Under Armour says it has received preliminary approval from the Circuit Court for Baltimore City to settle a lawsuit brought by holders of the company's A shares to oppose a plan to create a new class of C shares that will reinforce Kevin Plank's personal grip on the company. This is because the new shares hold no voting rights, while Class A shares have one-tenth of the voting power of the Class B shares held by Plank. Through this system, Plank currently owns 16.6 percent of UA's outstanding shares and 66.6 percent of the voting rights. In June, the company announced plans for a two-for-one stock split, involving the new C class of stock without voting rights. Owners of each A share are to be given one new C class share, effectively diluting the voting power of most shareholders. The company indicated in August that it would delay the plans until the lawsuit was resolved, although it was approved by shareholders at a special meeting on Aug. 26. The lawsuit alleges that UA's board breached its fiduciary duty to shareholders by approving the new class of stock. Under the terms of the proposed settlement, an extra $59 million is to be paid to holders of class C stock, mostly in the form of additional Class C shares.The settlement also calls for Plank's non-competition agreement to be expanded, to reinforce the founder and chief executive's obligations in terms of time spent on the performance of his duties.

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