Nov. 14 (Bloomberg) -- Apple Inc. won dismissal of a shareholder lawsuit claiming company officers including Chief Executive Officer Steve Jobs were overpaid with illegally backdated option awards.

U.S. District Judge Jeremy Fogel in San Jose, California, dismissed the case in an order today. Apple, maker of the iPod and iPhone music-and-video players, said last year that 6,428 stock-option grants issued between 1997 and 2002 were backdated.

The New York City Employees' Retirement System, the lead plaintiff in the case, acknowledged that Apple's stock price didn't fall as a result of the backdating, which is the most common basis for shareholder claims. Instead, the retirement system argued the awards caused Apple to dilute its stock by issuing more than 200 million shares that weren't properly accounted for or disclosed.

``While the subsequent disclosure that the options were backdated might require a restatement, without a discernable drop in the stock price there is no basis upon which to establish an injury to shareholders,'' Fogel wrote in his opinion.

Apple, based in Cupertino, California, found no misconduct by Jobs, who recommended favorable dates on some option grants other than his own. The company recorded $84 million in charges to correct its accounting.

Derivative Lawsuit

In dismissing the lawsuit, Fogel allowed shareholders to refile the claims as a so-called derivative suit arguing the alleged violations hurt the company. The case would then likely be folded into an existing derivative claim, according to the order.

The derivative lawsuit is based on similar claims made by the U.S. Securities and Exchange Commission against former Apple General Counsel Nancy Heinen. The SEC sued Heinen in April, accusing her of backdating a 7.5 million-share option grant to Jobs in 2001 and earlier grants to his executive team. That case is also pending before Fogel.

The New York City Employees' Retirement System serves more than 200,000 working members and 120,000 retirees. Jay Eisenhofer, a lawyer representing the shareholders, wasn't available to comment after business hours.

Kristin Huguet, an Apple spokeswoman, didn't immediately return a call seeking comment.

Apple shares fell $3.85 to $166.11 in Nasdaq Stock Market trading. The shares have risen 95.8 percent this year.

The case is Vogel v. Jobs, 06-05208, U.S. District Court for the Northern District of California (San Jose).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

Last Updated: November 14, 2007 20:39 EST