Former executives at Altera may have engaged in backdating stock option grant dates for the years between 1996 and 2000.
Altera said in a document filed with the US Securities and Exchange Commission that a former CEO and a former general counsel designated stock option grant dates that were at the lowest closing date in December of the years from 1996 through 2000.
While the document did not name the CEO and general counsel, Rodney Smith and Wendell Bergere served in those roles during the period in question.
“Instead of granting options on the date intended by the compensation committee, our former CEO and former general counsel chose as the grant date the date with the lowest closing price in December,” Altera said in the document. “Both the former CEO and former general counsel received some of these in-the-money options in December of each year from 1996 to 2000.”
Further, Altera said that “management has concluded that as of December 30, 2005, the company had a material weakness in its internal controls over financial reporting with respect to the modifications of stock option grant agreements in connection with termination of employment.
“Specifically, we did not have sufficient safeguards in place to monitor our control practices in this area and to foster a consistent and open flow of information and communication between those initiating transactions and those responsible for their financial reporting,” Altera said in the document.
“Inadequate coordination and communication among our legal, finance, and human resource functions prevented us from assuring that the accounting consequences of decisions and agreements were identified on a timely basis and accounted for properly in our financial statements. The company’s 2005 Form 10-K/A will further describe the material weakness along with planned remedial actions that are being taken, which include searching for a new chief financial officer and improved controls and training.”
Altera also announced this week that its CFO has retired, effective immediately.