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This excerpt taken from the MRVL 10-Q filed Dec 6, 2007. Stock
option review related impacts: The additional payable for payroll taxes associated
with affected stock option grants of approximately $10.6 million, additional
Section 409A expenses for the adverse tax consequences of the re-measure
options exercised during calendar year 2006 of approximately $24.2 million, and
Section 162(m) liabilities of $26.5 million for cumulative period from fiscal
2001 through 2007, represents potential cash outflow totaling $61.3 million and
was accrued during the restated fiscal years 2001 through 2006 as well as in
fiscal year 2007. Through October 27,
2007, $20.3 million has been paid on account of Section 409A and employment
taxes on gross up payments. The
remaining balances appear on the balance sheet in current liabilities. The liabilities recorded in connection with
the stock option review are not included in the above table because it is not
feasible to reasonably estimate when the liabilities will be paid.
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The IRS has provided taxpayers with the following two ways of correcting unexercised discounted stock options: 1) setting a fixed exercise date; and 2) increasing the exercise price of the option up to the fair market price on the date of grant. We are actively evaluating these options. The discount associated with unexercised stock options outstanding as of October 27, 2007 amounted to approximately $49.7 million. In November 2007, we filed a tender offer to correct the misdated stock options. The tender offer will permit us to give employees the opportunity to correct the §409A United States tax issues with the stock options and therefore exercise stock options without incurring a penalty tax. The tender offer will amend certain outstanding options and provide restrictive stock unit grants and/or cash payments as set forth under the Offer to Amend the Exercise Price of Certain Options to employees with misdated options. As of October 27, 2007, we have not determined the amount stock compensation expense to be recorded in connection with the granting of restricted stock to compensate employees for the value loss in correcting the misdated options. In November 2007, we announced a plan (the “Plan”) to reduce operating expenses and help meet financial targets with a worldwide reduction in force of approximately 400 employees, or approximately 7% of its total workforce. We expect to incur a restructuring charge in connection with the Plan of up to $8.0 million in the fourth quarter of fiscal 2008 related to severance and other expenses. The workforce reduction will affect all functions of our global workforce, and in particular positions based in the United States and Israel, and to a lesser degree, other international locations. The Plan is expected to be completed in the fourth quarter of fiscal 2008. This excerpt taken from the MRVL 10-Q filed Sep 6, 2007. Stock
option review related impacts: The additional payable for
payroll taxes associated with affected stock option grants of approximately
$10.6 million, additional Section 409A expenses for the adverse tax
consequences of the re-measure options exercised during calendar year 2006 of
approximately $24.2 million, and Section 162(m) liabilities of $26.5 million
for cumulative period from fiscal 2001 through 2007, represents potential cash
outflow totaling $61.3 million and was accrued during the restated fiscal years
2001 through 2006 as well as in fiscal year 2007. Through July 28, 2007, $20.3 million has been
paid on account of Section 409A and employment taxes on gross up payments. The remaining balances appear on the balance
sheet in current liabilities. The
liabilities recorded in connection with the stock option review are not
included in the above table because it is not feasible to reasonably estimate
when the liabilities will be paid.
The IRS has provided taxpayers with the following two ways of correcting unexercised discounted stock options: 1) setting a fixed exercise date; and 2) increasing the exercise price of the option up to the fair market price on the date of grant. We are actively evaluating these options. The discount associated with unexercised stock options outstanding as of January 27, 2007 amounted to approximately $51.7 million. As of July 28, 2007, we have not determined the tax consequences, if any associated with these potential future remedies. This excerpt taken from the MRVL 10-Q filed Jul 9, 2007. Stock
option review related impacts: The additional payable for
payroll taxes associated with affected stock option grants of approximately
$10.6 million, additional Section 409A expenses for the adverse tax
consequences of the re-measure options exercised during calendar year 2006 of
approximately $24.2 million, and Section 162(m) liabilities of $26.5 million
for cumulative period from fiscal 2001 through 2007, represents potential cash
outflow totaling $61.3 million.
The IRS has provided taxpayers with the following two ways of correcting unexercised discounted stock options: 1) setting a fixed exercise date; and 2) increasing the exercise price of the option up to the fair market price on the date of grant. We are actively evaluating these options. The discount associated with unexercised stock options outstanding as of January 27, 2007 amounted to approximately $51.7 million. We have not determined the tax consequences associated with these potential future remedies. | EXCERPTS ON THIS PAGE:
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