According to the final hearing held on September 2, 1999 by U.S. District Judge Judge George Caram Steef of the Eastern District of Michigan, a settlement has been approved. The agreement to settle the class action lawsuit was pending against the Company and three of its former senior officers who were also directors that alleges violations of the anti-fraud provisions of Section 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder. The settlement provides for a payment by the Company's insurers of $10.25 million in satisfaction of all claims. According to this settlement, the certified class consists of all persons who purchased the Company's common stock from June 27, 1995 through July 29, 1998. The final approved settlement resulted in the claims asserted in this action, as well as any other claims relating to the Company's common stock, SEC filings and the conduct of the Company's business during the class period, being released and dismissed with prejudice.
The original complaint alleges that the market price of the Company's stock was artificially inflated as a result of alleged misstatements and omissions regarding the
quality, adequacy and honesty of the Company's manufacturing processes, the
Company's revenues, cost of goods sold, warranty expenses, net income,
inventory, accounts receivable and warranty liability. Specifically, the
complaint alleges that senior executives of the Company instructed employees to
inflate publicly reported financial results and sold old or used batteries as
new batteries, sold defective and mislabeled batteries and improperly credited