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Using a similar mechanism, existing employees regularly received additional options priced at the lowest price for the month of July.

An unidentified Microsoft official told the that Microsoft’s accountants at Deloitte had approved the programs, evidently opining that such options grants could be considered “at-the-money” grants — options priced at fair market value as of the day of the grant.

Backdating itself isn't illegal, but not telling the SEC or stockholders about it is considered securities fraud.

Heinen has denied the SEC's accusations — and Anderson, who was essentially charged for being asleep at the wheel while the backdating occurred, has claimed Jobs was informed about the implications of backdating.

In the deposition, Jobs told SEC lawyers during a March 2008 interview that he initially approached Apple's board of directors in 2001 about a stock option grant out of perceived lack of respect.

According to the SEC interview, Jobs claimed he doesn't know much about accounting or backdating shenanigans and didn't know the practice was illegal.

But for the next 30 days, if the stock price fell, the option price would be “reset” to the lower price.

In the end, new employees would get their options at the lowest trading price for the 30-day period following their date of hire.

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Reduxio Storage is fully integrated with core Windows features - the Microsoft i SCSI Software Initiator and Microsoft MPIO (Multipath I/O).Meanwhile, Micrel kept using its own 30-day pricing policy for two more years, until November 2001.By that time, however, according to Micrel’s complaint, the lead Deloitte partner on the Micrel account had changed.Last month, on the eve of a scheduled trial, the accounting firm of Deloitte & Touche quietly settled a malpractice suit that accused it of having approved a stock option pricing program that amounted to backdating.The plaintiff in the case, San Jose semiconductor maker Micrel Inc., disclosed the fact of the settlement — though none of its terms — last week in its 10-K filing with the SEC.Here is the chronology of the intertwined events at the two companies.In 1992, Microsoft instituted an options pricing policy that seems to have aimed at solving a problem many tech companies were then facing — one that only grew more intense during the dot-com bubble years.Due to extremely volatile prices, new employees often complained about receiving options with dramatically different strike prices from those of similarly situated colleagues who had joined the company just a few days earlier or later.Under Microsoft’s program, new employees were granted options that, at first, conformed to the norm: they had an exercise price equal to the price of a share of Microsoft at the market close the day before.In an interview, Micrel general counsel Vince Tortolano declined to give any additional information about the deal, but suggested that some clues about its size might be discernable from the company’s 10-Q for the first quarter of 2007, which will be filed in April or May.“Deloitte & Touche has denied, and continues to deny, any responsibility for the claims in the lawsuit brought by Micrel,” a spokesperson for the accounting firm said in an e-mail Monday.

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