<p style= text-align: justify; >On August 21st, 2008, King Pharmaceuticals Inc. (NYSE:KG) entered into a settlement with shareholders to settle a shareholder derivative lawsuit, that was pending in Chancery Court for Sullivan County at Bristol, Tennessee and accused the company , among other things, of breaching its fiduciary duty by certain former officers and certain current and former directors by underpaying commitments to Medicaid.</p> <p style= text-align: justify; > </p>
<p style= text-align: justify; >King Pharmaceuticals Inc. revealed the settlement in a U.S. Securities and Exchange Commission filing on Wednesday, August 27th, 2008. Under the settlement King Pharmaceuticals Inc agreed to make changes to its corporate governance, including changes to its internal auditing procedures that would create separate positions for both the chairman and CEO, new accounting policies, and duties for various committees on the board of directors, and to pay $13.5 million plus escrow account interest for counsel for the plaintiffs as full and complete compensation for all their services in the action. According to the SEC filing this amount will be paid on the Company’s behalf by its insurance carriers. The settlement is subject to court approval.</p>
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<p style= text-align: justify; >According to a press release dated from August 7th, 2006, King Pharmaceuticals Inc. had already paid $38.25 million in the class-action lawsuit settlement.</p>