Stock-Option Dating Skewers Trident

Trident Microsystems said it took a $61 million pre-tax charge covering the past four years to revise measurement dates and the accounting for stock-options grants awarded between December 1992 through June 2006.

This was offset by the benefits of a reversal of minority interest charges of $2 million and a reversal of income tax expense of about $3 million, resulting in a net charge of $56 million. The company previously estimated this expense to be between $33 million and $35 million.

Trident, a maker of chips for high-definition televisions, also disclosed that the Department of Justice and the Securities and Exchange Commission are conducting formal investigations into its stock-option grant practices. The company said it has been cooperating with the investigations.

Meanwhile, Trident filed its delayed fiscal 2006 annual report on Tuesday and said that it will file its quarterly reports for the first three quarters of fiscal 2007 within the next two weeks.

Once the quarterly reports are filed, Trident said it will be in compliance with SEC requirements, and with most requirements of the Nasdaq Global Select Market. Trident said it expects to hold its annual meeting as soon a possible, although it did request an extension in order to comply with the Nasdaq.

Trident said it still must modify the accounting measurement dates for roughly 57 percent of the stock-option grants awarded between the time of its initial public offering in December 1992 until June 2006, covering options to purchase approximately 38 million shares of common stock. The company also needs to adjust its accounting for all options granted by its Taiwanese and Chinese subsidiaries.

After related income tax and minority interest adjustments, Trident restated results by about $52 million for the years 1993 through 2005 and by about $4 million for fiscal 2006.