Apple finds more stock option 'irregularities'

The company may have to restate past financial results

Apple Computer Inc. has found more problems with its accounting for stock option grants and now says it is likely that it will restate some past financial results.

The company said last month that an internal investigation had uncovered problems with some stock option grants made between 1997 and 2001. Late Thursday, it said it had found additional evidence of irregularities.

Because of the new discoveries, Apple is likely to have to restate past financial results to record noncash charges for the expense of making stock option grants, the company said in a statement. Apple also said it filed a Form 8-K with the U.S. Securities and Exchange Commission that said its earnings, press releases and similar communications for periods after Sept. 29, 2002, should not be relied upon.

Because of the ongoing investigation, the company will also delay filing its Form 10-Q for the quarter that ended July 1 to the SEC, Apple said. Form 10-Q is a formal report of quarterly results. The Cupertino, Calif.-based company plans to file the 10-Q and any restated results as soon as possible after the investigation is finished, it said.

On June 29, Apple said it had found problems with historical stock option grants, including one to CEO Steve Jobs. The grant to Jobs had been cancelled, and Jobs didn't financially benefit from it, according to Apple. At that time, the company said it was hiring outside counsel to investigate and had informed the SEC.

In recent months, a long line of high-tech companies has run into problems with how stock-option grants to employees and executives have been accounted for. Options were a critical form of currency in Silicon Valley during the tight job market early in this decade.

In after-hours trading Thursday, Apple's stock (AAPL) was down $3.59 per share to $66.

Copyright © 2006 IDG Communications, Inc.

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