Motorola 2007 Annual Report Download - page 38

U.S. Judgment
The Company continues its efforts to collect on its judgment of $2.13 billion (the “U.S. Judgment”) for
compensatory damages rendered by the United States District Court for the Southern District of New York (the
“District Court”) against the Uzans on July 31, 2003 and affirmed by the U.S. Court of Appeals for the Second
Circuit (the “Second Circuit”) in 2004 and in connection with foreign proceedings against the Uzan family.
However, the Company believes that the ongoing litigation, collection and/or settlement processes against the Uzan
family will be very lengthy in light of the Uzans’ continued resistance to satisfy the judgments against them and
their decision to violate various courts’ orders, including orders holding them in contempt of court. Following a
remand from the Second Circuit of the U.S. Judgment, 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. That decision was affirmed by the Second Circuit on November 21, 2007.
In re Motorola Securities Litigation
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. In 2003, it was consolidated with a number of related cases as In re Motorola
Securities Litigation in the United States District Court for the Northern District of Illinois (“Illinois District
Court”). During 2005, the Illinois District Court certified the case as a class action. In April 2007, the parties
entered into a settlement agreement, pursuant to which Motorola paid $190 million to the class and all claims
against Motorola by the class have been dismissed and released.
Howell v. Motorola, Inc., et al.
A class action, Howell v. Motorola, Inc., et al., was filed against Motorola and various of its directors, officers and
employees in the United States District Court for the Northern District of Illinois (“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 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 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”). Three new purported lead plaintiffs have since intervened in the case,
and have filed a motion for class certification seeking to represent a class of Plan participants. On September 28, 2007,
the Illinois District Court granted the motion for class certification but narrowed the requested scope of the class. On
October 25, 2007, the Illinois District Court modified the scope of the class, granted summary judgment dismissing two
of the individually-named defendants in light of the narrowed class, and ruled that the judgment as to the original
named plaintiff, Howell, would be immediately appealable. The class as certified includes all Plan participants for
whose individual accounts the Plan purchased and/or held shares of Motorola common stock from May 16, 2000
through May 14, 2001, with certain exclusions. On February 15, 2008 plaintiffs and defendants each filed motions for
summary judgment in the Illinois District Court. On February 22, 2008 the appellate court granted defendants’ motion
for leave to appeal from the Illinois District Court’s class-certification decision. In addition, the original named plaintiff,
Howell, has appealed the dismissal of his claim.
Silverman/Williams Federal Securities Lawsuits and Related Derivative Matters
A purported class action lawsuit on behalf of the purchasers of Motorola securities between July 19, 2006 and
January 5, 2007, Silverman v. Motorola, Inc., et al., was filed against the Company and certain current and former
officers and directors of the Company on August 9, 2007, in the United States District Court for the Northern
District of Illinois. The complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 and
SEC Rule 10b-5 as well as, in the case of the individual defendants, the control person provisions of the Securities
Exchange Act. The factual assertions in the complaint consist primarily of the allegation that the defendants
knowingly made incorrect statements concerning Motorola’s projected revenues for the third and fourth quarter of
2006. The complaint seeks unspecified damages and other relief relating to the purported inflation in the price of
Motorola shares during the class period. An amended complaint was filed December 20, 2007.
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