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Lam records $65.8M charge for stock-option backdating
The semiconductor manufacturing equipment supplier has recorded adjustments to previously issued financial statements totaling $65.8 million for compensation expenses, net of taxes, in fiscal years 1997 through 2006, with a $3 million impact on the three most recent fiscal years.
By Ann Steffora Mutschler, Senior Editor -- Electronic News, 4/1/2008
Fremont, Calif.-based semiconductor manufacturing equipment supplier Lam Research Corp announced late Monday that it has filed its fiscal year 2007 Form 10-K, September 2007 Form 10-Q, and December 2007 Form 10-Q with the Securities and Exchange Commission (SEC).
The company said it believes it is now current with its SEC filings and is awaiting confirmation from Nasdaq that it has complied with all applicable listing standards.
As the company said previously, the independent committee appointed by Lam’s board of directors determined that the actual measurement dates for financial accounting purposes of certain stock option grants differed from the recorded grant dates of these awards.
Therefore, Lam has recorded adjustments to previously issued financial statements totaling $65.8 million for compensation expenses, net of taxes, in fiscal years 1997 through 2006, with a $3 million impact on the three most recent fiscal years.
Further, Lam said it expects to incur a cash expense of $50 million to $55 million, which will be recorded in the March 2008 quarter, as a result of the board’s decision authorizing the company to assume responsibility for the 409A tax liabilities of employees.
Interestingly, for a company that defended its options practices in May 2006, before it was even suspected of wrongdoing, Lam said last December that a review of the company’s historical stock-option practices and related accounting found actual dates for certain stock-option grants issued in the past differed from the recorded grant dates of such awards and that it would restate certain financial statements.
Lam is not the only company to feel the impact of charges associated with stock option misdating. Early in 2007, Broadcom was blasted with a $2.2 billion options charge, while Nvidia's stock option dating errors cost the company approximately $127 million.
Meanwhile, last month, Lam announced the close of its tender offer for the SEZ Group, with approximately 95% of the outstanding shares tendered in the offer.
Lam said the combination of the companies allows it to offer a full spectrum of wafer cleaning and decontamination solutions, with products incorporating SEZ’s proprietary Spin-Process single-wafer technology, and single-wafer bevel and linear wet clean applications.
