Apple Inc. has agreed to pay $16.5 million to settle a class action suit by the New York City Employees’ Retirement System that the company improperly backdated stock options between 2001 and 2006. Apple will return $14 million to shareholders and contribute a total of $2.5 million to corporate governance programs at various U.S. universities, including Harvard, Yale and Columbia. Administrative and attorneys’ fees of $4 million will be paid separately by Apple, bringing the total value of the settlement to over $20 million. Corporation Counsel Michael A. Cardozo, the city’s chief legal officer and counsel to the city’s pension funds, said in a written statement:
This settlement is an excellent example of shareholder advocacy and compensates shareholders for systemic options backdating at the company. We are happy to have reached an accord with Apple after four years of litigation.
The city must obtain preliminary approval of the settlement in U.S. District Court for the Northern District of California tomorrow. Those eligible for distributions from the settlement fund purchased Apple common stock at a price in excess of $65.71 between August 24, 2001, and June 29, 2006. The New York City Employees’ Retirement System, the court-appointed lead Plaintiff in the class action, is the largest municipal public employee retirement system in the country with more than 300,000 active members and retirees.
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