DHB Industries, Inc. (OTC Pink Sheets - DHBT), a Florida-based manufacturer of body armour, has announced the preliminary settlement of the securities class action (and related derivative suit) pending against the company in the E.D.N.Y. The case was originally filed in September 2005 and alleges that the company failed to disclose that its body armor products were defective and did not meet the standards of its customers.
The settlement is for $34.9 million in cash, plus 3,184,713 shares of DHB common stock. The company's insurers will pay $12.9 million. In an unusual settlement provision, DHB stated that its CEO (who apparently is being forced out) "will help fund the payments to be made by the Company by exercising 3 million warrants held by him at an elevated exercise price." Moreover, the company apparently "has the option to put to [its CEO], approximately 3 million shares of common stock to finance the remaining portion of the cash settlement."
Newsday has an article on the settlement.Posted by Lyle Roberts at July 14, 2006 7:48 PM | TrackBack