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NATL61_018,020 03/08/2007 09:33 AM Page 20 Cross Border Department termination of employment for anyone & Graydon LLP in Toronto, stresses that delegated the authority to make option involved in a fraudulent scheme. the entire backdating scandal brings a more grants, there should be documentation Turner has specific advice for in-house fundamental issue to light. “The useful showing such delegation, as well as paper- counsel seeking to steer clear of even the thing for Canadian corporate counsel— work setting out when and how the dele- possibility of trouble. First, Turner advises leaving aside a very purposeful kind of gated grants were made. Tuzyk also notes that counsel “ought to be going back and activity where you’re deliberately picking that option grant letters or forms should be just looking at their administrative proce- the wrong day—is the necessity for prop- promptly provided to any insiders, and that dures for the granting of options to make erly documenting the decision-making counsel should assist insiders in making sure sure that they’re not being sloppy.” It must stream on option grants.” their insider reporting is up to date. be clear, for instance, who is issuing option Tuzyk states that, in addition to comply- The option grant scandal, dramatic as it grants, and the actual date of issuance. ing with the Staff Notice recently issued by may be, is actually a good opportunity for Second, “any time you’ve got material the Canadian Securities Administrators in-house counsel to ensure that their deci- undisclosed information, you shouldn’t be Staff—which recommends the establish- sion-making streams are properly docu- granting options.”Third,Turner notes that ment of a compensation committee,“black- mented, and that they are moving forward many of his clients have begun to move to out periods” and adoption for insider trad- with proper procedures in place. Further a fixed date for the granting of options.“By ing policy around earnings announce- research will show whether or not option fixing the date in advance, nobody can ments—in-house counsel should ensure backdating has been a problem in Canada in allege that you’re manipulating the time of that they have “the proper written process- the past, but counsel can act now to ensure the grant based on information you have.” es in place.” For example, if someone aside that it’s not a problem in the future. John Tuzyk,a partner with Blake,Cassels from the board of directors has been Emily White Financial Strength Ratings: Demotech, Inc. A” | Fitch Ratings A + | LACE Financial A Over the past 100 years, Stewart Title has become range of endorsements allows for the maximum one of the largest, most reliable title insurance possible coverage. Commercial experience and companies in the world. However, global presence expertise. Multi-site capabilities. These enable us and financial strength tell only half the story. It’s to provide title insurance for even the most com- how we work that sets us apart. plex transactions. Stewart Title’s commercial team deals exclusively At Stewart Title, we know it’s our relationship with with commercial transactions. Our experienced our clients that determines our success. That’s why underwriters will work with you to provide unsur- service is the foundation of our business and passed, customized policy coverage. A wide integrity, the keystone in all our dealings. Call us today or visit www.stewart.ca. Canadian Head Office (Toronto): (888) 667-5151 Atlantic Canada: (888) 757-0078 Western Canada: (866) 515-8401 Québec: (866) 235-9152 20 CCCA Canadian Corporate Counsel Association MARCH 2007