According to the docket dated April 12, 2000, on January 29, 1999, the Court entered the Preliminary Order in connection with the settlement proceedings and set the Settlement Fairness Hearing date for May 19, 1999 at 9:00 a.m. On June 1, 2999, the Court further entered the Order regarding the enforcement of the settlement stipulation and final judgment, and the case was closed. As stated in the Notice of Proposed Settlement of the Class Action, the Settlement Fund consisted of $16,275,000 in cash, plus interest.
On October 20, 1998, the district court of New Jersey granted the motion for class certification with respect to class of purchasers of Tower Ordinary Shares between 25 May 1995 and 10 June 1996 seeking relief pursuant to Exchange Act. But the Motion for Class Certification was denied as pertains to pendent state law claims. On October 2, 1997, the district court denied Tower Semiconductor's motion to dismiss plaintiffs' consolidated amended complaint, which had alleged that the plaintiffs' violated the Private Securities Litigation Reform Act of 1995.
According to the docket for the case filed in the U.S. District Court for the Eastern District of New York, on September 6, 2996, the Court entered the Order by Judge I. L. Glasser dismissing and discontinuing the action without prejudice.
The action filed in the District of New Jersey is ongoing.
During the class period, the Company was allegedly dependent on a few large customers, including Hewlett-Packard ("H-P"). In July of 1993, the Company and H-P entered into an agreement for the sale by Tower to H-P of wafer starts chips, which had to conform to H-P specifications. In its FY1994 Form 20-F, the Company stated that it expected to meet the H-P chip specifications by the third quarter of 1995. On July 29, 1995, the Company publicly offered three million shares of common stock. In the accompanying prospectus, Tower repeated its expectations regarding the H-P agreement. On August 8, 1995, the Company announced a new agreement with H-P and reiterated the strength of the H-P relationship. Press releases on October 30 and December 4, 1995 and February 13, 1996 emphasized the Company's optimism in its future performance and the strong demand for its products. On March 13, 1996, the Company lowered its projected sales for o $10-3/8. Based on these facts, plaintiffs allege that defendants used communications with securities analysts to promote the Company and manipulate and artificially inflate the price of Tower stock. Bear Stearns & Co., Tower's market maker, relied in its reports on information provided by defendants through extensive communication between top Company officers and Bear Stearns securities analysts. Plaintiffs claim that defendants, knowing the investing community would rely on Bear Stearns positive reports of the Company, used those reports to present a successful picture of Company operations and its financial condition and to condition the market for the 1995 public offering. Plaintiffs assert that defendants were privy to non-public adverse information, that they had a duty to correct positive information introduced to the market, and that their failure to do so constitutes a fraud on the plaintiffs. Accordingto plaintiffs, adverse information included knowledge of rapidly changing technology, declining prices, and repeated delays in chip production. Based on these assertions, plaintiffs allege violations of sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Tower Semiconductor is a foundry manufacturer of semiconductor integrated circuits on silicon wafers, which are incorporated into a wide range of computer and electronic equipment.
A similar, purported class action complaint was also filed in the U.S. District Court for the District of New Jersey on August 1, 1996.