McAfee seeks gag on exec ousted over options

by


Elinor Mills

Former McAfee President Kevin Weiss, exonerated of wrongdoing in a
stock option-backdating scandal, plans to ask a judge on Monday to
unseal the arbitration award that cleared him of wrongdoing and ordered
McAfee to pay damages for firing him without proper cause.

Three years after being unceremoniously ousted from McAfee amid the options mess that was sweeping through corporations at the time, Weiss is attempting to clear his name in public.

"If an executive is terminated, how does he get his reputation back? Is
it even possible to do that?" Weiss' attorney, Scott Fletcher, asked
rhetorically in a phone interview on Friday.

Fletcher could not comment on the arbitration award because a Texas
state court had agreed to a McAfee request to put it under temporary
seal. Depending on what happens in Monday's hearing before Judge Carlos
Cortez in the 44th District Court in Dallas, the information may stay
confidential indefinitely.

McAfee claims that the arbitration proceedings were confidential. Fletcher disputes that.

A McAfee representative did not return a call seeking comment. Weiss,
who is now president and chief executive of self-publishing firm Author
Solutions, could not be reached for comment.

On October 11, 2006,
Mcfee announced that it had ousted Weiss and that CEO George Samenuk
had resigned in a management shake-up attributed to an internal
investigation into the stock option backdating.

As a result of the stock option practices, McAfee had to restate its
earnings and was subject to a U.S. Securities and Exchange Commission
investigation. McAfee was just one of a number of firms that found
itself in the predicament involving the practice of granting an
employee stock options with a date prior to the date it was actually
granted.

At the time, Weiss had been McAfee president only for seven months,
having been promoted to the post from executive vice president of
worldwide sales and services in March 2006. Prior to joining McAfee, the Princeton University graduate had held senior positions at Ariba, BindView, and BMC Software.

In January 2007, Weiss filed claims in arbitration for breach of his
employment contract. Separately, he filed an action for defamation and
breach of his stock option agreements against McAfee in Santa Clara
District Court in September 2007. Those court claims were folded into
the arbitration.

On June 1, the arbitrator ruled in favor of Weiss on his claims for
breach of contract and breach of duty of good faith and fair dealing,
according to a motion Weiss filed in the Texas court in response to
McAfee's request to seal the arbitration order. The arbitrator found
that Weiss had had no part in the stock option-granting process and
that he had been improperly fired, and awarded him substantial damages,
the document states.

The amount of the damages awarded was not disclosed in that document,
but a footnote says McAfee withheld "several million dollars" from the
payment, designating it as ordinary income for tax purposes, which
provides some sense of the size of the award.

Following the arbitrator's ruling, Weiss filed paperwork in the Texas
court on June 16, seeking to have the award confirmed judicially.
McAfee then filed documents asking the court to seal the records
relating to the arbitration, and Weiss responded.

"McAfee's request is merely the last in a long series of attempts to
undermine Mr. Weiss' credibility and tarnish his reputation," the court
document filed on behalf of Weiss said. "Confirmation of the award

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