A Delaware court yesterday (8 April) approved the settlement in a shareholder lawsuit against current and former directors of Tyson Foods .
The suit alleged that Tyson officials were granted stock options timed in advance of favourable news that was likely to boost the price of Tyson shares.
The lawsuit also alleged that Tyson failed to adequately disclose transactions under which company officials received millions of dollars from the company for farm and aircraft leases, livestock operations and other services.
“Under the settlement, all claims against all defendants will be dismissed. In exchange, Don Tyson and the Tyson Limited Partnership, the company’s largest shareholder, have agreed to pay the company US$4.5m,” a Tyson spokesperson told just-food.
According to the terms of the agreement, Tyson will implement or continue certain governance measures.
“For example, the company has formed a newly-created Nominating Committee composed entirely of independent directors. Its first task in 2008 is to identify candidates to nominate to the board as a new independent director,” the spokesperson added.
Certain limitations have also been placed on new transactions between the company and the Tyson Limited Partnership, Don Tyson, members of his family, or executive officers.
“The time, expense and distraction of this litigation were proving to be a drain on the company, its officers and directors, and would have continued to be. I thought it made sense for myself, the company, and all concerned, to settle and get the litigation behind us,” Don Tyson said.