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San Jose, CA, 2005-06-30 - Pericom Semiconductor Corporation [Nasdaq National
Market: PSEM] today announced its Board of Directors has approved accelerating the vesting of unvested and out-of-the-money stock options awarded to
employees and officers under its stock option plans that had exercise prices greater than $10.00. The unvested options to purchase approximately
397,000 shares became exercisable as a result of the vesting acceleration.
Options held by non-employee directors are excluded from the
vesting acceleration. Also, to prevent unintended benefits to executive officers, restrictions will be imposed on shares received through the exercise of
accelerated options held by those individuals. Those restrictions will prevent the sale of any shares received from the exercise of an accelerated option
prior to the earlier of the original vesting date of the option or the individual's termination of employment.
The purpose of the accelerated
vesting is to enable Pericom Semiconductor Corporation to avoid recognizing in its income statement compensation expense associated with these options
in future periods, upon adoption of FASB 123(R) (Share-Based Payment) in July 2005. The charge to the income statement to be avoided amounts to
approximately $2.3 million on a pre-tax basis over the course of the original vesting period, of which approximately $1.2 million occurs in the first fiscal
year, $0.7 million in the second fiscal year, and $0.4 million in the third fiscal year.
Alex Hui, President and Chief Executive Officer of
Pericom, commented "We
believe this acceleration is in the best interests of shareholders as it will
reduce
future period compensation
expense for stock options that are currently underwater.
Also, because these options are underwater, they are not achieving their original
objectives of incentive compensation and employee retention, therefore we believe
the acceleration may have a positive effect on employee morale and
retention."
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About Pericom
Pericom Semiconductor Corporation (NASDAQ: PSEM) enables serial connectivity with the industry's most complete solutions for the computing, communications and consumer market segments. Pericom's analog, digital and mixed-signal integrated circuits, along with its SaRonix-eCera frequency control products are essential in the timing, switching, bridging and conditioning of high-speed signals required by today's ever-increasing speed and bandwidth demanding applications. Company headquarters are in San Jose, Calif., with design centers and technical sales and support offices globally.
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