Firing Wasn’t on GC’s List of Possible Penalties for his Backdated Stock
Former McAfee general counsel Kent Roberts gave company executives a list of possible actions they could take against him for a date change on his stock options grant.
The list, neatly written on hotel stationery, included alternatives such as terminating his stock options, reducing his bonus or even demoting him, the Daily Journal reports (sub. req.). But it didn’t have the option taken by the company four days after Roberts disclosed the backdating—his firing.
The list was admitted into evidence in Roberts’ backdating trial in San Francisco federal court. Prosecutors contend he caused the date to be changed on his stock options after he realized that a drop in the price of McAfee stock made them worthless. Roberts never exercised the options and he claims he relied on the company’s controller in changing the date.
Robert Dutkowsky, a former member of McAfee’s board of directors, testified yesterday that Roberts told him about the backdating before a shareholders meeting in 2006, the Daily Journal story says. Dutkowsky recalled that Roberts told him he had mentioned his worthless stock options to company controller Terry Davis, and Davis told Roberts he would take care of it.
Roberts “said he felt bad that it happened,” Dutkowsky testified, according to the Daily Journal account. “He never gained anything from the change. … In fact, he was never going to exercise [the options]. He and his wife and a planner had done some financial planning and they were not going to exercise them because they were wrong and he shouldn’t ever gain from them.”
