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Mercury News, April 28, 2009 article


Deposition in Apple options backdating case gives glimpse of the real Jobs


Updated: 04/28/2009 08:17:40 AM PDT

In 2001, Apple CEO Steve Jobs was looking for a little affirmation from the company's board of directors for the work he'd done in resurrecting the company.

Less than two years before, Apple had given Jobs a $90 million gift of an airplane and the largest stock option grant in history. But by summer 2001, he was upset that those options were underwater and the company hadn't granted him more.

"I was hurt," Jobs said in a deposition taken last year and obtained Monday by the Mercury News. He noted that he had helped secure millions of options for other top Apple executives earlier that year, and added: "I just felt like there is nobody looking out for me here."

"It wasn't so much about the money," Jobs continued in the deposition, which was taken during the government's investigation into options backdating at Apple. "But everybody likes to be recognized by their peers."

Apple later granted Jobs an additional 7.5 million options. The company acknowledged in late 2006 that it backdated that grant and thousands of others. Jobs in 2003 traded the two massive options grants for 5 million shares of restricted stock.

The deposition, taken in March 2008 in Cupertino, provides a rare up-close and unvarnished look at the notoriously secretive Jobs and his role at Apple. What comes across is not only Jobs' neediness but also his apparent ignorance of the finer points of accounting and corporate governance.

For example, Jobs acknowledged that he had signed a letter sent in October 2001 to Apple's auditors that claimed that the company had fully disclosed to the auditors all the information they needed to check the company's books.

But Jobs acknowledged in the deposition that, at the time of the letter, he was essentially ignorant of what the auditors might need to verify Apple's internal accounting, particularly how it accounted for stock options.

"I mean, I've since learned some things in the last 18 months; but at this point in time, I didn't understand that, no," Jobs said in response to a question about options accounting.

During the deposition, Jobs was not feeling well, a point he emphasized both at the beginning and the end. He requested that if the video of the deposition were ever shown to a jury, that the jury be shown the part where he acknowledged being ill.

Jobs went out on a five-month medical leave in January this year after rumors about his health had swirled since the company's developer conference last June, when he appeared gaunt. The New York Times reported in July that Jobs had surgery and suffered a malady in the weeks before the conference.

The conference took place less than three months after Jobs' deposition. Apple spokesman Steve Dowling declined to comment Monday on whether the illness Jobs mentions in the deposition is the same one he suffered before the developer conference.


Contact Troy Wolverton at or 408-920-5021.





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