Sepracor: Prescription for governance improvements

In settling this derivative action alleging that certain officers and directors of Sepracor Inc. (Sepracor) improperly backdated their stock options, we obtained substantial relief for the company and its shareholders.

Among other things, Sepracor agreed to: cancel or reprice more than 2.7 million unexercised options; improve internal controls and granting procedures for stock options; require shareholder approval to change the exercise prices of stock options; hire an employee responsible for ensuring compliance with its stock option plans; and appoint a director of internal auditing.