Two potentially important Delaware law decisions were published on Feb. 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 as true, and the decisions do not constitute findings of actual liability, unless they are reversed on appeal or superseded, they are likely to add to the supercharged atmosphere in which directors of public companies are making decisions about granting equity-linked incentive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. The cases will also be of concern to the roughly 150 companies presently involved in options-related investigations.
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