KV Pharmaceutical settles stock option lawsuit

KV Pharmaceutical Co. said Tuesday it reached a comprehensive settlement agreement in principle with the plaintiffs in a derivative lawsuit relating to the company's historic stock option granting practices.
Upon final court approval of the settlement agreement, all private securities litigation pending against the company regarding the stock option matter will be resolved, KV said.
"Upon its finalization, the settlement of this litigation will be another step ... towards putting the entire option issue behind us," Marc Hermelin, chairman of KV Pharmaceutical said in a statement.

Fees and costs awarded by the court are expected to be covered by insurance.
In October 2007, an independent investigation into KV's historical stock option practices and related accounting concluded that certain compensation expenses resulting from historical stock option granting practices between 1996 and 2006 were not recorded in accordance with U.S. Generally Accepted Accounting Principles (GAAP).

The company said it will restate its financial statements for the fiscal years 1996 to 2006 to record additional non-cash stock based compensation expense in the amount of approximately $12 million, net of tax.

St. Louis-based KV Pharmaceutical (NYSE: KVa, KVb) develops and markets pharmaceutical products.

Source : www.bizjournals.com

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