Definition of option backdating
Many companies use employee stock options plans to compensate, retain, and attract employees.
These plans are contracts between a company and its employees that give employees the right to buy a specific number of the company’s shares at a fixed price within a certain period of time.
Companies sometimes revalue the price at which the options can be exercised.
This may happen, for example, when a company’s stock price has fallen below the original exercise price.
The trial court granted the defendants summary judgment, holding that FH Partners didn’t own the loan and so it couldn’t enforce it.
On appeal, the Missouri Court of Appeals, Western District agreed.
This process occurred when companies were only required to report the issuance of stock options to the SEC within two months of the grant date.