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Technology Stocks : ADI: The SHARCs are circling! -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2848)	12/2/2004 10:34:23 AM
From: Jim Oravetz	Read Replies (1) \| Respond to of 2882

SEC Probes Analog Devices' Options By RACHEL ZIMMERMAN Staff Reporter of THE WALL STREET JOURNAL December 2, 2004 Analog Devices Inc. said the Securities and Exchange Commission is probing the company's granting of stock options to executives just before it announced favorable financial results. The Norwood, Mass., chip maker said in a federal filing Tuesday that regulators are conducting an inquiry into its options-granting practices over the past five years. Analog Devices said it believed the SEC inquiry also encompasses other companies and added that it is cooperating fully with regulators. A page one story in The Wall Street Journal in March said the SEC was looking broadly at the practice of granting options just before positive news, focusing particularly on the high-tech sector. Regulators are trying to determine whether companies are understating executives' compensation -- deliberately or not -- when they disclose the value of options to shareholders. Critics also have said executives are using the tactic to, in effect, take advantage of inside information to get options just before positive news pushes up their company's stock price. So far, the SEC hasn't cited any company for wrongdoing as part of the probe. An SEC spokesman declined to comment on Analog Devices' filing. Analog Devices has been a high-tech star in recent years. According to Thomson Financial, Analog Devices insiders have sold more than $350 million in stock in the past five years. Although it isn't clear what stock grants regulators are examining, the top five Analog Devices executives were granted 920,000 options on Nov. 10, 2000, when the stock closed at $44.50 in New York Stock Exchange composite trading. Chief Executive Jerald Fishman got 600,000 of those options. Four days later, the company announced better-than-expected earnings, sending the stock on Nov. 15 to a close of $63.25. Maria Tagliaferro of Analog said the timing of the two events is irrelevant because company policy is that no option vests until at least three years from its granting date. "What happens to the stock price in the day, the hour, the year the option is granted is not relevant to that option," she said. "The stock price only becomes relevant after that option has vested." Write to Rachel Zimmerman at rachel.zimmerman@wsj.com