1. This action arises under the Federal Securities laws as a result of false, misleading, and unlawful statements made by Defendants in their proxy statement filed with the Securities and Exchange Commission on December 29, 1998 and issued pursuant to §14(a) of the Securities and Exchange Act of 1934 ("Exchange Act"). The proxy statement and the false and misleading statements made therein were Defendants' efforts to discourage shareholders from voting in opposition to the Company's proposed one-for-five reverse stock split of Destron Fearing Corp ("the Company") outstanding shares of common stock, par value $.01 dollars per share. Plaintiff and members of the clam have received the false and misleading proxy statement and Plaintiff named herein now seeks to enjoin the Defendants use of false and misleading statements in the proxy statements and to enjoin the shareholders' vote currently scheduled for January 29, 1999.

2. The Court's jurisdiction is predicated upon §27 of the Securities and Exchange Act of 1934, 15 U.S.C. §78(j)(n) and (aa); venue is proper in this Court in that the claims arose in this district. Each of the Defendants is found in, inhabits in or transacts business in this district. Plaintiff resides in this district. Defendants used the means and instrumentalities of interstate commerce, including the U.S. mails and interstate wire communications, to engage in the false and misleading practices complained of herein.

3. Plaintiff, Theodor H. Herman is, and was at all times relevant to this action, a shareholder of Destron Fearing Corp.

4. Destron Fearing Corp. is a Delaware corporation whose principal place of business is 490 Villaume Avenue, South St. Paul, Minnesota 55075. According to the company's press releases, Destron Fearing is a manufacturer of electronic and visual identification devises for the companion animal, livestock, laboratory animals, and fish and wildlife markets worldwide.

5. Plaintiff brings this action on his own behalf and as a class action, pursuant to Rule 23 of the Federal Rules of Civil Procedure, on behalf of all stockholders of Destron Fearing Corp. other than the defendants named herein and any person, firm, trust, corporation or other entity related to or affiliated with any of the defendants or their successors in interest, who held Destron Fearing shares on December 29, 1998 (the date when the final proxy statement was issued).

6. This action is property maintainable as a class action pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure for the following reasons:

a. the prerequisites to a class action under Rule 23(a) have been met:

(1) the class of the shareholders for whose benefit this action is brought is so numerous that the joinder of all class members is impracticable. There were approximately 13.4 million shares of the Company's common stock outstanding owned by thousands of shareholders of record. The vast majority of the Destron Fearing shares were held by public stockholders unaffiliated with any members of management;

(2) there are questions of law or fact common to members of the class including:

(i) whether defendants violated the provisions of the Exchange Act by engaging in the common course of conduct complained of herein;

(ii) whether defendants entered into a plan, scheme or common course of conduct to enable the reverse split through deceptive means and for inadequate consideration;

(iii) whether the final proxy statement dated December 29, 1998 and other filings with the SEC concerning the reverse split omitted to state material facts necessary to make the statements made, in light of the circumstances under which they were made, not misleading in violation of §14(a) of the Exchange Act; and

(iv) whether plaintiff and the members of the class have been damaged, and the appropriate measure of damages.

(3) The claims of the plaintiff are typical of the claims of the class as they arise out of the ownership of shares in the Destron Fearing and relate to a course of conduct that affects all of the members of the class in the same fashion.

(4) Plaintiff will fairly and adequately protect the interests of the class since he has retained competent counsel experienced in litigation of this nature and is committed to prosecuting this action.

b. This action is maintainable as a class action because the prerequisites of Rule 23(a) are met and because the common questions of law and fact predominate over any individual questions affecting members of the class and a class action represents a superior means for adjudicating the controversy.

7. On or about October 1, 1993, Destron Fearing Corp. filed it's certificate of incorporation with the Secretary of State for the State of Delaware. Pursuant to Article 10 of the Articles of Incorporation:

Stockholders of the company shall have the right to dissent from certain corporate action to the fullest extent now or hereinafter permitted by the General Corporation Law of the State of Delaware. Stockholders shall have the further right to dissent in the event the Corporation (i) amends this Certificate of Incorporation to add, change or remove any provisions restricting or constraining the issue, transfer, or ownership of shares, (ii) amends this Certificate of Incorporation to add, change or remove by restriction upon the business or businesses the Corporation may carry on, (iii) sells, leases or exchanges all or substantially all of its assets, (iv) amends this Article X in any way, or (v) effects any merger or consolidation in which the corporation is a constituent corporation, unless such merger or consolidation involves a wholly-owned subsidiary of the Corporation. The Corporation may merge or consolidate with another entity if the surviving entity is subject to the Delaware General Corporation Law and its Certificate of Incorporation includes this article X, or if the surviving entity owns or operates a significant business and is not controlled by the Corporation and the merger or consolidation does not have as its primary purpose the avoidance of this Article X, and in the event of such merger or consolidation, stockholders shall have the right to dissent under the Delaware General Corporation Law. The Corporation may amend this Article X by a special resolution approved by the holder of 90% of the common stock of the Corporation if the amendment occurs on or before October 1, 1998. After October 1, 1998, the Corporation may amend this Article X by a special resolution approved by the holders of 66-2/3% of the common stock of the Corporation.

8. On or about December 29, 1998 pursuant to Section 14(a) of the Securities Exchange Act of 1934, the company disseminated its final proxy statement which incorporated relevant portions of the preliminary proxy statement, pursuant to which proxies of shareholders were to be solicited in conjunction with the consideration and approval of an amendment to the company's certificate of incorporation to grant the Board of Directors discretion to effect up to a one-for-five reverse stock split of the company's outstanding shares of common stock.

9. The proxy statements stated that it was "solicited by and on behalf of the board of directors of Destron Fearing Corp., a Delaware corporation for use at the annual meeting of stock holders to be held on January 29, 1999. This proxy statement and the accompanying form of proxy are being mailed to stock holders on or about December 29, 1998."

10. As of December 29, 1998, the date the shareholders were solicited, there were approximately 13,353,982 shares of the company's common stock outstanding. Each share of said common stock entitled shareholders including plaintiff named herein and members of the class to vote upon each matter to be presented at the annual meeting scheduled for January 29, 1999. Of these outstanding shares, the executive officers and directors of the company controlled approximately 1,310,130 shares or 9.4% of all outstanding shares.

11. In the proxy statement disseminated by the company to its shareholders, the company stated, in a paragraph entitled NO DISSENTERS RIGHTS, that "dissenting stock holders have no appraisal rights under Delaware law or under the company's certificate of incorporation or by-laws in connection with the reverse stock split.

12. As reflected in paragraph 7 above, the company's proxy statement is false and misleading because the shareholders of the Company do have the right to dissent to the proposed amendment to the company's certificate of incorporation to effect a reverse stock split.

13. Plaintiff and members of the class will suffer imminent harm if Defendants are permitted to go forward with the shareholders' vote procured by the false and misleading proxy statement described above.

14. If the Company is permitted to effect the reverse stock split, such will cause the share float to diminish over 80% thereby preventing the Company's shares from being able to be actively traded thereby likely resulting in larger spreads between the bid and ask price. This will likely result in larger commissions being paid to broker-dealers and market makers in the event that Plaintiff and members of the class wish to sell or purchase more of Destron Fearing common stock. In addition, pursuant to the false and misleading proxy statement described above, "if a stock holder is entitled to a fractional interest of a share, he or she will receive in lieu thereof, cash (without interest) in an amount equal to such fractional share of common stock multiplied by the last reported sale of the common stock . . . " Thus, these small shareholders will be stripped of their equity in the company and have no right to dividends, voting rights or any other rights as a stock holder. Finally, the small shareholders owning fractional amounts of stock which will be turned into cash payment following voting on the false and misleading proxy statement may and will incur capital gains or losses as defined by the Federal tax laws without any apparent ability to control by vote or other means, incurring such capital gain or loss.

15. Plaintiff realleges, as set forth in full. each allegation set forth above.

16. This claim is asserted against Destron Fearing Corp. and Randolph Geissler.

17. Because Defendants distributed to Plaintiff and members of the class, the proxy statement which misrepresented and omitted to state material information necessary to make the statements made therein not misleading in light of the circumstances under which they were made, to solicit a proxy or consent or authorization with respect to a stock holders right to dissent in connection with the Company's proposal to effect a reverse stock split and use the mails and instrumentalities of interstate commerce, the facilities of a national securities exchange and contravention of the rules and regulations prescribed by Securities and Exchange Commission for the protection of investors, Plaintiff complains and alleges that Defendants violated §14(a) of the Securities Exchange Act of 1934 and Rule 14 a-9 thereunder.

18. Defendants knew, or were reckless or negligent in not knowing that the proxy statement contained untrue statements of material fact and omitted to state material facts necessary in order to make the statements made in light of the circumstances under which they were made, not misleading.

19. As a result, Plaintiff and members of the class will suffer imminent harm should they be denied the opportunity to make an informed decision on the reverse stock split and have sustained and will sustain damages as a result.

20. As a direct and proximate result of the Defendants' wrongful conduct, Plaintiff and members of the class have suffered and will suffer irreversible harm in the event that the Defendants are permitted to go forward with the shareholder vote by means of their false and misleading proxy statement.

21. Plaintiff realleges as set forth above in full the allegations contained in the preceding paragraphs.

22. This claim is asserted against Randolph Geissler. Randolph Geissler acted as a control person within the meaning of 20 of the Exchange Act. By reason of Mr. Geissler's power and influence over the Company as its President, Chief Executive Officer and Chairman, W Geissler had the power to influence and did influence directly and indirectly the unlawful acts and conduct complained in Claim I above in violation of Section 14(a) of the Securities and Exchange Act.

WHEREFORE, Plaintiff prays for the following relief:

A. A determination that this instant action is a proper class action maintainable under Rule 23 of the Federal Rules of Civil Procedure;

B. Awarding monetary damages against all Defendants, jointly and severally, in favor of Plaintiff and members of the class for any and all losses and damages suffered as a result of the acts and transactions complained of herein, together with prejudgment interest.

C. An order granting an injunction against Defendants from continuing with their intent to go forward with the shareholders meeting on January 29, 1999 or, in the alternative, granting an injunction prohibiting action to be taken on proposal No. 2 and further requiring that Defendants amend or withdraw their proxy statement containing false and misleading statements; awarding Plaintiff the costs and disbursements of this action, including reasonable attorneys fees and experts fees;

D. Granting such other and further equitable, injunctive, or relief as this Court may deem just and proper.

Source: Scanned paper copy of court-stamped document