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United States: Two Delaware Chancery Court Cases On Backdating And Spring-Loading Stock Options Increase The Stakes For Directors

22 February 2007
Article by Robert A. Profusek , Lyle Ganske , Louis Rorimer , Lizanne Thomas , Philip Stamatakos and Manan Shah

Two potentially important Delaware law decisions were published on February 6 , relating to potential director liability in the highly charged area of option pricing, particularly "spring-loading" and "backdating." While each case was decided in response to a motion to dismiss where all facts alleged must be considered to be true, and the decisions do not constitute findings of actual liability, unless they are reversed on appeal or superseded, they are likely to add to the supercharged atmosphere in which directors of public companies are making decisions about granting equity-linked incentive awards....
 
 
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