UNITED STATES DISTRICT COURT

DISTRICT OF SOUTH DAKOTA

SL- 0 7 2OOi

CLERK

SOUTHERN DIVISION

T FM IN VE *1 E , MAl J. )DEARMAN, WPG MERGER ARBITRAGE )FUND, L.P. and WPG MERGER ARBITRAGE )OVERSEAS FUND, LTD., On Behalf of )Themselves and All Others Similarly Situated, )

Plaintiffs, )

vs. )

IBP, INC ., FOODBRANDS AMERICA, INC., )DIVERSIFIED FOOD GROUP, L .L.C., )ROBERT L . PETERSON, LARRY SHIPLEY )RICHARD L. BOND, R. RANDOLPH )DEVENING, WILLIAM BRADY, ANDREW )J. ZAHN and PHILIP SEXAUER, )

Defendants. )

In re IBP , INC. SECURITIES LITIGATION )

This Document Relates To : )

ALL ACTIONS. )

Civil Action No . 01-403 1

CLASS ACTION

CONSOLIDATED AMENDED CLASSACTION COMPLAINT FOR VIOLATIONOF THE FEDERAL SECURITIES LAW S

DEMAND FOR JURY TRIAL

INTRODUCTION

1 . This is a securities fraud class action on behalf of a ll persons who purchased the

common stock of IBP , Inc. ("IBP " or the "Company") between February 7, 2000 and January 2S,

2001, inclusive (the "Class Period" ) against IBP and i ts wholly-owned subsidiaries Foodbrands

America, Inc . ("Foodbrands") and Diversified Food Group LLC ("DFG") (collectively, the

"Company") as well as the Company 's senior insiders for intentionally preparing and disseminating

false and misleading earnings releases and Securi ties and Exchange Commission (" SEC") filings

relating to the Company 's 1999 and interim 2000 financial results, which earnings , releases and SEC

filings contained false financial statements that defendants have now admitted were in the aggregate

overstated by over $100 mil lion due to the failure of the defendants to properly account for IBP's

investment in DFG, as we ll as for DFG's invento ry, receivables and pre-paid assets .

SUMMARY OF THE ACTIO N

2. This action arises out of the manipulation of accounting records and financial reports

at DFG, a specialty food manufacturer . DFG is a wholly-owned subsidiary of the Company thatwas

acquired by the Company in October 1998 . Beginning in October of 1998 and continuing through

September 2000, DFG CEO Andrew Zahn ("Zahn") and CFO Philip Sexauer ("Sexauer") engaged in

a scheme to manipulate the books and records of DFG by falsifying DFG's pre-paid expense

accounts, accounts receivable and manipulating DFG's inventory accounting records in order to

artificially inflate the reported profitability of DFG's operations in an effort by defendants Zahn and

Sexauer to obtain almost S40 million of performance related compensation.

3. The accounting scheme perpetrated by defendants Zahn and Sexauer was discovered

by Foodbrands in Novtmbcr 1999 in connection with an internal audit of DFO by Foodbrands'

internal audit personnel operating under the direction of Foodbrands' CFO William Brady ("Brady")

and Foodbrands' Director of Internal Audit Dan Hughes ("Hughes") .' Thereafter, beginning in

I Attached hereto as Exhibit A is a complaint filed by the Company against defendant Zahn 3weeks after plaintiffs' counsel advised defendant Bond's and Peterson's Delaware counsel thatplaintiffs in this action would be asserting claims against defendant Zahn in their consolidatedcomplaint .

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February 2000, Foodbrands CEO Randolph Devening ("Devening") and Foodbrands CFO Brady

actively furthered the wrongful scheme alleged herein (together with defendants Zahn and Sexauer

who were falsifying DFG's books and records) by intentionally participating in the preparation and

dissemination of financial data, including DFG's and Foodbrands' FY99, 1Q00, 2Q00 and 3Q00

income statements and balance sheets, which these defendants knew were being incorporated into the

Company's news releases and SEC filings throughout 2000 and into 2001 . Foodbrands and its senior

executives participated in the dissemination of these false financial statements despite the fact that

Foodbrands was by December 1999 aware of that : (i) DFG had refused to institute inventory and

receivables systems as instructed to by Foodbrands ; (ii) Foodbrands disregarded what the Company's

CFO and internal auditors believed to be significant amounts of bad debt and accounting errors ; (iii)

Foodbrands' internal auditors had expressed reservations about the accuracy of DFG's financial

statements ; and (iv) Zahn was not conducting physical inventory counts as directed by Foodbrands .

4. Between July and October 2000, Foodbrands commenced additional internal audits of

DFG's operations under the direction of Hughes, which audit further confirmed the depth of the fraud

at DFG. By October 2000, the Company's senior executives were aware of the accounting fraud at

DFG, had called in the Company's outside accountants PricewaterhouseCoopers to assist in the

audit/investigation and had terminated DFG CEO Zahn for "cooking of the books" at DFG .

5 . By November 2000, the internal audits conducted by Foodbrands' internal accountin g

personnel overseen by Foodbrands CEO Devening and CFO Brady with the assistance of

PricewaterhouseCoopers confirmed that DFG's operation was so severely impaired that the

Company would have to write-off nearly its entire investment in DFG, leading to a $60 million

charge and that IBP would have to restate its FY99 and FY00 earnings by an amount 300% greater

than the $9 million figure disclosed by IBP on November 7, 2000 .2 Defendant Peterson has testified

that he was extremely upset and extremely embarrassed by the fact that the Company had "a thief i n

2 Defendants Peterson, Bond and Shipley's knowledge of this accounting fraud in November2000 has been confirmed by the testimony of senior Tyson executives and senior IBP executives,including defendants named herein, in a trial conducted by the Delaware Chancery Court in May2001 (Del . Ch. Case No. 18373) .

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the henhouse" and that by November 2000, Peterson had been advised by the Company's accounting

personnel that the Company would have to restate at least $30 million of its previously reported

earnings for FY 99 and 2000 . In fact, it was defendant Peterson's belief by November 2000, that the

situation at DFG was so grave that Peterson considered DFG to be a "big, black hole . "

6. By December 2000, defendants Shipley, Bond and Peterson were already aware tha t

in order to comply with generally accepted accounting principles ("GAAP"), the Company's FY99

and interim 2000 financial statements would have to be restated by an amount at least 300% greater

than the amount previously restated by the Company in November 2000, and that the Company

would have to take an additional charge against earnings to reflect the fact that because DFG was not

"economically viable," the intangible assets associated with DFG were materially overstated .

Although defendants disclosed certain of these facts to Tyson in connection with the execution of the

Merger Agreement and the due diligence process, defendants continued to conceal this information

from the investing public in the hopes that they could quickly consummate the Tyson transaction and

avoid ever having to publicly disclose the magnitude of the fraud at DFG . On December 8, 2000, at

a 3-4 hour meeting at the Hilton Hotel in Sioux City, Iowa defendants Shipley, Bond, Peterson and

IBP general counsel Sheila Hagen admitted to Tyson executives John Tyson, Les Baledge and Read

Hudson that the amount that the Company would have to restate in connection with the accounting

fraud at DFG would beat least $30 million and might exceed $35 million . On December 11, 2000,

as part of the internal investigation of DFG, defendant Brady disseminated a memorandum to senior

Company insiders, including defendant Devening, which expressly concluded that "the magnitude of

th[ej loss is staggering given the size of this business ." Thus, "it is clear that the business, as it is

currently configured, is not economically viable ." Similarly, defendant Bond testified that he "had

never seen anything like this," characterizing the problem at DFG as a "disaster ." Notwithstanding

their awareness of the magnitude of the fraud at DFG, defendants Shipley, Bond, Peterson and

Devening continued to cause the Company to file false SEC filings, throughout December2000 and

continuing into early January 2001, concealing the magnitude of the fraud at DFG from the investing

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public in the hope that they could close the sale of IBP to Tyson and avoid ever having to disclose

the truth about DFG _

7 . On December 29, 2000, the SEC sent a letter to the Company questioning its

accounting practices . The same day, defendants Peterson and Bond conferred with Tyson executives

and immediately thereafter participated in a meeting in Oklahoma City at which several SEC

enforcement attorneys were present . The Company also had its outside accountants

PricewaterhouseCoopers in attendance, including Mr . Binkly, the partner in charge of the Company's

account. On January 10, 2001, 113P's General Counsel informed Tyson that the SEC had sent a

comment letter to IBP on December 29, 2000 questioning the Company about its accounting

practices. Although defendants admitted certain of their accounting improprieties to Tyson

executives in connection with the due diligence process, it was not until January 24, 2001 (when

Tyson issued a release alluding to the Company's accounting fraud), that defendants finally disclosed

to the public that the S9 million write-off taken by MP in November 2000 was simply a drop in the

bucket . In fact, each of the defendants falsified and/or materially participated in the issuance of the

Company's false financial statements, which statements overstated IBP's FY99 and 2000 balance

sheet and income statement by more than $100 million. In fact, the fraud at DFG so deeply

pervaded Foodbrands' operation since 1999 that its own executives have testified that DFG's

operations as configured were not viable and required a charge of more than S60 million .

8. Begin ing in January 2001, as defendants were finally forced by SEC examiners an d

Tyson's public releases to begin to reveal the truth about the fraud at DFG and its adverse impact on

the Company's income statement and balance sheet, the price of IBP stock plummeted, falling from

almost $29 per share on January 24, 2001 to a low of S15 per share on March 30, 2001, as Tyson

announced that it was terminating the Tyson/IBP Merger because of the impact of the accounting

fraud on the Company's operations and financial reports .

9 . Following the March 29, 2001 announcement that Tyson was terminating the Merger,

IBP commenced a lawsuit in Delaware Chancery Court seeking specific performance of the Merger

Agreement, claiming that because defendants Peterson, Bond and Shipley had adequately informed

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Tyson of defendants' accounting improprieties prior to executing the Merger Agreement on

January 1, 2001, Tyson lacked a good faith basis to terminate the Merger Agreement . On June 15,

2001, Delaware Vice-Chancellor Leo Strine issued an opinion ordering specific performance of the

Merger Agreement, finding, among other things, that Tyson lacked the ability to terminate the

agreement in light of the fact that : (i) Tyson had been apprised in connection with the execution of

the Merger Agreement that the accounting fraud at DFG required a $30+ million restatement of the

Company's previously reported financials ; and (ii) DFG would not generate even a single dollar in

profits in FY 2001 . However, the ultimate consummation of the Tyson Merger in August 2001, has

done little to remedy the millions of dollars of damages suffered by IBP shareholders who purchased

IBP shares at prices as high as $28 .81 per share based upon defendants' false and misleading

statements .

JURISDICTION AND VENUE

10. This action arises under §§l0(b) and 20(a) of the Securities Exchange Act of 1934

(the "Exchange Act"), 15 U .S.C . §§78j(b) and 78t(a), and Rule lOb-5 promulgated thereunderby the

SEC, 17 C .F .R. §240 .1 Ob-5. This Court has jurisdiction of this litigation under §27 of the Exchange

Act, 15 U.S.C. §78aa, and 28 U.S.C. §1331 .

11 . Venue is proper in this District pursuant to §27 of the Exchange Act and 28 U .S .C .

§1391(b) . IBP is and at all relevant times was headquartered in Dakota Dunes, South Dakota, certain

of the defendants, including defendants Bond and Peterson, reside in this District . In addition, many

of the acts and transactions, including defendants' preparation and dissemination of the false

statements, complained of herein occurred in this District .

12 . In connection with the conduct complained of herein, defendants directly or indirectly

used the means and instrumentalities of interstate commerce, including the mail and interstate

telephone communications and the facilities of a national securities exchange .

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PARTIE S

13 . (a) Plaintiff, Mark J . Dearman, purchased shares ofIBP common stock during th e

Class Period as set forth in the Certification attached to his initial complaint and suffered damages a s

a result of defendants' wrongful acts as alleged herein .

(b) Plaintiff, TFM Investment Group purchased shares of IBP common stoc k

during the Class Period as set forth in the Certification attached to plaintiffs lead plaintiff motion ,

and suffered damages as a result of defendants' wrongful acts as alleged herein .

(c) Plaintiff, WPG Merger Arbitrage Fund, L .P., purchased shares of IB P

common stock during the Class Period as set forth in the Certification attached to plaintiffs lea d

plaintiff motion and suffered damages as a result of defendants' wrongful acts as alleged herein.

(d) Plaintiff, WPG Merger Arbitrage Overseas Fund, Ltd ., purchased shares of

IBP common stock during the Class Period as set forth in the Certification attached to plaintiffs lea d

plaintiff motion and suffered damages as a result of defendants' wrongful acts as alleged herein .

14 . Defendant IBP operates beef and pork carcass production facilities and, together with

its subsidiaries, produces a variety of food products . As of March 27, 2001, the Company had more

than 106 million shares of common stock outstanding, which at all times relevant hereto traded on an

active and efficient market, namely, the New York Stock Exchange. One of IBP's primary

subsidiaries is Foodbrands, a wholly owned subsidiary of W . Since its acquisition of Foodbrands

in 1997, IBP has operated its high margin, value added operations under the Foodbrands subsidiary .

15 . Defendant Foodbrands ("Foodbrands") is a wholly-owned subsidiary of IBP .

Foodbrands is one of IBP's primary subsidiaries and is engaged in producing value added and hig h

margin food products .

16. Defendant DFG is a wholly owned subsidiary of IBP . DFG is a producer of hors

d'oeuvres, prepared meals and desserts . IBP purchased DFG in October 1998 in a transaction that

cost IBP approximately S70 million . Following the October 1998 acquisition, the assets acquired i n

the 1998 asset purchase were consolidated under the Foodbrands umbrella .

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17 . (a) Defendant Robert L . Peterson ("Peterson") was at all times relevant hereto,

Chairman of the Board and Chief Executive Officer of IBP . Peterson joined IBP in 1961 . All

strategic decisions made in connection with the Company's acquisitions prior to the Class Period as

well as those related to Foodbrands' accounting practices and the sale of IBP were made by

defendants Peterson, Bond and/or Devening . Peterson signed the 1999 Form 10-K and the Q l, Q2

and Q3 00 Form 10-Qs, which the Company has now admitted were false . Because of his position,

Peterson knew the adverse, material non-public information about DFG's operations and IBP's

prospects via conversations with defendants Bond, Shipley and Devening and access to internal

corporate documents (including the Company's operations compared thereto), conversations and

connections with other corporate officers and employees, attendance at management and Board of

Directors' meetings and/or committees thereof and via access to internal corporate documents

(including the Company's operating plans, budgets and forecasts and reports of actual operations

compared thereto), conversations and connections with other corporate officers and employees,

attendance at management and Board of Directors' meetings and/or committees thereof and via

reports and other information provided to him in connection therewith . For example, defendant

Peterson has testified under oath that in November 2000 he was personally made aware of the fact

that IBP's financial statements, as filed with the SEC and disseminated to the public, were false and

misleading . During the Class Period, Peterson participated in the issuance of the false and

misleading statements, including the preparation of the releases and filings detailed in 111135-3 8, 40,

45-46 .

(b) Defendant Richard Bond ("Bond") functioned as President, Chief Operating Officer

and a director of IBP during the Class Period. Bond joined IBP approximately 20 years ago and has

been a senior officer of IBP since 1989 . Bond signed in the 1999 Form 10-K, which the Company

has now admitted was materially false and misleading . Because of his position as COO and

oversight over the accounting policies and practices of IBP, including the internal audits conducted

by IBP and Foodbrands' accounting employees . Bond was apprised (by at least October 2000) of the

fraud occurring at DFG and knew that DFG's financial results for 1999 and 2000 were false . He also

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was aware of the problems at DFG and its adverse impact on the Company's present and future

business prospects via his access to a review of internal Company documents (including the

Company's operating plans, budgets and forecasts and reports of actual operations compared

thereto), conversations and connections with other corporate officers and employees, including

defendants Devening, Brady and Zahn, attendance at management and/or Board of Directors'

meetings and committees thereof and via reports and other information provided to him concerning

Foodbrands' operations . During the Class Period, Bond participated in the issuance of false and

misleading statements, which participation included the preparation of the releases detailed in 111135-

38,40,45-46. Bond has admitted in testimony that during December 2000, he was aware that the

adjustments to IBP's prior financial statements would be 300% higher than the amount represented to

the public in November 2000 and that IBP had not disclosed this to the market.

(c) Defendant Larry Shipley ("Shipley") was, at all times relevant hereto, Chief

Financial Officer of IBP . Shipley signed the 1999 Form 10-K and the Q 1, Q2 and Q3 00 Form 10-

Qs, which the Company has now admitted were false and misleading . Shipley knew (by at least

October 2000) the material, adverse, non-public information about DFG's accounting practices and

1BP's financial statements, as well as its present and future business prospects via access to internal

corporate documents (including the Company's operating plans, budgets and forecasts and reports of

actual operations compared thereto), conversations and connections with other corporate officers and

employees, attendance at management meetings and via reports and other information provided to

him in connection therewith . During the Class Period, Shipley participated in the issuance of false

and/or misleading statements, including the preparation of false and/or misleading releases detailed

in ¶¶ 35-38, 40, 45-46 .

(d) Defendant R. Randolph Devening ("Devening") was, at all times relevant

hereto an executive officer of IBP and CEO of Foodbrands . Because of his position with IBP and

Foodbrands he knew since December 1999 or had available to him the material, adverse, non-public

information about DFG and the Company's financial statements as well as its present and future

business prospects via access to internal corporate documents (including the Company's operatin g

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plans, budgets and forecasts and reports of actual operations compared thereto), conversations and

connections with other corporate officers and employees, attendance at management meetings and

via reports and other information provided to him in connection therewith . Foodbrands' internal

audit department conveyed the fact that DFG's financial statements were inaccurate to Foodbrands'

top management which Devening and Brady did not pursue or correct . Devening was motivated to

participate in the manipulations alleged herein as his bonus was tied directly to Foodbrands reporting

operating earnings at specified targets . Devening received a $728,000 bonus for 1999 but only

$50,000 in 2000 once the problems with DFG were uncovered . During the Class Period, Devening

participated in the issuance of false and/or misleading statements, including the preparation of the

false and/or misleading releases detailed at 111126, 28-32, 35-38, 40, 45-46 . Devening, with Brady,

prepared, reviewed and provided Foodbrands' false financial statements, which he knew, or

recklessly disregarded, contained the false financial statements of DFG, to IBP to be incorporated in

IBP's publicly disseminated financial statements .

(e) Defendant William Brady ("Brady") was, at all times relevant hereto, Chief

Financial Officer of Foodbrands . Because of his position since December 1999, Brady knew or had

available to him the material, adverse, non-public information about IBP's financial statements, as

well as its present and future business prospects via access to internal corporate documents

(including the Company's operating plans, budgets and forecasts and reports of actual operations

compared thereto), conversations and connections with other corporate officers and employees,

attendance at management meetings and via reports and other information provided to him in

connection therewith . During the Class Period, the head of internal audit at Foodbrands, Dan

Hughes, reported to Brady concerns about DFG's accounting . These concerns included that DFG

had $5 million in uncollectible receivables and was not conducting physical inventories as called for

by Foodbrands . Brady chose not to follow up on these findings, and neither pursued the findings or

corrected any misstatement. During the Class Period, Brady participated in the issuance of false

and/or misleading statements, detailed at ¶¶ 26, 28-32, 35-38, 40, 45-46 herein .

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(f) Defendant Andy Zahn ("Zahn") was, at all times relevant hereto, President of

DFG and Senior Vice President of Foodbrands . Zahn had available to him the material, adverse,

non-public information about 1BP's business, as well as its finances and present and future business

prospects via access to internal corporate documents (including the Company's operating plans,

budgets and forecasts and reports of actual operations compared thereto), conversations and

connections with other corporate officers and employees, attendance at management meetings and

via reports and other information provided to him in connection therewith . Zalm was personally

involved in making the improper adjustments to inventory, himself canceling physical inventories,

which would have uncovered big manipulations . Zahn and Sexauer conveyed financial information

to IBP, which they knew was false and misleading and they knew was being incorporated in IBP's

publicly disseminated financial results . During the Class Period, Zahn participated in the issuance of

false and/or misleading statements, detailed at ¶¶ 26, 28-32, 35, 37, 40 .

(g) Defendant Philip Sexauer ("Sexauer") was, prior to termination of his

employment in 1 Q 00, Chief Financial Officer of DFG . Because of his position, Sexauer knew the

material, adverse, non-public information about IBP's financial statements and business prospects via

his preparation and review of internal corporate documents (including the Company's operating

plans, budgets and forecasts and reports of actual operations compared thereto), conversations and

connections with other corporate officers and employees, attendance at management meetings and

via reports and other information provided to him in connection therewith. Sexauer was personally

involved in the financial manipulations of DFG's results and was aware of and caused the improper

entries to inventory, receivables and prepaid expenses . Zahn and Sexauer conveyed financial

information to IBP, which they knew was false and misleading and they knew was being

incorporated in IBP's publicly disseminated financial results . During the Class Period, Sexauer

participated in the issuance of false and/or misleading statements, detailed at ¶¶ 26, 28-32, 35, 37,

40 herein .

18. The defendants identified in 1117(a)-(g) are referred to herein as the Individual

Defendants . By reason of their management positions, as well their ability to make publi c

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statements in the name of the Company, the Individual Defendants Bond, Peterson, Shipley and

Devening controlled the day-to-day affairs of the Company and participated in the preparation and/or

dissemination of the statements in this Complaint alleged to be false .

INVOLVEMENT OF INDIVIDUAL DEFENDANTS

The DFG Defendants

19. Zahn and Sexauer were responsible for causing the improper accounting entries to b e

made to DFG's books between October 199S and September 2000, including millions of dollars

worth of fictitious entries to inventory, causing reported inventory to be artificially inflated . During

1999 and continuing into 2000, Zahn and Sexauer also repeatedly cancelled physical inventories,

which would have exposed the inflated inventory figures they were reporting . Zahn and Sexauer

also caused DFG not to write-down or reserve for millions of dollars worth of uncolleciible accounts

receivable, specifically refusing to write-down receivables which accounting personnel told them

were not collectible, causing receivables and earnings to be inflated . In fact, these defendants made

improper entries to transfer receivables into other assets to conceal the large amount of receivables .

The Foodbrands Defendants

20. Devening and Brady, as CEO and CFO of Foodbrands, respectively, were responsible

for causing DFG's false financial information to be included in the Company's consolidated financial

statements as they intentionally disregarded accounting improprieties at DFG. Foodbrands' internal

audit department had expressed concerns about DFG's accounting procedures for some time and the

head of internal audit, Dan Hughes, conveyed these concerns to Foodbrands' senior executives,

including Brady. Despite knowing that DFG's computer system was not compatible with

Foodbrands' system, (which required even closer attention to the figures submitted by DFG),

Foodbrands chose to not pursue these concerns . Brady and Devening had every opportunity to

pursue the concerns as Foodbrands' management had monthly meetings with DFG management,

weekly conference calls and daily contact via email, faxes and telephone calls . At least as early as

November 1999, Foodbrands' staff identified numerous accounts receivable, which did not appear

collectible . Nonetheless, Foodbrands willfully agreed to ignore these improprieties and chose not to

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investigate these matters . In the course of the annual internal audit in November 1999, Foodbrands

learned that DFG had also capitalized millions of dollars of suspicious current period expenses as

Prepaid Expenses . However, Devening and Brady refused to verify that the expenses were written

off.

The IBP Defendants

21 . Peterson, Bond and Shipley were informed at the latest by mid-October 2000 that th e

accounting problems at DFG involved "irregularities" or intentional misstatements of DFG's

financial statements and exceeded by 300%, the $9 million problem disclosed by defendants . In fact,

by December 2000, although the public was told there was a $9 million problem, Bond, Peterson and

Shipley knew there was at least another $20 to $25 million which needed to be written off. Their

concern about DFG was confirmed when they received a December 11, 2000 memorandum from

Brady detailing the problems. However, the fact that DFG's problems greatly exceeded the $9

million announced in November 2000, was not disclosed even to the audit committee of the Board,

let alone to the public, until January 25, 2001, when it disclosed an SEC inquiry into IBP's

accounting practices .

22. During the Class Period, each Individual Defendant occupied a position as one of the

Company's top executives, which made him privy to non-public information concerning the

Company's operations and financial statements . IBP's releases and SEC filings were each group-

published documents for which each defendant is equally responsible .

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BACKGROUND TO THE CLASS PERIO D

23 . During the mid-1990's, defendants Peterson and Bond became increasingly concerned

about IBP's ability to continue to show strong profit growth in light of the extremely low margins in

the Company's core fresh meats business, pursuant to which IBP essentially acted as a

slaughterhouse, i.e., a middleman between cattle ranchers and supermarkets . In an attempt to

increase profit margins and foster long-term earnings growth, defendants Peterson and Bond initiated

an aggressive acquisition program in 1997, whereby IBP began acquiring companies which had

operations in the higher margin food processing end of the business . For example, during 1997, IBP

acquired Foodbrands, a leading manufacturer of frozen food products and pizza toppings . In late

1998, IBP added to Foodbrands' operations the assets of Diversified Food Group, L .L.C., Cohen's

Kosher Foods, LLC and Resturance, Inc ., at aprice of almost $91 .6 million .; In connection withthe

acquisition of DFG, defendants Devening, Peterson, Shipley and Bond caused the Company to enter

into an employment arrangement with DFG principle and CEO Zahn and DFG's CFO Sexauer,

which provided for "earn out" payments whereby defendants Sexauer and Zahn were to be paid as

much as $40 million dollars of additional compensation between 1999 and 2001, depending upon the

level of profits generated for Foodbrands by the assets acquired in the DFG acquisition .

24. In December 1999, defendants announced that the Company would be acquiring

Corporate Brand Foods America ("CBFA") for 1 I to 14 million IBP shares, (depending upon the

trading price of IBP stock), and the assumption of approximately S300 million of CBFA debt .

However, just weeks before, in connection with an internal audit of DFG's financial records by

defendant Foodbrands, Devening and Brady discovered that DFG's financial records were riddled

with fraud, including at least $5 million worth of accounts receivable which were uncollectible

and/or had not been properly reserved for . Foodbrands was also apprised that DFG's accounting

practices and procedures were not in compliance with GAAP nor Foodbrands' own accounting

policies and procedures manual . Defendants Foodbrands, Devening and Brady were also aware that

defendants Zahn and Sexauer were using inventory and accounting systems that were not compatibl e

These companies were engaged in the hors d'oeuvres, kosher food and/or other foodbusinesses .

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with Foodbrands' systems and thus, absent ongoing continual oversight and an affirmative effortby

Foodbrands to institute financial controls and procedures consistent with Foodbrands own, neither

Foodbrands nor 1BP would be able to correct DFG's financial fraud . However, defendants

Foodbrands, Devening and Brady willfully refused to expand their internal review of DFG's false

financials, looking the other way in the face of the accounting improprieties discovered by

Foodbrands, concealing this accounting fraud when working with IBP Controller Hart, IBP CFO

defendant Shipley and the PricewaterhouseCoopers ("PWC") auditors in Oklahoma City and Omaha,

in preparing and disseminating the Company's FY99 earnings release in February 2000 and its 1999

Form 10-K filed with the SEC on March 25, 2000 .

25 . On February 2, 2000, defendant Shipley announced that defendants arranged for the

sale of several hundred million dollars of debt. Because of defendants' assurances to Wall Street that

the Company was on track to report record results, the Company's sale of 10-year notes (the "Notes")

received an "enthusiastic response" from Wall Street, the Company was able to sell the Notes at a

better than expected interest rate allowing defendants to increase the size of the note offering to $300

million .FALSE AND MISLEADING STATEMENTS PREPARED

AND DISSEMINATED BY DEFENDANTS DURING THE CLASS PERIO D

26. On February 7, 2000, defendants issued a release titled IBP's "Record Sales &

Earnings" which stated that IBP's "net earnings in 1999 were the best in company history ."

Expressly noting that "Foodbrands America and related value-added operations [had] experienced a

9% increase in operating earnings in 1999," the released stated :

New Corporate Structure also AnnouncedImproved consumer demand for beef and pork coupled with the success of

IBP's prepared foods business, contributed to record earnings in 1999, companyofficials reported today. They also announced plans for a new corporate structuredesigned to foster further growth .

Before nonrecurring items, net earnings in 1999 were the best in companyhistory totaling $321 million or $3 .44 per diluted share . These totals exceededcomparable 1998 earnings, before extraordinary items, of $205 million or $2 .19 perdiluted share. IBP's previous high was $280 million or $2 .92 per diluted sharerecorded in 1995. After such items, 1999 net earnings were S313 million or $3.36per diluted share versus 1998 net earnings of $190 million or ,2 .03 per dilutedshare . . . .

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In the fourth quarter, net earnings before nonrecurring charges in 1999 totaledS93 million or $1 .00 per diluted share compared to $92 million or $ .98 per dilutedshare in 1998 . After nonrecurring charges, primarily related to cow division assetimpairment write-downs, fourth quarter 1999 net earnings totaled $82 million or£ 87 per diluted share. . . .

"Virtually all major areas of our business had outstanding results in 1999,"Robert L . Peterson, IBP chairman and chief executive officer, said . "Strong domesticand international demand, along with our focus on meeting customer needs andmaintaining manufacturing efficiencies, were key factors in our success . Our value-added companies, including Foodbrands America, The Bruss Company and otherrecent acquisitions, have also tremendously enhanced results . "

FoodBrands Expansion

IBP continues to expand its prepared foods business through existingoperations and acquisition. This growth is enabling the company to capitalize onchanges in consumer trends, with more people buying food prepared away fromhome-

FoodbrandsAmerica and related value-added operations, experienced a 9%increase in operating earnings in 1999, and a 47% increase in sales . . . .

27 On February 8, 2000, defendants announced the consummation of the CBFA

acquisition for approximately $550 million, or 14 .4 million shares of IBP common stock and the

assumption of S344 million of CBFA preferred stock and debt .

28 On or about March 25, 2000, defendants caused the Company to file with the SEC the

Company's form 10-K for the fiscal year ended December 25, 1999 (the "1999 Form 10-K") . The

1999 Form 10-K contained the Company's results for FY99 as previously reported by defendants on

February7, 2000 . Defendants Foodbrands, Brady, Devening, DFG, Zahn and Sexauer materially

participated in the preparation and dissemination of the 1999 Form 10-K .

29 On or about April 18, 2000, defendants caused the Company to issue a release

containing the Company's financial results for l Q00, reporting net earnings and EPS for the

Company of $20 million and $0 .16, respectively .

30 On or about May 9, 2000, the Company filed with the SEC its Form 10-Q for the

quarter ended March 24, 2000 (the "1 Q00 Form 10-Q") . The 1 Q00 Form 10-Q repeated the

Company's previously reported results for 1 Q00 .

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31 On or about July 1 7, 2000, defendants caused the Company to issue a release

reporting that the Company had earned $59 mill ion or $0.55 per share, and announcing that "strong

product demand" had driven IBP's earnings for the second quarter ended June 24, 2000 .

32 On or about August 8, 2000, the Company filed with the SEC its report on Form 10- Q

for the quarter ending June 24, 2000 (the "2Q00 Form 10-Q") . The 2Q00 Form 10-Q repeated the

Company's previously reported results for 2Q00.

33 In fact, the Company' s releases and SEC filings detailed in IT 1126 and 28-32 above ,

were each materially false and misleading when issued . The true facts, which were then known to o r

recklessly disregarded by defendants Foodbrands, DFG, Zahn, Sexauer, Devening and Brady, were :

(a) That IBP's 1999 earnings were overstated by at least $0 .10 per share due to

inventory, accounts receivable and prepaid expenses manipulations at DFG, as described in ¶ IT 54-

80, Foodbrands' operating earnings actually represented only 4% of net sales in 1999,25% less than

the percentage represented in the Form 10-K ;

(b) That the inventory, accounts receivable, prepaid expenses and intangibl e

assets reported on the Company's FY 99,1 QO 1 and 2Q01 balance sheets were materially overstate d

due to DFG's manipulations and the Company's failure to report the impairment in the value of IBP' s

investment in DFG ;

(c) That the Company' s 1 Q00 earnings were overstated by at least $0 .03 per share

due to inventory, accounts receivable and prepaid expenses manipulations at DFG, as described i n

¶¶ 54-80 ;

(d) That the Company's 2Q00 earnings were overstated by at least $0.12 per shar e

due to inventory , accounts receivable and prepaid expenses manipulations at DFG, as described i n

1111 54-80 ; and

(e) That defendants Foodbrands, Devening and Brady knowingly participated i n

the preparation and dissemination of the Company's earnings, releases and Form 10-K filings fo r

FY99, 1 Q01 and 2Q01 by, among other things, forwarding financial information to be incorporate d

in the earnings releases and SEC Forms 10-Q and 10-K, which they knew or recklessly disregarde d

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was false due to their refusal to properly investigate DFG's improper valuation of accounts

receivable, fictitious inventory records, and other accounting errors at DFG discovered by an audit

team directed by Dan Hughes and defendant Brady in connection with Foodbrands' November 1999

audit of DFG's operations and its books and records, which falsified accounting data these

defendants worked closely with defendants Bond and Shipley to incorporate into the Company's

financial statements and news releases .

34 On or about October 2, 2000, defendants IBP, Bond, Peterson, Shipley and Devening

caused the Company to issue a release over the national newswires announcing that the IBP Board

had agreed to sell the Company for approximately $3 .8 billion to Rawhide Holdings Corporation, an

entity affiliated with Donaldson, Lufkin & Jenrette, Inc . ("DLJ") .

35 On October 16, 2000, defendants caused the Company to issue a release announcing

the Company's "strong quarterly earnings performance" for the third quarter ended September 23,

2000, including earnings of $83 .9 million, or $0 .79 per share for the quarter, substantially in excess

of analysts' estimates of 50 .75 per share .

36 In connection with the October 16, 2000 release of the Company's 3Q00 results ,

defendants Peterson, Bond, Shipley and Devening conducted a nationwide conference call with

individual securities analysts, hedge fund managers, and large IBP shareholders . In an attempt to

convince the market of IBP's continuing strong financial performance during the conference call

defendant Shipley assured investors that the Company had turned in a "solid financial performance

for the quarter," while defendant Bond noted that despite the fact that Foodbrands would report

results "slightly under our plan for the year," primarily due to higher than anticipated raw materials

costs these defendants assured the market that they continued to expect "Foodbrands to have an

excellent year . "

37 On or about November 7, 2000, the Company filed with the SEC its third quarter

Report on Form I 0-Q for the quarter ended September 23, 2000 (the "3 Q00 Form 10-Q") . The 3Q00

Form 10-Q was prepared in material part by, inter alia, each of the defendants and repeated IBP' s

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previously reported third quarter financial results. The 3Q00 Form I 0-Q noted that there had been a

change to the Company's previously reported results, stating :In late October 2000, management discovered inaccuracies in a Foodbrands

subsidiary's financial statements, resulting in a $9 million reduction in pre-taxearnings and inventories . The third quarter 2000 financial statements included hereininclude this reduction from amounts previously reported in IBP's earnings pressreleases on October 16, 2000.

38 On November 7, 2000, defendants Peterson and Bond also caused the Company to

issue a release on the national newswires, which stated :IBP, Inc. today announced restated earnings for the third quarter and first ninemonths of 2000 .

In late October, IBP management discovered certain inaccuracies in thefinancial statements of IBP-owned DFG Foods .

As a result of overstated inventory value, IBP is mating a $9 millionreduction in pre-tax earnings from the amount previously announced .

Restated third quarter 2000 net earnings totaled $78 .4 million or $ .73 perdiluted share compared to $96 .6 million or $ .90 per diluted share before a $13 .8million nonrecurring reduction of income tax expense during the same period in1999 . After the reduction of income tax expense, third quarter 1999 earnings totaledS 110 .4 million or $1 .03 per diluted share .

Year-to-date earnings, before unusual and nonrecurring items, totaled $198million or $1 .82 per diluted share in 2000 compared to $231 million or $2 .16 perdiluted share before nonrecurring items during the first nine months of 1999 .

39 On November 13, 2000 Smithfield Foods, Inc . announced that it had submitted an

offer to purchase IBP for $25 per share in Smithfield common stock .

40 On November 28, 2000, defendants filed a preliminary Form 14-A proxy statement

(the "Proxy") in connection with the planned acquisition of the Company by Rawhide Holdings . The

Proxy included the Company's financial statements for fiscal year ended December 25, 1999 and the

quarters ended March 24, 2000, June 24, 2000 and September 23, 2000 . The Proxy also stated that

defendants expected IBP to post FY 2000 EPS of $2 .43 per share . Emphasizing the importance to

investors of the information contained in the Proxy, defendant Peterson included a letter in the Proxy

urging shareholders to "read these materials carefully . "

(a) The Proxy contained a detailed description of events related to the planned

acquisition of IBP by Rawhide Holdings, including events which occurred subsequent to th e

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October 2, 2000 announcement of the Rawhide acquisition. However, the Proxy concealed any

mention of the fact that the Company and defendants Bond, Shipley, Devening and Brady had, prior

to the filing of the Proxy with the SEC, been apprised by Foodbrands' accounting personnel in

Oklahoma City that TBP's financial statements remained overstated by at least $21 million following

the $9 million writeoff taken by IBP on November 7, 2000 .

(b) The Proxy also included several material affirmative misrepresentations

concerning the Company's earnings for FY 1999, 1Q 00, 2Q 00 and 3Q00 as well as IBP's expected

FY 00 performance . For example, on pages 34 and 35 of the Proxy, defendants represented that IBP

would post FY00 EPS of $2 .48 . However, defendants Shipley, Bond, Devening and Brady

concealed the fact that they were already aware that the problems at DFG required at least a $30

million restatement of IBP's previously reported earnings and that because of the required charges

and the impaired nature of DFG's long-lived assets, IBP could not possibly post FY 2000 EPS of

S2.48. In an attempt to immunize themselves from liability for these misrepresentations, the

Company and defendants Bond, Shipley and Peterson included boilerplate disclaimer language in the

Proxy which was designed to immunize defendants from their false statements, but offered no

meaningful warnings to investors about the fact that the defendants were already aware that DFG

was not economically "viable" and that the Company was required to take tens of millions of dollars

of charges and restatements in order for the Company's FY99 and FY00 financial statements to

comply with GAAP, but rather stated simply that "there can be no assurance that the assumptions

made in preparing the projections set forth below will prove accurate, and actual results may be

materially greater or less than those contained in the projections . "

(c) Page 67 of the Proxy included LBP's net earnings and EPS of $156 million and

$1 .58, respectively, for the 9 months ended September 23, 2000, which amounts were false and

misleading as detailed in ¶¶ 54-80 hercin;

(d) The Proxy also incorporated by reference IBP's 3 Q00 Form 10-Q which

provided as follows :

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L. SUBSEQUENT EVEN T

In late October 2000, management discovered inaccuracies in a Foodbrandssubsidiary's financial statements, resulting in a $9 million reduction in pre-taxearnings and inventories . The third quarter 2000 financial statements included hereininclude this reduction from amounts previously reported in IBP's earnings pressrelease on October 16, 2000 .

(e) Defendants also attached to the Proxy a copy of the Rawhide Merger

Agreement which in §4 .7(b) expressly referred to IBP's FY99 Form 10-K and Form 10-Qs for 1Q00

and 2Q00, stating :Section 4 .7. SEC FILINGS .

(b) As of its filing date , each such report or statementfiled pursuant to the,Exchange Act did not contain any untrue statement of a material fact or omit tostate any materialfact necessary in order to make the statements made therein, inthe light of the circumstances under which they were made, not misleading.

41 The statements made by defendants in the October 16, 2000 press release, the 3 Q 00

conference call and the Proxy, including for the Company's financial statements for FY99, 1Q00,

2Q00 and 3Q00, and the projections contained therein concerning IBP's FY00 EPS, were each false

and misleading when made . The true facts, which were then known to or recklessly disregarded by

defendants, were :

(a) That in order to inflate DFG's earnings and thereby obtain additional earn-ou t

payments of as much as $40 million, defendants Zahn and Sexauer had knowingly caused DFG's

inventory records to be overvalued by approximately $35 million and to other assets to be overstated

by at least $10 million;

(b) That defendants Devening and Bond had been aware since November 199 9

that overstatements of assets and earnings existed at DFG and that DFG's accounting procedures

were not in compliance with GAAP or Foodbrands' own accounting policies practices policies and

procedures as a result of an internal audit conducted by Foodbrands audit staff in Oklahoma City,

directed by defendant Brady and Dan Hughes (Director of Internal Audit at Foodbrands) ;

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(c) That the Company had not reported generated "solid financial performance" or

posted "strong" financial results for 3 Q00, but rather had posted the better than expected results due

to defendants' fraudulent accounting ;

(d) That by 3 Q00, defendants Brady and Devening were aware as a result of th e

November 1999 and 3Q00 internal Foodbrands audits that DFG's accounts receivable were riddled

with accounting errors and that tens of millions of dollars worth of false and fraudulent entries had

occurred at DFG and that DFG's inventory, accounts receivable, pre-paid marketing expenses and

other asset accounts had been falsely and fraudulently inflated by more than $15 million, including at

least $5 million of overvalued accounts receivable and $5 million in improperly capitalized pre-paid

expenses ;

(e) That, by the time the Proxy was filed with the SEC on November 28, 2000,

defendants Brady and Devening had been apprised by Foodbrands' internal audit staff, including Dan

Hughes, Rodney Helus and Chuck Watson that DFG was experiencing a decline in its operating

performance, and was generating substantial losses, which losses caused defendants to expect that

DFG's FY00 financial losses would continue into 2001 and that as a result thereof, DFG was

required to take substantial write-offs in addition to the $9 million disclosed in November 2000 .

This was were confirmed in a December 11, 2000 memorandum from Brady to Devening which

stated, "it is clear that the business as it is currently configured is not economically viable ; "

(f) That defendant Bond was aware by mid October 2000 that there were

"problems with the integrity of DFG's books and records; "

(g) That in light of the Foodbrands' performance during the first half of 4Q00 and

defendants' awareness of the pervasive operating and accounting problems at DFG and the

accounting charges and restatements required in connection therewith, neither the Company nor

defendants Peterson, Bond or Shipley, had a good faith basis to believe, and did not in fact believe

that the Company could possibly post FY00 EPS of $2 .45 ;

(h) That the EPS figures reported for IBP for FY99,1Q00, 2Q00 and 3Q00 wer e

false as detailed in ITT 54-80 below;

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(i) That the Company and Defendants Peterson, Bond, Shipley and Devening

were aware that IBP could not possibly post FY00 EPS of $2 .48, as defendant Bond has testified to,

these defendants were already aware that IBP was "going to miss our projections for the basic

Foodbrands business by $32 million." And that in addition to this shortfall, the defendants have

testified to the fact that they were aware at that time that there was no way possible that DFG would

contribute the operating earnings assumed in the Proxy's FY00 EPS projections of $2 .48 ; and

(j) That because defendants were aware of the material, adverse non-public

information set forth above in ¶¶( a)-(i), as well as the fact that defendant Zahn and Sexauer had

inflated DFG's inventory valuation figures, defendants had no reasonable basis to believe and did

not, in fact, believe that the Company would post FY 00 EPS of $2 .48 .

42 On December 4, 2000, Tyson Foods, Inc. announced its offer to buy IBP for

approximately $26 per share, with 50 .1 % of the consideration in cash and 49 .9% in Tyson Class A

common stock-

43 On December 22, 2000, defendants caused the Company to file with the SEC a

schedule 14D-9 SolicitationJRecommendationStatement ("Schedule 14D-9") in connection with the

pending Tyson tender offer to acquire the Company .

(a) Item 4 of the Schedule 14D-9 contained a detailed description of the factua l

events, which occurred both prior to Rawhide's October 1, 2000 offer and subsequent to Tyson's

December 4, 2000 offer. Despite the fact that defendants discussed in detail the facts and issues

surrounding the Rawhide and Tyson offers, they concealed all mention of their awareness at that

time that in order for the Company's financial statements to comply with GAAP, the Company

needed to record a $50+ million charge for impairment to DFG's intangible assets and to restate the

Company's FY99 and interim 2000 EPS by an aggregate amount at least 300% greater than that

disclosed by defendants on November 7, 2000 .

(b) Attached as Exhibit E to the Schedule 14D-9 were excerpts from the Proxy ,

which had been filed with the SEC just weeks before . Ex. E reiterated that the Company "has

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represented and warranted to certain matters" related to its financial performance, includin g

representations and warrantees relating to :

a the accuracy of its SEC filings ;

its financial statements ;

the absence of certain changes or events since the date of i ts mostrecent annual financial statements filed with the SEC .

44 On January 1, 2001, IBP issued a press release announcing a definitive Merge r

Agreement with Tyson. The release stated :IBP, Inc. announced that it has entered into a definitive merger agreement

with Tyson Foods, Inc. (NYSE:TSN). Under the terms of the agreement . . . Tysonwill pay $30 for each share of IBP common stock, with 50 .1 % ofthe consideration incash and the remainder in Tyson Class A common stock. The stock portion of theconsideration is subject to a maximum exchange ratio of 2 .381 and a minimumexchange ratio of 1 .948 Tyson Class A shares if Tyson's average trading price for anagreed to period of time is outside the range, or "collar" of $12 .60 and $15.40 .

45 On January 2, 2001, defendants Peterson , Bond and Shipley caused IBP to file an

amendment to the Schedule 14D-9 ("Amendment No. 1 ") . Amendment No. I was prepared under

the direction of defendants Bond, Peterson and Shipley and was signed under penalty of perjury by

defendant Shipley . Amendment No . 1 amended and supplemented the Schedule 14D-9 filed by

defendants on December 22, 2000. Attached to Amendment No . 1 as Exhibit E was the Tyson/IBP

Merger Agreement. Sections 5 .07-5.09 of the Merger Agreement provided :(a) The Company has delivered or made available to Parent (i) the Company's

annual report on Form 10-K for the year ended December 25, 1999 (the "COMPANY10-K"), (ii) its quarterly report on Form 10-Q for its fiscal quarter ended September23, 2000, its quarterly report on Form 10-Q for its fiscal quarter ended June 24, 2000(as amended) and its quarterly report on Form 10-Q for its fiscal quarter ended March25, 2000 (together, the "COMPANY 10-QS"), (iii) its proxy or informationstatements relating to meetings of, or actions taken without a meeting by, thestockholders of the Company held since January 1, 1998, and (iv) all of its otherreports, statements, schedules and registration statements filed with the SEC sinceJanuary 1, 1998 .

(b) As of its filing date, each such report or statementfledpursuant to theExchange Act did not contain any untrue statement of a materialfact or omit tostate any materialfact necessary in order to make the statements made therein, inthe light of the circumstances under which they were made, not misleading .

- 23 -

Section 5 .08 . FINANCIAL STATEMENTS . The audited consolidatedfinancial statements of the Company included in the Company 10-K and theunaudited consolidated financial statements of the Company included in theCompany 10-Qs each fairly present, in all material respects , in conformity withgenerally accepted accounting principles applied on a consistent basis (except as maybe indicated in the notes thereto ), the consolidated financial position of the Companyand its consolidated subsidiaries as of the dates thereof and their consolidated resultsof operations and changes in f nancial position for the periods then ended (subject tonormal year-end adjustments in the case of any unaudited inte rim financialstatements) . . . .

Section 5 .09. DISCLOSURE DOCUMENTS . (a) Each document required tobe filed by the Company with the SEC in connection with the transactionscontemplated by this Agreement (the "COMPANY DISCLOSUREDOCUMENTS"), including, without limitation, (i) the Exchange Schedule 14D-9(including information required by Rule 14f-1 under the Exchange Act), the Schedule14D-9/A (including information required by Rule 14f-1 under the Exchange Act) and(iii) the proxy or information statement of the Company containing informationrequired by Regulation 14A under the Exchange Act (the "COMPANY PROXYSTATEMENT"), if any, to be filed with the SEC in connection with the Offer or theMerger and any amendments or supplements thereto will, when filed, comply as toform in all material respects with the applicable requirements of the Exchange Actexcept that no representation or warranty is made hereby with respect to anyinformation furnished to the Company by Parent in writing specifically for inclusionin the Company Disclosure Documents .

(b) At the time the Schedule 14D-9/A . . . or any amendment or supplementthereto is first mailed to stockholders of the Company, . . . the Schedule 14D-9/A, . . .as supplemented or amended, if applicable, will not contain any untrue statement of amaterial fact or omit to state any material fact necessary in order to make thestatements made therein, in the light of the circumstances under which they weremade, not misleading . . . .

46 On January 5, 2001, defendants Peterson, Bond, Devening and Shipley caused the

Company to file a second amendment and supplement to the Schedule 14D-9 ("AznendmentNo . 2") .

Amendment No . 2 stated that "the information set forth in this statement is true, complete and

correct" and was prepared and/or reviewed by defendants Shipley, Bond and Peterson and was

signed by defendant Peterson. Attached as Exhibits "A" and "B" to AmendmentNo . 2 were detailed

financial analyses prepared by Peter Solomon & Company and J .P. Morgan & Company which

expressly "relied upon and assumed, without independent verification, the accuracy and

completeness of all information that was publicly available or was furnished . . . by the Company ."

The opinions expressly relied upon the Company's audited financial statements for FY99 and 3Q00,

as well as the Company's "past and current business operations, [financial conditions] and future

prospects and operations ." Amendment No . 2 advised shareholders to not only "read the opinion s

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carefully and in their entirety," but also "urge[d] [shareholders] to consider this information

carefully. "

47 The Schedule 14D-9,AmendmentNo . 1 dated January 2, 2001 and AmendmentNo .

2 dated January 5, 2001 were each false and misleading when issued . The true facts, which were

then known, available or recklessly disregarded by each of the defendants, were :

(a) That the Company's financial statements as filed with the SEC and

disseminated to public investors were false, as the Company was required to record a restatement of

300% greater than that disclosed by defendants in the Company's November 7, 2000 filing ;

(b) That defendant Bond was aware by mid October 2000 that there wer e

"problems with the integrity of DFG' s books and records ; "

(c) That by November 1999, defendant Foodbrands was aware of and willfully

disregarded the accounting shenanigans at DFG which had been discovered in an internal audit in

November 1999 and, in fact, had taken steps to frustrate the public dissemination of the accounting

shenanigans at DFG by intentionally concealing the underlying accounting improprieties from the

SEC filings made by the Company between March 25, 2000 and January 5, 2001 ;

(d) That as conveyed by defendants Bond and Peterson to Tyson executives John

Tyson , Les Baledge and Read Hudson in a 3-4 hour meeting at the Hilton Hotel in Sioux City, Iowa ,

on December 8, 2000 , IBP viewed DFG has a "black hole " and a complete "disaster " which they

expected to generate no pro fit in FY 2001 ;

(e) That on December 29, 2000, defendant Peterson and IBP's controller, Crai g

Hart, confirmed that IBP's financial statements required a restatement of at least $30-$35 million an d

advised Tyson's CFO and its General Counsel of that facts ;

(f) That the Company and defendants Peterson, Bond and Shipley were aware o f

the true magnitude of the accounting fraud that had taken place at the Company, which had

attempted to conceal from investors in the hope that the Tyson Merger would be consummated i n

late January or early February 2001, thereby allowing defendants to avoid disclosing the truth about

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the fraud at the Company and the repercussions associated therewith, including civil suits or criminal

prosecution, as well as public humiliation and embarrassment ;

(g) That since October 2000 , DFG had been in the midst of a full blown forensic

investigation and internal audit involving scores of accounting professionals from Foodbrands,113P

and PricewaterhouseCoopers' offices in Omaha and Oklahoma City, as we ll as investigators from

Kroll & Associates , and by January 1, 2001 , defendants Bond and Shipley had already participated

in meetings which included numerous attorneys from the SEC's Division of Enforcement ;

(h) That, as a result of their conversations with one another and their review of

internal accounting data and memoranda generated by Foodbrands and IBP's internal audit staff,

including memoranda generated in connection with the November 1999 internal audit of DFG by

Foodbrands conducted under the direction of Dan Hughes, the September/October 2000 internal

audit overseen by Dan Hughes in conjunction with PricewaterhouseCoopers partner Binkley and the

December 11, 2000 memorandum from Brady to Devening, each of the defendants was aware during

the Class Period of the inaccuracy of the financial data relating to DFG's balance sheet and income

statements for FY99 and IQ00, 2Q00 and 3Q00 ; and

(i) That by November 2000 defendants Bond, Peterson, Shipley, Devening and

Brady had already concluded that the Company would have to once again restate its previously filed

financial statements for FY99 and FY00, and to take a charge of at least $50 million for the

diminution value of the Company's intangible assets .

48 On January 25, 2001, it was disclosed that IBP was being questioned by the SEC

about the accuracy of its previously reported financial statements . On January 10, 2001, defendant

Peterson was apprised that the Company had received an inquiry letter from the SEC questioning

certain of the accounting practices utilized by the Company and its subsidiaries .

49 Adding insult to injury, investors were also apprised that the specter of adjustments to

the Company's historical financial results had caused Tyson to formally notify the Company that it

was "assess[ing] the impact of materiality of any changes to [the Company's] financial statements

and business," causing the price of IBP stock to plummet by $4 per share .

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50 On January 26, 2001, defendants confirmed that the Company had in fact been

utilizing improper accounting practices, filing a fourth amendment to II3P's Schedule 14D-9

("Amendment No . 4"). Attached to Amendment No. 4 was a January 26, 2001 release which

confirmed that the restatement required by the Company to correct the inaccuracies in its

previously reported financial statements exceeded by as much as 525%, the S9 million restatement

previously disclosed by defendants . In addition to disclosing that the Company would "be required

to take an additional charge which could be as much as $47 million," Amendment No . 4 also

disclosed that it would have to take an unidentified charge for the impairment of goodwill and/or

long-lived assets associated with DFG .

51 On February 22, 2001, defendants further confirmed that the Company had previously

disseminated false 1999 and 2000 financial statements, stating :IBP stated the amendments will reflect revisions the company has agreed to

make in response to an SEC review of various filings made by the company in 2000 .The amendments will also include revisions based upon the results of the company's

investigation of financial results at its DFG Foods subsidiary .

The disclosure statements will be amended and filed with the SEC include :IBP's Annual Report on Form 10-K for the fiscal year ended December 25, 1999 ; theQuarterly Reports on Form 10-Q for the 13 weeks ended March 25, 2000, the 26weeks ended June 24, 2000 and the 39 weeks ended September 23, 2000,respectively; and the Current Report on Form 8-K datedNovember 3, 2000 . IBP saidthat it expects to file the amendments with the SEC as promptly as possible . Theprincipal matters involve :

1 . Revisions to previously issued financial statements with respect to :

-- A restatement of certain previously reported financial information to reflectadjustments related principally to inventory, accounts receivable and accruedliabilities resulting from misstatements or irregularities at the company's FoodbrandsAmerica's DFG subsidiary . The company had previously announced, in a pressrelease dated January 26, 2001, that these adjustments could result in an additionalcharge of as much as $47 million in pre-tax earnings . This additional charge hasbeen finally determined to be $44 .9 million (or $0 .26 per fully diluted share,) andincludes a $15.5 million charge to the 4th quarter of 1999, an aggregate of $17.4million in charges to the first 3 quarters of 2000 (including an impairment charge of$5 .8 million in the 2nd quarter to reflect the write-off of an earn-out payment to theseller of the DFG business, ultimately determined by the company not to have beenearned) and a $12 million charge to the 4th quarter of 2000 . These charges willprimarily increase the cost of products sold and selling, general and administrativeexpenses for the affected periods .

-- Applying 'variable plan' accounting principles to account for options to acquire anaggregate of approximately 2 million shares of the company's common stock grantedto officers of the company during the period 1993 to 2000 under the company's 199 3

_27-

Stock Option Plan and 1996 Stock Option Plan. The application of 'variable plan'accounting principles under APB Opinion No . 25, will have the effect of a non-cashcharge or credit (based on fluctuations in the trading price of the common stock ascompared to the strike price for such options) to the compensation expense portion ofthe company's selling, general and administrative expenses in various periodspresented. The company is still in the process of calculating the dollar impact oneach of the periods presented .

- Expanded reportable business segment information for the company, as well asassociated disclosures . These disclosures will have no impact on the consolidatedfinancial results of the company.

2 . Final resolution of the following two matters :

-- A write down of long-lived assets at the DFG business unit to recognize animpairment in the value of such assets. The possibility of an impairment charge hadbeen identified by the company in a press release issued on January 26, 2001 . Thewrite-down will result in a non-cash, pre-tax nonrecurring charge in 2000 of up to amaximum of $108 million, which is the carrying value of the long-lived assets of thecompany's DFG Subsidiary on the company's balance sheet. This impairment chargemay or may not affect previously reported results . A final determination of whatportion of the carrying value will be taken as an impairment charge has not beenmade .

-- As previously disclosed on the company's Report on Form 10-Q for the 3rd quarterof 2000, the company will adopt the provisions of SAB 101, as required in 2000 .The company is still in the process of determining the impact of adopting thisguidance .

DFG Subsidiary Update

In a related matter, IBP said that its counsel is finalizing a forensicinvestigation, assisted by IBP's forensic consultants at PricewaterhouseCoopers, intothe causes and responsible parties giving rise to the misstatements and irregularitiesat DFG .

"We are determined to get to the bottom of the problems at DFG and takewhatever actions are appropriate and necessary in response to issues uncovered in ourinvestigation. After completing the investigation, IBP will pursue all partiesresponsible for the misrepresentations and inaccuracies identified . We intend toprotect the interests of IBP shareholders by seeking restitution ."

52 On March 20, 2001, IBP issued a release announcing its results for 4Q00 and FY0 0

and a completion of the financial review by the SEC as well as the outstanding accounting fraud

issues related to DFG. Confirming that IBP would report a loss of $6 million for 4Q00 (after

restating earnings at its DFG subsidiary), defendants stated :An IBP investigation of the DFG subsidiary, to date, has uncovered potential

manipulation of financial records and product theft. It has also revealedmismanagement by former DFG managers . The previously reported restatement ofthe subsidiary's financial results included the amount of an earn-out payment to thosewho sold the DFG business, but ultimately determined by IBP not to have bee n

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earned. IBP will use the results of its forensic audit as the basis for any legal action itdeems appropriate to recover its losses .

53 Between January 24, 2001 and March 28, 2001, the price of 1BP stock fell over 20%

to as low as $22 per share, as investors began to realize the magnitude of defendants' accounting

manipulations and its impact on the Company's FY00 results . Then, on March 29, 2001, Tyson

announced that it was terminating the Merger Agreement due to the Company's breach of the Merger

Agreement, which breaches included the fact that the Company had "restated its financial filings to

address the SEC's issues and correct earlier mistakes." The market's reaction to Tyson's response to

defendants' accounting manipulations was swift and decisive, resulting in the price of YBP stock

falling from $22 .75 per share to as low as $15 .00 per share . Defendants' efforts to conceal the

pervasive accounting fraud at the Company's DFG subsidiary and its repeated dissemination of false

financial statements through 2000 and into 2001 has resulted in millions of dollars in damage to

plaintiffs and members of the Class .

THE COMPANY'S FALSE FINANCIALREPORTING DURING THE CLASS PERIOD

54 Defendants falsely reported the Company's results for 1999 and 2000 through

intentional improper accounting for receivables, inventory, prepaid assets and liabilities .

Defendants also caused IBP to fail to properly report the value of its investment in DFG. Ultimately,

the Company revealed that its results for 1999 and the first three quarters of 2000 would be restated

to properly account for uncollectible receivables, non-existent inventory, prepaid expenses which

never should have be capitalized as assets and liabilities which should have been accrued but never

were. The Company has belatedly recorded a $60 million charge to write-off the intangibles

(goodwill) associated with DFG .

55 The impact of the restatement was as follows :

1999 Q100 Q2 00 Q3 00

P rriir ac Per CharP------a- - -- ---

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Reported $3 .36 $0.16 $0.55 $0 .73

Restated ***° $0.13 $0.43 $0.74

Overstatement 3% 23% 28% N/Aas percentag e

Receivable s

Reported $798,551 $802,632 $843,370 $795,422

Restated $794,996 $682,478 $696,277 $672,370

Overstatementas percentage >1% 17.6% 21 .1% 18.3%

56 These results were included in releases and SEC filings, as detailed infra, including

Form 10-Q's and IBP's 1999 Form 10-K. These filings represented that the accompanying financial

statements included all adjustments necessary for a fair presentation of IBP's results .

57 This representation was false and misleading when made as IBP's financial statement s

for 1999 and 2000 were not a fair presentation of IBP's results and were presented in violation o f

GAAP and SEC rules .

58 GAAP are those principles recognized by the accounting profession as the

conventions, rules and procedures necessary to define accepted accounting practice at a particular

time . SEC Regulation S-X (17 C .F.R. §210.4-01 (a)(1)) states that financial statements filed with the

SEC which are not prepared in compliance with GAAP are presumed to be misleading and

inaccurate, despite footnote or other disclosure . Reg S-X requires that interim financial statements

IBP admitted that the accounting problems at DFG caused its 1999 earnings to be overstatedby $0.10. When the Company ultimately restated its results, the restated 1999 results included otheraccounting issues and reflected the pooling of interests with CBFA . Thus, restated 1999 EPS was$2.96 .

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must also comply with GAAP, with the exception that interim financial statements need not include

disclosure which would be duplicative of disclosures accompanying annual financial statements . (17

C.F.R. §210 .10- 01(a)) .

59 During the Class Period, f .BP misstated its earn ngs due to its improper accounting for

receivables, inventory and prepaid assets . IBP has subsequently admitted that its earnings, as

originally reported, were overstated by $44 .9 million due to financial misstatements and

irregularities at its DFG foods subsidiary .

Accounting Guidelines Violated by IS P

60 GAAP, as set forth in FASB Statement of Financial Accounting Standards , (" SPAS")

No. 5, Accounting for Contingencies, states with respect to receivables that :22. The assets of an enterprise may include receivables that arose from creditsales, loans, or other transactions . The conditions under which receivables existusually involve some degree of uncertainty about their collectibility, in which case acontingency exists as defined in paragraph 1 . Losses from uncollectible receivablesshall be accrued when both conditions in paragraph 8 [the loss is probable and can bereasonably estimated) are met. Those conditions may be considered in relation toindividual receivables or in relation to groups of similar types of receivables . If theconditions are met, accrual shall be made even though the particular receivables thatare uncollectible may not be identifiable .

61 During the Class Period, DFG's accounts receivable were overstated by at leas t

$5 million due to the failure to record losses on uncollectible receivables, which were deeme d

uncollectible by Foodbrands accounting personnel by 11/99.

62 GAAP, as set forth in Accounting Research Bulletin ("ARB") No . 43, Chapter 4 ,

Inventory Pricing, requires the appropriate matching of costs against revenues . ARB No. 43,

Chapter 4, Statements 2 and 5, states :A major objective of accounting for inventories is the proper determination ofincome through the process of matching appropriate costs against revenues .

A departure from the cost basis of pricing the inventory is required when the utilityof the goods is no longer as great as its cost . Where there is evidence that the utilityof goods, in their disposal in the ordinary course of business, will be less than cost,whether due to physical deterioration, obsolescence, changes in price levels, or othercauses, the difference should be recognized as a loss of the current period. This isgenerally accomplished by stating such goods at a lower level commonly designatedas market.

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63 In 1999 and continuing into 2000, DFG's inventory was falsely inflated due to

improper entries, which overstated the amount of and valuation of inventory, and the failure to

record losses for the diminution in value of such inventory on a timely basis .

64 GAAP, as described by FASB Statement of Concepts No . 6, ¶26, a cost should b e

considered an asset only when it meets three criteria : (i) it embodies a future economic benefit that

involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to

future net cash inflows, (ii) a particular entity can obtain the benefit and control others' access to it,

and (iii) the transaction or other event giving rise to the entity's right to or control of the benefit has

already occurred .

65 During 1999 and continuing into 2000, DFG improperly recorded as Prepai d

Expenses (an asset) current expenses such as travel, which did not have a future economic benefit,

which the Company could control. By including these current costs as an asset, IBP's reported

expenses on its income statement were understated and Prepaid Expenses were overstated by $5

million .

66 GAAP, as set forth in SFAS No . 5, states that a loss should be recorded for a loss

contingency when it is probable a liability has been incurred and the amount can be reasonably

estimated. SFAS No . 5, IT S . According to FASB Statement of Concepts No . 6, ¶36, liabilities are

recorded for present obligations to transfer assets or to perform services .

67 Defendants have now admitted that DFG failed to record liabilities for obligations it

had to pay for inventory purchases, for temporary labor, for and for marketing, rebates and

commissions . This failure to record these liabilities had the impact of understating costs and

expenses during 1999 and 2000 .

IBP'S Restatement of Previously Reported Earning s

68 Contrary to GAAP and SEC Rules, during the Class Period, defendants improperly

measured and reported IBP's receivables, inventory and prepaid assets, causing its reported earnings

to be misstated . Defendants have now admitted, in its March 13, 2001 press release, the following

with respect to its prior results :

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IBP said that the amended statements filed today involve IBP's AnnualReport on Form 10-K for the fiscal year ended December 25, 1999 ; the QuarterlyReports on Form 10-Q for the 13 weeks ended March 25, 2000, the 26 weeks endedJune 24, 2000 and the 39 weeks ended September 23, 2000, respectively ; and theCurrent Report on Form 8-K dated November 3, 2000 .

More specifically, the amendments include the following :

-A restatement to reflect adjustments due to financial misstatements andirregularities at DFG . As previously reported, the restatement involves additionalcharges totaling $44.9 million . This consists of a $15 .5 million pre-tax charge to thefourth quarter of 1999, and a total of $29 .4 million in charges in 2000, including$12.0 million in the fourth quarter. These charges increase the cost of products soldand selling, general and administra tive expenses for the affected periods .

69 The Company also made adjustments for a change in accounting treatment of a

stock option program from ' fixed accounting, " to "variable plan " accounting principles to

recognize expense for certain options granted to officers of the company during theperiod 1993 to

2000, and change in method of accounting for revenue recognition in accordance with new

accounting guidance .

70 The Company's 2000 Form 10-K stated the following with respect to the restatement :Following the third quarter 2000, the company identified $9 .0 million in

adjustments that were necessary related to inaccuracies at its DFG subsidiary, whichwere reflected in the company's reported results in its Quarterly Report on Form 10-Q for the period ended September 23, 2000 . Asa result of these inaccuracies, whichwere identified during the fourth quarter 2000, the company initiated acomprehensive internal review of operations, systems, processes and controls relatedto its DFG subsidiary . These reviews and other issues raised during the fourthquarter 2000 resulted in recording certain charges and adjustments, as discussedbelow, which impacted previously reported results for the year ended December 25,1999 and unaudited results for quarterly periods in 2000 .

The accompanying discussion and analysis for 1999 has been revised toreflect $15 .5 million of pre-tax adjustments, related principally to overstated prepaidexpenses; inventory valued above net realizable value ; uncollectible accountsreceivable due to customer short payments, unauthorized deductions and subsequentallowances; and underaccrual of liabilities for inventory purchases, temporary laborcosts, marketing, rebates and commissions at December 25, 1999 . These adjustmentsresulted in an $8 .7 million increase in previously reported cost of products sold and a$6.8 million increase in selling, general and administrative expenses . The related taximpact of these adjustments of $5 .9 million has also been reflected . The impact ofthese adjustments reduced net earnings by $9 .6 million and related basic and dilutedearnings per share by $0 .10 and $0.09, respectively, from amounts previouslyreported for fiscal 1999 .

71 The fact that the Company has restated its financial statementsfor 1999 and 200 0

is an admission that the financial statements originally issued were false and that th e

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overstatement of income was material . Pursuant to GAAP, as set forth in Accounting Principles

Board Opinion ("APB") No. 20, the type of restatement announced by IBP (at least as to the DFG

issues) was to correct for material errors in its previously issued financial statements . See APB No .

20, ¶117-13. The restatement of past financial statements is a disfavored method of recognizing an

accounting change as it dilutes confidence by investors in the financial statements, it makes it

difficult to compare financial statements and it is often difficult, if not impossible, to generate the

numbers when restatement occurs . See APB No. 20, 1114. Thus, GAAP provides that financial

statements should only be restated in limited circumstances, i .e ., when there is a change in the

reporting entity, a change in accounting principles used or to correct an error in previously issued

financial statements . The Company's restatement was not due to a change in reporting entity or a

change in accounting principles, but rather, to errors in previously issued financial statements. Thus,

the restatement is an admission by the Company that its previously issued financial results and its

public statements regarding those results were materially false and misleading .

72 The fact that the Company referred to "irregularities" in the release is significan t

because it indicates the errors were caused by intentional behavior . According to accounting

literature, "irregularities" refers to intentional misstatements . See Statement on Auditing Standards

No. 53 .

The Company's Failure to Write-off Impaired Long-Lived Assets Associated with DF G

73 Defendants also falsified the Company's financial statements by failing to record a

loss for the impairment of goodwill associated with DFG on a timely basis . IBP has subsequently

recorded a $60.3 million charge to write-down its investment in DFG .

74 GAAP, as set forth in SFAS No . 121, states that where circumstances indicate that th e

carrying amount of an asset may not be recoverable , the entity shall estimate future cash flows

expected to result from use of the asset and, where the future expected cash flows is less than the

carrying amount of the asset, an impairment loss sha ll be recognized , measured as the difference

between the carrying amount of the asset and its fair value . SFAS No. 121, ¶¶5-7 .

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75 During 1999 and 2000, circumstances were apparent which indicated that the costs t o

acquire DFG might not be recoverable , including :

(a) Costs would have to be incurred to make DFG's computer systems and accounting

procedures consistent with Foodbrands .

(b) The purchase of DFG had cost more than $ 75 millionn, plus earn-out provisions, yet

DFG was, during 2000, in the process of generating only $66 million in sales .

(c) Prices were declining for DFG's goods as demand declined-

(d) The Company was projecting earnings before interest and taxes ("EBIT") of just $ 8

million for 2000, on an investment which had cost $75 million plus earn-out payments .

76. Given these factors and the fact that projections for DFG were based on admittedly

false and inflated financial results, defendants could not and did not reasonably expect that DFG's

future cash flows exceeded the carrying amount of the intangible assets associated with DFG . In

fact, the business was not "economically viable" as "currently configured ." As such, defendants

were required to record a write-down to reflect the impairment in the value of IBP's investment in

DFG, by early 2000, at the latest .

77. Ultimately, IBP has recorded a $60.3 million loss to re flect the impairment in th e

value of intangible assets (goodwill) associated with DFG . This was in addition to a $29 millio n

operating loss for 2000 and a $9 million restatement (reduction in earnings) for 1999 . As an internal

IBP memo confirmed, the amount of this loss was "staggering given the size of (the] business . "

78. The Company's failure to record the impairment in the DFG assets caused th e

Company' s financial statements to be mate rially misstated, in violation of GAAP .

The Company's Improper Accounting Caused Its Financial Statements to Violate GAA P

79. Due to these accounting improprieties, the Company presented its financial result s

and statements in a manner which violated GAAP, including the following fundamental accountin g

principles :

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(a) The principle that interim financial reporting should be based upon the same

accounting principles and practices used to prepare annual financial statements (APB No . 28, ¶ 12) ;

(b) The principle that financial reporting should provide information that is usefu l

to present and poten tial investors and creditors and other users in making rational investment , credit

and similar decisions was violated (FASB Statement of Concepts No. 1, ¶34) ;

(c) The principle that financial reporting should provide information about the

economic resources of an enterprise, the claims to those resources, and effects of transactions, events

and circumstances that change resources and claims to those resources was violated (FASB

Statement of Concepts No. 1, ¶40) ;

(d) The principle that financial reporting should provide information about ho w

management of an enterprise has discharged its stewardship responsibility to owners (stockholders)

for the use of enterprise resources entrusted to it was violated . To the extent that management offers

securities of the enterprise to the public, it voluntarily accepts wider responsibilities for

accountability to prospective investors and to the public in general (FASB Statement of Concepts

No. 1, ¶50) ;

(e) The principle that financial reporting should provide information about a n

enterp rise's financial performance during a pe riod was violated. Investors and creditors often use

information about the past to help in assessing the prospects of an enterprise . Thus, although

investment and credit decisions reflect investors' expectations about future enterp rise performance,

those expectations are commonly based at least partly on evaluations of past enterprise perform ance

(FASB Statement of Concepts No . 1, ¶42) ;

(f) The principle that financial reporting should be reliable in that it represents

what it purports to represent was violated . That information should be reliable as well as relevant is

a notion that is central to accounting (FASB Statement of Concepts No . 2, ¶¶58-59) ;

(g) The principle of completeness, which means that nothing is left out of the

information that may be necessary to insure that it validly represents underlying events and

conditions was violated (FASB Statement of Concepts No . 2, ¶79) ; and

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(h) The principle that conservatism be used as a prudent reaction to uncertainty t o

try to ensure that uncertainties and risks inherent in business situations are adequately considered

was violated. The best way to avoid injury to investors is to try to ensure that what is reported

represents what it purports to represent (FASB Statement of Concepts No . 2, ¶ ¶95, 97) .

80 . Further, the undisclosed adverse information concealed by defendants during the

Class Period is the type of information which, because of SEC regulations, regulations of the

national stock exchanges and customary business practice, is expected by investors and securities

analysts to be disclosed and is known by corporate officials and their legal and financial advisors to

be the type of information which is expected to be and must be disclosed.

CLASS ACTION ALLEGATIONS

81 . Plaintiffs bring this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of all persons who purchased IBP common stock during the

Class Period (the "Class") . Excluded from the Class are the defendants herein, members of their

immediate families, any entity in which a defendant has a controlling interest, and the legal

representatives, heirs, successors-in-interest, or assigns of any excluded party .

82 . The members of the Class are so numerous that joinder of all members is

impracticable . The disposition of their claims in a class action will provide substantial benefits to

the parties and the Court. As of March 27, 2001, IBP had more than 106 million shares of stock

outstanding, owned by hundreds, if not thousands, of shareholders .

83 . There is a well-defined community of interest in the questions of law and fact

involved in this case . The questions of law and fact common to the members of the Class which

predominate over questions which may affect individual Class members include the following :

(a) Whether the federal securities laws were violated by defendants ;

(b) Whether defendants misrepresented material facts ;

(c) Whether defendants' statements omitted material facts necessary to make th e

statements made, in light of the circumstances under which they were made, not misleading ;

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(d) Whether defendants knew or recklessly disregarded that their statements were

false and misleading ;

(e) Whether the price of TBP stock was artificially inflated during the Class

Period; and

(f) The extent of damage sustained by Class members and the appropriate

measure of damages .

84. Plaintiffs' claims are typical of those of the Class because plaintiffs and the Clas s

sustained damages from defendants' wrongful conduct .

85. Plaintiffs will adequately protect the interests of the Class and have retained counse l

who are experienced in class action securities litigation . Plaintiffs have no interests which conflic t

with those of the Class .

86. A class action is superior to other available methods for the fair and efficien t

adjudication of this controversy .

87. The prosecution of separate actions by individual Class members would create a ris k

of inconsistent and varying adjudications .FIRST CLAIM FOR RELIE F

For Violation of §10(b) of theExchange Act and Rule 10b-5 Against All Defendants

88 . Plaintiffs incorporate 11111-87 by reference.

89. Each of the defendants : (a) knew the material, adverse, non-public information abou t

IBP's financial results and then-existing business conditions, which was not disclosed; and (b)

participated in compiling, reviewing, and/or approving the misleading statements, releases , reports,

and other public representations of and about the Company .

90. During the Class Period, defendants disseminated or approved the false statement s

specified above, which they knew or recklessly disregarded were materially misleading in that the y

contained misrepresentations and failed to disclose material facts necessary in order to make th e

statements made, in light of the circumstances under which they were made , not misleading .

91 . Defendants violated §10(b) of the Exchange Act and Rule 1Ob-5 in that they :

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(a) Employed devices, schemes, and artifices to defraud ;

(b) Made untrue statements of material facts or omitted to state material facts

necessary in order to make statements made, in light of the circumstances under which they were

made, not misleading ; or

(c) Engaged in acts, practices, and a course of business that operated as a fraud or

deceit upon plaintiffs and others similarly situated in connection with their purchases of IBP

common stock during the Class Period .

92. Plaintiffs and the Class have suffered damages in that, in reliance on the integrity of

the market, they paid artificially inflated prices for IBP stock . Plaintiffs and the Class would not

have purchased IBP stock at the prices they paid, or at all, if they had been aware that the market

prices had been artificially and falsely inflated by defendants' misleading statements .

SECOND CLAIM FOR RELIEFFor Violation of §20(a) of th e

Exchange Act Against Defendants IBP, Bond, Peterson, Devening and Brady

93. Plaintiffs incorporate Ir 111-87 by reference .

94 . Defendants Bond and Peterson acted as controlling persons of DFG, Foodbrands and

IBP as well as of Individual Defendants Brady, Devening, Zahn and Sexauer within the meaning of

§20(a) of the Exchange Act . By reason of their positions as directors and/or officers of 1BP they had

the power and authority to cause IBP to engage in the wrongful conduct complained of herein. IBP

controlled each of the Individual Defendants and all of its employees .

95 . Defendant IBP owned 100% of the equity interest in the common stock o f

Foodbrands . Similarly, IBP possessed and exercised control and dominion over DFG as the owner

of its equity interest and its controlling member. All strategic decisions for IBP, Foodbrands and

DFG were made by or required the approval of IBP and its two senior executives, defendants

Peterson and Bond . Defendants Peterson and Bond exercised complete and total control over IBP,

Foodbrands, DFG and each of the other Individual Defendants as Bond and Peterson, as the two

senior executives at IBP, were the sole arbitors of the continuing employment of each of the

remaining defendants .

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96. Defendants Devening and Brady possessed and exercised the power and authority t o

cause Foodbrands to engage in the unlawful conduct asserted herein, as they were two senior

executives at the Foodbrands subsidiary . Defendant Devening also functioned as an executive

officer of IBP, the controlling shareholder of Foodbrands. Defendant Devening and Brady also

controlled Foodbrands through their direct participation in the preparation of Foodbrands' financial

statements, which they caused to be included and disseminated as part of the Company's publicly

disseminated earnings releases and SEC filings.

97. By reason of such wrongful conduct, the Individual Defendants and TBP are liabl e

pursuant to §20 (a) of the Exchange Act. As a direct and proximate result of these defendants '

wrongful conduct, plaintiffs and the other members of the Class suffered damages in connection wit h

their purchases of IBP common stock during the Class Period .

PRAYER FOR RELIEF

WHEREFORE, plaintiffs pray for judgment as follows :

A. Declaring this action to be a proper class action pursuant to Rule 23 (a) and (b)(3) of

the Federal Rules of Civil Procedure on behalf of the Class defined herein ;

B . Awarding plaintiffs and the members of the Class compensatory damages ;

C. Awarding plaintiffs and the members of the Class pre-judgment and post judgment

interest, as well as reasonable attorneys' fees, expert witness fees, and other costs ;

D. Awarding extraordinary, equitable, and/or injunctive relief as permitted by law ,

equity, and federal statutory provisions sued hereunder, pursuant to Rules 64, 65, and an y

appropriate state law remedies ; and

E. Awarding such other relief as this Court may deem just and proper .

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JURY DEMAND

Plaintiffs demand a trial by jury .

DATED: September ~1 2001 DOUGHERTY & DOUGHERTYTIMOTHY J . DOUGHERTY

100 N. Phillips Avenue, Suite 402Sioux Falls, SD 57101-1004Telephone: 605/335-8586

MILBERG WEISS BERS14ADHYNES & LERACH LLP

WILLIAM S . LERACHDARREN J. ROBBINSRANDALL J. BARONDOUGLAS R. BRITTON600 West Broadway , Suite 1800San Diego , CA 92101Telephone : 619/231-105 9

KIRBY, McINERNEY & SQUIRE, LLPDANIEL HUME830 Third Avenue10th FloorNew York, NY 10022Telephone: 212/317-2300212/751-2540 (fax)

Attorneys for Plaintiffs

N:%C.ASES\MM\z cnd.ept

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