By Steve Green (contact)

Tue, Jun 2, 2009 (1 p.m.)

Information technology company Computer Sciences Corp. faces another
lawsuit over the alleged backdating of stock options for executives,
employees and directors.

A suit seeking class-action status was filed May 29 by shareholder
Shirley Morefield. It was filed in state court in Nevada -- where
Computer Sciences has been incorporated, though its headquarters is in
Falls Church, Va.

Morefield alleges in the suit, filed in Clark County District Court
in Las Vegas, that CSC and current and former board members deceived
shareholders by failing to disclose that many of the stock options
granted from 1997 to 2004 were backdated -- meaning recipients of the
options could earn extra profits by buying stock at prices lower than
the market price on the option grant dates.

Options typically are awarded to executives to give them an
incentive to push a company's share price higher. With an option, an
executive can immediately profit by buying a security at the option
grant date's low price and then selling it at the current higher price
-- assuming the value of the stock has risen.

The proxy statement for the CSC annual meeting in 2007 was among the
deceptive disclosures provided to shareholders, Morefield charges.

It was "false and misleading because those individual defendants
failed to disclose that many of the options that the company had issued
were backdated, misdated or mispriced and thus carried exercise prices
less than fair market value at the date of the grant,'' the suit
charged.

The suit seeks certification it is a class action representing all
CSC shareholders as of May 29; a judgment voiding all outstanding
options, restricted stock and equity awards issued under CSC's options
plans for 1997, 1998, 2001 and 2004; and an order barring CSC from
issuing CSC stock under the 2001 and 2004 plans.

A CSC spokesman declined comment Tuesday, citing a company policy of not commenting on pending or ongoing litigation.

This is at least the 10th lawsuit or claim to be filed against the
company since 2006 over the issue of allegedly backdated stock options.
CSC has succeeded in having many of the suits dismissed.

The company and the plaintiffs in one of the class-action suits
filed in federal court in Los Angeles now await a key ruling on summary
judgment motions filed by both sides, CSC said in a recent regulatory
filing. The ruling is expected this month.

"At this time it is not possible to make reliable estimates of the amount or range of loss

http://www.lasvegassun.com/news/2009/jun/02/it-company-sued-over-stock-option-allegations/