In April 2003, the Company received a court order approving the proposed settlement with plaintiffs in class action shareholder lawsuits filed following its initial public offering. Pursuant to the settlement agreement, the Company paid to the class members (inclusive of their attorney fees and costs) $250,000 and issued them 500,000 six-year warrants to purchase its common stock at an exercise price of $10.00 per share. The Company also reached an agreement with the primary carrier of its directors' and officers' insurance policy such that the carrier paid to the Company $1.6 million in settlement for the shareholders' class action lawsuit.
The original action charged DOV and certain of its officers and directors, and the lead underwriters of DOV's IPO, CIBC World Markets and Lehman Brothers, with violations of Sections 11 and 12 of the Securities Act of 1933. DOV issued five million shares in its IPO on April 25, 2002 at $13 a share, but failed to timely inform the Class of a revision of its 1999 financial results to properly include a Joint Venture in Bermuda with Elan Corporation. The class of purchasers of the shares in the IPO or in the aftermarket were not promptly made aware of the restatement, and as a result, suffered losses on the first day of trading or thereafter, when the shares of DOV fell from $13 to $8.70 per share.