Aug articles on stock option backdating

Although backdating had not yet been recognized as a problem, the provisions of Sarbanes-Oxley requiring that insiders report the acquisition of securities, including options, within two days of receipt greatly hindered the ability of corporations to backdate options.

The Board of Directors and the Compensation Committee failed to adopt adequate procedures to ensure that Compensation Committee members understood the company's 1997 Stock Option Plan and that it was properly administered.

From 1998 through 2005, the company's processes, procedures and controls were inadequate, although management steadily improved the processes beginning in 2001.

Chief Financial Officer Bradley Singer said this morning that the SEC inquiry is still open and it is not known what expenses the company will incur during the investigation.

American Tower said it did not report its full financial results for the third quarter, due to its internal stock options granting review.

The option grants involving lookbacks were inconsistent with the company's disclosures that option grants were made at fair market value, were not accounted for properly and, to the extent they involved incentive stock options, violated the requirement under the company's 1997 Stock Option Plan that they be at fair market value.

Stock options were granted by management pursuant to authority they believed had been delegated by the Compensation Committee, but that delegation was not adequately documented, and therefore the necessary legal approval of some grants did not occur until they were subsequently approved by the Compensation Committee.However, it did note that no terminations or changes in responsibilities of current executive management should be made as a result of its findings.In May , ATC said federal regulators were probing their grants of stock options to executives, joining a growing list of companies caught up in a rapidly expanding SEC investigation of options practices.Other similar practices are being reviewed by government officials as well.“Spring loading” involves the issuance of options immediately prior to the announcement of favorable financial news expected to have a positive impact on the underlying share price, thereby providing an immediate profit to the option holder.However, they said, certain members of past management who initiated and were involved with the option practices should have been aware of the accounting or legal issues or sought legal and accounting advice as to the practice.

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