Blackberry 2009 Annual Report Download - page 29

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• Changes to the Company’s Stock Option Granting
Practices — In June 2007, the Board of Directors
approved a formal policy on granting equity awards,
the details of which are described in the Company’s
Management Information Circular, dated May 28, 2008
(the “Management Information Circular”), a copy of which
can be found on SEDAR at www.sedar.com and on the
SEC’s website at www.sec.gov. In addition, in July 2007, the
Board of Directors determined to exclude independent
directors from future stock option grants.
• Changes to the Company’s Board of Directors, Board
Committees and Organizational Structure — In accordance
with the Special Committee’s recommendations and other
considerations, the Board of Directors established in 2007
an Oversight Committee, separated the roles of Chairman
and Chief Executive Officer, implemented other changes
to the Company’s Board of Directors, Audit Committee,
Compensation Committee, and Nominating Committee,
and changed various management roles. In addition
to Barbara Stymiest and John Wetmore, who became
directors of the Company in March 2007, David Kerr and
Roger Martin were elected as directors of the Company
at the Annual General Meeting of the Company on July
17, 2007. Each of the new directors is “independent”
within the meaning of applicable securities laws and stock
exchange rules. As previously disclosed, each of Douglas
Fregin, Kendall Cork and Douglas Wright did not stand for
re-election at the Annual General Meeting of the Company
in 2007. Kendall Cork and Douglas Wright were appointed
to the honorary position of Director Emeritus of the Board
effective July 17, 2007 in recognition of their substantial
contributions to the Company over many years.
• Other Changes — The Company established an internal
audit department and an individual commenced
employment with the Company in the fourth quarter of
fiscal 2008 in the position of Senior Vice-President,
Risk Performance and Audit. This new officer reports
directly to the chair of the Audit Committee as well
as administratively to the Co-Chief Executive Officer,
Jim Balsillie. Additionally, the Company enhanced its
capabilities in U.S. GAAP and in securities disclosure
and compliance matters issues by establishing two new
permanent full-time positions which have been filled,
respectively, by an employee with expertise in U.S. GAAP
and an employee with expertise in securities disclosure
and compliance. The latter employee is assisting in
the administration of the Company’s equity awards
granting program.
same basis as Jim Balsillie and Mike Lazaridis. In addition,
Dennis Kavelman and Angelo Loberto each agreed to be
prohibited, for a period of five years from acting as an officer
or director of a company that is registered or required to file
reports with the SEC, and to be barred from appearing or
practicing as an accountant before the SEC with a right to
reapply after five years.
Jim Balsillie, Mike Lazaridis, Dennis Kavelman and
Angelo Loberto also agreed to the payment of monetary
penalties totaling, in aggregate, $1.4 million to the SEC as an
administrative penalty.
Actions Taken as a Result of the Review
As previously disclosed, the Board of Directors, based on the
recommendations of the Special Committee, implemented a
number of measures in response to the findings of the Special
Committee, including measures that are designed to enhance
the oversight and corporate governance of the Company and
to strengthen the Company’s control over its stock option
granting process in particular. These measures include:
• Benefits from Option Grants — All directors and each of
RIM’s co-Chief Executive Officers and Chief Operating
Officers (“c-level officers”) agreed in respect of options
that were incorrectly priced to return any benefit on
previously exercised options and to reprice unexercised
options that were incorrectly priced. All vice-presidents of
the Company were asked to agree to similar treatment for
their options that have dating issues, where those options
were granted after the employee’s commencement of
employment and in the employee’s capacity as vice-
president. All of the stock options held by directors, c-level
officers and vice-presidents that were subject to such
repricing have been repriced, and the Company received
$8.7 million, including interest, in restitution payments
from its directors, c-level officers and vice-presidents in
fiscal 2008. In addition to the repricings described above,
certain employees of the Company agreed in fiscal 2008
and fiscal 2009 to reprice stock options held by them that
were incorrectly priced. The total repriced options for all
directors, c-level officers, vice-presidents and employees
to date include, in fiscal 2009, 43 stock option grants in
respect of options to acquire 752,775 common shares and
in fiscal 2008 87 stock option grants in respect of options
to acquire 9,426,000 common shares.