MANHASSET, N.Y. Communications semiconductor supplier Broadcom Corp. said Friday (July 14) it plans to restate results for the past five years and record additional noncash expenses of more than $750 million related to granting stock options to employees.
An audit committee appointed by Broadcom (Irvine, Calif.) recommended the company restate its financial statements
for each of the years 2000 through 2005 as well as for the first quarter of 2006. The company announced last month (see June 12 story) that the Securities and Exchange Commission was investigating the company's stock option practices.
Broadcom expects to record an additional non-cash stock-based compensation expense, likely to exceed $750 million, related to the ongoing investigation. The company believes the non-cash expense will be recorded in the years 2000-2003. Most of the additional expense relates to a broad-based employee focal grant awarded May 26, 2000.
Broadcom said none of the awards were given to its co-founders, chief executives, or board members. The company added that since its inception, 95 percent of the total stock options awarded through equity incentive programs have gone to non-executive employees.
The company does not expect the expense to affect Broadcom's current financial condition or previously reported revenues and will be offset by corresponding increases in additional paid-in capital.
After the restated finances are completed and audited, Broadcom expects to file an amended Form 10-K report for the year ended Dec. 31, 2005, as well as amended Form 10-Q for the quarter ended March 31, 2006 with the Securities and Exchange Commission (SEC).
Broadcom is the latest in a string of companies under investigation for its practices in backdating stock options.