SAN JOSE, Calif. Atmel Corp. Monday (April 30) announced that its board has completed its independent investigation regarding the company's past stock option grants and practices.
The company estimates that aggregate non-cash stock-based compensation expenses for the period from 1993 through 2005, excluding related income tax adjustments, will be approximately $125 million.
Atmel, based here, has been investigating its stock-option practices for months and blamed its former CEO on the matter. The board's investigation covered 112 stock option grants, consisting of over 10,000 individual stock option grants to approximately 4,250 recipients, for all grant dates during the period January 1, 1997 through August 3, 2006, according to Atmel.
''The individuals who were primarily responsible for directing the backdating of stock options were George Perlegos, the company's former chief executive officer, and Mike Ross, the company's former general counsel,'' according to Atmel.
On August 5, 2006, Perlegos and Ross were terminated for cause following an unrelated investigation into the misuse of corporate travel funds. Perlegos has subsequently battled to regain control of Atmel.
Perlegos was one of the company's founders, and was Atmel's CEO and chairman from 1984 until August 2006. ''Based on evidence from the stock option investigation, the Audit Committee concluded that Mr. Perlegos was aware of, and often directed, the backdating of stock option grants,'' according to Atmel.
''The evidence included handwritten notations from Mr. Perlegos expressly directing stock administration employees to use prior board meeting dates for many employees' stock option grants. The evidence showed that Mr. Perlegos circumvented the company's stock option plan requirements and granting procedures,'' according to the firm.
''The evidence indicated that Mr. Perlegos knew that stock option grants had to be approved by the board and that the price for stock options should be set as of the date on which the board approved the grant,'' according to the firm. ''There was evidence that, at least by 2002, Mr. Perlegos was informed about the accounting consequences of backdating stock options. However, the Audit Committee was unable to reach a conclusion as to whether Mr. Perlegos understood the accounting principles that apply to stock options, or whether he intended to manipulate the financial statements of the company.''
Perlegos ''did not fully cooperate in the investigation,'' it said. ''Mr. Perlegos did not hold any backdated stock options, and the evidence did not show that he received a direct personal benefit from the backdating of stock options.''