Actel's noncompliance is a result of the ongoing review of its historical stock option grant practices and related failure to file with the SEC a Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 2007.
As previously announced, Actel already received notices from Nasdaq of Staff determinations that the Company is not in compliance with Rule 4310(c)(14) due to Actel's failure to file with the SEC a Quarterly Report on Form 10-Q for the quarter ended October 1, 2006, an Annual Report on Form 10-K for the fiscal year ended December 31, 2006 ("Form 10-K"), and a Quarterly Report on Form 10-Q for the quarter ended April 1, 2007. Actel also already received notice from Nasdaq of a Staff determination that the Company is not in compliance with the requirements for continued listing set forth in Nasdaq Marketplace Rules 4350(e) and 4350(g), under which listed companies must hold an annual meeting of shareholders, solicit proxies, and provide proxy statements to Nasdaq. Actel did not hold an annual meeting of shareholders during 2006 because of the stock option review.
On February 16, 2007, a Nasdaq Listing Qualifications Panel ("Panel") granted Actel's request for continued listing. On May 18, 2007, the Panel determined to delist the Company's securities, but stayed the delisting pending further action by the Nasdaq Listing and Hearing Review Council ("Listing Council"). On April 2, 2007, the Listing Council stayed the Panel's decision pending a review by the Listing Council. The staff of the Nasdaq Listing Qualifications Department provided the Listing Council with an updated qualifications summary sheet and additional information on June 26, 2007, and the Company submitted additional information to the Listing Council on June 29, 2007. Pending further action by the Listing Council, Actel will remain a listed company.
Stock Option Review
As previously announced:
-- A Special Committee of Actel's Board of Directors, composed of
independent directors and assisted by independent counsel, was appointed on
September 22, 2006, to review the Company's historical stock option grant
practices and related accounting. On January 30, 2007, the Special
Committee presented its preliminary findings to the Board of Directors.
The preliminary findings were described in a Current Report on Form 8-K
filed by Actel on February 1, 2007. On March 9, 2007, the Special
Committee delivered its final report to the Board of Directors.
-- Actel voluntarily informed the staff of the SEC about the internal
review. On May 23, 2007, the staff indicated that it had closed its file
and would not recommend any enforcement action by the SEC.
-- On January 18, 2007, Actel's management concluded that shareholders
and other investors should no longer rely on the Company's financial
statements and the related reports or interim reviews of Actel's
independent registered public accounting firm and all earnings press
releases and similar communications issued by the Company for fiscal
periods commencing on or after January 1, 1996. Actel's management has
also concluded that the Company needs to restate its historical financial
statements to record additional non-cash and potentially other charges
related to past stock option grants.
-- Working with its independent registered public accounting firm, the
Company is evaluating corrections to measurement dates and other related
accounting issues and is quantifying the financial and tax impact of those
inaccuracies and corrections. In lieu of amending its prior filings with
the SEC to restate financial statements, Actel intends to include in its
Form 10-K the comprehensive disclosure outlined in guidance posted by the
SEC Chief Accountant's Office on January 16, 2007.
The Company intends to file its delinquent SEC periodic reports, including any required restatements, and solicit proxies and hold an annual shareholders' meeting as soon as practicable. -Actel
