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Technology Stocks : Apple Inc. -- Ignore unavailable to you. Want to Upgrade?


To: Lizzie Tudor who wrote (68700)9/17/2007 12:15:24 PM
From: inaflash  Read Replies (2) | Respond to of 213177
 
Thanks for the added information. It's a complicated situation and I'm still trying to figure out what evidence if any was critical in the Brocade case. It should be an interesting casestudy at law schools now and in the future.

The Executive Team grant, which was nominally dated January 17, 2001, worked like this, according to the SEC complaint. On January 30 Heinen emailed CEO Jobs and CFO Anderson spreadsheets laying out Apple’s stock prices for every day in the month of January, and recommending possible dates on which to retroactively date the grant. In her email to Jobs she wrote, “To avoid any perception that the Board was acting in appropriately [sic] for insiders prior to Macworld announcements, I suggest we use Jan. 10, the day after your Macworld keynote, at $16.563. That was one of the lowest closes of the month, after the $14.875 price on Jan 2. I don’t think the [Executive Team] would object to the $1.688 difference to avoid claims of inappropriate conduct.”

I wonder what the current accounting requirement would be as far as setting the price, especially given the price variability even during a single day, and the volatility changes that apply to the options. Do they need to use the opening price? closing price? average price? Exact market price (bid or ask or mid?) at the time the decision is being made? The HR department processes the grant? The accounting department makes the charge? With Apple swinging $5 on some days, that variability is not insignificant, and around events are worse. And the processing of these grants can take weeks, or months in the case of Jobs big grants that span multiple negotiating sessions.