EFI says some defendants in stock option case will pay $19 million in insurance payments to the company - blogs.mercurynews.com - Jack Davis

EFI says some defendants in stock option case will pay $19 million in insurance payments to the company

http://blogs.mercurynews.com/docudrama/2008/07/11/efi-says-some-defendants-in-stock-option-case-will-pay-19-million-in-insurance-payments-to-the-company/

Posted by Jack Davis on July 11th, 2008 at 3:38 pm | Categorized as Backdating, Electronics for Imaging | Tagged as Backdating, Electronics for Imaging

We posted
back in June about the proposed settlement Electronics for Imaging says
it has reached in the litigation relating to its past stock option
granting practices that accused some of the company’s officers and
directors of breaching their “fiduciary duties” in the matter. At that
time, mention was of “certain payments to be made to the company” that
were not specified. “By whom and for what, we must wait to see,” we
wrote at the time.

It looks like we now know have answers based on a release EFI put out today announcing a final

settlement date in the matter.

The “certain payments” turn out to come from “some defendants” in
the action who will “contribute their rights to an additional $19
million in insurance proceeds,” the same defendants who have agreed to
“cancel, return or reprice certain mispriced and other stock options.”

So let’s see if we’ve got this straight: certain defendants were due
to be paid $19 million by their insurance carriers as claims against,
um, what, the profits they might have gained from the tainted stock
options they gave up?

The company also said it won’t let this kind of stuff happen again
because it has agreed to implement “”certain corporate governance
reforms.”

Any shareholders who wants to contest the settlement, or the more
than $3 million to be paid in attorney fees and costs, “MAY DO SO BY
FOLLOWING THE PROCEDURE SET FORTH IN PARAGRAPH 21 OF THE NOTICE OF
PENDENCY OF CLASS AND DERIVATIVE ACTION.” (Their emphasis, not ours.)

In case you are such a shareholder and haven’t received your notice about this proposed

settlement offer, “you may obtain copies by contacting the Notice Administrator at Gilardi &

Co., P.O. Box 5100, Larkspur, 94977-5100.” Good luck.