Jabil circuit sec investigation backdating

Reacting to that Journal story, the Securities and Exchange Commission and the U. Attorney's Office launched inquiries into the stock options practices at Jabil Circuit.

In a conversation at Jabil headquarters during the SEC investigation, Main told me that the SEC threat and the vague allegations had hurt the morale at the company — a 75,000-employee business with worldwide operations and, frankly, plenty of accompanying pride.

According to Jeffrey Benner, a Moody’s analyst and one of the report’s authors, backdating inquires could raise ratings questions about a company’s leadership, reputation, governance practices, and financial performance.

For instance, the report points out that investigations into backdating have already led to leadership shakeups, as senior managers at several companies under investigation departed abruptly.

As a result, Jabil increased stock-based compensation expense by .7 million. The deficiencies in the fraud allegations concern the falsity or misleading nature of the statement. The plaintiffs' allegedly contemporaneous trades appear in the table below. The "controlling person" will be liable for the acts of the violator "unless the controlling person acted in good faith and did not induce the act or acts constituting the violation or cause of action." 15 U.

Although Jabil also issued options to several officers on October 12, 2000, no officer enjoyed a re-pricing of the options granted on this date. 114, ¶ 229) Third, Jabil improperly accounted stock option grants to a non-employee director who provided consulting services. 114, ¶ 118(b)) Although the grant date of the replacement options was September 21, 2001, the documentation for recording the options was provided to CW5 several months after September 2001 and possibly as late as March 2002. 114, ¶ 118(c)) The PSLRA imposes no requirement that a plaintiff name a confidential witness. Kasaks, 216 F.3d 300, 313 (2d Cir.2000); In re PSS World Med., Inc. The complaint alleges which individual defendant signed each Form 10-K and Sarbanes-Oxley certification. Ca.1992) ("No liability can attach for trades made by plaintiffs before the insider engages in trading activity.").

said two preliminary internal reviews determined that the company didn't backdate stock-options grants. Petersburg, Fla., maker of circuit boards and computer components also said it had been contacted Tuesday by the Securities and Exchange Commission and that the agency said it is conducting an informal inquiry of the matter.

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On Tuesday, Jabil announced the unusual: The SEC had specifically told the company the inquiry was over. Here's what the company said: "Jabil announced that it had received a letter from the SEC Division of Enforcement advising that the Division had completed its investigation and did not intend to recommend that the SEC take any enforcement action." If the champagne is not flowing at Jabil's headquarters, then at least there must be some grim satisfaction that the regulatory nightmare appears to be over.

Coincidentally, Jabil stock traded over a share in early 2006, just before the Journal's claims of backdating shenanigans. Not all companies accused of backdating stock options have fared so well.

Earlier this year, a plea agreement was filed in federal court indicating Henry Samueli, a founder of Broadcom, would plead guilty to lying to the SEC during an inquiry into the backdating of stock options at the computer chip maker.

Plaintiffs were a putative class of investors who purchased stock in Jabil Circuit, Inc., a publicly traded electronics and technology company, from September 19, 2001 through December 21, 2007. Fifth, plaintiffs alleged that the individual defendants were liable as controlling persons of Jabil under Section 20(a) of the 1934 Act, 15 U. As a result, the district court held that plaintiffs failed to plead both falsity and scienter (intent to commit fraud) sufficiently to satisfy the heightened pleading requirements of the Reform Act.

This decision represents the most recent effort by the Eleventh Circuit to apply the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995 (“Reform Act”) and the Supreme Court’s decision in ., 551 U. 308 (2007) [see blog article here], to allegations of securities fraud arising from options backdating. The district court viewed the complaint as based on a scheme of backdating options, and found that the speculative allegations did not adequately plead backdating because they failed to detail the role of any of the individual defendants in the alleged scheme and did not identify when or how any stock option was backdated.

57), Laborers Pension Trust Fund for Northern California ("Laborers") and Pension Trust Fund for Operating Engineers ("Pension") sue on behalf of themselves and a putative class of other persons and entities (collectively the "plaintiffs") who purchased Jabil publicly traded securities from September 19, 2001, through December 21, 2006, (the "class period"). 114, ¶ 1, 62) The plaintiffs allegedly suffered financial loss as a result of the defendants' Exchange Act violations. Petersburg, Florida, Jabil provides "design, production and product management services" to electronics and technology companies. 114, ¶ 229) Because the grants issued at fair market value on December 22, 2000, Jabil recognized no compensation expense. Third, the plaintiffs allege that defendants Grafstein, Lavitt, Lewis, Main, Morean, Murphy, Newman, Raymund, Sansone, and Walters violated Section 14(a) and Rule 14a-9 by signing a proxy statement containing a false or misleading statement of material fact. § 78j(b), proscribes the "use or employ[ment], in connection with the purchase or sale of a security ..., [of] any manipulative or deceptive device or contrivance in contravention" of SEC rules. To satisfy Rule 9(b)'s particularity requirement for fraud, a plaintiff must set forth "(1) precisely what documents or oral representations were made, ... 114, ¶ 59) "CW5 was also responsible for handling the exercising and cancellation of options on behalf of the options recipients." (Doc. Home Depot, Inc., 544 F.3d 1230, 1240 (11th Cir.2008). Because the plaintiffs fail to plead a claim after four attempts, further leave to amend is futile.

Nichols, Holland & Knight, LLP, Miami, FL, Kevin H. Rose, Latham & Watkins, PA, Washington, DC, for Defendants. Appointed the lead plaintiffs in a January 18, 2007, order 2007 WL 170556 (Doc. Each individual defendant held a directorship or officership at Jabil for all or part of the class period. On October 12, 2000, Jabil decided to grant options to 1,510 non-executive employees. "Rather than issue `underwater' options, [Jabil] decided on December 22, 2000, to issue new grants." (Doc. Second, the plaintiffs allege that the defendants Alexander, Brown, Edwards, Main, Morean, Lewis, Murphy, Raymund, and Sansone violated Section 10(b) and Rule 10b-5 by selling Jabil securities without disclosing material confidential information concerning Jabil's financial condition. To state a claim under Section 10(b) or Rule 10b-5, a plaintiff must allege "(1) a misstatement or omission (2) of a material fact (3) made with scienter (4) upon which the plaintiff relied (5) that proximately caused the plaintiffs loss." Theoharous v. A plaintiff must also satisfy the pleading requirements of Rule 9(b), Federal Rules of Civil Procedure, and the PSLRA. To satisfy the PSLRA, a plaintiff must "`specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading.'" Tellabs, Inc. 114, ¶ 59) CW5 "was also responsible for entering details of grant `letters' that Kathryn Vetter (Doc. However, "the weight afforded to allegations based on statements proffered by a confidential source depends on the particularity of the allegations made in each case, and confidentiality is one factor that courts may consider." Mizzaro v.

The following table lists the stock-based compensation expense included in the restated financial statements and the effect of the restatement on reporting earnings (net of tax benefits). The order also finds that the PSLRA's "safe harbor" protects the defendants' forward-looking statements concerning Jabil's third quarter performance. Supp.2d at 1235-36) By failing to adequately plead backdating, the amended complaint also fails to plead loss causation. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir.2007). The issuance of a "suspiciously timed" option combined with a restatement of financial information fails to convert the policy representation into an actionably false and misleading statement. The plaintiffs fail to allege contemporaneous trades for Brown's and Main's March 23, 2006, trades, and fail to allege a single trade by Edwards. In this circuit, a "controlling person" has "the power to control the general affairs of the entity primarily liable at the time the entity violated the securities laws" and "the requisite power to directly or indirectly control or influence the specific corporate policy which resulted in the primary liability." Brown v.

Of the .3 million restatement for the eleven-year period, .9 million results from increased compensation expense to non-executive employees,

On Tuesday, Jabil announced the unusual: The SEC had specifically told the company the inquiry was over. Here's what the company said: "Jabil announced that it had received a letter from the SEC Division of Enforcement advising that the Division had completed its investigation and did not intend to recommend that the SEC take any enforcement action." If the champagne is not flowing at Jabil's headquarters, then at least there must be some grim satisfaction that the regulatory nightmare appears to be over.

Coincidentally, Jabil stock traded over $40 a share in early 2006, just before the Journal's claims of backdating shenanigans. Not all companies accused of backdating stock options have fared so well.

Earlier this year, a plea agreement was filed in federal court indicating Henry Samueli, a founder of Broadcom, would plead guilty to lying to the SEC during an inquiry into the backdating of stock options at the computer chip maker.

Plaintiffs were a putative class of investors who purchased stock in Jabil Circuit, Inc., a publicly traded electronics and technology company, from September 19, 2001 through December 21, 2007. Fifth, plaintiffs alleged that the individual defendants were liable as controlling persons of Jabil under Section 20(a) of the 1934 Act, 15 U. As a result, the district court held that plaintiffs failed to plead both falsity and scienter (intent to commit fraud) sufficiently to satisfy the heightened pleading requirements of the Reform Act.

This decision represents the most recent effort by the Eleventh Circuit to apply the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995 (“Reform Act”) and the Supreme Court’s decision in ., 551 U. 308 (2007) [see blog article here], to allegations of securities fraud arising from options backdating. The district court viewed the complaint as based on a scheme of backdating options, and found that the speculative allegations did not adequately plead backdating because they failed to detail the role of any of the individual defendants in the alleged scheme and did not identify when or how any stock option was backdated.

57), Laborers Pension Trust Fund for Northern California ("Laborers") and Pension Trust Fund for Operating Engineers ("Pension") sue on behalf of themselves and a putative class of other persons and entities (collectively the "plaintiffs") who purchased Jabil publicly traded securities from September 19, 2001, through December 21, 2006, (the "class period"). 114, ¶ 1, 62) The plaintiffs allegedly suffered financial loss as a result of the defendants' Exchange Act violations. Petersburg, Florida, Jabil provides "design, production and product management services" to electronics and technology companies. 114, ¶ 229) Because the grants issued at fair market value on December 22, 2000, Jabil recognized no compensation expense. Third, the plaintiffs allege that defendants Grafstein, Lavitt, Lewis, Main, Morean, Murphy, Newman, Raymund, Sansone, and Walters violated Section 14(a) and Rule 14a-9 by signing a proxy statement containing a false or misleading statement of material fact. § 78j(b), proscribes the "use or employ[ment], in connection with the purchase or sale of a security ..., [of] any manipulative or deceptive device or contrivance in contravention" of SEC rules. To satisfy Rule 9(b)'s particularity requirement for fraud, a plaintiff must set forth "(1) precisely what documents or oral representations were made, ... 114, ¶ 59) "CW5 was also responsible for handling the exercising and cancellation of options on behalf of the options recipients." (Doc. Home Depot, Inc., 544 F.3d 1230, 1240 (11th Cir.2008). Because the plaintiffs fail to plead a claim after four attempts, further leave to amend is futile.

Nichols, Holland & Knight, LLP, Miami, FL, Kevin H. Rose, Latham & Watkins, PA, Washington, DC, for Defendants. Appointed the lead plaintiffs in a January 18, 2007, order 2007 WL 170556 (Doc. Each individual defendant held a directorship or officership at Jabil for all or part of the class period. On October 12, 2000, Jabil decided to grant options to 1,510 non-executive employees. "Rather than issue `underwater' options, [Jabil] decided on December 22, 2000, to issue new grants." (Doc. Second, the plaintiffs allege that the defendants Alexander, Brown, Edwards, Main, Morean, Lewis, Murphy, Raymund, and Sansone violated Section 10(b) and Rule 10b-5 by selling Jabil securities without disclosing material confidential information concerning Jabil's financial condition. To state a claim under Section 10(b) or Rule 10b-5, a plaintiff must allege "(1) a misstatement or omission (2) of a material fact (3) made with scienter (4) upon which the plaintiff relied (5) that proximately caused the plaintiffs loss." Theoharous v. A plaintiff must also satisfy the pleading requirements of Rule 9(b), Federal Rules of Civil Procedure, and the PSLRA. To satisfy the PSLRA, a plaintiff must "`specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading.'" Tellabs, Inc. 114, ¶ 59) CW5 "was also responsible for entering details of grant `letters' that Kathryn Vetter (Doc. However, "the weight afforded to allegations based on statements proffered by a confidential source depends on the particularity of the allegations made in each case, and confidentiality is one factor that courts may consider." Mizzaro v.

The following table lists the stock-based compensation expense included in the restated financial statements and the effect of the restatement on reporting earnings (net of tax benefits). The order also finds that the PSLRA's "safe harbor" protects the defendants' forward-looking statements concerning Jabil's third quarter performance. Supp.2d at 1235-36) By failing to adequately plead backdating, the amended complaint also fails to plead loss causation. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir.2007). The issuance of a "suspiciously timed" option combined with a restatement of financial information fails to convert the policy representation into an actionably false and misleading statement. The plaintiffs fail to allege contemporaneous trades for Brown's and Main's March 23, 2006, trades, and fail to allege a single trade by Edwards. In this circuit, a "controlling person" has "the power to control the general affairs of the entity primarily liable at the time the entity violated the securities laws" and "the requisite power to directly or indirectly control or influence the specific corporate policy which resulted in the primary liability." Brown v.

Of the $54.3 million restatement for the eleven-year period, $48.9 million results from increased compensation expense to non-executive employees, $1.7 million results from misdated options to executive officers, and $3.7 million relates to consultation by a single director. The plaintiffs purport to allege repeated instances of backdating by pleading the dates of "suspiciously timed" option grants and the individual defendants who received the grants. 114, ¶¶ 111-16, 126-28, 135-37, 144) However, the plaintiffs fail to allege that any specific grant of options to any specific defendant was backdated. --------------------------------------------------------- Alexander 3/27/2006 3/31/2006 Laborers --------------------------------------------------------- Brown 3/23/2006 3/30/2006 3/31/2006 Laborers --------------------------------------------------------- Edwards n/a n/a --------------------------------------------------------- Lewis 6/30/2004 7/2/2004 Laborers --------------------------------------------------------- Main 1/11/2006 1/13/2006 Laborers 3/23/2006 --------------------------------------------------------- Morean 12/30/2003 12/30/2003 Laborers 1/23/2006 1/24/2006 Laborers 1/24/2006 1/24/2006 Laborers 1/25/2006 Pension 2/6-2/8/2006 2/7/2006 Pension 2/8/2006 Pension 3/30/2006 3/31/2006 Laborers 4/20/2006 4/20/2006 Laborers 4/24/2006 4/26/2006 Pension --------------------------------------------------------- Murphy 1/26/2006 1/27/2006 Laborers 1/30/2006 Pension --------------------------------------------------------- Raymund 4/18/2006 4/20/2006 Laborers --------------------------------------------------------- Sansone 11/23/2005 11/23/2005 Laborers 11/26/2005 Laborers 1/24/2006 1/24/2006 Laborers --------------------------------------------------------- The plaintiffs allege trades within four days of sales by defendants Alexander, Brown (on March 30, 2006), Lewis, Main (on January 11, 2004), Morean, Murphy, Raymund, and Sansone.

In general, government probes are being launched to determine whether the grants were backdated to a point shortly before the company announced good news, so option holders could capitalize on a lower market value.

Although the practice is considered controversial by many investors, backdating is legal if disclosed in regulatory filings, allowed by the company’s own policies, and accounted for properly.

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On Tuesday, Jabil announced the unusual: The SEC had specifically told the company the inquiry was over. Here's what the company said: "Jabil announced that it had received a letter from the SEC Division of Enforcement advising that the Division had completed its investigation and did not intend to recommend that the SEC take any enforcement action." If the champagne is not flowing at Jabil's headquarters, then at least there must be some grim satisfaction that the regulatory nightmare appears to be over.Coincidentally, Jabil stock traded over $40 a share in early 2006, just before the Journal's claims of backdating shenanigans. Not all companies accused of backdating stock options have fared so well.Earlier this year, a plea agreement was filed in federal court indicating Henry Samueli, a founder of Broadcom, would plead guilty to lying to the SEC during an inquiry into the backdating of stock options at the computer chip maker. Plaintiffs were a putative class of investors who purchased stock in Jabil Circuit, Inc., a publicly traded electronics and technology company, from September 19, 2001 through December 21, 2007. Fifth, plaintiffs alleged that the individual defendants were liable as controlling persons of Jabil under Section 20(a) of the 1934 Act, 15 U. As a result, the district court held that plaintiffs failed to plead both falsity and scienter (intent to commit fraud) sufficiently to satisfy the heightened pleading requirements of the Reform Act. This decision represents the most recent effort by the Eleventh Circuit to apply the heightened pleading requirements of the Private Securities Litigation Reform Act of 1995 (“Reform Act”) and the Supreme Court’s decision in ., 551 U. 308 (2007) [see blog article here], to allegations of securities fraud arising from options backdating. The district court viewed the complaint as based on a scheme of backdating options, and found that the speculative allegations did not adequately plead backdating because they failed to detail the role of any of the individual defendants in the alleged scheme and did not identify when or how any stock option was backdated. 57), Laborers Pension Trust Fund for Northern California ("Laborers") and Pension Trust Fund for Operating Engineers ("Pension") sue on behalf of themselves and a putative class of other persons and entities (collectively the "plaintiffs") who purchased Jabil publicly traded securities from September 19, 2001, through December 21, 2006, (the "class period"). 114, ¶ 1, 62) The plaintiffs allegedly suffered financial loss as a result of the defendants' Exchange Act violations. Petersburg, Florida, Jabil provides "design, production and product management services" to electronics and technology companies. 114, ¶ 229) Because the grants issued at fair market value on December 22, 2000, Jabil recognized no compensation expense. Third, the plaintiffs allege that defendants Grafstein, Lavitt, Lewis, Main, Morean, Murphy, Newman, Raymund, Sansone, and Walters violated Section 14(a) and Rule 14a-9 by signing a proxy statement containing a false or misleading statement of material fact. § 78j(b), proscribes the "use or employ[ment], in connection with the purchase or sale of a security ..., [of] any manipulative or deceptive device or contrivance in contravention" of SEC rules. To satisfy Rule 9(b)'s particularity requirement for fraud, a plaintiff must set forth "(1) precisely what documents or oral representations were made, ... 114, ¶ 59) "CW5 was also responsible for handling the exercising and cancellation of options on behalf of the options recipients." (Doc. Home Depot, Inc., 544 F.3d 1230, 1240 (11th Cir.2008). Because the plaintiffs fail to plead a claim after four attempts, further leave to amend is futile. Nichols, Holland & Knight, LLP, Miami, FL, Kevin H. Rose, Latham & Watkins, PA, Washington, DC, for Defendants. Appointed the lead plaintiffs in a January 18, 2007, order 2007 WL 170556 (Doc. Each individual defendant held a directorship or officership at Jabil for all or part of the class period. On October 12, 2000, Jabil decided to grant options to 1,510 non-executive employees. "Rather than issue `underwater' options, [Jabil] decided on December 22, 2000, to issue new grants." (Doc. Second, the plaintiffs allege that the defendants Alexander, Brown, Edwards, Main, Morean, Lewis, Murphy, Raymund, and Sansone violated Section 10(b) and Rule 10b-5 by selling Jabil securities without disclosing material confidential information concerning Jabil's financial condition. To state a claim under Section 10(b) or Rule 10b-5, a plaintiff must allege "(1) a misstatement or omission (2) of a material fact (3) made with scienter (4) upon which the plaintiff relied (5) that proximately caused the plaintiffs loss." Theoharous v. A plaintiff must also satisfy the pleading requirements of Rule 9(b), Federal Rules of Civil Procedure, and the PSLRA. To satisfy the PSLRA, a plaintiff must "`specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading.'" Tellabs, Inc. 114, ¶ 59) CW5 "was also responsible for entering details of grant `letters' that Kathryn Vetter (Doc. However, "the weight afforded to allegations based on statements proffered by a confidential source depends on the particularity of the allegations made in each case, and confidentiality is one factor that courts may consider." Mizzaro v. The following table lists the stock-based compensation expense included in the restated financial statements and the effect of the restatement on reporting earnings (net of tax benefits). The order also finds that the PSLRA's "safe harbor" protects the defendants' forward-looking statements concerning Jabil's third quarter performance. Supp.2d at 1235-36) By failing to adequately plead backdating, the amended complaint also fails to plead loss causation. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir.2007). The issuance of a "suspiciously timed" option combined with a restatement of financial information fails to convert the policy representation into an actionably false and misleading statement. The plaintiffs fail to allege contemporaneous trades for Brown's and Main's March 23, 2006, trades, and fail to allege a single trade by Edwards. In this circuit, a "controlling person" has "the power to control the general affairs of the entity primarily liable at the time the entity violated the securities laws" and "the requisite power to directly or indirectly control or influence the specific corporate policy which resulted in the primary liability." Brown v. Of the $54.3 million restatement for the eleven-year period, $48.9 million results from increased compensation expense to non-executive employees, $1.7 million results from misdated options to executive officers, and $3.7 million relates to consultation by a single director. The plaintiffs purport to allege repeated instances of backdating by pleading the dates of "suspiciously timed" option grants and the individual defendants who received the grants. 114, ¶¶ 111-16, 126-28, 135-37, 144) However, the plaintiffs fail to allege that any specific grant of options to any specific defendant was backdated. --------------------------------------------------------- Alexander 3/27/2006 3/31/2006 Laborers --------------------------------------------------------- Brown 3/23/2006 3/30/2006 3/31/2006 Laborers --------------------------------------------------------- Edwards n/a n/a --------------------------------------------------------- Lewis 6/30/2004 7/2/2004 Laborers --------------------------------------------------------- Main 1/11/2006 1/13/2006 Laborers 3/23/2006 --------------------------------------------------------- Morean 12/30/2003 12/30/2003 Laborers 1/23/2006 1/24/2006 Laborers 1/24/2006 1/24/2006 Laborers 1/25/2006 Pension 2/6-2/8/2006 2/7/2006 Pension 2/8/2006 Pension 3/30/2006 3/31/2006 Laborers 4/20/2006 4/20/2006 Laborers 4/24/2006 4/26/2006 Pension --------------------------------------------------------- Murphy 1/26/2006 1/27/2006 Laborers 1/30/2006 Pension --------------------------------------------------------- Raymund 4/18/2006 4/20/2006 Laborers --------------------------------------------------------- Sansone 11/23/2005 11/23/2005 Laborers 11/26/2005 Laborers 1/24/2006 1/24/2006 Laborers --------------------------------------------------------- The plaintiffs allege trades within four days of sales by defendants Alexander, Brown (on March 30, 2006), Lewis, Main (on January 11, 2004), Morean, Murphy, Raymund, and Sansone. In general, government probes are being launched to determine whether the grants were backdated to a point shortly before the company announced good news, so option holders could capitalize on a lower market value.Although the practice is considered controversial by many investors, backdating is legal if disclosed in regulatory filings, allowed by the company’s own policies, and accounted for properly.

.7 million results from misdated options to executive officers, and .7 million relates to consultation by a single director. The plaintiffs purport to allege repeated instances of backdating by pleading the dates of "suspiciously timed" option grants and the individual defendants who received the grants. 114, ¶¶ 111-16, 126-28, 135-37, 144) However, the plaintiffs fail to allege that any specific grant of options to any specific defendant was backdated. --------------------------------------------------------- Alexander 3/27/2006 3/31/2006 Laborers --------------------------------------------------------- Brown 3/23/2006 3/30/2006 3/31/2006 Laborers --------------------------------------------------------- Edwards n/a n/a --------------------------------------------------------- Lewis 6/30/2004 7/2/2004 Laborers --------------------------------------------------------- Main 1/11/2006 1/13/2006 Laborers 3/23/2006 --------------------------------------------------------- Morean 12/30/2003 12/30/2003 Laborers 1/23/2006 1/24/2006 Laborers 1/24/2006 1/24/2006 Laborers 1/25/2006 Pension 2/6-2/8/2006 2/7/2006 Pension 2/8/2006 Pension 3/30/2006 3/31/2006 Laborers 4/20/2006 4/20/2006 Laborers 4/24/2006 4/26/2006 Pension --------------------------------------------------------- Murphy 1/26/2006 1/27/2006 Laborers 1/30/2006 Pension --------------------------------------------------------- Raymund 4/18/2006 4/20/2006 Laborers --------------------------------------------------------- Sansone 11/23/2005 11/23/2005 Laborers 11/26/2005 Laborers 1/24/2006 1/24/2006 Laborers --------------------------------------------------------- The plaintiffs allege trades within four days of sales by defendants Alexander, Brown (on March 30, 2006), Lewis, Main (on January 11, 2004), Morean, Murphy, Raymund, and Sansone.

In general, government probes are being launched to determine whether the grants were backdated to a point shortly before the company announced good news, so option holders could capitalize on a lower market value.

Although the practice is considered controversial by many investors, backdating is legal if disclosed in regulatory filings, allowed by the company’s own policies, and accounted for properly.

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