Southwall Completes Tentative Settlement and Submits to Court

    PALO ALTO, Calif.--July 2, 2001--Southwall Technologies Inc. announced today that the tentative settlement referred to in its June 4, 2001 press release has been completed and submitted to the United States District Court in San Francisco for its approval. The Company's CEO, Thomas G. Hood, reported that "as anticipated in our June 4th release, this settlement will resolve all of the pending litigation against the Company filed by its shareholders, or their representatives, without any adverse affect on the Company's financial position. We are very pleased to have reached this agreement with the plaintiff shareholders and their counsel that will put an end to all litigation arising out of the Company's restatement of its financial statements for fiscal 1999 and the first quarter of fiscal 2000. This enables Southwall to focus its energies on the future and on its new products and expanding markets."