Motorola 2004 Annual Report Download - page 33

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dismissed. The court, however, declined to dismiss the plaintiÅs' claims that the individual defendants were
""controlling persons of Motorola.''
In addition, a purported class action, Howell v. Motorola, Inc., et al., was Ñled against Motorola and various
of its oÇcers and employees in the Illinois District Court on July 21, 2003, alleging breach of Ñduciary duty and
violations of the Employment Retirement Income Security Act (""ERISA''). The complaint alleged the defendants
had improperly permitted participants in Motorola's 401(k) ProÑt Sharing Plan (the ""Plan'') to purchase or hold
shares of common stock of Motorola because the price of Motorola's stock was artiÑcially inÖated by a failure to
disclose vendor Ñnancing to Telsim in connection with the sale of telecommunications equipment by Motorola.
The plaintiÅ sought to represent a class of participants in the Plan for whose individual accounts the Plan purchased
or held shares of common stock of Motorola from ""May 16, 2000 to the present'', and sought an unspeciÑed
amount of damages. On October 3, 2003, plaintiÅ Ñled an amended complaint asserting three claims for breach of
Ñduciary duties under ERISA against 24 defendants grouped into Ñve categories. The amended complaint alleges the
defendants violated ERISA by: (1) continuing to oÅer Motorola stock as an investment option under the Plan,
even though it had become an imprudent investment due to Motorola's dealings with Telsim and other third
parties; (2) negligently making misrepresentations and negligently failing to disclose material information necessary
for Participants to make informed decisions concerning their participation in the Plan; and (3) failing to appoint
Ñduciaries with the knowledge and expertise necessary to manage Plan assets, failing to monitor those Ñduciaries
properly, and failing to provide suÇcient information to Participants and other Plan Ñduciaries. On December 9,
2003, all but one of the defendants Ñled their motion to dismiss. On September 23, 2004, the Illinois District Court
granted the motion in part and denied it in part. The court dismissed the plan committee defendants from the case,
without prejudice, and left all other defendants in the lawsuit. On October 15, 2004, Howell Ñled a second
amended complaint and a motion for class certiÑcation. On December 3, 2004, Defendants Ñled a Motion for
Summary Judgment seeking to dismiss PlaintiÅ Howell's individual claims.
Charter Communications Class Action Securities Litigation
On August 5, 2002, Stoneridge Investment Partners LLC Ñled a purported class action in the United States
District Court for the Eastern District of Missouri against Charter Communications, Inc. (""Charter'') and certain of
its oÇcers, alleging violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. This
complaint did not name Motorola as a defendant, but asserted that Charter and the other named defendants had
violated the securities laws in connection with, inter alia, a transaction with Motorola. In August 2003, the plaintiÅ
amended its complaint to add Motorola, Inc. as a defendant. The amended complaint alleges that Motorola
participated in a ""scheme'' with Charter in connection with this transaction to artiÑcially inÖate Charter's earnings.
On October 12, 2004, the court granted Motorola's motion to dismiss, holding that there is no civil liability under
the federal securities laws for aiding and abetting. On October 26, 2004, the plaintiÅ Ñled a motion for the
reconsideration of the court's decision. On December 20, 2004, the court issued its ruling denying plaintiÅ's
motion for reconsideration of its earlier decision to dismiss the complaint against Motorola. The court issued a Ñnal
judgement dismissing Motorola from the case on February 15, 2005.
In re Adelphia Communications Corp. Securities and Derivative Litigation
On December 22, 2003, Motorola was named as a defendant in two cases relating to the In re Adelphia
Communications Corp. Securities and Derivative Litigation (the ""Adelphia MDL''). The Adelphia MDL consists of
at least eleven individual cases and one purported class action that were Ñled in or have been transferred to the
United States District Court for the Southern District of New York. First, Motorola was named as a defendant in
the Second Amended Complaint in the individual case of W.R. HuÅ Asset Management Co. L.L.C. v. Deloitte &
Touche, et al. This case was originally Ñled by W.R. HuÅ Asset Management Co. L.L.C. on June 7, 2002, in the
United States District Court for the Western District of New York and was subsequently transferred to the
Southern District of New York as related to the Adelphia MDL. Several other individual and corporate defendants
are also named in the amended complaint along with Motorola.
As to Motorola, the complaint alleges a claim arising under Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5 promulgated thereunder, and seeks recovery of the consideration paid by plaintiÅ for
Adelphia debt securities, compensatory damages, costs and expenses of litigation and other relief. Motorola has
recently been served with this complaint, the case is in its early stages, and fact discovery has not yet begun.
Motorola Ñled a motion to dismiss this complaint on March 8, 2004.