ADT 2002 Annual Report Download - page 5

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alleged improper conduct: making misstatements and omissions in order to disclose certain accounting
issues slowly over time in order to maintain an allegedly artificial inflation of Tyco’s stock price; making
misstatements and omissions in recommending in the February 2003 proxy statement against
reincorporation in Delaware; making misstatements and omissions in recommending in the
February 2003 proxy statement against a proposal to separate the positions of CEO and Chairman; and
other allegedly improper conduct. Plaintiffs seek money damages and attorneys’ fees and expenses.
A class action complaint was filed on July 1, 2003 in the United States District Court for the
Southern District of Florida, Chang v. Tyco International Ltd. & Breen purporting to represent a class of
purchasers of Tyco Securities between December 30, 2002 to March 12, 2003. Plaintiffs name as
defendants Tyco and Edward D. Breen, Tyco’s Chairman and Chief Executive Officer. The complaint
asserts a cause of action under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder against both defendants. As against defendant Breen, the complaint asserts a
cause of action under Section 20(a) of the Securities Exchange Act of 1934. The complaint alleges that
defendants violated the securities laws by making materially false and misleading statements and
omissions concerning, among other things, Tyco’s financial and operating condition and financial
prospects for Tyco and its ADT business segment and the results of its investigation of its former
management.
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