Homestore Settles Class Action With CalSTRS

Homestore Inc., a provider of real estate media and technology systems, has announced a $63.6 million settlement agreement with the California State Teachers' Retirement System, the lead plaintiff in a class action lawsuit against the company.Under the agreement, which is subject to the approval of the U.S. District Court for the Central District of California, Homestore will pay $13 million in cash, issue 20 million new shares of common stock to members of the class, and adopt certain changes in corporate governance. The $13 million and the stock, currently valued at $50.6 million, will result in a one-time litigation settlement charge of approximately $63.6 million in the second quarter, the company said. Jack Ehnes, chief executive officer of CalSTRS, commended "the straightforward way in which the new management team at Homestore and its board of directors" worked to resolve the case. The governance provisions include, among other things, requirements for independent directors and special committees, the appointment of a new shareholder-nominated director, and a ban on the use of stock options for director compensation. The company can be found online at http://ir.homestore.com.