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Apple Investigation Clears Steve JobsPOSTED December 29, 2006 CUPERTINO -- Apple Computer filed its annual 10-K report and 10-Q quarterly report on the last business day of the year after a delay in gathering information regarding options and potential backdating. A report directed by Al Gore found Steve Jobs did know of backdating some options but did not benefit from this. Apple filed its Form 10-Q for the quarter ended July 1, 2006 and its Form 10-K for the fiscal year ended September 30, 2006 with the Securities and Exchange Commission ("SEC"). Both filings had been delayed pending the conclusion of an independent investigation by the special committee of the board of directors into past stock option practices and the resulting restatement of the Company's financial results. Apple undertook this investigation on its own initiative and has informed the SEC and the U.S. Attorney's Office of the results. Jobs and the company have been mired under a cloud of uncertainty regarding options practices. Based on an analysis of the findings of the independent investigation, the Company has recognized total additional non-cash stock-based compensation expense of $84 million after tax, including $4 million and $7 million in fiscal years 2006 and 2005, respectively. The restatement arises solely from certain stock option grants made between 1997 and 2002; the investigation found no grants after December 31, 2002 that required accounting adjustments. "The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," said Al Gore, chair of the special committee, and Jerome York, chair of Apple's Audit and Finance Committee in a joint statement. "The board of directors is confident that the Company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team." Gore is a former Vice President of the United States and York is a former Chief Financial Officer at IBM. Here is data from Apple's 10-K report: "The independent counsel and its forensic accountants ("Investigative Team") reviewed the facts and circumstances surrounding stock option grants made on 259 dates. The Investigative Team spent over 26,500 person-hours searching more than one million physical and electronic documents and interviewing more than 40 current and former directors, officers, employees, and advisors. Based on a review of the totality of evidence and the applicable law, the Special Committee found no misconduct by current management. The Special Committee's investigation identified a number of grants for which grant dates were intentionally selected in order to obtain favorable exercise prices. The terms of these and certain other grants, as discussed below, were finalized after the originally assigned grant dates. The Special Committee concluded that the procedures for granting, accounting for, and reporting stock option grants did not include sufficient safeguards to prevent manipulation. Although the investigation found that CEO Steve Jobs was aware or recommended the selection of some favorable grant dates, he did not receive or financially benefit from these grants or appreciate the accounting implications. The Special Committee also found that the investigation had raised serious concerns regarding the actions of two former officers in connection with the accounting, recording and reporting of stock option grants." © Copyright SVDaily.com |
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