joined WD. Based on a determination that the employee had fabricated evidence, the arbitrator then concluded that
WD had to know of the fabrications. As a sanction, the arbitrator precluded any evidence or defense by WD disputing
the validity, misappropriation, or use of the three remaining alleged trade secrets by WD, and entered judgment in
favor of Seagate with respect to such trade secrets. Using an unjust enrichment theory of damages, the arbitrator
issued an interim award against WD in the amount of $525 million plus pre-award interest at the Minnesota stat-
utory rate of 10% per year. In his decision with respect to these three trade secrets, the arbitrator did not question the
relevance, veracity or credibility of any of WD's ten expert and fact witnesses (other than WD's former employee), nor
the authenticity of any other evidence WD presented. A hearing to consider the amount of pre-award interest was
held on January 10, 2012. On January 23, 2012, the arbitrator issued a final award adding pre-award interest in the
amount of $105.4 million for a total final award of $630.4 million. On January 23, 2012, WD filed a petition in the
District Court of Hennepin County, Minnesota to have the final arbitration award vacated. A hearing on the petition
to vacate was held on March 1, 2012, and the court has taken the matter under submission.
WD "had to know" of the alleged fabrication and believes that if all of its evidence had been properly considered it
would have prevailed on all remaining claims. WD intends to pursue vigorously its motion to vacate the award and, if
necessary, to appeal the award if it is confirmed by the District Court of Hennepin County, Minnesota. The Company
does not believe it is probable that the arbitrator's award will be sustained and accordingly has not recorded any cost
or liability for the arbitrator's award in excess of the amount previously accrued by the Company ($25 million). There
is no assurance that WD's efforts to vacate the award or to overturn the award on appeal if it is confirmed by the Dis-
trict Court of Hennepin County, Minnesota will be successful. It is reasonably possible that losses with respect to this
matter could range from $0 to $605.4 million in excess of the amount previously accrued ($25 million). This estimate
does not include additional interest (as simple interest, not compounding) at the Minnesota statutory rate of 10% per
year, which will continue to accrue on the amount of the final award ($630.4 million) while WD pursues its motion
to vacate the award, and if necessary, an appeal if the motion to vacate the award is unsuccessful.
other matters is subject to many uncertainties and is therefore not predictable with assurance, management believes
that any monetary liability or financial impact to the Company from these other matters, individually and in the
aggregate, would not be material to the Company's financial condition, results of operations or cash flows. However,
there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from
these other matters could differ materially from those projected.