8-KOther Events

Monster Beverage Corp 8-K Report, Corporate Update (Feb 27, 2008)

Filed February 27, 2008For Securities:MNST

Summary

Hansen Natural Corporation (now Monster Beverage Corp.) announced on February 25, 2008, that it has entered into a Stipulation and Agreement of Settlement to resolve two shareholder derivative lawsuits. These lawsuits alleged breaches of fiduciary duty, corporate asset waste, and violations of statutes, primarily concerning the improper dating of stock option grants. The company maintains these allegations were denied by the defendants. The settlement requires Hansen Natural to continue implementing previously adopted changes to its stock option granting procedures and to adopt further corporate governance reforms for a minimum of two years. Importantly, all attorneys' fees associated with this settlement, amounting to $437,500, will be covered by the company's insurance carrier. This resolution aims to provide a full release of all claims related to the stock option backdating allegations on behalf of the company and its shareholders, subject to court approval.

Key Highlights

  • 1Hansen Natural Corporation has reached a settlement agreement to resolve two shareholder derivative lawsuits concerning stock option granting practices.
  • 2The lawsuits alleged improper dating of stock options, breaches of fiduciary duty, and waste of corporate assets.
  • 3Defendants in the lawsuits deny all allegations, including any claims of manipulation or illegal backdating of stock options.
  • 4As part of the settlement, the company will maintain and adopt specific corporate governance reforms related to stock option procedures for at least two years.
  • 5The settlement requires court approval following a shareholder hearing.
  • 6Attorneys' fees for the plaintiffs' counsel will be $437,500 and will be paid entirely by the company's insurance carrier.
  • 7Upon court approval, the settlement will provide a full release of claims against the company and its directors and officers related to the stock option allegations.

Frequently Asked Questions

This 8-K filing announces that Hansen Natural Corporation (now Monster Beverage Corp.) has reached a settlement agreement to resolve two shareholder derivative lawsuits related to stock option grants.

The lawsuits alleged that certain company stock option grants were improperly dated, leading to claims of breached fiduciary duties, wasted corporate assets, and violations of federal and California statutes.

The company will continue its existing reforms in stock option granting procedures and adopt additional corporate governance changes for at least two years. The company and its officers deny any wrongdoing.

The company's insurance carrier will pay the attorneys' fees for the plaintiffs' counsel, which are set at $437,500. The company itself is not directly paying these fees from its own funds.

No, the defendants expressly deny each and every claim and allegation made against them, including any allegations of manipulation or illegal backdating of stock options. The settlement is presented as a way to avoid further litigation.