Xilinx Won't Have to Restate

The company's shares rise nearly 9% after it completes a probe into its option grants.
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(XLNX) - Get Report

shares were rising a day after the chipmaker said it won't need to restate any of its past financial results following an internal investigation into stock-option backdating.

The probe has been completed, and no evidence of fraud was found. However, Xilinx said that as a result of the analysis it will take a $2.2 million compensation charge in the first quarter of fiscal 2007, which is about $700,000 higher than the charge announced on July 25.

Lately, Xilinx was up $1.84, or 8.9%, to $22.49 on heavier-than-normal volume.

Scores of companies are embroiled in a controversy involving the practice of backdating stock options. In recent weeks, several companies have announced delays in filing their quarterly financial results because of ongoing internal reviews, something that can put a company at risk of having its stock delisted.

For the companies and managers involved, the stakes can be high -- senior executives at




Comverse Technology


are facing criminal charges by federal prosecutors as a result of their option-award programs.

Xilinx, of San Jose, Calif., said in its 10-Q filing Tuesday that its investigation uncovered no evidence of incorrectly timed or manipulated option grants. The examination also didn't find any reason to question the integrity of its management in the issuance of options.

"The investigation determined that in nearly all cases, stock options were issued as of pre-set dates," the filing read.

The $2.2 million charge is based on the difference between the recorded grant dates and measurement dates in certain option awards between 1997 and 2006, Xilinx said. The charge won't have a material effect on the company's historical financial statements, and therefore Xilinx said it won't need to restate.

What remains unclear is how the company's findings will affect the

Securities and Exchange Commission's

informal inquiry into its option accounting, a matter Xilinx disclosed in June. An SEC representative said the agency couldn't comment on the issue.

Meanwhile, Xilinx, like many of the companies involved in the backdating affair, still faces a shareholder lawsuit related to a complaint about its option grants. The suit is seeking class-action status.