Accounting & Tax

Maxim CFO Resigns amid Options Probe

Following an internal review, the manufacturer of analog and mixed-signal integrated circuits will restate its results back to 2000.
Stephen TaubFebruary 1, 2007

Maxim Integrated Products announced two departures from its executive ranks in connection with an internal probe of prior stock option grants and practices.

Chief financial officer Carl Jasper has resigned, and former chief executive officer John F. Gifford, who stepped down for health reasons in December, has retired as a strategic advisor to the company. They could not immediately be reached for comment.

Vice president Alan Hale, who served as CFO of Dallas Semiconductor from 1992 through 2001, will assume that role at Maxim on an interim basis until the company hires Jasper’s successor.

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The manufacturer of analog and mixed-signal integrated circuits, which has a market capitalization of about $10 billion, also disclosed that it will restate its results for fiscal years 2000 through 2005 and quarterly periods through March 25, 2006. The adjustments will reflect material differences due to accounting measurement dates for stock option grants that differ from the historical grant dates.

The company added that it has not yet determined the amount to be restated or the tax consequences.

A special committee of Maxim’s board of directors found deficiencies related to the process for granting stock options to employees and directors. According to the company, the committee determined that in certain instances from the beginning of fiscal year 2000 until the end of fiscal year 2006, the recorded exercise price of stock option grants to employees and directors differed from the fair market value of the underlying shares on the actual measurement date.

Maxim stressed, however, that a special committee had determined that all stock option grants to officers of the company were properly awarded. Further, the company stated that the special committee had found no evidence that any outside directors engaged in wrongdoing or malfeasance with respect to any Maxim stock option grants to officers, non-officer employees, or directors.

The company also stated that the committee found no evidence that any member of current or former management or the board of directors engaged in any action involving the grant of a stock option for self-enrichment.

Until Maxim completes a review of its process for granting stock options, the company added, any option grants will be approved by its board of directors.

Option grants at Maxim came under SEC scrutiny in June 2006. The company stated that it has been cooperating with inquiries made by the Securities and Exchange Commission and by the U.S. Attorney for the Northern District of California.