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McAfee seeks gag on exec ousted over options

Former McAfee President Kevin Weiss wants to clear his name after being awarded damages over his firing, but McAfee wants the information to remain confidential.

Former McAfee President Kevin Weiss Author Solutions

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 provides a means to clear Mr. Weiss' name publicly--something McAfee is apparently unwilling to do."

The arbitrator never ordered that the award be confidential, and Weiss did not agree to keep it confidential, the filing states.

In addition, McAfee has not shown a compelling need for keeping the award secret, the document claims.

In what could be its final public word on the case, McAfee's latest quarterly filing with the SEC two weeks ago states, "In January 2007, a former executive filed an arbitration demand with the American Arbitration Association, Dallas, Texas, seeking arbitration of claims associated with his employment. McAfee filed counterclaims. The arbitration took place in March 2009, and the matter was closed in June 2009."