Merely stating a retroactive effective date in the main agreement may not do the trick.
As to the first issue, the transaction between the FDIC and Weatherford couldn’t have retroactive effect unless the parties showed a clear intent for the transaction to be retroactive.
From the supply side, the question is what motivates a firm to grant a backdated option, and from the demand side, what motivates an executive to demand (or, at the very least, accept) a backdated option?
Both sets of motivations arise from the quantitative and qualitative benefits, costs, and risks of issuing and receiving backdated options. Certain AMT may be carried forward and applied to reduce the general tax payable in subsequent years (to the extent that the general tax exceeds the tentative alternative minimum tax liability for the subsequent year).
Most of the research to date has focused on supply side factors (e.g., accounting treatment, securities regulations, and corporate taxation), while there has been little discussion of demand side factors.
While understanding the propensity to backdate undoubtedly requires insight on the supply side factors to backdating (as it is the firms that ultimately grant executive stock options), without demand there would be no supply.