Affymetrix Settles Derivative Litigation
In 2006, an internal review of stock-option granting practices by Affymetrix found no pattern of inappropriate backdating, “lapses in documentation” and one instance in which a stock-option grant date had been recorded incorrectly for options granted from 1997 to 1999. As a result, the company restated its financial statements for 2003–2005 “to record additional non-cash stock-based compensation expense and the related tax impact resulting from stock options granted during fiscal years 1997 to 1999.”
Washington, DC 5/20/09; San Jose, CA 5/6/09—The US District Court for the Northern District of California has preliminarily approved a settlement agreement between Affymetrix and shareholders in a 2006 shareholder derivative action brought against company officers. Shareholder derivative actions are lawsuits brought by shareholders against a company’s management for the violation of fiduciary duties. Three Affymetrix shareholders brought suit against 13 company executives, alleging improper backdating of stock option grants received between 1998 and 2002, unjust enrichment and other charges. Under the settlement, Affymetrix will cancel more than 700,000 stock options granted to company officers, implement corporate governance measures and pay $3.5 million in plaintiffs’ attorney fees and expenses. A settlement hearing is set for June 29.
