But the company didn’t follow its own rules. Instead, said people familiar with the company, options paperwork was administered by Berry.

She filled out the forms herself, “signing” committee members’ names with rubber stamps of their signatures.

People familiar with the KLA case say Berry is unlikely to face serious legal consequences for her role in grants there, since the statute of limitations for stock fraud is five years.

That’s not the case for others associated with the company. After Berry left the company in 1999 for Juniper Networks � again with the recommendation of Sonsini � the backdating continued at KLA. Wilson Sonsini remained as primary corporate counsel, and Sonsini as corporate secretary � a role that he told the Wall Street Journal last year was “merely clerical.”

A series of grants to top KLA executives in October 2001 has been the subject of media and regulatory scrutiny.

In March of that year, then-GC Stuart Nichols asked Wilson partners Stern and Bret DiMarco for advice on whether to let executives backdate their options awards.

In an e-mail written by DiMarco � who’s no longer with the firm � they said no, and outlined the accounting and regulatory perils of the practice, according to several sources with direct knowledge of the case.

Nichols passed that information on, lawyers familiar with the case say, but he was ignored: At the end of 2001, the company’s top five executives received a grant dated Oct. 2, 2001, at a sharp dip in share price; the company now says it had been backdated.

Then-CEO Kenneth Schroeder got the biggest award, an option to buy 341,100 shares. The KLA awards became a prime example in Wall Street Journal stories last year that exposed the options scandal.

People familiar with KLA’s probe said the 2001 e-mail from Stern and DiMarco made it appear, in the initial stages of KLA’s internal and government probes, that the Wilson lawyers were in the clear.

Optional Reading

Read The Recorder‘s roundup of the stock-option backdating scandal. There won’t be a test later … but there might be a subpoena.