LOS ANGELES(Reuters) – A federal judge in San Jose has given preliminary approvalto a $14 million settlement of shareholder claims over backdating ofstock options against current and former Apple Inc executives, courtdocuments showed.
The current and former executives and directors, including Chief Executive Steve Jobs, agreed to the settlement.
As part of the deal, Apple’s liability insurer agreed to pay the company $14 million, the court document said.
The deal also includes the insuring company’s payment of nearly $9million in fees and expenses to lawyers who brought the state andfederal actions that were later consolidated.
U.S. District Judge Jeremy Fogel gave preliminary approval to the proposal and set a hearing for October 31 to finalize it.
Apple had no comment on the proposed settlement on Wednesday.
The shareholders’ attorney could not be reached for comment.
Such shareholder derivative actions are brought by shareholders onbehalf of a corporation, generally against officers and directorsaccused of harming the company or breaching their fiduciary duty toshareholders.
Under the proposed settlement, Apple agreed to implement certaincorporate governance reforms and modify its existing process forgranting and documenting stock options and other equity awards.
The shareholder actions, filed in 2006, accused Apple executives anddirectors of breaches of fiduciary duty, corporate waste, unjustenrichment and violations of state and federal laws related to allegedstock options backdating.
The lawsuits, which at one time numbered 21 in state and federalcourts, followed Apple’s disclosure in 2006 that it had discoveredirregularities related to stock options grants made between 1997 and2001, and had to take an $84 million charge.
The defendants included Jobs, former Chief Financial Officer FredAnderson, former General Counsel Nancy Heinen, Chief Financial OfficerPeter Oppenheimer, Chief Operating Officer Timothy Cook, Senior VicePresident Ronald Johnson, former executives Avadis Tevanian, MitchellMandich and Jonathan Rubinstein, and board members William Campbell,Millard Drexler, Arthur Levinson and Jerome York.
All of the defendants agreed to the settlement, according to court documents.
(Reporting by Gina Keating; Additional Reporting by Ajay Kamalakaran in Bangalore, Editing by Andre Grenon, Paul Bolding)
? Thomson Reuters 2008 All rights reserved
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