According to the Company’s FORM 10-K for the fiscal year ended December 30, 2005, a tentative settlement has recently been reached between the plaintiffs and all defendant stock issuers, with ongoing negotiations as to the specific terms of the settlement agreement. Under that agreement, the Company would not be required to pay any damages, expenses or litigation costs to the plaintiffs. When negotiations are completed and the parties have agreed upon the final terms of the settlement agreement, the agreement must be approved by the court before dismissal of us and other parties to the agreement from the suit. On February 15, 2005, the Judge preliminarily approved the issuer’s settlement agreement. Final approval is subject to certain revisions requested by the Judge, notice to the affected class members, and a final hearing.
As summarized by the same SEC filing, the Company and certain of its present officers and directors as well as its lead initial public offering underwriter and lead underwriter of our September 2000 initial public offering, Credit Suisse First Boston Corporation, were named as defendants in several law suits, the first of which is a class action filed on June 8, 2001 in the United States District Court for the Southern District of New York. These lawsuits against the Company, as well as those alleging similar claims against other issuers in initial public offerings, have been consolidated for pre-trial purposes with a multitude of other securities related suits. In April 2002, the plaintiffs filed a consolidated amended complaint against the Company and certain of its officers and directors. The consolidated amended complaint pleads claims under both the 1933 Securities Act and under the 1934 Securities Exchange Act. In addition to the allegations of wrongdoing described above, plaintiffs also now allege that analysts employed by underwriters who were acting as investment bankers for the Company improperly touted the value of its shares during the relevant class period as part of the purported scheme to artificially inflate the value of the Company's shares. In October 2002, the individual employee defendants were dismissed from the class action suit. The plaintiffs seek unspecified damages, litigation costs and expenses.
The complaint alleges that defendants Intersil, certain individuals and Credit Suisse First Boston Corporation violated Section 10(b) of the Securities Act of 1934 and Rule 10b-5 promulgated thereunder for issuing a Registration Statement and Prospectus (the ``Prospectus'') that contained material misrepresentations and/or omissions. The Prospectus was issued in connection with the Intersil IPO. The complaint alleges that the Prospectus was false and misleading because it failed to disclose (i) Credit Suisse's agreement with certain investors to provide them with significant amounts of restricted Intersil shares in the IPO in exchange for exorbitant and undisclosed commissions; and (ii) the agreement between Credit Suisse and certain of its customers whereby Credit Suisse would allocate shares in the IPO to those customers in exchange for the customers' agreement to purchase Intersil shares in the after-market at pre-determined prices.