By Elinor Mills, 6 February 2009 15:28
NEWS
The co-chief executives of RIM and two other executives will pay more than $74.5m to settle a stock-options-backdating case, under an agreement approved on Thursday by Canada's Securities Commission.
Co-chief executives Jim Balsillie and Mike Lazaridis, chief financial officer Dennis Kavelman, and finance director Angelo Loberto have agreed to contribute $31m to RIM for the benefit they received from the incorrectly priced stock options granted to all employees from 1996 to 2006. They will also pay $36.4m to defray costs incurred by the company in the investigation and $7.4m to the Ontario Securities Commission (OSC) as an administrative penalty, according to the settlement.
RIM said the company and the executives have also made settlement offers to the US Securities and Exchange Commission (SEC) to resolve that agency's investigation into option-granting practices at the company. Those offers are subject to SEC approval. If they are approved RIM does not expect the settlements would have a material adverse effect on the company's business, RIM said.
John Richardson, RIM's lead director, said in a statement: "RIM is pleased that the parties have resolved matters with the OSC and looks forward to resolving matters with the SEC."
According to the settlement agreement, about 1,400 of RIM's 3,200 stock-option grants were backdated (dated prior to the date of actual granting) or re-priced (dated later than the actual granting), both of which are done to increase the value of the option.
RIM employees made about $53.6m as a result of the incorrect options dating practices but only half of that has been repaid, the settlement agreement said.
The company announced on Wednesday that the settlement has been reached.
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