Motorola 2006 Annual Report Download - page 36

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(""ERISA''). The complaint alleged that the defendants had improperly permitted participants in the Motorola
401(k) 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 September 30, 2005, the district
court dismissed the second amended complaint filed on October 15, 2004 (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 (the
""October 19th Motion''). On August 11, 2006, the district court denied the October 19th Motion, finding the
second purported plaintiff lacked standing to sue. Plaintiff filed an appeal. On November 20, 2006, the appeals
court dismissed the second appeal. Three new purported lead plaintiffs have since intervened in the case, and have
filed a motion for class certification seeking to represent Plan participants for whose individual accounts the Plan
purchased and/or held shares of Motorola common stock from May 16, 2000 through December 31, 2002.
Securities and Exchange Commission Investigation
Motorola was involved in an investigation by the Securities and Exchange Commission (""SEC'') regarding
Telsim matters. On February 5, 2007, the investigation was terminated by the SEC and the Company was notified
that no enforcement action was recommended by the SEC.
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 (""District Court'') 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 compensatory damages. The District Court issued a final judgment dismissing Motorola from the
case which plaintiff appealed to the United States Court of Appeals for the Eighth Circuit (""Court of Appeals'').
On April 11, 2006, the Court of Appeals affirmed the final judgment of the District Court dismissing Motorola
from the case. On July 7, 2006 plaintiff filed a petition for certiorari seeking review of the Court of Appeals
decision by the United States Supreme Court. On October 20, 2006, Motorola submitted its response opposing the
petition.
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 fourteen individual cases and one purported class action that were filed 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. Huff Asset Management Co. L.L.C. v. Deloitte &
Touche LLP, et al. (the ""Huff Complaint'') This case was originally filed by W.R. Huff 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 relating to Adelphia securities, and seeks recovery of the
consideration paid by plaintiff for Adelphia debt securities, compensatory damages, costs and expenses of litigation
and other relief. Motorola filed a motion to dismiss this complaint on March 8, 2004, which is awaiting decision.
Also on December 22, 2003, Motorola was named as a defendant in Stocke v. John J. Rigas, et al. This case
was originally filed in Pennsylvania 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 generally makes the same allegations as the Huff
Complaint and a state law claim of aiding and abetting fraud relating to Adelphia securities. The complaint seeks