Marvell Technology, the Bermuda-based chip company that operates out of Santa Clara, said today that it has agreed to resolve a shareholder class action lawsuit filed in August 2007 related to the way the company granted stock options in the past.

The company will pay $72 million and has decided to throw the charge retroactively into it results for its fiscal 2010 first quarter ended May 2, deepening its net loss to $111.5 million for the quarter.

Last year the company and its then chief operating officer–and the only member of its stock option “committee” during the period in question–Weili Dai, paid fines to the Securities and Exchange Commission over charges of false financial information to investors by improperly backdating stock option grants to employees, totaling $10 million and $500,000 respectively.

(In an question-and-answer feature last month with Mercury News reporter Steve Johnson, Dai declined to discuss the backdating case.)

The settlement of the class action suit is subject to preliminary and then, following notice to class members, final approval by the United States District Court for the Northern District of California.

Apple shareholders will be getting a “say on pay” after all.

Beginning next year, Apple will allow investors to have an annual advisory vote on its executive pay packages, the company said Monday in a statement. After repeatedly saying that shareholders had lost a vote on the matter at its annual meeting in February, Apple acknowledged in the statement that it had miscounted shareholder votes, mistakenly counting abstentions as no votes.

In a post on Friday, I noted that Apple seemed to have changed the way it counts shareholder votes over the last year. More shareholder votes were cast in favor of “say on pay” this year than last, and the gap between yes and no votes on the matter had widened. Despite that, Apple said last year that the matter had passed, while saying this year that it failed.

The company initially reported that the “say on pay” proposal failed in February at its annual meeting. Unlike other public companies, Apple does not release the preliminary vote totals on which it makes a call about the outcome of shareholder votes. So investors had to wait until last week — two months after the vote — to find out the real totals when the company reported them inside its latest quarterly financial report. That’s when the discrepancy finally came to light.

In fact, Apple miscalculated the the percentage of shareholder votes that voted against each of the investor-backed proposals. The only one that really mattered, though, was “say on pay,” because the other proposals were all soundly defeated, even if you excluded the votes that abstained.

Apple chalked up the mistake to “human error,” saying that it had launched an internal investigation into the matter last week after becoming aware of the vote problem shortly after it released its quarterly report. The company did not say who was responsible for the error, whether it was someone at Apple itself or someone at the auditor that counted votes at Apple’s meeting.

Regardless, investors will finally be able to formally tell Apple directors how they feel about the company’s pay practices. Shareholder representing a significant portion of Apple shares have been voting in favor of that right at the last three annual meetings. The issue became an especially hot-button topic at the company after 2006, when it acknowledged backdating thousands of stock options.

Before today, Apple had declined to comment on the votes. But in its proxy statement, Apple urged investors to vote against “say on pay” this year, arguing in part that because Congress is strongly considering mandating “say on pay” that the company should wait to see what Congress decides before acting on its own.

On Monday, the company said it would allow shareholders an advisory vote regardless of what Congress decides.

“The Compensation Committee of Apple’s Board of Directors has been closely following the say on pay issue,” the company said in a statement. Even if Congress doesn’t act on the issue, “Apple is committed to implementing an advisory Say on Pay vote next year.”

Sometime in the last year, Apple seems to have changed the way it tallies shareholder votes.

At its annual meeting with investors in February, Apple announced that shareholders had voted down all investor-sponsored proposals, including a widely watched one that urged the company to allow shareholders to vote every year on its executive compensation practices.

The result was something of a surprise, given that a similar say-on-pay proposal had passed the previous year and the say-on-pay movement has been gaining strength ever since.

Because Apple doesn’t immediately report voting tallies, it wasn’t immediately clear how much the vote had shifted year over year to turn a victory into a defeat for shareholder activists.

Apple finally cleared up the matter on Thursday when, inside its latest quarterly financial report, it released the voting results from its meeting. And, indeed, there were significant changes in the “say on pay vote.”

To wit, shares voted in favor of the proposal increased by more than 20 million shares; shares voted against it increased by nearly 11 million; and shares that abstained from voting fell by nearly 19 million.

“But wait a second,” you might say, “the net results of that change means that more votes at Apple were cast in favor of ‘say on pay’ this year than last.” Which might lead you to wonder how the resolution passed last year and failed this year.

To which I’d respond: Exactly.

Inside its quarterly report, Apple noted that if you combine the number of shares that voted against “say on pay” with those that abstained from voting on the matter, some 51.7 percent of shares voted at this year’s meeting did not vote in favor of the resolution. To put it a different way, only 48.3 percent of total votes were voted in favor of it.

But, as can be gleaned from the numbers above, if that’s the way Apple counts shareholder votes, “say on pay” was even more clearly defeated last year, when only 45.7 percent of total shares were voted in favor of the proposal. So, why did it report that the proposal won last year?

Apple spokesman Steve Dowling couldn’t immediately explain the discrepancy, but said he would look into it.

What seemed clear last year was that Apple, when tallying shareholder votes, threw out those that abstained. If you do that and look just at those shares that were voted for or against “say on pay,” you find that about 50.7 percent of shares voted in favor of the proposal last year. That proportion rose to 51.6 percent of shares at this year’s meeting.

As might be expected, that’s how shareholder activists look at the tallies and expect companies to do so too. Including abstentions in determining whether a shareholder proposal passed or failed is rare in corporate America, said Scott Adams, a pension analyst at the American Federation of State, County and Municipal Employees (AFSCME) union, which sponsored the “say on pay” proposal at Apple’s meeting this year. Adams charged that Apple changed the rules after losing the vote on such a basis last year.

“Clearly, they’re trying to game an election,” he said. “It’s clear that Apple doesn’t care what shareholders say (about) improving corporate governance at the company.”

Whether or not abstentions should be counted in tallying shareholder votes isn’t necessarily all that clear. Shareholder activists point to an obscure memo from Securities and Exchange Commission staff to support their position. But at least some companies have it in their bylaws that abstentions must be counted and included as a vote not in favor of a proposal.

What is clear, though, is that companies can’t just randomly change their methodology from year to year, noted Gary Lutin, chairman of the Shareholder Forum, a group which has held a series of discussions among investors about “say on pay” and other corporate governance-related issues.

“People can argue for either one method or the other for calculating votes, but you do have to be consistent about it,” Lutin said.

Regardless of how Apple tallies the votes, what has been consistent is that shareholders representing a sizable portion of Apple shares favors having a “say on pay” at the company.

Since 2007, the number of shares voted in favor of the proposal has grown from 230.5 million to 266.3 million. Including not just abstentions, but non-voted shares, those in favor “say on pay” at Apple have gone from about 26.7 percent of all shares to 29.9 percent.

(In contrast, the shareholder proposal that was the next most popular after “say on pay” at this year’s Apple meeting was supported by shareholders representing about 90 million shares or just 10 percent of all outstanding shares.)

What’s also been consistent is the company’s resistance to adopting “say on pay” — or even somehow responding to shareholder support for the issue — no matter its popularity among shareholders at Apple, its support among investors in general or the wider political climate.

Along those lines, Dowling declined to comment on how Apple might respond to this latest vote on “say on pay.” Adams, of course, was more than willing to comment on how Apple has responded in the past.

Apple’s “still got the iron first of Steve Jobs and his belief that shareholders’ voices are not important,” he said.

Apple’s governance practices have been under scrutiny since at least the turn of the millenium, when the company’s board awarded CEO Steve Jobs two massive stock options grants and an airplane worth $90 million, including the taxes the company paid on Jobs’ behalf that he owed for the receipt of the plane.

Such concerns were revived in 2006 when the company acknowledged that Apple officials had backdated thousands of options grants in preceding years, that Jobs had been the beneficiary of a backdated grant, that the CEO was aware that others were backdated and that he had even helped pick dates for certain grants.

Apple’s internal investigation cleared Jobs of wrongdoing, though, and federal investigators declined to press charges against him.

More recently, though, Apple’s governance again raised the ire of investors with how the board has handled information about Jobs’ health. Despite reports and widespread speculation that Jobs was inpoor health, Apple said little about his status for months. Earlier this year, Jobs issued a statement saying he was essentially fine. Then little more than a week later, he turned around and said he was essentially taking a five-month sabbatical from the company.

A day after repricing underwater options held by a couple hundred of its employees, Integrated Silicon Solutions filed details Tuesday of a proposed settlement of a lawsuit against the company and some of its current and past executives and members of its board over allegations of stock option backdating.

Although the defendants in the matter — including the company’s chief executive, Jimmy Lee — deny “each and every allegation” made in the complaint, they decided to the settlement in order to “to avoid the continuing additional expense, inconvenience,and distraction of this burdensome litigation and to avoid the risks inherent in any lawsuit.”

The shareholder lawsuit, first filed in July 2006, led to the formation a month later of a special committee of ISSI’s board “to review its historical stock option practices and related accounting.” Two months later, the company declared it would need to restate its financials going all the way back to its initial public offering in February 1995. The company filed restated results in May 2007, a month after settlement discussions began between the parties to the lawsuit.

As part of the settlement, CEO Jimmy Lee has “voluntarily” paid the company $257,329, the difference between the price he paid to exercise certain misdated options and the price the special committee later determined they should have had. He also agreed to the repricing of 157,962 unexercised options he held that forfeited $1.2 million of their value.

Former CFO Fischer settled a complaint filed against him directly by the SEC by paying the company $414,830, which was his pre-tax gain he realized exercising improperly priced stock options plus interest.

Two unnamed underlings who helped execute the paperwork related to the back-dated options also agreed to reprice options on 10,830 shares, giving up $177,585 in value.

The company also agreed to institute changes in the way options are granted in the future, including pre-established award dates and steps to provide greater transparency and immediacy in the paperwork surrounding them. It also agreed to a provision that would claw back bonus money paid to an executive who’s actions are found to have contributed to a restatement of financial results on which the bonus was based.

Among the other governance reforms called for by the settlement is a limit on the time  directors may serve on the compensation committee to six years, and a requirement that board members attend the “Director’s College” held annually by Stanford’s law school, or other similar programs.

On Monday, the company reported that 208 employees availed themselves of its offer to reprice old options with exercise prices ranging from $6, turning in 2.1 million shares in exchange for 355,822 shares priced at $1.65. Executives and directors on the company’s board were not eligible to participate in the offer.

On Tuesday, ISS filed details of the settlement, which is to be finalized in a federal court room in San Jose on June 5, as part of its duty to notify shareholders of the terms of the proposed deal.

Oh, and did we mention the plaintiff’s lawyers, who have worked on the case without pay, are to be awarded $2.1 million for their efforts?

Take-Two Interactive has agreed to fork over $3 million as a civil penalty related to allegations the company backdated options. Although the company took the step, “(w)ithout admitting or denying the SEC’s allegations”, Take-Two Interactive acknowledged to the District Attorney serving the U.S. District Court for the Southern District of New York “that certain of its former directors and officers engaged in certain illegal behaviors related to the historical granting of stock options,” which the District Attorney agreed not to prosecute.

The company’s former CEO, Ryan Brant, plead guilty in 2007 to charges that he backdated stock option grants to increase their value to himself, other Take-Two executives, and company employees. Specifically, Brant plead guilty to first degree falsification of business records and agreed to pay a fine of $7.26 million and serve five years’ probation. However, the guilty plea enables Brant to avoid prison time.

Blackberry maker Research-In-Motion and four of its top executives were charged today by the Securities and Exchange Commission with backdating millions of stock option grants over an eight year period from 1998 through 2006. In its complaint, the SEC alleges that RIM’s former Chief Financial Officer Dennis Kavelman, former finance Vice President Angelo Loberto, and Co-Chief Executive Officers James Balsillie and Mike Lazaridis (pictured here with the Blackberry Pearl) illegally granted undisclosed, in-the-money options to RIM executives and employees, and that they “made false and misleading disclosures about how RIM priced and accounted for options, and that the illicit backdating provided the executives and other employees with millions of dollars in undisclosed compensation.”

The executives are specifically accused of backdating option grants and offer letters, which concealed the fact that the options were granted in-the-money, according to the complaint. Kavelman and Loberto, the two finance executives, also “took steps to hide the backdating from regulators, RIM’s independent auditor and outside lawyer,” according to the compplaint.

The complaint further alleges that after all four executives were aware of backdating issues that had come to light at other companies, they attended RIM’s July 2006 annual shareholder meeting where Kavelman misled investors by denying that RIM was backdating options.

All defendants have agreed to settle the matter, without, of course, admitting or denying the allegations in the SEC’s complaint,

Kavelman and Loberto have agreed to be barred for five years from serving as officers or directors of a public company or other entity required to file reports with the SEC. They also agreed to to an SEC order prohibiting them from appearing or practicing before the SEC as accountants for five years.

The individual defendants will pay civil penalties in the following amounts: $500,000 for Kavelman; $425,000 for Loberto; $350,000 for Balsillie; and $150,000 for Lazaridis.

The individual defendants also agreed to disgorge the in-the-money value of backdated options they had exercised ($132,914.60 for Kavelman, $47,950.56 for Loberto, $334,250 for Balsillie and $328,300 for Lazaridis) plus interest, which have been satisfied by their previous payment of these amounts to RIM.

John Gifford, who founded analog chip maker Maxim Integrated Products and served as its chief executive until his retirement in 2007, passed away Sunday of an apparent heart attack, according to a company press release distributed Monday.

Gifford was born in 1941 and grew up in Los Angeles. After graduating from UCLA in 1963 with a bachelor’s degree in electrical engineering, he worked for Fairchild Semiconductor, first in sales in L.A. and later in marketing in Silicon Valley.

An industry legend, Gifford was one of the many engineers who left Fairchild to start their own companies in the 1960s. Gifford helped co-found Advanced Micro Devices in 1969 and later became president of Intersil, which he left in 1983. Weeks later he founded Maxim, which became a public company in 1988.

”Jack founded Maxim with the firm belief that analog integrated circuits would prove to be a great growth market. He led our Company with steadfast determination for 24 years, grew it from the ground up to over $2B in sales” said Tunç Doluca, Maxim’s CEO, in a written statement.”His success provided returns for shareholders and income for over 10,000 employees and their families over his long tenure here. He was a strong leader with seemingly limitless energy and enthusiasm. His attention to detail and guiding management principles established the highly pragmatic culture at Maxim.”

Gifford left Maxim in 2007 on the advice of his doctor, citing declining health as he wrestled with federal investigations into the suspicious timing of stock options. He stayed on as a special strategic adviser.

”It’s caused by having more to do than you can do,” Maxim Vice President Charles Rigg told the Mercury News at the time. ”He basically took on two companies: Maxim, and the other was  this backdating issue. It got to be more than he could handle. The things that came out of  that is high blood pressure, a loss of weight, that sort of thing.”

A special committee of Maxim’s board later concluded the company had mishandled stock-option grants to employees and directors from 2000 to as late as 2006, even as stock-option backdating was exploding into national headlines. In connection with its investigation, Gifford agreed to step down as special adviser.

In December 2007, the Securities and Exchange Commission filed civil charges against Maxim’s former chief executive, Jack Gifford, and former Chief Financial Officer Carl Jasper, accusing them of rigging stock options for employees. Without admitting or denying the allegations, Gifford agreed to pay nearly $800,000 in a settlement.

The Securities and Exchange Commission today charged Blue Coat Systems and its former chief financial officer Robert Verheecke, alleging that they backdated stock option grants to executives and employees and reported false financial information to shareholders.

The complaint against the Sunnyvale network security company and its ex-CFO alleges that “from approximately 2000 through 2005, Blue Coat concealed nearly $50 million in compensation expenses associated with valuable ‘in-the-money’ options by backdating paperwork to make it appear as if the options had been granted on earlier dates.”

Both Blue Coat and Verheecke have agreed to settle the SEC’s charges without admitting or denying the allegations.  Verheecke will pay more than $185,000 in disgorgement, penalties, and prejudgment interest.

Verheecke, who lives in Palo Alto, served as CFO from May 2001 through May 2005.  According to the SEC’s complaint, at various times he used “hindsight” to pick stock option grant dates, prepared or distributed misleading option paperwork, and approved Blue Coat’s false and misleading financial statements and SEC filings.  The SEC says that Verheecke personally exercised backdated options for $30,000 in excess profits.

Verheecke agreed to pay back $35,946 to cover his gain on the option exercise along with prejudgment interest, and to pay a financial penalty of $150,000. He also agreed to a not serve as an officer or director of a public company, nor appear or practice as an accountant before the SEC for five years.

According to the SEC complaint, Verheecke obtained his state CPA license in 1977 but it was inactive during his tenure at Blue Coat. Prior to joining Blue Coat, he served as CFO to Business Objects and Netframe Systems. He also served as an auditor at PricewaterhouseCoopers from 1979 to 1983.

Blue Coat, which the SEC credited with cooperating in its investigation, essentially agreed not to violate the anti-fraud and other provisions of the federal securities laws in the future.

Lam Research’s chief executive, Stephen Newberry, finally became an outright owner of his company’s stock last month when he exercised an option to buy 5,250 shares of the company for $11.66 each, or $61,215. The shares were the last left in an option granted to him 10 years ago that were to expire Thursday.

Newberry hasn’t owned any of his company’s stock for at least five years, based on a review of the company’s proxies, which show all of his equity in the company being unexercised option grants but none he owned outright.

Newberry has profited handsomely from exercising his options and then selling them during this time, having netted $11 million in fiscal 2004, $9.2 million in fiscal 2005 and $37.5 million in 2006 from option exercises.

In July 2007, Lam’s board of directors formed an independent committee to investigate the company’s stock option grants from 1997 through 2005. The investigation, which included the review of millions of documents and scores of interviews with Lam’s current and former directors, officers and employees, concluded that numerous options grants were mispriced, including a new-hire grant given to Newberry when he joined Lam in August 1997.

The company restated results earlier this year to add $96.4 million in extra non-cash compensation expense from 1997 through 2006. The investigation itself cost $9.5 million, and in March, the company estimated it would pay Newberry $10.3 million to cover the extra tax he owed on mispriced options he had exercised and sold.

Although not implicated in any wrongdoing in the matter, Newberry received a rebuke of sorts from shareholders at its last annual meeting in June when less than 60 percent of shares were voted in favor of his re-election to the board, compared with an average of 95 percent for the other 9 nominees.

Maxim Integrated Products, the Sunnyvale chip maker that hasn’t filed financial reports with the Securities and Exchange Commission since May 2006 because of an investigation into its past stock option granting practices, said Monday it reached a settlement of a shareholder lawsuit over the matter.

The legal action, brought against some of the company’s current and former executive officers and directors, included no admission of “wrongdoing or fault” on their part. Such settlements almost never do.

However, three current members of Maxim’s board of directors — James Bergman, Kipling Hagopian and A.R. Frank-Wazzan — are set to cough up a total of about $1.5 million in order to “remediate excess gains” they “incorrectly received” due to “allegedly misdated stock options” that were issued to them. The exercise price of some stock options previously granted to them will also be raised as part of the settlement.

Jack Gifford, the company’s “former chief executive” — who remains nameless throughout the release — has evidently agreed to pay $6 million to the company he founded as part of the settlement. He will also cancel vested but unexercised stock options for approximately 3.1 million shares of Maxim stock he held.

Maxim’s former chief financial officer, Carl Jasper — also unnamed throughout the release  — will give up claims on about 97,000 vested in-the-money stock options that expired during the mandatory option exercise suspension period that has been part of the company’s failure to file mandatory financials with the SEC.

In December, the SEC filed civil charges against both Gifford and Jasper accusing them of rigging options for employees. Gifford agreed to pay nearly $800,000 in a settlement with the SEC, while Jasper continued to fight the charges.

The lawyering bill dedicated to this chapter of Maxim’s history is bound to be huge if the linguistic acrobatics of the company’s press release announcing the deal is any indication.

Lawyers for the plaintiffs in the action will receive “no more than” $15 million in legal fees and $500,000 in out-of-pocket expenses. Maxim reserved for itself the “right to object to the amount of such fees and expenses,” which the company will pay out of the $21 million Maxim will be paid by the liability insurers indemnifying its directors and officers.

In January, the company said that it will restate some of its reports from fiscal 1997 through March 25, 2006, to record additional non-cash compensation worth $550 million to $650 million related to mispriced options. The restatements have yet to be filed, but “(t)his tentative settlement represents an important milestone in Maxim’s efforts to resolve all outstanding issues related to the company’s past stock option practices,” said its current CEO Tunc Doluca.

That said, the company also pointed out that “No assurances can be given” that other “derivative actions pending in State and Federal Courts in California will be dismissed as a result of this settlement.”

A year ago, Maxim became the second Silicon Valley company to have its stock delisted from the Nasdaq stock exchange until it can restate its financial reports because of stock option-related investigations. The company’s stock is now traded on the Pink Sheets, a private listing service.