CMD Announces Tentative Settlement of Class Action Lawsuits.MILPITAS, Calif.--(BUSINESS WIRE)--Sept. 16, 1996--California Micro Devices Corp. (NASDAQ/NMS:CAMD CAMD Center for Advanced Microstructures and Devices CAMD Clean Air Markets Division (US EPA) CAMD Computer-Assisted Molecular Design CAMD Chemical Agent and Munitions Disposal CAMD Carl Asmis Memorial Dressage Association ), headquartered in Milpitas, today announced a tentative settlement has been reached in the securities class action lawsuits against the company filed in 1994 and 1995. The tentative settlement has been approved by the boards of CMD CMD cerebromacular degeneration. and the class representatives, the Colorado Public Employees' Retirement Association (ColPERA) and the California State Teachers' Retirement System (CalSTRS). The tentative settlement, which is subject to approval by U.S. District Judge Vaughn R. Walker after notice to the settling class, calls for the payment by CMD of $6 million in cash and the issuance of 608,696 shares of common stock. Each share of common stock will be accompanied by a Contingent Value Right (CVR CVR See contingent value right (CVR). ), which is personal to the class member, guaranteeing that the stock will trade at an average price of at least $11.50 per share, for twenty consecutive trading days within three years after issuance of the stock. In addition, CMD will assign to the settling class its pending claims against Chan M. Desaigoudar, the Company's former Chairman and Chief Executive Officer. CMD also will assign to the settling class its rights under its directors and officers liability insurance Directors and Officers Liability Insurance is insurance payable to the directors and officers of a company to cover damages or defence costs in the event they are sued for wrongful acts while they were with that company. policies, and will enter into a mutual release of all claims with Coopers and Lybrand LLP LLP - Lower Layer Protocol , the Company's former auditors. The setting class will release CMD and its outside directors (other than Mr. Desaigoudar) from any further claims or liability if the settlement is approved. The company understands that a tentative settlement has also been reached with certain former officers of CMD, but not with Mr. Desaigoudar. According to Wade Meyercord, CMD's Chairman, "Although the $13 million dollar value of this tentative settlement is the same as that reserved by the Company in the quarter ending March 31, 1995, the change in terms is significant to our shareholders. By contrast to the tentative settlement that was reached last year, the proposed settlement announced today involves the issuance to the settling class of a substantially smaller number of new shares of common stock of the Company. "If approved by the Court, the new settlement will create significantly less dilution to existing shareholders. At the same time, management is confident that the cash payment will leave the Company with adequate cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. to cover our needs for capital and to fund growth." "This tentative settlement, if approved by the Court, will finally remove a cloud that has been hanging over the head of CMD for the past two years," said Jeffrey Kalb, CMD's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "This litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. has impacted the Company's ability to do business with certain large customers. With the bulk of our legal difficulties behind us, we can and will focus all of our attention on the growth opportunities we have with our customers." Statements contained herein which are not historical facts are forward looking statements. The forward-looking statements in this release are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward looking statements involve a number of risks and uncertainties including, but not limited to, product demand, pricing, market acceptance, risk of dependence on third party suppliers, intellectual property rights and litigation, risks in product and technology development and other risk factors detailed in the CMD's Securities and Exchange Commission filings. Headquartered in Milpitas, Calif., California Micro Devices (CMD) designs, manufactures and markets integrated thin-film silicon-based termination and filtering passive components and active electronic circuitry. CMD's products target the requirements of computer, networking and communication-based customers for smaller, densely integrated devices that operate at high-frequencies within superior performance and functionality. CONTACT: California Micro Devices Wade Meyercord, 408/934-3128 (Chairman) Jeffrey Kalb, 408/934-3106 (President and CEO) John Trewin, 408/934-3103 (VP and CFO See Chief Financial Officer. ) Scott Hover-Smoot, 408/934-3182 (General Counsel) |
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