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 Apple today
announced that the special committee of its board of directors has reported
its findings after a three month investigation into Apple’s stock option
practices. The special committee of outside directors, together with independent
counsel and accountants, examined more than 650,000 emails and documents, and
conducted interviews with more than 40 current and former employees, directors
and advisors.
Apple initiated this voluntary independent investigation
after a management review discovered irregularities in past stock option
grants.
The independent investigation's key findings are:
- The investigation found no misconduct by any member of Apple's
current management team.
- The most recent evidence of irregularities relates to a January
2002 grant.
- Stock option grants made on 15 dates between 1997 and 2002 appear
to have grant dates that precede the approval of those grants.
- In a few instances, Apple CEO Steve Jobs was aware that favorable
grant dates had been selected, but he did not receive or otherwise benefit
from these grants and was unaware of the accounting implications.
- The investigation raised serious concerns regarding the actions
of two former officers in connection with the accounting, recording and reporting
of stock option grants. The company will provide all details regarding their
actions to the SEC.
"I apologize to Apple's shareholders and employees for these problems,
which happened on my watch. They are completely out of character for Apple," said Steve
Jobs, Apple's CEO. "We will now work to resolve the remaining issues
as quickly as possible and to put the proper remedial measures in place to
ensure that this never happens again."
The company also announced that Fred Anderson, Apple’s former
CFO, has resigned from its board of directors. Mr. Anderson, who
served as CFO from 1996 until 2004, informed the company that he believes it
is in Apple’s best interests that he resign from the board at this time.
The company and its independent auditors are reviewing the findings of the
independent investigation. Management continues to believe, and the audit committee
agrees, that Apple will likely need to restate its historical financial statements
to record non-cash charges for compensation expense relating to past stock
option grants.
The company and its independent auditors are reviewing
recent accounting guidance published by the SEC, and have not yet determined
the amount of such charges, the resulting tax and accounting impact, or which
periods may require restatement. The company continues to proactively inform
the SEC of its findings.
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