperation requirements of Paragraph 13 of this Plea Agreement, the United States agrees that it will not bring further criminal charges against the Defendants or any Related Entities for any act or offense committed before the date of this Plea Agreement that was undertaken in furtherance of or related to an antitrust conspiracy involving the production or sale of DRAM in the United States and elsewhere, or undertaken in connection with any investigation of such a conspiracy. The nonprosecution terms of this Paragraph do not apply to civil matters of any kind, to any violation of the federal tax or securities laws, or to any crime of violence.
16. The United States agrees to the following:
17. The United States agrees that when any person travels to the United States for interviews, grand jury appearances, or court appearances pursuant to this Plea Agreement, or for meetings with counsel in preparation therefor, the United States will take no action, based upon any Relevant Offense, to subject such person to arrest, detention, or service of process, or to prevent such person from entering or departing the United States. This Paragraph does not apply to an individual's commission of perjury (18 U.S.C. § 1621), making false statements (18 U.S.C. § 1001), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401- 402) in connection with any testimony or information provided or requested in any Federal Proceeding.
18. The Defendants understand that they may be subject to administrative action by federal or state agencies other than the United States Department of Justice, Antitrust Division, based upon the conviction resulting from this Plea Agreement, and that this Plea Agreement in no way controls whatever action, if any, other agencies may take. However, the United States agrees that, if requested, it will advise the appropriate officials of any governmental agency considering such administrative action of the fact, manner, and extent of the cooperation of the Defendants and their Related Entities, including the fact that the United States, pursuant to U.S.S.G. § 8C4.1, moved for a downward departure from the Guidelines fine range, as matters for that agency to consider before determining what administrative action, if any, to take.REPRESENTATION BY COUNSEL
19. The Defendants have been represented by counsel and are fully satisfied that their attorneys have provided competent legal representation. The Defendants have thoroughly reviewed this Plea Agreement and acknowledge that counsel has advised them of the nature of the charge, any possible defenses to the charge, and the nature and range of possible sentences.
20. The Defendants' decision to enter into this Plea Agreement and to tender a plea of guilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or representations other than the representations contained in this Plea Agreement. The United States has made no promises or representations to the Defendants as to whether the Court will accept or reject the recommendations contained within this Plea Agreement.VIOLATION OF PLEA AGREEMENT
21. The Defendants agree that, should the United States determine in good faith, during the period that any Federal Proceeding is pending, that the Defendants or any of their Related Entities have failed to provide full and truthful cooperation, as described in Paragraph 13 of this Plea Agreement, or have otherwise violated any provision of this Plea Agreement, the United States will notify counsel for the Defendants in writing by personal or overnight delivery or facsimile transmission and may also notify counsel by telephone of its intention to void any of its obligations under this Plea Agreement (except its obligations under this Paragraph), and the Defendants and their Related Entities shall be subject to prosecution for any federal crime of which the United States has knowledge including, but not limited to, the substantive offenses relating to the investigation resulting in this Plea Agreement. The Defendants may seek Court review of any determination made by the United States under this Paragraph to void any of its obligations under the Plea Agreement. The Defendants and their Related Entities agree that, in the event that the United States is released from its obligations under this Plea Agreement and brings criminal charges against the Defendants or their Related Entities for any offense referred to in Paragraph 15 of this Plea Agreement, the statute of limitations period for such offense will be tolled for the period between the date of the signing of this Plea Agreement and six months after the date the United States gave notice of its intent to void its obligations under this Plea Agreement.
22. The Defendants understand and agree that in any further prosecution of them or their Related Entities resulting from the release of the United States from its obligations under this Plea Agreement, because of the Defendants' or their Related Entities' violation of the Plea Agreement, any documents, statements, information, testimony, or evidence provided by them, their Related Entities, or theircurrent or former directors, officers, or employees of them or their Related Entities, to attorneys or agents of the United States, federal grand juries, or courts, and any leads derived therefrom, may be used against them or their Related Entities in any such further prosecution. In addition, the Defendants unconditionally waive their right to challenge the use of such evidence in any such further prosecution, notwithstanding the protections of Fed. R. Evid. 410.ENTIRETY OF AGREEMENT
23. This Plea Agreement constitutes the entire agreement between the United States and the Defendants concerning the disposition of the criminal charge in this case. This Plea Agreement cannot be modified except in writing, signed by the United States and the Defendants.
24. The undersigned is authorized to enter this Plea Agreement on behalf of the Defendants as evidenced by the Resolution of the Board of Directors or Committee authorized by the Board of Directors of the Defendants attached to, and incorporated by reference in, this Plea Agreement.
25. The undersigned attorneys for the United States have been authorized by the Attorney General of the United States to enter this Plea Agreement on behalf of the United States.
26. A facsimile signature shall be deemed an original signature for the purpose of executing this Plea Agreement. Multiple signature pages are authorized for the purpose of executing this Plea Agreement.
DATED: October 13, 2005
Minutes of the Resolution of the Management Committee of Samsung Electronics Co., Ltd. with respect to the Execution of the Plea Agreement attached as Exhibit 1and Entry of Guilty Plea
On October 13, 2005, after discussion, the Management Committee, composed of Messrs Jong-Yong Yun (CEO), Yoon-Woo Lee, and Do-Seok Choi unanimously took the following resolutions:
1. The execution, delivery and performance of the so-called Plea Agreement between Samsung Electronics Co., Ltd. (the "Corporation") and the United States Department of Justice, in substantially the form of the presented draft, as appended hereto as Exhibit 1, is hereby approved.
2. Dahm Huh, CFO and Vice President of Samsung Semiconductor, Inc., is hereby authorized and directed to execute and deliver, in the name and on behalf of the Corporation, the Plea Agreement.
3. Dahm Huh may individually represent the Corporation at any hearing in order to waive any and all rights of the Corporation referred to under section 2 of the Plea Agreement and to plead guilty in accordance with the provisions of the Plea Agreement in the name and on behalf of the Corporation.
4. Dahm Huh is hereby authorized and empowered to take individually any and all actions required or appropriate in order to carry out the intent and purpose of the preceding resolution.
The above resolutions are hereby adopted by the Management Committee in accordance with authority specifically vested by the Board of Directors of the Corporation and the Commercial Laws of the Republic of Korea.
Korea, October 13, 2005
CERTIFICATE OF SECRETARY
I, Dahm Huh, the duly elected, qualified and acting Secretary of Samsung Semiconductor, Inc., do hereby certify that the attached copy of the Resolutions, adopted by the Board of Directors of Samsung Semiconductor, Inc. at a special meeting held on October 11, 2005, is true, correct and complete, that said Resolutions were duly adopted and that said Resolutions have not been amended, modified or repealed, and remain in full force and effect, as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of Samsung Semiconductor, Inc. this eleventh day of October, 2005.
SAMSUNG SEMICONDUCTOR, INC.
Resolutions of the Board of Directors
October 11, 2005
RESOLVED, that the execution, delivery and performance of that certain Plea Agreement, by and among Samsung Semiconductor, Inc., Samsung Electronics, Co. Ltd. and the United States Department of Justice, in substantially the form made available to the Board (the "Plea Agreement"), is hereby approved;
RESOLVED, that Mr. Dahm Huh, Vice President and Chief Financial Officer of the Corporation, be, and hereby is, authorized, empowered and directed, for and on behalf of the Corporation, to execute and deliver the Plea Agreement;
RESOLVED, that Mr. Dahm Huh, Vice President and Chief Financial Officer of the Corporation, be, and hereby is, authorized, empowered and directed to represent the Corporation at any hearing in order to waive any and all rights of the Corporation referred to in the Plea Agreement and to plead guilty at such hearing, for and on behalf of the Corporation, in accordance with the terms therein; and
RESOLVED, that Mr. Dahm Huh, Vice President and Chief Financial Officer of the Corporation, be, and hereby is, authorized, empowered and directed, for and on behalf of the Corporation, to prepare and deliver or cause to be prepared and delivered and to execute all documents and take or cause to be taken such further actions as he may deem necessary, appropriate or advisable to fully effectuate the intent of the foregoing resolutions and to comply with the provisions of any of the documents or instruments approved or authorized hereby.