Counsel from Law Firm Litigating Options Backdating Cases Are Available to Answer Questions about the Backdating Practice and the Status of More Than 20 Suits Initiated on Behalf of Its Clients.

NEW YORK -- One of the nation's leading class actions law firms, which has filed more than 20 lawsuits on behalf of shareholders of companies whose officers and directors appear to have improperly backdated stock options, will make its counsel available to members of the media who need background information or answers to questions about the litigation and the alleged backdating options scandal.

While many of the pending cases are at the earliest stages of litigation, Wolf Haldenstein Adler Freeman & Herz LLP has already been appointed lead counsel in actions against officers and directors of AMCC, Caremark, Mercury Interactive, Novellus Systems, and Xilinx. Motions to decide lead counsel status are pending in other cases.

Wolf Haldenstein is a New York City based law firm with offices in Chicago, San Diego, Washington, DC and West Palm Beach. With roots that date back to 1888, it is one of the oldest firms in New York City. It is one of the country's leading law firms litigating class actions under the federal securities laws and shareholder actions under state laws. The firm has recovered billions of dollars for investors, including participants in employee pension funds.

In addition to its internal team of lawyers and analysts who are working on the backdating litigation, the firm has retained one of the country's foremost experts in the field, a professor of economics who originally identified the corporate practice of manipulating stock option grants to maximize the profits or corporate executives.

The stock options backdating complaints filed by the firm on behalf of its clients are pending in federal and state courts across the country, including courts in California, Delaware, Massachusetts, New York, Tennessee and Texas.

THE PRACTICE OF BACKDATING STOCK OPTION GRANTS

A stock option granted to an employee of a corporation allows the employee to purchase company stock at a specified price - referred to as the "exercise price" - for a specified period of time. When an employee exercises an option, he or she purchases the stock from the company at the exercise price, regardless of the stock's market price at the time the option is exercised. Stock options are granted as part of employees' compensation packages to create incentives for them to boost profitability and stock value.

Pursuant to most companies' stock option plans, options are required to be priced at the price of the company's stock on the day of the grant. If an option is backdated to a day on which a market price was lower than the price on the day the option is granted, then the employee pays less and the company gets less money for the stock when the option is exercised. This gives the employee greater compensation than that to which he or she is entitled, and undermines the incentive value of the option grant. It's akin to betting on a poker hand after all the cards are displayed. It appears that at an alarming number of corporations, executive officers awarded themselves and their associates options backdated to a date just prior to a large increase in the company's stock price. As a result of these backdated option grants, these officers were unjustly enriched to the detriment of the companies and their shareholders. Backdating the options also breached these individuals' fiduciary duties of care, loyalty, and good faith.

The backdating of stock option grants appears to have resulted in numerous instances of falsely inflated income in companies' financial statements filed with the Securities & Exchange Commission ("SEC"), and the underpayment of federal income taxes by both the companies and the individual executives who received the grants. This has, in turn, resulted in government investigations and enforcement proceedings by the SEC, the Internal Revenue Service and several regional United States Attorneys. Many of these companies are being required to restate their financial results going back several years and are missing SEC periodic filing deadlines that may threaten to cause the delisting of the companies from their national stock exchanges.

In a recent article published by The Wall Street Journal, Arthur Levitt, a former chairman of the Securities and Exchange Commission (SEC), was quoted as stating that stock option backdating "represents the ultimate in greed." Further, Levitt stated, "It is stealing, in effect. It is ripping off shareholders in an unconscionable way." On May 5, 2006, President George W. Bush stated in an interview on the Kudlow & Company show airing on CNBC that "overcompensating or trying to backdate things is bad for America, and there ought to be consequences when people don't tell the truth and are not transparent."

REMEDIES FOR SHAREHOLDERS

Litigation initiated by Wolf Haldenstein is based on the premise that any shareholder is entitled to assert the rights of companies who have been harmed by the manipulation of stock option grants. Typically, the majority of the members of the board of directors are on the committees that oversee executive compensation and the audit of the company's public financial statements. This means that it is up to the shareholders to recover for the harm to the corporation and to force implementation of corporate practices designed to guard against future option grant abuse. Indeed, a recent study by a team of economists being published in the Michigan Law Review has estimated that the average company currently under investigation for publishing false information about its stock option grants has lost approximately $500 million of its market value.

Members of the press who have questions about the backdating practice or the status of the litigation can contact Lawrence Kolker of Wolf Haldenstein Adler Freeman & Herz LLP at 212-545-4600.