Motorola 2009 Annual Report Download - page 38

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Item 2: Properties
Motorola’s principal executive offices are located at 1303 East Algonquin Road, Schaumburg, Illinois 60196.
Motorola also operates manufacturing facilities and sales offices in other U.S. locations and in many other
countries. (See ‘‘Item 1: Business’’ for information regarding the location of the major facilities for each of
Motorola’s business segments.) Motorola owns 22 facilities (manufacturing, sales, service and office), 12 of which
are located in the Americas Region (USA, Canada, Mexico, Central and South America) and 10 of which are
located in other countries. Motorola leases 322 facilities, 131 of which are located in the Americas Region and
191 of which are located in other countries. Motorola primarily utilizes 10 major facilities for the manufacturing
and distribution of its products. These facilities are located in: Hangzhou and Tianjin, China; Taipei, Taiwan;
Chennai, India; Penang, Malaysia; Schaumburg, Illinois; Jaguariuna, Brazil; Reynosa, Mexico; Arad, Israel; and
Berlin, Germany.
Since the beginning of 2009, facilities in: Chandler, Arizona; Libertyville, Illinois; Flensburg, Germany;
Nogales, Mexico; and Gurgaon, India were sold. Sites in Singapore and Swindon, England are currently for sale
or under contract.
Motorola generally considers the productive capacity of the plants operated by each of its business segments
to be adequate and sufficient for the requirements of each business group. The extent of utilization of such
manufacturing facilities varies from plant to plant and from time to time during the year.
A substantial portion of Motorola’s products are manufactured in Asia, primarily China, either in our own
facilities or in the facilities of others who manufacture and assemble products for Motorola. If manufacturing in
the region was disrupted, Motorola’s overall productive capacity could be significantly reduced.
Item 3: Legal Proceedings
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 Mobil
Telekomunikasyon Hizmetleri A.S. (‘‘Telsim’’) in connection with the sale of telecommunications equipment by
Motorola. Telsim had subsequently defaulted on the payment of approximately $2 billion of such vendor
financing, approximately half of which the Company has recovered to date. The plaintiff sought to represent a
class of participants in the Plan and sought an unspecified amount of damages. On September 30, 2005, the
Illinois District Court dismissed the second amended complaint filed on October 15, 2004 (the ‘‘Howell
Complaint’’). Three new purported lead plaintiffs subsequently intervened in the case, and filed a motion for class
certification seeking to represent a class of Plan participants. 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. The court granted leave to defendants to appeal the class
certification and granted leave to lead plaintiff Howell to appeal an earlier dismissal of his individual claim. Each
party filed those appeals. On June 17, 2009, the Illinois District Court granted summary judgment in favor of all
defendants on all counts. On June 25, 2009, the Seventh Circuit Court of Appeals (the ‘‘Seventh Circuit’’)
dismissed as moot defendants’ class certification appeal and stayed Howell’s appeal. On July 14, 2009, plaintiffs
appealed the summary judgment decision. By order of the Seventh Circuit on August 17, 2009, Howell’s
individual appeal and plaintiffs’ appeal of the summary judgment decision (now cited as Howell v. Motorola, Inc.
et al. and Lingis et al. v. Rick Dorazil et al.) have been consolidated with Spano et al. v. Boeing Company et al.
and Beesley et al. v. International Paper Company for argument and decision.
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) and Rule 10b-5 of the Securities
Exchange Act of 1934, 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