Ending a five-year dispute, PSB Bancorp Inc. in Philadelphia has agreed to pay $9.65 million to settle a number of shareholder lawsuits over stock options.
The $566 million-asset parent of First Penn Bank said Tuesday that it would take an after-tax charge of $6.37 million this quarter, after paying six shareholders for terminating their suits, which claimed PSB had voided their stock options unlawfully.
In 2001, PSB unilaterally canceled more than 1.3 million options issued for its October 1999 acquisition of First Philadelphia Bancorp. The option holders were all former First Philadelphia shareholders.
In March 2002 six of them, who controlled 895,240 of the disputed options, sued to have them reinstated. The court ruled in their favor in 2004, but a year later the Appeals Court dismissed the case.
The settlement announced Tuesday ends new lawsuits that the six filed in reply. Still pending is a suit another shareholder filed in 2004 to reinstate options for 171,400 shares.
PSB has 5.4 million shares outstanding.
