FARO Announces Agreement to Settle Securities Litigation
27 February 2008 - 11:50AM
PR Newswire (US)
LAKE MARY, Fla., Feb. 26 /PRNewswire-FirstCall/ -- FARO
Technologies, Inc. (NASDAQ:FARO), the world market leader in
portable computer-aided measurement arms and laser tracker sales,
announced today that it has entered into a Memorandum of
Understanding to settle the consolidated class action securities
fraud lawsuit pending against FARO and certain of its current and
former officers and directors in the United States District Court
for the Middle District of Florida (the "Securities Litigation").
Pursuant to the Memorandum of Understanding, which is subject to
certain conditions, the issuer of the Company's directors and
officers insurance policy will pay $6.875 million into a settlement
fund that will be distributed to members of a class of all persons
who purchased the Company's common stock from April 15, 2004
through March 15, 2006 and to the lead plaintiff's counsel and also
will be used to pay various costs. The Memorandum of Understanding
provides that the parties to the Securities Litigation will file
with the court a Stipulation and Agreement of Settlement seeking
the court's preliminary and final approval of the terms of the
proposed settlement. If the Court approves the settlement, a
judgment will be entered dismissing the Securities Litigation, with
prejudice, as against each defendant. The lead plaintiff had
asserted claims under the Securities Exchange Act of 1934 alleging
that the defendants made misrepresentations and omissions related
to the value of the Company's inventory and consequently to the
amount of the Company's gross margins and profits, the amount of
the 2005 selling expenses that the Company had accrued and
expected, payments made in connection with certain of the Company's
Asian sales in possible violation of the Foreign Corrupt Practices
Act, and the effectiveness of the Company's systems of internal
controls in light of the above and other circumstances. The $6.875
million is within the coverage limit of the directors and officers
insurance policy, and thus the settlement requires no payment by
either the Company or the individual defendants. Announcing the
settlement, Jay Freeland, FARO's President and CEO, stated, "We
have always believed that the case was without merit and had
planned to continue defending the litigation vigorously. However,
given that we were able to reach an accommodation that will be
fully covered by our directors and officers insurance and was
acceptable to our insurance carrier, we are pleased to be able to
avoid the distraction that further litigation could cause. As the
settlement does not require any payment by either FARO or any of
the individual defendants, our shareholders are best served with
this matter behind us and our attention focused on our business."
FARO also announced today that a Verified Shareholder Derivative
Complaint (the "Derivative Complaint") has been filed by an alleged
shareholder of the Company in the United States District Court for
the Middle District of Florida against five current and one former
director of the Company, as defendants, and against the Company, as
a nominal defendant. The Derivative Complaint alleges breach of
fiduciary duty and other claims against the individual defendants
principally in connection with the alleged acts and omissions
asserted in the Securities Litigation. The plaintiff alleges that
the individual defendants caused the Company's stock price to be
falsely inflated, and subjected the Company to costs, fines and
other damages, as well as a loss of good will. The plaintiff
purports to seek an unspecified amount of damages, together with
other relief, on behalf of the Company and against the individual
defendants. Prior to filing the Derivative Complaint, the plaintiff
had requested that the Company assert certain of such claims
against some of the individual defendants. The Company has formed a
committee of independent directors to review and investigate the
shareholder's demand, and the allegations made in the Derivative
Complaint. The committee has not yet made a recommendation with
respect to those matters. To the Company's knowledge, no defendant
has been served with the Derivative Complaint. About FARO With
approximately 16,000 installations and 7,400 customers globally,
FARO Technologies, Inc. designs, develops, and markets portable,
computerized measurement devices and software used to create
digital models -- or to perform evaluations against an existing
model -- for anything requiring highly detailed 3-D measurements,
including part and assembly inspection, factory planning and asset
documentation, as well as specialized applications ranging from
surveying, recreating accident sites and crime scenes to digitally
preserving historical sites. FARO's technology increases
productivity by dramatically reducing the amount of on-site
measuring time, and the various industry-specific software packages
enable users to process and present their results quickly and more
effectively. Principal products include the world's best-selling
portable measurement arm - the FaroArm; the world's best-selling
laser tracker - the FARO Laser Tracker X and Xi; the FARO Laser
ScanArm; FARO Laser Scanner LS; the FARO Gage, Gage-PLUS and
PowerGAGE; and the CAM2 family of advanced CAD-based measurement
and reporting software. FARO Technologies is ISO-9001 certified and
ISO-17025 laboratory registered. DATASOURCE: FARO Technologies,
Inc. CONTACT: Darin Sahler, Global PR Manager of FARO Technologies,
Inc., +1-407-333-9911, Web site: http://www.faro.com/
Copyright
FARO Technologies (NASDAQ:FARO)
Historical Stock Chart
From Jun 2024 to Jul 2024
FARO Technologies (NASDAQ:FARO)
Historical Stock Chart
From Jul 2023 to Jul 2024