Research in motion stock option backdating Chat without reg on wap

Posted by / 09-Jun-2020 08:18

It is common for two parties, particularly in the commercial context, to enter into a contract at one time, but agree to have the contract come into effect at an earlier time. Courts respect the parties' decision to backdate since giving effect to backdating provisions respects the parties' intentions as well as their freedom of contract., 1968 (the date the contract was delivered to the insured).

The Court considered the construction of the whole policy and held that the exclusion clause took effect on the backdated date chosen by the parties.

For example, in the case one executive got 500,000 backdated options that are described as having an immediate paper profit of .5 million. The question is what factors should be analyzed in determining how much the executive profited and how much shareholders may have lost? The enforcement actions seem to talk about the profits to executives as if one can simply take the difference between the price the options should have been issued at and what the backdated price was as the profit.

Critics argue that this practice misaligns the interest of shareholders and the executive because options are suppose to be an incentive to improve the stock price in the future, not give an instant profit. Backdating options, however, may not necessarily give any executive an “instant profit.” Most options are not immediately exercisable.

The Law Society of Upper Canada Ontario Discipline Committee determined that backdating the employment contracts was for the purpose of misleading a third party, and suspended the solicitor for a period of twelve months.

Additionally, where the backdating of an agreement affects the taxes that are imposed (or not imposed) on one of the contracting parties, courts will generally only respect the backdating provisions as between the contracting parties.

A court will generally not enforce the backdating provisions as between a taxpayer and the applicable tax enforcement agency (such as the Canada Revenue Agency).

The company attempted to impede the unionization by hiring additional employees that were against the union.

However, to the company's disappointment, these employees were not hired until after the company's current employees filed their application to unionize, making the new employees unable to participate.

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In addition to misleading a third party, backdating may also be impermissible where it contravenes applicable rules or legislation.