Summary
NVIDIA Corporation (NVDA) filed an 8-K on November 10, 2008, detailing the definitive settlement agreements for stockholder derivative lawsuits concerning historical stock option practices. These agreements, filed in Delaware Chancery Court and the U.S. District Court for the Northern District of California, are subject to court approval. Crucially, the settlement includes no admission of wrongdoing or fault by NVIDIA, its board, or executive officers. The settlement terms involve significant corporate governance enhancements to be continued and implemented by the board. It also acknowledges prior amendments to stock options, including re-pricings and exercise period limitations. CEO Jen-Hsun Huang has agreed to amend additional options, increasing their aggregate exercise price by $3.5 million or canceling options with equivalent intrinsic value. Furthermore, NVIDIA will receive an $8.0 million cash payment from its insurance carrier.
Key Highlights
- 1Definitive settlement agreements for stockholder derivative lawsuits regarding historical stock option practices have been filed.
- 2Settlement agreements are subject to approval by the Delaware Chancery Court and the U.S. District Court, Northern District of California.
- 3The settlement includes no admission of wrongdoing or fault by NVIDIA, its board of directors, or executive officers.
- 4Corporate governance changes will be continued and implemented by the board of directors.
- 5CEO Jen-Hsun Huang will amend certain options, increasing their aggregate exercise price by $3.5 million or canceling options with equivalent intrinsic value.
- 6NVIDIA will receive an $8.0 million cash payment from its insurance carrier.
- 7NVIDIA agreed not to object to attorneys' fees for plaintiffs' counsel, capped at $7.25 million, subject to court approval.