Text 15844, 91 rader
Skriven 2007-02-04 07:31:16 av mike (1:379/45)
Ärende: Apple warns that it may lose select listing with Nasdaq
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From: mike <mike@barkto.com>


http://business.timesonline.co.uk/article/0,,9075-2581389,00.html

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Apple has given warning that it could be removed from the highly regarded
Nasdaq Global Select Market, as the maker of iPod and Macintosh acknowledged
for the first time that it was the subject of a federal investigation into its
stock option practices.

The company, which last June revealed “irregularitiesö in its stock option
grants and took an $84 million (œ43 million) charge six months later, said that
the investigation by the US Securities and Exchange Commission (SEC) could lead
to further restatements and delays to its financial reporting.


“The resolution of these matters will be time consuming, expensive and will
distract management from the conduct of the company’s business,ö Apple said
yesterday in a regulatory filing. “Furthermore, if the company is subject to
adverse findings in litigation, regulatory proceedings or government
enforcement actions, the company could be required to pay damages or penalties
to have other remedies imposed, which could harm its business, financial
condition, results of operations and cashflows.ö

Apple also noted that the investigation could “subject the company to a
potential delisting from the Nasdaq Global Select Marketö. That market, which
started last July, comprises about one third of the companies listed on the
Nasdaq exchange. Membership confers an extra degree of respectability on a
company’s accounting and corporate governance proceedures and, accordingly,
gives investors an increased level of confidence.

The SEC is investigating the way that Apple accounted for “backdatedö options,
which the company has admitted that it granted to key employees, including
Steve Jobs, the chief executive. The most sensitive case under investigation
relates to options granted to Mr Jobs in December 2001. The award was backdated
to October, when Apple’s share price was lower, thereby guaranteeing a much
bigger profit for Mr Jobs if the options were cashed in.

Apple acknowledged in December that it had falsified records to show that a
board meeting was held to approve the move when no such meeting took place.
Apple also said that Mr Jobs was not aware of accounting implications of
backdating and that he returned the options so that he would not benefit from
the practice.

Apple also disclosed yesterday that, in the last quarter of 2006, it had given
Mr Jobs $204,000 towards the running of a $40 million Gulfstream V jet aircraft
that the board had awarded the founder nearly six years ago. The company said
that it awarded the sum for expenses incurred by Mr Jobs while using his
aircraft for business purposes. Last year Mr Jobs did not incur any expenses
relating to the Gulfstream. In previous years, however, he was reimbursed as
much as $1.16 million in one quarter for flying his aircraft on company
errands. The reimbursement arrangement has been in place since March 2002,
after Apple gave Mr Jobs the luxury aircraft in May 2001 for returning to glory
the once-struggling business.

Mr Jobs takes an annual salary of $1. In 2001, however, management awarded him
the Gulfstream, costing the company a total of $90 million when various
associated expenses and costs are included.

Trial of error
- June 29, 2006: Apple says that an internal review has discovered
irregularities relating to the issuance of certain stock options between 1997
and 2001, including a grant to Steve Jobs, chief executive

- October 4: Mr Jobs admits that Apple will have to restate some of its
past financial results because it had changed the grant date of stock options
made on 15 days. Fred Anderson, then Apple’s chief financial officer, resigns
from the board with immediate effect

- October 5: It emerges that a Californian lawyer is investigating
several individuals in connection with stock option manipulations

- December 29: Apple says that it will restate financial results going
back to 2002 and take an $84 million (œ43 million) charge after unearthing
evidence that the board committee misdated 6,428 stock option grants. It admits
falsifying records relating to the grant of 7.5 million options to Mr Jobs

- January 23, 2007: It emerges that the Securities and Exchange
Commission (SEC) is not satisfied with Apple’s internal report and has asked it
for documents relating to its own inquiry into the company’s accounting

- February 2: Apple publicly admits that the SEC is investigating its
stock option grants and says that the company could be delisted from the Nasdaq
Global Select Market.
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  /m

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