ADT 2005 Annual Report Download - page 100

New Hampshire back to the Circuit Court of Cook County, Illinois. On March 17, 2005, the United
States District Court for the District of New Hampshire granted plaintiff’s motion to remand and
denied defendants’ motion to dismiss. On March 31, 2005, the Company moved for reconsideration of
the Court’s remand order, which motion remains pending before the Court.
As previously reported in our periodic filings, a complaint, Sciallo v. Tyco International Ltd., et al.,
was filed on September 30, 2003 in the United States District Court for the Southern District of New
York. The plaintiffs purport to be former executives of U.S. Surgical who traded their U.S. Surgical
stock options for Tyco International, Ltd. stock options when Tyco acquired U.S. Surgical on October 1,
1998. Plaintiffs name as defendants Tyco International Ltd. and certain former Tyco directors and
executives. The complaint asserts causes of action under Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 promulgated thereunder, for common law fraud and negligence, and violation
of New York General Business Law Section 349, which prohibits deceptive acts and practices in the
conduct of any business. The complaint alleges that defendants made materially false and misleading
statements and omissions concerning, among other things, Tyco’s financial condition and accounting
practices. The Judicial Panel on Multidistrict Litigation has transferred this action to the United States
District Court for the District of New Hampshire.
As previously reported in our periodic filings, a complaint was filed on September 2, 2004 in the
Court of Common Pleas for Dauphin County, Pennsylvania, Jasin v. Tyco International Ltd., et. al. This
pro se plaintiff named as additional defendants Tyco International (US) Inc., L. Dennis Kozlowski, our
former Chairman and Chief Executive Officer, Mark H. Swartz, our former Chief Financial Officer and
Director and Juergen W. Gromer, currently President of Tyco Electronics. Plaintiff’s complaint asserts
causes of action under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, as well as Section 11 of the Securities Act of 1933. Claims against
Messrs. Kozlowski, Swartz and Gromer are also asserted under Section 14(a) of the Securities
Exchange Act of 1934 and Rule 14a-9 promulgated thereunder and Section 20A of the Securities
Exchange Act of 1934, as well as Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. Plaintiff
also asserts common law fraud, negligent misrepresentation, unfair trade practice, breach of contract,
breach of the duty of good faith and fair dealing and violation of Section 1-402 of the Pennsylvania
Securities Act of 1972. Tyco has removed the complaint to the United States District Court for the
Middle District of Pennsylvania. The Judicial Panel on Multidistrict Litigation transferred this action to
the United States District Court for the District of New Hampshire. The plaintiff has moved to vacate
the conditional transfer order.
As previously reported in our periodic filings, the Judicial Panel on Multidistrict Litigation was
notified that Hall v. Kozlowski may be an action that should be transferred to the United States District
Court for the District of New Hampshire. Thereafter, the Judicial Panel on Multidistrict Litigation
transferred the action to the United States District Court for the District of New Hampshire. On
March 16, 2005, Tyco International (US) Inc. answered plaintiff’s amended complaint.
Shareholder Derivative Litigation
As previously reported in our periodic filings, an action was filed on June 7, 2002 in the Supreme
Court of the State of New York, Levin v. Kozlowski, alleging that the individually named defendants
breached their fiduciary duties, committed waste and mismanagement and engaged in self-dealing in
connection with Tyco’s accounting practices, individual board members’ use of funds, and the financial
disclosures of certain mergers and acquisitions. It is further alleged that certain of the individual
defendants converted corporate assets for their own use. Plaintiffs seek money damages. Plaintiffs
agreed to stay that action pending the resolution of the federal derivative action, which was dismissed
by the United States District Court for the District of New Hampshire on October 14, 2004; and the
appeal from that ruling was voluntarily dismissed on May 19, 2005. On June 14, 2005, the plaintiffs
24 2005 Financials