According to a Press Release dated April 01, 2003, on March 28, 2003, the
United States District Court for the District of Colorado held a
fairness hearing regarding the settlement of Vari-L's private securities
class action lawsuit. At such hearing, the court approved the settlement
of the class action as fair and reasonable to the members of the class.
Following the March 28, 2003 fairness hearing, the court entered its
final judgment and order of dismissal of the actions with prejudice
whereby the court approved the settlement of the class action pursuant
to the stipulation of settlement. Under the terms of the stipulation of
settlement, Vari-L will pay the class $250,000 in cash and issue two
million shares of its common stock.
On October 3, 2002, Vari-L and the class representatives reached an agreement in principle for the settlement of the litigation and executed a memorandum of
understanding, subject to court approval. On January 22, 2003 the
parties filed with the court a stipulation of settlement setting forth
the terms and conditions of the proposed settlement of the class action.
On January 29, 2003 the court issued its order preliminarily approving
the settlement of the class action, certification of the class, and the
provision of notice to members of the class.
The original complaint charged Vari-L and certain of its officers, with violations of the federal securities laws by issuing materially false and misleading financial statements. The Company, on May 17, 2000, revealed that it would be restating its previously reported financial results for the period ended December 31, 1997, and potentially other periods as well. In addition, during the Class Period insiders sold massive amounts of stock, reaping substantial proceeds as a result of the inflated value of Vari-L's stock. After the
Company's announcement, Vari-L shares fell roughly $5 per share from their May
16 close of $16.188, to close at $11.25 on May 22, 2000, a drop of roughly 35%,
as the market fully absorbed the impact of these disclosures.