Attention Applied Micro Circuits Corporation, Inc. Shareholders: Robbins Umeda & Fink, LLP Announces a Pending Shareholder Action Settlement May Impact Your Rights -- AMCC


SAN DIEGO, March 21, 2008 (PRIME NEWSWIRE) -- The plaintiffs and defendants in a derivative action brought on behalf of Applied Micro Circuits Corporation, Inc. ("AMCC" or the "Company") pending before the United States District Court for the Northern District of California (the "Court") have reached a tentative settlement. The case is titled In re Applied Micro Circuits Corporation, Inc. Derivative Litigation, Lead Case No. 06-cv-04269-JW. The case is pending before the Honorable James Ware. The plaintiffs in that case recently sent a notice of that tentative settlement to AMCC's shareholders notifying them that they intend to seek final approval of the settlement from the Court on May 5, 2008. This settlement impacts all current AMCC shareholders because it seeks to extinguish claims in favor of AMCC worth tens of millions of dollars. If you are an AMCC shareholder and wish to object to the proposed settlement, the settlement notice requires that you do so by April 18, 2008.

The settling plaintiffs first filed the derivative action, purportedly for the benefit of AMCC, on July 11, 2006. The action alleges that certain former and current AMCC officers and directors engaged in a practice commonly referred to as stock option backdating. Backdating involves the use of hindsight to pick stock option grant dates where AMCC's stock price was lower than the actual date of the grant. The recipient of the backdated stock option receives a paper profit equal to the number of shares underlying the stock option multiplied by the difference between AMCC's stock price on the backdated grant date and the actual grant date.

As part of its own internal investigation and financial restatement, AMCC announced that it needed to recognize $95 million in compensation expenses as a result of stock option backdating. The Company arrived at that $95 million figure after first predicting up to $200 million in compensation expenses might have to be restated to account for improperly backdated options.

On January 28, 2008, plaintiffs agreed to settle the claims they brought purportedly on behalf of AMCC. The settlement seeks to release all of the defendants named in the action as well as other individuals, which includes current and former officers and directors of AMCC, from liability to the Company in connection with the backdating activities. In exchange for releasing these claims, the Company is purportedly receiving a few corporate governance reforms. These reforms are coming after extensive remedial measures that were already undertaken by the Company prior to the settlement being reached by the parties. Importantly, while there is an insurance payment to reimburse certain Company expenses, the proposed settlement does not provide for any monetary recovery from the individual defendants or any current or former officer of AMCC. This means that no person who received backdated options from AMCC is being required to pay money or return any backdating proceeds to the Company.

The Court ordered, on February 27, 2008, that notice be sent to current AMCC shareholders informing them of the terms of the proposed settlement and that a final approval hearing has been set for May 5, 2008 for the Court to determine whether the proposed settlement is fair, reasonable and adequate.

Any current AMCC shareholder who held stock as of January 28, 2008 and who continues to hold some of their AMCC stock has a right to appear at the final approval hearing and object to the settlement. If you do not object, AMCC's ability to recover the tens of millions in backdated stock options will likely forever be lost. According to the settlement notice, your objection must be in writing and filed with the United States District Court for the Northern District of California, together with a sworn statement attesting to the date of your purchase of AMCC common stock and documentation showing your continued ownership, by no later than April 18, 2008. The address of the Court is 280 South 1st Street, San Jose, CA 95113. Additionally, you must serve and show proof of service of your objection and supporting documents upon counsel of record in the action.

Robbins Umeda & Fink, LLP, a San Diego, California based law firm with experience in the litigation of shareholder derivative actions, currently represents an AMCC shareholder who plans on objecting to the proposed settlement because she believes that it is not fair, reasonable, adequate nor in the best interests of AMCC and its current shareholders. She has made a demand upon AMCC's Board of Directors to take relief far in excess of what the proposed settlement seeks to accomplish, but she anticipates that the parties will ignore her demand and move forward in seeking approval of their settlement. If you are a current AMCC shareholder and you also wish to object to the settlement, feel free to contact Brian J. Robbins of Robbins Umeda & Fink, LLP at 1-(800) 350-6003 or by e-mailing caseinfo@ruflaw.com. Our physical address is 610 West Ash Street, Suite 1800, San Diego, CA 92101 and our fax number is (619) 525-3991.

More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca.



            

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