Apple options backdating 2016
Here, NYCERS stated that the dilution “reduce[d] a shareholder’s percentage of ownership” and that “this 20% transfer clearly ha[d] a highly significant economic consequence even though the Company’s share price may not have moved in response to the transfer.” The Court was not persuaded.In contrast, the Court held that NYCERS’ dilution theory of economic loss is unsupported by caselaw, and, as the district court recognized, economic loss does not necessarily accompany dilution.Third, the proxy statement also indicated that in March 2003, Steve Jobs, Apple’s Chairman and CEO, canceled his outstanding options in exchange for ten million (split adjusted) shares of restricted stock.NYCERS alleged that this was misleading because some of the canceled options were backdated, improperly providing Jobs with 630,000 extra shares valued at over million. 375 (1970), grants courts broad authority to fashion equitable remedies for Section 14(a) claims.
NYCERS asserted that from 1996 to 2005, shareholders “unwittingly” authorized issuance of a total of 205 million shares, or 20% of Apple’s stock. NYCERS sought to plead economic loss in the form of “dilution to shareholder interests.” In dismissing the claim, the district court held that “dilution is not necessarily accompanied by economic loss” and that the principles of Dura Pharmaceuticals bars any suit brought solely on the basis that a misrepresentation caused an inflated share price. NYCERS alleged economic loss only in the form of dilution of their shareholdings and, as such, purportedly did not seek to rely on Dura Pharmaceuticals. Accordingly, pursuant to Dura Pharmaceuticals, without an allegation of economic loss no remedy, equitable or otherwise, is available.
Apple, it was alleged, compensated some employees by awarding stock options that were dated on a date earlier than when the stock options were actually issued, usually at a date when the stock price was lower.