Five months after a blistering Delaware Chancery Court ruling questioned Tyson Foods Inc.’s motivations in spring-loading its stock options, former CEO Don Tyson and a partnership that owns Tyson Foods shares agreed to pay $4.5 million to settle before the court suit comes to trial.

To settle the two-year-old derivative case, titled In Re Tyson Foods Inc., the company also agreed to “implement or continue certain governance measures,” including establishing a nominating committee, appointing a new independent director, and limiting related-party transactions that Tyson LP, Don Tyson, his family members, or Tyson Foods executives have with the company.

The former CEO and Tyson LP, identified as the company’s largest holder, will make the payment, with no other defendant participating, according to the Springdale, Ark.-based food producer.

While shareholder contentions about the design of the stock options will not be adjudicated — and claims against the defendants will be dismissed — an attorney for the plaintiffs tells CFO.com that “getting senior officers to write checks back to a company, where it’s not covered by insurance, is a big deal.” That outcome, along with governance changes being agreed to by Tyson Foods, add more significance to a case already rife with it.

“This case provided two huge pro-shareholder rulings early on in (Tyson Foods’s) motion to dismiss part of the case,” notes Stuart Grant, whose Delaware firm Grant & Eisenhofer represented plaintiffs. In refusing to dismiss the case on Aug. 15, Chancellor William B. Chandler III ruled that Tyson’s board had acted with “disloyalty that could not have arisen from a good faith business judgment” in its position on spring-loading the options. Spring-loading of options, as distinct from backdating, is the dating of strike prices ahead of expected favorable company news so that the value of issued shares likely will rise.

Still at issue, Tyson Foods noted in its press release, is whether as much as $3 million of the settlement amount will be devoted to attorney fees and expenses. The company said it “will contest this requested fee award.” But Grant notes that the judge will make that decision based on a range between $1 million and $3 million agreed upon by both sides.

Fees aren’t a major issue, Grant says, “compared to self-dealing transactions and issues of spring-loaded options granting and other misdeeds like that.” He says that Tyson agreed to make reforms in its board as a result of negotiations with the plaintiffs.

The case gave Tyson Foods more than its share of buffeting last year. Chancellor Chandler, after examining investors’ challenges to three option grants made by Tyson directors between 2001 and 2003, first let the plaintiffs’ spring-loading allegations stand in February, when he wrote that, compared to backdating, spring-loading entails “much more subtle deception” by a board.

The jurist saved more-biting language for the August ruling, however, writing that Tyson’s proxy statements had displayed “an uncanny parsimony with the truth” and saying that the company’s position allowed him to infer that the board had “engaged in later dissembling to hide earlier subterfuge.” A further inference, he said, is that “grants of spring-loaded stock options were both inherently unfair to shareholders and…the long-term nature of the deceit involved suggests a scheme inherently beyond the bounds of business judgment.”

In saying that he is “generally pleased with the settlement” that Tyson Foods agreed to late last week, attorney Grant adds that the company’s actions will make the board “somewhat more independent.” Still, he adds, “they’ve got a long way to go.”

A Tyson spokesman, asked to comment on Grant’s remarks, didn’t immediately return a phone call from CFO.com.