Bandag, Michelin drop all charges and financial claims

May 21, 2002

Michelin North America Inc. and Bandag Inc. today agreed to end their respective lawsuits against each other. All parties, including Michelin subsidiary Michelin Retread Technologies Inc., have been dismissed from the litigation, and Michelin and Bandag have agreed to dismiss all financial claims against all parties.

Bandag spent $4 million in legal fees related to the litigation during the first quarter of 2002 alone.

The trial, held in the U.S. District Court in Des Moines, Iowa, began May 13, 2002.

Bandag originally sued Michelin in September 1999 for "inducing... dealers to breach or not renew their agreements with Bandag and convert to Michelin," misappropriating trade secrets, engaging in predatory pricing and other activities designed "to destroy (Bandag) as a competitive force" in United States retreading.

In February 2001, MNA added Bridgestone/Firestone Americas Holding Inc. (BFAH) -- then Bridgestone/Firestone Inc. -- as a defendant in its countersuit against Bandag.

Three months later, a federal court shot down an injunction filed by MNA that would have prevented Bandag and BFAH from using business incentives in tandem to entice commercial tire dealers to sell their respective products.

Bandag enjoys 44% of the U.S. truck tire retread market, according to Modern Tire Dealer statistics; MNA has 10% retread market share.