What is wrong with backdating stock options
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Backdating is the practice of marking a document, whether a check, contract or another legally binding document, with a date that is before what it should be.
Rather, it is the use of the backdated documents by the parties or their counsel that may violate the law.” The US approach seems to be founded on the principle that parties to an agreement (or deed) are free to agree that the document is to take effect prior to the date of execution – this is often denoted by dating the document “as of” the earlier date. Bradley Real Estate Trust, the US Court of Appeals (7th Cir.Apple shareholders have been particularly unfazed by the revelation that Jobs was not only aware that backdating was occurring, but also intimately involved in picking the dates to which the stock options were backdated.Many shareholders have rallied to defend Jobs' actions on the basis of his overall performance with the company.It would not be uncommon for there to be a lapse of days or even weeks between the time commercial terms are agreed and the date of final contract execution.Even for a simple document such as a Non-Disclosure Agreement (or Confidentiality Agreement), the parties may legitimately want the document to take effect from an earlier date.