Start Stock option backdating settlements

Stock option backdating settlements

The settlement of the shareholder lawsuit requires Black Box to pay Young — even though the company maintains that Young's actions related to improperly backdating stock options for executives and directors were cause for dismissal.

"Plaintiffs and the company believe that the settlement is in the best interests of Black Box and current Black Box stockholders," the settlement states.

Black Box executives and attorneys for the plaintiffs couldn't be reached to comment.

The company will receive $1.5 million from its directors' and officers' liability insurer and another $500,000 from its employment practices liability insurer, according to the court filings.

Backdating of stock options means the date the options are granted is changed to take advantage of a lower stock price.

As part of the negotiated settlement, Black Box agreed to pay a portion of what Young said he's owed and all plaintiffs' legal costs in the case, totaling $1.6 million.

Young, who resides in Silver Point, Tenn., sued Black Box soon after he abruptly resigned his CEO and board positions in May 2007 amid a stock options backdating investigation, securities filings showed.

Young claimed stock options totaling nearly 1.5 million shares and worth $19.6 million were improperly taken from him.