Magma Design Automation, Inc. ("Magma" or the Company) provides electronic design automation software for the semiconductor industry.

The original Complaint alleges that Magma and certain of its officers and directors violated federal securities laws. Specifically, Defendants failed to disclose that Magma faced the serious risk of infringing on intellectual property rights of competitor Synopsys because inventions that were critical to Magma's business, and which were patented by Magma, were designed by Magma's chief scientist while employed by Synopsys. Defendants aggressively denounced the allegations, characterizing them as completely baseless. While Magma's stock price was artificially inflated, insiders sold 4,436,163 shares of common stock reaping gross proceeds of $82,385,174.

The Complaint further alleges that on or around April 13, 2005, the market learned that Magma's Chief Scientist admitted, in a sworn declaration filed in the Synopsys infringement action, that inventions covered by two of Magma's patents were conceived by him while he was employed by Synopsys and that his supervisor at Magma, and likely others, knew that the inventions covered by the patents were conceived by him at Synopsis and were encompassed by an agreement with Synopsis granting Synopsis the rights to those inventions. On this news, Magma's stock plummeted 40.7%, from $9.42 per share on April 12, 2005 to $5.58 per share on April 13, 2005.

Also included are all those who acquired Magma's shares through its acquisitions of Majave, Random Logic, Aplus Design or Silicon Metrics.

As summarized by the Company’s Form 10-Q for the quarterly period ended February 1, 2009, on June 13, 2005, a putative shareholder class action lawsuit captioned The Cornelia I. Crowell GST Trust vs. Magma Design Automation, Inc., Rajeev Madhavan, Gregory C. Walker and Roy E. Jewell., No. C 05 02394, was filed in U.S. District Court, Northern District of California. The Complaint alleges that Defendants failed to disclose information regarding the risk of Magma infringing intellectual property rights of Synopsys, in violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and asks for unspecified damages. In March 2006, Defendants filed a motion to dismiss the consolidated amended Complaint. Plaintiff filed a further amended Complaint in June 2006, which Defendants again moved to dismiss. Defendants’ motion was granted in part and denied in part by an order dated August 18, 2006, which dismissed claims against two of the individual Defendants. On November 30, 2007, the parties agreed to a settlement. The court granted preliminary approval of the settlement on July 7, 2008. On December 5, 2008, the court held a hearing on final approval of the settlement and requested that Plaintiff submit additional information, including information on claims by class members.

On March 27, 2009, the Court entered the Order by Judge Charles R. Breyer. According to the Order, the settlement, in the amount of $13.5 million in cash, is finally approved and the Court grants the motion for attorney fees and expenses. The Court grants the reimbursement of $945,345.69 in costs, grants reimbursement of lead Plaintiff Frank Weiler in the amount of $32,600 and grants Plaintiffs’ Counsel twenty percent of the remaining net settlement fund in attorneys’ fees.