Stock options backdating and representing law firms
You have to know what’s happening with clients, competitors, practice areas, and industries.Law360 provides the intelligence you need to remain an expert and beat the competition. 6, 2007, the Delaware Court of Chancery issued two significant decisions in derivative cases involving allegations of stock option backdating and spring-loading.In the first decision, involving allegations of backdating at Maxim Integrated Products Inc., the Chancellor recognized that stock option backdating is inherently deceptive and that “[a] director who approves the backdating of options faces at the very least a substantial likelihood of liability” for breaching the fiduciary duty of loyalty.
We have been involved in representing SLCs for Fortune 500 corporations. For that reason, we can advise you authoritatively when it comes to your SLC committee's disinterested independence and its good faith investigative procedures and methodologies.Employee stock options (ESOs) are a type of equity compensation granted by companies to their employees and executives.Rather than granting shares of stock directly, the company gives derivative options on the stock instead.Stock options are a benefit often associated with startup companies, which may issue them in order to reward early employees when and if the company goes public.They are awarded by some fast-growing companies as an incentive for employees to work towards growing the value of the company's shares.
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When a stock’s price rises above the call option exercise price, call options are exercised and the holder obtains the company’s stock at a discount.