Motorola 2010 Annual Report Download - page 35

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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.) were consolidated with Spano
et al. v. Boeing Company et al. and Beesley et al. v. International Paper Company for argument and decision. On
January 21, 2011, the Seventh Circuit affirmed the Illinois District Court’s summary judgment decision in favor of
Motorola and denied Howell’s individual appeal in all respects.
Silverman 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 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, and Motorola moved to
dismiss that complaint in February 2008. On September 24, 2008, the district court granted this motion in part to
dismiss Section 10(b) claims as to two individuals and certain claims related to forward looking statements, among
other things, and denied the motion in part. On August 25, 2009, the district court granted plaintiff’s motion for
class certification. On March 10, 2010, the district court granted plaintiffs motion to file a second amended
complaint which adds allegations concerning Motorola’s accounting and disclosures for certain transactions entered
into in the third quarter of 2006.
In addition, on August 24, 2007, two lawsuits were filed as purportedly derivative actions on behalf of
Motorola, Williams v. Zander, et al., and Cinotto v. Zander, et al., in the Circuit Court of Cook County, Illinois
against the Company and certain of its current and former officers and directors. These complaints make similar
factual allegations to those made in the Silverman complaint and assert causes of action for breach of fiduciary duty,
abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment. The complaints seek
unspecified damages associated with the alleged loss to the Company deriving from the defendants’ actions and
demand that Motorola make a number of changes to its internal procedures. An amended complaint was filed on
December 14, 2007. On January 27, 2009, Motorola’s motion to dismiss the amended complaint was granted in
part and denied in part.
On March 29, 2010, a purported derivative action lawsuit on behalf of Motorola, Goldfein v. Brown, et al.,
was filed in the United States District Court for the Northern District of Illinois against the company and certain of
its current and former officers and directors. The complaint makes substantially similar factual allegations to those
made in the Williams v. Zander, et al. and Cinotto v. Zander, et al. derivative actions pending in Illinois state court
and asserts causes of action for breaches of fiduciary duty, waste of corporate assets, and unjust enrichment. The
complaint seeks unspecified damages and other relief associated with the alleged loss to the Company deriving from
the defendants’ actions. On December 10, 2010 the district court granted the Defendants’ motion to dismiss and
dismissed the case. Plaintiffs have appealed the dismissal to the United States Court of Appeals for the Seventh
Circuit.
St. Lucie County Fire District Firefighters’ Pension Trust Fund Securities Class Action Case and Related
Derivative Matter
A purported class action lawsuit , St. Lucie County Fire District Firefighters’ Pension Fund v. Motorola, Inc., et
al., was filed against the Company and certain current and former officers and directors of the Company on
January 21, 2010, in the United States District Court for the Northern District of Illinois. The complaint was
amended on June 11, 2010, and again on December 3, 2010. The alleged class includes purchasers of Motorola
securities between October 25, 2007 and January 23, 2008. 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 primary factual allegations are that the defendants knowingly
or recklessly made materially misleading statements concerning Motorola’s financial projections and sales demand