Sonsini backdating a simple mandating portugal
OPINION BY: TASHIMA OPINION TASHIMA, Circuit Judge: Kent Roberts, the former General Counsel of Mc Afee, Inc. Background Sometime late in 2000, Roberts allowed Terry Davis, Mc Afee’s Controller and Senior Vice President, to backdate 20,000 stock options that the company had issued to Roberts months earlier as a reward for a promotion (the “Promotion Grant”).1 Backdating refers to the practice of dating an option grant retrospectively — that is, at some earlier date when the company’s stock was trading at a lower price than on the date of the grant.
Whatever Roberts said to the CEO and directors at the May 2000 shareholders’ meeting?
Davis changed the date of the grant from February 14 to April 14, when the stock price closed at .75.
Gillespie, Gillespie, Rozen & Watsky, PC, Dallas, Texas, for the plaintiff-appellee-cross-appellant. Hermle, Orrick, Herrington & Sutcliffe LLP, Menlo Park, California, for the defendant-appellant-cross-appellee. The district court denied the motion as to Roberts’ malicious prosecution claims, but granted it as to his claims for defamation and false light invasion of privacy. We conclude that Roberts has not demonstrated that his claims have the requisite degree of merit to survive Mc Afee’s anti-SLAPP motion: Mc Afee had probable cause to believe Roberts was guilty of a crime, and Roberts’ claims for defamation and false light invasion of privacy are time-barred. In Roberts’ case, the Promotion Grant was originally authorized on July 5, 2000, but dated as of February 14, 2000, the date of his promotion, when the stock was trading at .62.
Fickes successfully led the trial team in the first stock option backdating case to go to a jury.
in 1990, and University of California Hastings College of the Law with a J.
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(“Mc Afee”), alleges that Mc Afee maliciously prosecuted and defamed him in an attempt to deflect attention from largescale backdating of stock options within the company. Because an option’s strike price is typically equal to the stock price at the market’s close on the grant date, changing the grant date can change the strike price.whether he admitted culpability or not–the conversations led to his downfall at Mc Afee.Samenuk immediately asked Roberts to propose potential disciplinary measures; four days later, the Board voted to fire Roberts. Roberts’ involvement in backdating the Promotion Grant came under scrutiny in 2006, during a nationwide probe into options backdating that implicated Mc Afee. stock price,” had likely engaged in widespread backdating. The report identified five suspicious Mc Afee option grants.
In the second situation, backdating results in an overstatement of earnings, which misleads investors. The propriety of backdating the Promotion Grant turns on whether Davis and Roberts had the authority to backdate Roberts’ options, and whether a compensation expense should have been recorded to account for the later-added benefit Roberts received.
In the first situation, backdating augments the option’s value, which raises the cost of the option to the company without shareholders’ permission. 2011) (affirming defendant’s conviction for backdating stock options without authorization).