Lone Star Steakhouse & Saloon insiders have agreed to return $4.7 million to the company to settle a 2001 lawsuit filed by the California Public Employees Retirement System, a major shareholder. CalPERS accused Lone Star executives of looting the company by repricing stock options and arranging golden parachutes for CEO Jamie Coulter and others.
Lone Star didn't say who would be giving back options proceeds.
Lone Star's insurance carrier will also make a payment of $3 million, the company said.
The settlement remains subject to court approval.
Following the CalPERS suit, Lone Star took steps to reform its corporate governance, including the addition of three independent directors. It now requires shareholder approval before options are repriced.
"We are pleased that Lone Star has taken actions to improve their corporate governance profile and we believe that the company's focus on good governance has resulted in substantially improved financial performance at the company," said Mark Anson, CalPERS' chief investment officer.
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