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The lower the strike price, the greater the potential for making money when exercising the options.

Take this example, from The Wall Street Journal, which began investigating the practice last fall: "Suppose an executive gets 100,000 options on a day when the stock is at .

CEOs at other companies have been forced to resign for such activities.

His job may be saved by the fact that he did not directly profit.

Options backdating is the practice of altering the date a stock option was granted, to a usually earlier (but sometimes later) date at which the underlying stock price was lower.

This is a way of repricing options to make them valuable or more valuable when the option "strike price" (the fixed price at which the owner of the option can purchase stock) is fixed to the stock price at the date the option was granted.

Should Apple reach its 2007 high of 202.96 before the options expire in 10 years, the grant would be worth more than 0,000, not counting taxes.

Dozens of companies – including United Health Group, Comverse Technology, Vitesse Semiconductor and Affiliated Computer Services – have caught the eye of the Securities and Exchange Commission and the Department of Justice for the timing of their stock option grants.But it could lead to a false disclosure, which may, in turn, violate federal securities laws.Company stock option plans are on file with the SEC, with a description of how the strike prices are calculated.He took a seat on the Apple board in 2003 and co-founded the cable network Current TV in 2004.He also advises Google (GOOG) and venture capital firm Kleiner Perkins Caufield & Byers.Former vice president Al Gore, who sits on Apple’s compensation committee and supervised the company’s internal investigation of its option backdating case, has been granted options to buy 10,000 shares of Apple (AAPL) at the strike price of 9.67, according to Jonny Evans at Macworld UK.

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