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Press Release
FOR IMMEDIATE RELEASE Contact: Martha A. Buckley
Foamex International Inc.
(610) 859-2952
FOAMEX REACHES AGREEMENT ON SHAREHOLDER LAWSUITS
Costs to be Covered by Company's Insurance Carrier
LINWOOD, PENNSYLVANIA, August 1, 2000 - Foamex International Inc. (Nasdaq:
FMXI), the leading manufacturer of flexible polyurethane and advanced polymer
foam products, announced today that it had reached agreements in principle to
settle all lawsuits brought by stockholders of the company during the past two
years in Delaware state court and federal court in New York City.
The Delaware litigation relates to the unsuccessful attempts by Trace
International Holdings, Inc. to acquire Foamex in 1998 and 1999, as well as to
certain transactions entered into between Trace or Trace's affiliates and the
company. The federal lawsuit alleges that Foamex and certain of its directors
and officers misrepresented and/or omitted material information about the
company's financial condition between May 1998 and April 1999.
Under the terms of the settlement of the federal court litigation, members
of the class of shareholders who purchased Foamex shares between May 7, 1998 and
April 16, 1999 will receive payments as defined in the agreement. Payment to
class members in the federal action, along with plaintiffs' lawyers' fees in the
federal and Delaware actions, will be paid by Foamex's insurance carrier on
behalf of the company.
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Under the terms of the settlement of the Delaware litigation, Foamex
agreed that a special nominating committee of the Foamex Board of Directors,
consisting of Robert J. Hay as chairman, Stuart J. Hershon, John G. Johnson,
Jr., and John V. Tunney, will nominate two independent directors to serve on the
Foamex Board. The terms of the settlement also establish the criteria for the
independence of the new directors and require that certain transactions with
affiliates be approved by a majority of the disinterested members of the Foamex
Board.
Both settlements are subject to final documentation and court approvals,
which, if obtained, will resolve all outstanding shareholder litigation against
Foamex and its directors and officers. The settlements involve no admissions or
findings of liability or wrongdoing by Foamex or any individual. Details about
the terms of the settlements, including estimates of the amounts payable to
members of the class in the federal action, will be mailed to affected
stockholders by this Fall.
Foamex, headquartered in Linwood, Pennsylvania, is the world's leading
producer of comfort cushioning for bedding, furniture, carpet cushion and
automotive markets. The company also manufactures high-performance polymers for
diverse applications in the industrial, aerospace, electronics and computer
industries as well as filtration and acoustical applications for the home. For
more information visit the Foamex web site
at http://www.foamex.com.
This press release contains forward-looking information, and actual
results may materially vary from those expressed or implied herein. Factors that
could affect these results include those mentioned in the Company's reports
filed with the Securities and Exchange Commission.
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