Several months after acknowledging it is the subject of a Securities and Exchange Commission probe, Coherent Inc. admitted finding “a significant number” of stock-option grants that were incorrectly dated.
However, the maker of commercial and scientific lasers has yet to determine how it will account for the effect of the incorrect measurement dates on options awarded between January 1, 1995, and September 30, 2006. The company expects it will need to record additional compensation expenses, which may lead to a restatement of its prior financials. It believes these expenses will be noncash charges.
A Coherent special committee found the use of incorrect measurement dates resulted from a number of factors, including delays in award approvals, retroactive selection of grant dates, missing documentation, modification of previously awarded grants, and other issues.
In a press release, the company stressed there was no intentional wrongdoing by its current directors, CEO John Ambroseo, or CFO Helene Simonet. “The special committee continues to have the utmost confidence in the integrity and leadership of Mr. Ambroseo and Ms. Simonet and believes that they are the appropriate people to lead the company going forward,” Coherent said.
The special committee has recommended that the board make several changes to its options-granting process, such as scheduling dates for the granting of equity-based awards and requiring compensation-committee approval for all equity awards to officers and certain employees, as well as for annual employee grants.
The company also said it continues to cooperate with the SEC’s informal inquiry. In addition, Coherent said Nasdaq has stayed a decision to suspend the company’s securities.