Motorola 2005 Annual Report Download - page 38

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from the Second Circuit of the July 31, 2003 $2.13 billion punitive damages award by the District Court, on
February 8, 2006, the District Court awarded a judgment in favor of Motorola for $1 billion in punitive damages
against the Uzan family and their co-conspirator, Antonio Luna Bettancourt.
Class Action Securities Lawsuits
A purported class action lawsuit, Barry Family LP v. Carl F. Koenemann, was filed against the former chief
financial officer of Motorola on December 24, 2002 in the United States District Court for the Southern District of
New York, alleging breach of fiduciary duty and violations of Section 10(b) of the Securities Exchange Act of
1934 and SEC Rule 10b-5. It has been consolidated before the United States District Court for the Northern
District of Illinois (the ""Illinois District Court'') with 18 additional putative class action complaints which were
filed in various federal courts against the Company, its former chief financial officer and various other individuals,
alleging that the price of Motorola's stock was artificially inflated by a failure to disclose vendor financing to
Telsim Mobil Telekomunikasyon Hizmetleri A.S. (Telsim), in connection with the sale of telecommunications
equipment by Motorola as well as other related aspects of Motorola's dealings with Telsim. In each of the
complaints, plaintiffs proposed a class period of February 3, 2000 through May 14, 2001, and sought an unspecified
amount of damages. On August 25, 2004, the Illinois District Court issued its decision on Motorola's motion to
dismiss, granting the motion in part and denying it in part. The court dismissed without prejudice the fraud claims
against the individual defendants and denied the motion to dismiss as to Motorola. The plaintiffs chose not to file
an amended complaint; therefore, the fraud claims against the individual defendants are dismissed. The court,
however, declined to dismiss the plaintiffs' claims that the individual defendants were ""controlling persons of
Motorola.'' During 2005, the Court certified the case as a class action. No trial date is scheduled in the case at
present.
A purported class action, Howell v. Motorola, Inc., et al., was filed against Motorola and various of its officers
and employees in the Illinois District Court on July 21, 2003, alleging breach of fiduciary duty and violations of the
Employment Retirement Income Security Act (""ERISA''). The complaint alleged that the defendants had
improperly permitted participants in Motorola's 401(k) Profit Sharing Plan (the ""Plan'') to purchase or hold shares
of common stock of Motorola because the price of Motorola's stock was artificially inflated by a failure to
disclose vendor financing to Telsim in connection with the sale of telecommunications equipment by Motorola.
The plaintiff 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
unspecified amount of damages. On October 3, 2003, plaintiff filed an amended complaint asserting three claims
for breach of fiduciary duties under ERISA against 24 defendants grouped into five categories and seeking an
unspecified amount of damages. On September 23, 2004, the Illinois District Court dismissed the plan committee
defendants from the case, without prejudice. On October 15, 2004, plaintiff filed a second amended complaint (the
""Howell Complaint'') and a motion for class certification. On December 3, 2004, defendants filed a motion for
summary judgment seeking to dismiss the Howell Complaint and a corresponding motion to deny class
certification. On September 30, 2005, the Illinois District Court granted defendants' motion and dismissed the
Howell Complaint. Plaintiff filed an appeal to the dismissal on October 27, 2005. In addition, on October 19,
2005, plaintiff's counsel filed a motion seeking to add a new lead plaintiff and assert the same claims set forth in
the Howell Complaint.
Securities and Exchange Commission Investigation
Motorola is involved in an ongoing investigation by the Securities and Exchange Commission regarding Telsim
matters, which remains outstanding.
Charter Communications Class Action Securities Litigation
On August 5, 2002, Stoneridge Investment Partners LLC filed 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 officers, alleging violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder relating to Charter securities. 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. On August 5, 2003, the plaintiff amended its complaint to add Motorola, Inc. as a
defendant. As to Motorola, the amended complaint alleges a claim under Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5(a)-(c) promulgated thereunder relating to Charter securities and seeks an award of