Backdating a stock option means retroactively setting the option's strike price to a day when the stock traded at a different price. A call (buy) option with a lower strike price is more valuable because it's less expensive to exercise, while the inverse is true for a put (sell) option. The practice is not necessarily illegal but must be disclosed to shareholders. In July 2006, the company said it might restate financial results for the year that ended December 31, 2005, and previous years to record additional noncash charges for stock-based compensation expenses relating to various stock option grants.