Apple Computer sued in Federal, State courts over stock options
By Jason Bennert, Bay City News Service
July 6, 2006
CUPERTINO (BCN) - Apple Computer Wednesday announced that
it has been sued in both federal and state courts in connection
with its past stock options awards to company officers and directors,
including CEO Steve Jobs.
Apple is one of a number of Silicon Valley companies that have
come under scrutiny from federal regulators in recent months over
the practice of "back-dating'' stock options. Legally, options
are supposed to allow the recipient to purchase a set number of
shares at the price on the day the option was granted.
Recipients make money if the price of the stock rises between
the dates the options are granted and the date they are exercised.
According to regulators some companies, including possibly Apple,
allowed their options recipients to purchase shares at the lowest
price from a range of dates instead of the date they were granted.
In a statement, Apple would not discuss specifics about the lawsuits
it is facing.
"Both suits make claims against current and former officers
and directors with respect to the company's awarding of stock
option grants,'' the statement said. "Last week, Apple proactively
announced that it had discovered irregularities in the issuance
of certain stock option grants and is conducting an independent
investigation into the matter. The company is currently evaluating
its response to the lawsuits.''
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