WICHITA, Kan., Oct. 24, 2002 (PRIMEZONE) -- Lone Star Steakhouse & Saloon, Inc. (Nasdaq:STAR) announced that it had recently adopted a policy that provides for the use of pre-arranged trading plans by persons subject to the Company's insider trading. The policy provides, among other things, that to be valid, a trading plan must include a written formula (such as a limit price) for determining the amount, price and date of the transaction.
Pre-arranged trading plans, which can benefit both insiders and other stockholders, are provided for under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, which provides a safe harbor from insider trading liability if, among other things, an individual or entity can demonstrate that a purchase or sale occurred pursuant to a binding contract, specific instruction, or written plan put into place when the individual or entity was not in the possession of material nonpublic information.
Pre-arranged trading provides insiders with an opportunity to diversify their holdings with confidence that they will not violate insider trading rules even if they are aware of material nonpublic information at the time a trade is executed under the program. Pre-arranged trading plans can also be used in connection with the "cashless" exercise of stock options by insiders, whereby the option exercise price and tax liability on any gain can be covered by a sale of a portion of the options being exercised or of shares already held.
Pre-arranged trading can benefit the Company's stockholders by reducing or eliminating the market disruption that could otherwise occur if the Company's insiders were to conduct all of their transactions in the relatively brief "window" trading periods which follow the filing of quarterly and annual financial reports.
Lone Star owns and operates 249 domestic and 24 international Lone Star Steakhouse & Saloon restaurants; 15 Sullivan's Steakhouse restaurants; and five Del Frisco's Double Eagle Steak House restaurants. Licensees operate three domestic and one international Lone Star restaurants, and one domestic Del Frisco's Double Eagle Steak House restaurant.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the Company believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions including future performance could be inaccurate, and therefore, there can be no assurance that the forward-looking statements contained in the press release will prove to be accurate.