ADT 2005 Annual Report Download - page 106

U.S. Surgical’s motion for summary judgment. Applied Medical is appealing the summary judgment
ruling. Briefing on Applied Medical’s appeal has concluded and oral argument has not yet been
scheduled.
Environmental Litigation
We have been in discussions with the U.S. Environmental Protection Agency and the New Jersey
Department of Environmental Protection regarding historic environmental compliance issues at a
facility sold by Tyco in 2000. At this time, although these governmental authorities have not
commenced any formal legal proceedings, we believe such proceedings are contemplated by these
governmental authorities, and that such proceedings may result in potential monetary sanctions of
$100,000 or more. However, we do not believe that any such monetary sanctions will have a material
adverse effect on the Company’s financial position, results of operations or cash flows.
In June 2005, the Wisconsin Department of Natural Resources issued a Notice of Violation to
Tyco Safety Products, a subsidiary within the Tyco Fire and Security business segment, concerning
self-reported air permit compliance recordkeeping deficiencies. Based on discussions with the
Department, we anticipate enforcement proceedings are contemplated, and such proceeding may result
in potential monetary sanctions of $100,000 or more. However, we do not believe that any sanction will
have a material adverse affect on the Company’s financial position, results of operations or cash flows.
Commercial Litigation
Sensormatic v. Winner and Bagnara, Inc. is a franchise dispute for which Sensormatic originally filed
a complaint in 1999 in the United States District Court for the Western District of Pennsylvania
seeking declaratory relief. On June 28, 2004, the district court entered a stipulated judgment fixing the
amount of the defendant’s past damages and commissions for royalties allegedly owed under the
franchise agreement in the amount of $28 million, plus $5 million in pre-judgment interest, and the
entry of an injunction requiring Sensormatic to tender the franchise to the defendant. The judgment
stayed the imposition and payment of these damages and injunctive relief until resolution of an appeal
of the district court’s underlying rulings on liability to the United States Court of Appeals for the Third
Circuit. On June 29, 2004, Sensormatic filed its Notice of Appeal to the court of appeals. On
August 31, 2005, the appellate court affirmed the district court judgment. A request for re-hearing
before the entire Third Circuit was denied. No further appeals have been taken and the judgment was
satisfied on October 20, 2005. The Company does not expect to incur material losses beyond what has
already been accrued and paid.
Item 4. Submission of Matters to a Vote of Security Holders
None.
30 2005 Financials