McAfee Fires General Counsel

The company cites questions about an option award in 2000.
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Security software maker

McAfee

(MFE)

said its board fired the company's general counsel after learning that he might have wrongly benefited from an options grant roughly six years ago.

McAfee has previously said it was reviewing its previous practices in connection with the awards of employee stock options. Following the review, the company has become aware of one episode involving Kent Roberts, its general counsel, in 2000 that it says was improper.

Additional details weren't disclosed. McAfee said Tuesday that its audit committee is continuing to examine other option grants and has hired outside legal counsel for assistance. The company has had talks regarding its options giveaways with both with the staff of the

Securities and Exchange Commission

and the Justice Department.

McAfee's shares were down 10 cents, or 0.4%, at $23.85.

Several companies have come under fire in recent weeks for their options programs. Questions have been raised at

Juniper

(JNPR) - Get Report

,

F5

(FFIV) - Get Report

and

UnitedHealth

(UNH) - Get Report

, among others, about how they priced the options granted to their executives.

The firms under scrutiny are being quizzed about whether they changed the exercise prices for some options after they were initially granted in order to let employees take advantage of troughs in the company's share price.

Profits grow as a stock's price becomes more distant from an option's strike price. As a result, backdating the options to coincide with a low in the shares would allow the option recipient to make more than they otherwise would have if the strike was determined on the day of the award.