EXHIBIT 99.1
[LOGO HERE]
DHB
INDUSTRIES INC.
NEWS FROM DHB INDUSTRIES INC.
2102 SW 2nd Street Pompano Beach, FL 33069
Tel: 954-630-0900 www.dhbindustries.com
COMPANY CONTACT: Investor Relations
954-630-0900
IR@DHBT.com
FOR IMMEDIATE RELEASE
DHB INDUSTRIES ENTERS INTO MEMORANDUM OF UNDERSTANDING TO
SETTLE CLASS ACTION AND DERIVATIVE LAWSUITS
DAVID BROOKS TO RESIGN FROM THE DHB BOARD AND AS CEO
COMPANY TO ADOPT NEW CORPORATE GOVERNANCE POLICIES TO ACHIEVE `BEST PRACTICES'
POMPANO BEACH, FLORIDA, JULY 13, 2006 - DHB Industries, Inc. (OTC Pink Sheets:
DHBT.PK), a leader in the field of protective body armor, announced today that
it has signed a Memorandum of Understanding ("MOU") to settle the class action
securities lawsuit against the Company and certain of its current and former
directors and officers and others, as well as the shareholder derivative suit
brought by shareholder Alvin Viray, both of which actions have been pending in
the United States District Court for the Eastern District of New York.
The class action will be settled for $34.9 million in cash, plus 3,184,713
shares of Company common stock. The derivative action will be settled in
consideration of DHB adopting certain corporate governance provisions and paying
$300,000, as attorneys' fees and expenses to lead counsel in the derivative
action. The settlement amounts are required to be paid into escrow within ten
business days of the MOU. All costs of the settlement and all attorneys' fees
and expenses of plaintiffs' class counsel will be paid from the $34.9 million.
Of the cash payments to be made, it is expected that approximately $12.9 million
will be paid by the Company's directors' and officers' liability insurers and
the balance by the Company. It is expected that David Brooks, the Company's
Chief Executive Officer who was recently placed on administrative leave, will
help fund the payments to be made by the Company by exercising 3 million
warrants held by him at an elevated exercise price. The Company also has the
option to put to Mr. Brooks, approximately 3 million shares of common stock to
finance the remaining portion of the cash settlement.
Included in the terms of the settlement are provisions calling for the release
of the Company and all of the Company's present and former officers and
directors who were named in the class and derivative actions, from any and all
claims by the plaintiffs. Certain directors will be replaced within one year of
the settlement. The Company has not admitted and will not admit to any
wrongdoing in the cases. The actions are being settled because of expense and
uncertainty.
The Company also announced today, and as part of the agreement, that it will
adopt new corporate governance standards in an effort to improve controls and
enhance business practices. The Board is in the process of administering a
corporate compliance program which encompasses long-term strategic planning and
management oversight, internal controls on financial and performance reporting
and review and other governance matters.
-MORE-
Commenting on today's announcement, General (Ret.) Larry Ellis, President, CAO
and acting CEO, stated, "We are working to achieve `best practices' in
everything we do and we remain committed to implementing changes that will
improve our operating, financial, and competitive, market position. This is yet
another step we are taking and I remain confident in our ability as a team, to
emerge as a stronger organization."
The proposed settlement is subject to, among other things, review and approval
of the Court. There can be no assurance that the Court will approve the proposed
settlement.
ABOUT DHB INDUSTRIES, INC.
DHB Industries, Inc.'s Armor Group is in the protective body armor industry. Its
highly recognized subsidiaries, Point Blank Body Armor Inc.
(www.pointblankarmor.com) and Protective Apparel Corporation of America (PACA)
(www.pacabodyarmor.com), are focused on the design, manufacture, and
distribution of bullet resistant and protective body armor for military, law
enforcement, and corrections in the U.S. and worldwide. DHB Sports Group
produces and markets a comprehensive line of athletic supports and braces which
are merchandised through national superstore chains as well as through private
label distributors.
The Company maintains facilities in Deerfield Beach, FL, Oakland Park, FL,
Pompano Beach, FL, Jacksboro, TN and Washington, DC. To learn more about DHB
Industries, Inc., visit the website at (www.dhbindustries.com).
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: THE STATEMENTS WHICH ARE NOT HISTORICAL FACTS CONTAINED IN THIS PRESS
RELEASE ARE FORWARD-LOOKING STATEMENTS, WHICH ARE BASED LARGELY ON THE COMPANY'S
EXPECTATIONS AND ARE SUBJECT TO VARIOUS BUSINESS RISKS AND UNCERTAINTIES,
CERTAIN OF WHICH ARE BEYOND THE COMPANY'S CONTROL. WORDS SUCH AS "EXPECTS,"
"ANTICIPATES," "TARGETS," "GOALS," "PROJECTS," "INTENDS," "PLANS," "BELIEVES,"
"SEEKS," "ESTIMATES," VARIATIONS OF SUCH WORDS, AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS ARE ONLY PREDICTIONS THAT SPEAK AS OF THE DATE HEREOF AND ARE SUBJECT
TO RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT.
THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY AND ADVERSELY FROM THOSE
EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, (1) EXPECTATIONS
AS TO THE TIMING OF THE FILING OF THE REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2005 AND THE QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 2006, (2) ANY LISTING REQUIREMENTS WHICH MAY BE
PRESCRIBED OR ANY DETERMINATION WHICH MAY BE MADE BY THE AMERICAN STOCK
EXCHANGE, (3) UNCERTAINTY OF FUTURE FINANCIAL RESULTS, (4) ADDITIONAL FINANCING
REQUIREMENTS, (5) DEVELOPMENT OF NEW PRODUCTS, (6) GOVERNMENT APPROVAL
PROCESSES, INCLUDING APPROVAL OF THE SETTLEMENT BY THE COURT, (7) THE IMPACT OF
COMPETITIVE PRODUCTS OR PRICING, (8) TECHNOLOGICAL CHANGES, (9) THE EFFECT OF
POLITICAL AND ECONOMIC CONDITIONS, (10) THE OUTCOME AND IMPACT OF LITIGATION TO
WHICH THE COMPANY IS A PARTY AND THE SECURITIES AND EXCHANGE COMMISSION AND
OTHER INVESTIGATIONS REGARDING THE COMPANY, AND (11) OTHER UNCERTAINTIES
DETAILED IN THE COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
YOU ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS THAT SPEAK ONLY AS OF THE DATE HEREOF. THE COMPANY UNDERTAKES NO
OBLIGATION TO REVISE OR UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS TO
REFLECT ANY CHANGE IN THE EXPECTATIONS OF OUR MANAGEMENT WITH REGARD THERETO OR
ANY CHANGE IN EVENTS, CONDITIONS, OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENTS
ARE BASED.
- #### -