AMCC to Record $200M in Stock-Based Expenses
By Colleen Taylor -- EDN, September 15, 2006
Add Applied Micro Circuits Corp. (AMCC) to the list of companies paying -- literally -- for their stock options related mistakes. AMCC is set to restate its financial statements, and will record an additional $200 million in non-cash stock-based compensation expense, the company announced Thursday.
AMCC said its audit committee has completed its review of the company's stock option grant practices and related accounting, and has concluded that the company "should have used different measurement dates for the purpose of computing compensation costs for certain stock option grants," i.e., the company illegally backdated stock options for employees. The $200 million primarily relates to options awarded during fiscal years 2000 through 2002.
Additional details regarding these grants will be included in the company's restated financial statements, which, AMCC said, will be filed as soon as practicable. Pending final completion of the audit committee's review and review by the company's independent public accountants, AMCC said its financial statements and all financial press releases and similar communications issued by the company for the periods beginning with fiscal 1998 should not be relied upon.
In June, AMCC received a subpoena requesting documents relating to the company's stock option granting practices from the U.S. Attorney for the Northern District of California. At that time, the company was also contacted by the U.S. Attorney for the Southern District of California, which has opened its own investigation into the company's stock option practices.
AMCC assembled an audit committee in May to conduct a self-initiated review of its stock option grant practices. The review should be completed by June 29, the extended deadline for filing AMCC's annual Form 10-K, the company said.
AMCC is not the only company currently feeling the fallout from a history of backdating stock options. Earlier this month, Broadcom Corp. announced that it, too, would have to restate financial records due to stock options accounting errors -- putting the expected expense at at least $1.5 billion.
