Tyson Foods 2003 Annual Report Download - page 62

of all persons who purchased IBP common stock during
the period from February 7, 2000, through January 25,
2001, and approving proposed notice to the Settlement
Class members. The court also set December 8, 2003, as
the date for a hearing as to whether the settlement should
receive final court approval. The Company does not antic-
ipate that effectuation of the tentative settlement will
have any material impact on its financial condition, espe-
cially in view of IBP’s insurance coverage for the matter.
Between June 22 and July 20, 2001, various plaintiffs
commenced actions (the Delaware Federal Actions)
against the Company, Don Tyson, John Tyson and Les
Baledge in the U.S. District Court for the District of
Delaware, seeking monetary damages on behalf of a
purported class of those who sold IBP stock or traded in
certain IBP options from March 29, 2001, when the
Company announced its intention to terminate the
Merger Agreement with IBP, through June 15, 2001,
when the Delaware Court rendered its Post-Trial Opinion
in the Consolidated Action. The actions, entitled Meyer v.
Tyson Foods, Inc., et al., C.A. No. 01-425 SLR; Banyan
Equity Mgt. v. Tyson Foods, Inc., et al., C.A. No. 01-426
GMS; Steiner v. Tyson Foods, Inc., et al., C.A. No. 01-462
GMS; Aetos Corp., et al. v. Tyson, et al., C.A. No. 01-463
GMS; Meyers, et al. v. Tyson Foods, Inc., et al., C.A. No.
01-480; Binsky v. Tyson Foods, Inc., et al., C.A. No. 01-495;
Management Risk Trading LP v. Tyson Foods, Inc., et al.,
C.A. No. 01-496; and Stark Investments, L.P., et al. v.
Tyson et al., C.A. No. 01-565 alleged that the defendants
violated federal securities laws by making, or causing to
be made, certain false and misleading statements in con-
nection with the Company’s attempted termination of the
Merger Agreement. Plaintiffs are seeking an unspecified
amount of compensatory damages, interest, attorney
fees and costs. The various actions were subsequently
consolidated under the caption In re Tyson Foods, Inc.
Securities Litigation. On December 4, 2001, the plaintiffs
in the consolidated action filed a Consolidated Class
60 Tyson Foods, Inc.
notes to consolidated financial statements
TYSON FOODS, INC. 2003 ANNUAL REPORT
Securities Matters Between January and March 2001, a
number of lawsuits were filed by certain stockholders in
the U.S. District Court for the District of South Dakota and
one suit filed in the U.S. District Court for the Southern
District of New York seeking to certify a class of all per-
sons who purchased IBP stock between February 7, 2000,
and January 25, 2001. The plaintiff in the New York action
voluntarily dismissed and refiled its complaint in South
Dakota, where the suits were consolidated under the
name In re IBP, inc. Securities Litigation and a single, con-
solidated amended complaint was filed. The complaint,
seeking unspecified compensatory damages, alleges
that IBP and certain members of management violated
Sections 10(b) and 20(a) of the Securities Exchange Act of
1934, and Rule 10b-5 thereunder, and claims IBP issued
materially false statements about IBP’s financial results
in order to inflate its stock price. IBP filed a Motion to
Dismiss on December 21, 2001, which was then fully
briefed. While the motion was awaiting decision, IBP and
the plaintiffs reached a tentative settlement of all claims,
as reflected by a Memorandum of Understanding (“MOU”)
that was executed on March 19, 2003. The MOU set forth
the essential terms of a settlement to be reflected in final
settlement documents to be prepared and submitted to
the court for approval, including, among other terms and
conditions, the dismissal with prejudice of all claims
against defendants, releases by class members, and a
payment by IBP of a total amount of $8 million. In July
2003, a finalized Stipulation of Settlement consistent with
the MOU was executed and submitted to the court for its
preliminary approval. The tentative settlement is subject
to various conditions, including among other things,
execution of definitive documentation and receiving pre-
liminary and final court approvals. In light of this tentative
settlement, IBP was permitted by the court to withdraw its
pending motion to dismiss, without prejudice. On July 31,
2003, the court issued an order preliminarily approving
the settlement, preliminarily certifying a Settlement Class