14 DAY TRIAL // Court documents reveal that a federal judge in San Jose has given preliminary approval to a $14 million settlement of shareholder claims over backdating of stock options against several of Apple's current and former execs.
According to a Reuters report, Chief Executive Steve Jobs is among the enlisted Apple high-ups who have agreed to the settlement. Apple's liability insurer has agreed to pay the Cupertino-based electronics giant $14 million, as part of the deal, which also includes the insuring company's payment of nearly $9 million in legal fees and attorney expenses, Reuters informs.
The settlement proposal received preliminary approval from the U.S. District Judge, who set a hearing for October 31, when it should become legally effective. In the meantime, Apple refused to comment on the matter, as did the shareholders' attorney. Apparently, Apple's secretive attitude is also rubbing off on whoever makes contact with the company.
It was later revealed that, with the proposed settlement, Apple had agreed to “implement certain corporate governance reforms and modify its existing process for granting and documenting stock options and other equity awards,” the Reuters report reads. “Such shareholder derivative actions are brought by shareholders on behalf of a corporation, generally against officers and directors accused of harming the company or breaching their fiduciary duty to shareholders,” it is further explained.
Filed two years ago, the shareholder actions accused Apple's executive board of “breaches of fiduciary duty, corporate waste, unjust enrichment and violations of state and federal laws related to alleged stock options backdating.”
Apple's disclosure that it had discovered irregularities related to stock options grants made over a 4-year span (1997-2001) was at the core of all 21 lawsuits, filed in both state and federal courts, that cited Apple execs as defendants at one point.
This time, the defendants included Jobs, former Chief Financial Officer Fred Anderson, former General Counsel Nancy Heinen, Chief Financial Officer Peter Oppenheimer, Chief Operating Officer Timothy Cook, Senior Vice President Ronald Johnson, former executives Avadis Tevanian, Mitchell Mandich and Jonathan Rubinstein, and board members William Campbell, Millard Drexler, Arthur Levinson and Jerome York.
Court documents also showed that all of the parties against whom the action was brought were in accordance with the stipulations of the settlement proposal.