Shields

Introduction

In this shareholder derivative action plaintiff Rodney B. Shields is suing on behalf of Teledyne, Inc. (the Company) to recover for the Company damages it allegedly suffered due to the unlawful activities of certain employees of a subsidiary of the Company. The defendants to this action may be divided into three groups: The directors of the Company (Henry E. Singleton [who is also chairman of the Company], George A. Roberts [who is the Company’s president and chief executive officer], George Kozmetsky, Arthur Rock and Fayez Sarofim); the officers of the Company (Hudson B. Drake, William P. Rutledge, Jerrold V. Jerome, Leo W. Killen, Allen H. Orbuch, G. Williams Rutherford, Judith R. Nelson, and Gordon J. Bean); and certain individual employees and consultants of a subsidiary of the Company who are not parties to this appeal.

Plaintiff’s claims are based on the federal government’s wide-ranging investigation, known as Operation 111 Wind, of fraud and corruption in the procurement of military defense contracts, and the criminal and civil suits which resulted from that investigation. Teledyne Electronics, Inc., a division of Teledyne Industries, Inc., which is…