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Steve Jobs was aware of backdating scandal, but cleared of wrongdoing

Apple today 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. 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.

The Financial Times yesterday reported that Steve Jobs took a $7.5 million stock options reward in 2001 without the required authorization from the company’s board of directors. According the news story, Apple had a false record of a board meeting to approve the stock options, which never actually took place.

An excerpt from the report filed to the SEC gives an explanation of the matter:

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.

Based on an analysis of the findings of the independent investigation, the Apple 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.

Although some believe that Steve Jobs’ future at Apple is now in question, the company said in a statement that its trust in its CEO has not changed.

"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," in a joint statement said Al Gore, chair of the special committee, and Jerome York, chair of Apple's Audit and Finance Committee. "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." Al Gore is also a director of Apple Computer.

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RE: Did you know...
By masher2 on 12/31/2006 11:51:58 AM , Rating: 2
You left off an important part of Vint Cerf's message. Let me repeat it here:

No one person or even small group of persons exclusively "invented" the Internet. It is the result of many years of ongoing collaboration among people in government and the university community...Our work on the Internet started in 1973 and was based on even earlier work that took place in the mid-late 1960s.
Hundreds of thousands of people were involved, and no one person can claim even 1% of the credit. Cerf himself is only called the "father" of the Internet by pop-sci newsrags who feel the need to simplify to absurdity, in the hopes of selling print.

For Al Gore to claim credit for the Internet, simply because he voted some appropriations money, is a vast disservice to both history, and the countless fine researchers who actually did contribute greatly to the effort.

RE: Did you know...
By oTAL on 1/2/2007 10:59:18 AM , Rating: 2
Did you read the part I did quote?

"We don't think, as some people have argued, that Gore intended to claim he "invented" the Internet."

He made a slip up, not a lie. Credit is due and he just worded it an easily misinterpreted way.

"Moreover, there is no question in our minds that while serving as Senator, Gore's initiatives had a significant and beneficial effect on the still-evolving Internet. The fact of the matter is that Gore was talking about and promoting the Internet long before most people were listening. We feel it is timely to offer our perspective."

It is accepted in those circles that Gore deserves credit for promoting the concept and hastening its growth. It IS indeed VERY similar to the Bill Gates 640K stuff. I'm not really sure anymore but I seem to recall someone with knowledge on the matter quoting him with something like "640K ought to be enough for everybody". That sentence was used in a particular context and made perfect sense at the time, but as Al Gore's statement it was distorted to mean something it did not.

The main question is: Do you think he was trying to take credit for the invention of the Internet?
Any sane person will know he wasn't. He was doing what every other politician does. He was summing up his most important choices and actions that have had a positive impact on Americans in particular and the world in general. Although it may not be elegant to rave about all the great things you have done in the past, it is hard not to do it on some situations so I don't blame him for that.

As for the suggestion that I am associated with Al Gore or the Democratic party... please!! That sounds like the answer Sony fan boys give when one bashes the PS3... I'm Portuguese, I live in Europe, I have never and will never vote on a U.S. election. I just hate it when people bash someone for a distorted slip up instead of giving them credit for the important actions that person may have taken (and in this case they are directly connected). Keep on downrating and I'll keep on defending him about this matter... Maybe a few uninformed people will read it and be willing to search Google, and stop taking these "quotes" for granted.

No matter what my political beliefs may be, I'm standing up for what I believe is justice, instead of spreading disinformation on the internet... I may be a needle in a thousand haystacks on the internet, but at least I wanna make my needle a good one and not a sheepish, follow the masses, ignorant one.

RE: Did you know...
By masher2 on 1/2/2007 12:21:46 PM , Rating: 2
> "He made a slip up, not a lie..."

He vastly exaggerrated his own contribution. It certainly wasn't a "slip up", and it merely continued his long-standing tradition of inflating his actions beyond all pretense of reality.

RE: Did you know...
By oTAL on 1/5/2007 1:55:33 PM , Rating: 2
He vastly exaggerrated his own contribution. It certainly wasn't a "slip up", and it merely continued his long-standing tradition of inflating his actions beyond all pretense of reality.

That, I am in no position to argue since, as I mentioned, I am not American and I don't closely follow the smaller issues in your country. That means I have to take your word for it.
On the other hand, you should be able to admit that anyone who quotes Al Gore as saying "I invented the internet" is a sheepish numbnut and should be corrected (or disregarded).

RE: Did you know...
By oTAL on 1/5/2007 2:31:23 PM , Rating: 2
One interesting thing on our little discussion here is that we are both presenting our arguments constructively (unlike some other people who replied to the thread) and, given the choice, I'd uprate your comments although I may not agree with them. Yet, I always get slammed for actively and coherently displaying my opinion when it goes against the masses. Still, when my opinion follows the masses I feel less need to express it (which, when it happens, usually gives me high ratings).
I guess that means follow the herd types, with a knack for quick witty jokes, get the high ratings around here....

"I mean, if you wanna break down someone's door, why don't you start with AT&T, for God sakes? They make your amazing phone unusable as a phone!" -- Jon Stewart on Apple and the iPhone

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