The co-chief executives of Research in Motion and two other executives will pay more than $74.5 million ($92 million Canadian) to settle a stock options-backdating case, under an agreement approved on Thursday by Canada's securities commission.
Co-Chief Executives Jim Balsillie and Mike Lazaridis, Chief Financial Officer Dennis Kavelman, and Finance Director Angelo Loberto have agreed to contribute $31 million to RIM for the benefit they received from the incorrectly priced stock options granted to all employees from 1996 to 2006. They will also pay $36.4 million to defray costs incurred by the company in the investigation and $7.4 million to the Ontario Securities Commission as an administrative penalty, according to the settlement.
RIM said in a statement that the company and the executives, have also made settlement offers to the U.S. Securities and Exchange Commission to resolve that agency's investigation into option granting practices at the company, which makes the BlackBerry handheld device. Those offers are subject to SEC approval. If they are approved RIM does not expect the settlements would have a material adverse effect on the company's business, RIM said.
"RIM is pleased that the parties have resolved matters with the OSC and looks forward to resolving matters with the SEC," John Richardson, RIM's lead director, said in the statement.
According to the settlement agreement, about 1,400 of RIM's 3,200 stock option grants were backdated (dated prior to the date of actual granting) or re-priced (dated later than the actual granting), both of which are done to increase the value of the option.
RIM employees made about $53.6 million as a result of the incorrect options dating practices, but only half of that has been repaid, the settlement agreement said.
The company announced on Wednesday that the settlement had been reached.