Southwall Announces Tentative Settlement of All Shareholder Litigation

    PALO ALTO, Calif.--June 4, 2001--Southwall Technologies Inc. (Nasdaq Symbol: SWTX) announced that it has reached a tentative settlement of all shareholder litigation pending against it. It is anticipated that the settlement will have no adverse affect on the Company's ongoing financial performance. Since the litigation involves class actions, the settlement will be subject to approval by the United States District Court for the Northern District of California. Presently, definitive settlement documents are being prepared and certain discovery activities concluded. The Company believes that the parties will be filing a motion with the Federal Court for preliminary approval of the Settlement by the end of the month. Thomas G. Hood, the Company's President and Chief Executive Officer, stated, "The resolution of this shareholder litigation without adversely affecting the Company's financial condition is an important step forward."

    About Southwall Technologies Inc.

    Southwall Technologies (www.southwall.com) designs and produces technologically advanced thin film coatings that selectively absorb, reflect or transmit electromagnetic radiation. Southwall products are used in a number of architectural, automotive and electronic products to enhance optical and thermal performance characteristics, improve user comfort and reduce energy costs. Southwall exports advanced thin film coatings to over 25 countries around the world for use in products manufactured by such companies as Audi, BMW, DaimlerChrysler, Mitsubishi Electric, Peugeot-Citroen, Renault and Volvo.

    This press release may contain forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995), including, without limitation, statements regarding Southwall's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements in this press release are based on information available to Southwall on the date hereof, and Southwall assumes no obligation to update any such forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presented. These risks include the possibility that the settlement described in this press release will not be finalized or that the court will not approve the settlement and that, if the settlement were not finalized, Southwall's ultimate liability may be higher than its insurance policy limits. Further risks are detailed in Southwall's filing with the Securities and Exchange Commission, including those set forth in Southwall's most recent Form 10-K and Form 10-Q.