K2 Inc. and the members of K2’s board of directors (including two of whom who are executive officers of K2) had been named as defendants in a putative shareholder class action lawsuit concerning the sale of K2 pursuant to the merger agreement executed on April 24, 2007 between K2, on the one hand, and Jarden Corporation and a wholly-owned subsidiary of Jarden Corporation, on the other hand. The lawsuit was filed in California Superior Court for the County of San Diego.

The lawsuit alleges, among other things, that K2’s directors breached their fiduciary duties in approving the proposed merger and that the consideration payable to K2’s shareholders in the merger is unfair and inadequate. The plaintiff is asking, among other things, that the transaction contemplated in the merger agreement be enjoined or, if the merger is completed, that it be rescinded. K2 believes the lawsuit is without merit and intends to respond accordingly.