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, the city said in a statement.
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, the city Comptroller’s office and Law Department said in a statement.
Administrative and attorneys’ fees of $4 million will be paid separately by Apple, the statement said, bringing the total value of the settlement over $20 million.
“This settlement is an excellent example of shareholder advocacy and compensates shareholders for systemic options backdating at the company,” Corporation Counsel Michael A. Cardozo, the city’s chief legal officer and counsel to the city’s pension funds, said in the statement. “We are happy to have reached an accord with Apple after four years of litigation.”
Steve Dowling, a spokesman for Apple, said in a telephone interview that Apple and the city’s pension system “agreed to resolve their dispute in order to avoid lengthy and costly litigation.” He said the company was “glad to put this matter behind us.”
The city will seek preliminary approval of the settlement in U.S. District Court for the Northern District of California tomorrow, the statement said.
Those eligible for distributions from the settlement fund purchased Apple common stock at a price in excess of $65.71 between Aug. 24, 2001, and June 29, 2006, the statement said.
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.
To contact the editor responsible for this story: John Pickering at email@example.com