American Bank Note Holographics Announces Court's Preliminary Approval of Settlement in Pending Class Action Litigation.

Business Editors/Legal Writers

ELMSFORD, N.Y.--(BUSINESS WIRE)--Oct. 30, 2000

American Bank Note Holographics, Inc. ("ABNH" or the "Company", OTC Bulletin Board: ABHH) today announced that the United States District Court for the Southern District of New York has preliminarily approved the settlement of the consolidated securities class actions against the Company and all other defendants, including the Company's former parent, American Banknote Corporation ("ABN"), certain former officers and directors of the Company, certain current and former officers and directors of ABN and the Company's former independent auditors, Deloitte & Touche LLP, named in the actions entitled, In re American Bank Note Holographics, Inc. Securities Litigation and In re American Banknote Corporation Securities Litigation filed in the United States District Court for the Southern District of New York (the "Court"). The Court directed that notice be given to a conditionally certified class of stockholders of the Company's common stock. The Court's Order does not constitute an expression of opinion on the merits of the claims asserted in the class actions and does not constitute an expression of its opinion as to the fairness or adequacy of the terms of the settlement. The Court set a hearing for December 15, 2000 to consider final approval of the proposed settlement. The settlement remains subject to the approval of the Bankruptcy Court for the Southern District of New York in which the Chapter 11 case of the Company's former parent, ABN is pending.

The proposed settlement of the class action litigation provides for a release of all claims that the plaintiffs and class members in each action have and may have against the Company and the other defendants. The proposed settlement calls for a cash payment of $14,850,000, of which amount the Company's and ABN's insurance carrier is funding $12,500,000, and the remaining $2,350,000 will be contributed by defendant Deloitte & Touche LLP. The Company will have no cash payment obligation with respect to the settlement. In connection with the settlement, the Company will issue 1,460,000 shares of the Company's Common Stock, as well as warrants to purchase 863,647 shares of the Company's Common Stock at an exercise price of $6.00 per share. The warrants will be exercisable for a 30 month period commencing with final settlement approval by the Court. ABN will also issue certain of its securities as part of the settlement.

American Bank Note Holographics is a world leader in the origination, production and marketing of mass-produced holograms. The Company's products are used primarily for security applications such as counterfeiting protection and authentication of transaction cards, identification cards, documents of value, and consumer and industrial products, as well as for packaging and promotional applications.

This news release includes forward-looking statements that involve risks and uncertainties. Although the Company believes such statements are reasonable, they can make no assurance that such statements will prove to be correct. Such statements are subject to certain factors which may cause results to differ materially from the forward-looking statements, including but not limited to, the outcome of pending shareholder litigation; competition in the market for holograms; retaining and attracting key employees; and changes in business conditions which might impact customers and suppliers. The Company undertakes no obligation to publicly release results of any of these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected results.