Apple stands by CEO Jobs

NEW YORK- Apple Computer Inc. Chief Executive Steve Jobs received a vote of confidence from his company on Friday in an eagerly awaited filing with U.S. regulators that included the disclosure that Apple would expense $84 million to cover misdated stock options.

The filing with the U.S. Securities and Exchange Commission came after Apple shares fluctuated sharply this week amid speculation that the company's annual report could include damaging findings about Jobs' role in the option grants.

But Apple said in the filing that while Jobs and other managers recommended or were aware of certain inaccurate grant dates, they did not financially benefit from the grants. Apple, which made a similar statement when it first announced the findings of its internal investigation in October, said it had "complete confidence" in its top executive and other senior managers.

Apple shares rose more than 3 percent in early Nasdaq trading.

Apple disclosed the amount of its restatement - which it had not previously reported -- and conceded that thousands of stock option grants made between 1997 and 2002 used the wrong measurement date. It said problems that led to the restatement had been corrected.

In all, Apple said the originally assigned dates for 6,428 grants on 42 dates were improper. Among those were two questionable grants to Jobs, dated Jan. 12, 2000, for 10 million shares, and Oct. 19, 2001, for 7.5 million shares.

The board originally approved the Oct. 19, 2001, grant at a meeting on Aug. 29, with an exercise price of $17.83.

The final terms of the grant were set on Dec. 18, and the price was changed to $18.30. But Apple shares were trading at $21.01 on that date.

According to Apple, "The approval for the grant was improperly recorded as occurring at a special board meeting on Oct. 19, 2001. Such a special board meeting did not occur. There was no evidence, however, that any current member of management was aware of this irregularity."

Apple has recognized $20 million in stock-based compensation expense for this grant, it said, reflecting the difference between the grant price and the actual stock price on Dec. 18.

Both the Oct. 19, 2001, and the Jan. 12, 2000, grants were never exercised and were canceled in March 2003, the company said.

Overall, Apple said it has recognized non-cash stock-based compensation expenses of $84 million after taxes, including $4 million in fiscal 2006 and $7 million in fiscal 2005.

Most noteworthy in the filing was Apple's support of its CEO and the lack any bombshells about his role in option grants.

"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," Al Gore and Jerome York, both board members, said 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."

Friday's filing echoed much of what Apple said in October, when it cleared Jobs of any wrongdoing related to option grants, blaming two other managers who it said had left the company.

Apple is among the best known companies caught up in the stock options scandal that has ravaged the technology industry. More than 160 companies are either under federal investigation or have launched their own inquiries into whether grant dates of stock options were manipulated to benefit executives who received them.

The biggest concern among Apple followers is that fallout from the probe could lead to the departure of Jobs, a company founder who has been lauded for turning around Apple's fortunes with the iPod digital music player and a revamped line of Mac computers.

Apple shares were up $2.70 to $83.57.