Apple Computer Inc. says its investigation of stock-option grants found no misconduct by current management but did find that CEO Steve Jobs recommended or was aware of the selection of some favourable grant dates.

However, Apple said Jobs did not financially benefit from the grants and the special committee that investigated the company said it has "complete confidence" in the CEO.

Its options mishandling will result in an additional non-cash charge of $84 million US, the Cupertino, Calif.-based company said Friday.

In its full-year financial report filed with the U.S. Securities and Exchange Commission, which was delayed due to the options probe, Apple said earnings for fiscal years 2006, 2005 and 2004 will be lowered by $4 million US, $7 million US and $10 million US, respectively.

Apple shares rose almost five per cent to $84.84 US on Nasdaq after the news.

The three-month probe identified a number of instances in which option grant dates were intentionally selected in order to obtain favourable exercise prices, the company said.

"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," former U.S. vice-president Al Gore, chairman of the special committee, and Jerome York, chairman of Apple's audit and finance committee, said in a joint statement.

"The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team."

The maker of the iPod music player and Macintosh computers is one of the most prominent among some 200 companies that have come under scrutiny for backdating stock options. It's a widespread practice, especially in Silicon Valley, that involves pegging stock options to favourable grant dates in the past to boost the recipients' award.

The manipulation itself isn't necessarily illegal, but securities laws require companies to properly disclose the practice in its accounting and settle any charges that may result.

Dozens of companies have been forced to restate their earnings, erasing some of their earlier recorded profits, after their stock option shenanigans came to light.

Apple initiated its own stock options probe in June and delayed its quarterly report for the period ending July 1 and its annual report for the fiscal year ended Sept. 30 as a result.

Apple said its investigation reviewed 42,077 stock option grants made on 259 dates between October 1996 and January 2003. Of those, 6,428 grants on 42 dates did not have the proper measurement dates, Apple said.

Of two option grants awarded to Jobs, one was improperly dated Oct. 19, 2001, with an exercise price of $18.03 US, instead of the correct date on Dec. 18, when Apple shares were trading at $21.01 US. That stock-option grant was for 7.5 million shares. Jobs later surrendered those options without exercising them and realized no financial benefit.

Though the probe exonerated current management, it did raise "serious concerns" with the stock-options accounting actions of two former officers, the company stated.

Apple did not identify those officers.

The company said it has provided the results of its internal review and independent investigation to the SEC and the U.S. Attorneys Office for the Northern District of California and has responded to their "informal requests" for documents and additional information.

The details of the findings Friday appeared to ease investor concerns that the options scandal would threaten Jobs. Shares of Apple went on a roller-coaster ride earlier in the week following media reports that federal investigators were looking into the
falsification of documents and that Jobs had received an award of stock options in 2001 without proper board approval.

The nationwide stock options scandal has already led to criminal indictments and resignations of several executives.

But none is considered as well known or tied to their company's success and identity as Jobs. Wall Street analysts have largely shrugged off the impact of the scandal on Apple as long as the company's iconic co-founder and CEO was to remain unscathed.