Calculating the fair value of an equity compensation award requires the use of an option pricing model based on six factors, several of which require analysis of historic grant and forfeiture patterns and, thus, tracking of employee termination dates and forfeiture, expiration and exercise dates, as well as the time elapsed between the grant date and the forfeiture, expiration or exercise date (thus the need for an auditable solution that calculates the expense based on all of these factors, appropriately weighted to the company's circumstances).
While these technologies are more expensive than using an Excel spreadsheet, the advent of cloud computing opened the door for them to be delivered over the Internet, thus eliminating the need for expensive software updates each time the regulations change.What were once simple awards now required data security, audit trails, and complicated accounting calculations.Even if only the essential requirements are met, being able to prove that awards were made on a certain date when the stock price was a specific amount requires tracking the issue date and the processing date (thus the need for data security and an audit trail). After the defendant’s motion to dismiss our client’s claims was denied by the United States District Court for the Southern District of Texas, the case settled favorably. During our representation of the Outside Directors of Enron’s Board, we handled groundbreaking litigation in the district court and the United States court of appeals concerning the interpleader of insurance policies. The injunction was affirmed in every respect by a unanimous Beaumont Court of Appeals, and the Banks did not pursue further appellate remedies. We are proud to say that of our clients were ever charged with any criminal or regulatory violations of the securities laws despite the white-hot attention of the press and Congress.