AMD 2007 Annual Report Download - page 282

Spansion Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(Unaudited)
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Adoption, on January 1, 2007, did not have a material
effect on the Company’s consolidated financial statements. The effect of this change on the Company’s condensed consolidated statements of operations for the
three months ended September 30, 2007 is not material. As of the date of the adoption, the Company’s total gross unrecognized tax benefits were $2.2 million, of
which $1.7 million, if recognized, would affect the Company’s effective tax rate. For the three months ended September 30, 2007, the Company’s total gross
unrecognized tax benefits were $3.5 million, of which $2.5 million, if recognized, would affect the effective tax rate. The gross amount of the increase in
unrecognized tax benefits from the date of adoption to the nine months ended September 30, 2007 was primarily due to an increase in unrecognized tax credits.
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expenses and such amounts were immaterial in the nine
months ended September 30, 2007.
The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s tax years 2003 through 2006 are
subject to examination by the tax authorities. With few exceptions, the Company is not subject to U.S. federal, state, local or foreign examinations by tax
authorities for years before 2003.
The Company does not believe that it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease
within the next twelve months.
3. Stock-Based Compensation
Plan Descriptions
On May 29, 2007, the Company’s stockholders approved the Spansion Inc. 2007 Equity Incentive Plan (the “2007 Plan”). The maximum number of shares
of the Company’s Class A Common Stock that may be issued or transferred pursuant to awards under the 2007 Plan equals the sum of: (1) 6,675,000 shares, plus
(2) the number of shares available for award grant purposes under the Company’s 2005 Equity Incentive Plan (the “2005 Plan”) as of May 29, 2007, plus (3) the
number of any shares subject to stock options and restricted stock or restricted stock unit (RSU) awards granted under the 2005 Plan and outstanding as of
May 29, 2007 which expire, or for any reason are cancelled or terminated, after that date without being exercised or paid. As of May 29, 2007, approximately
920,523 shares were available for award grant purposes under the 2005 Plan, and approximately 7,091,852 shares were subject to options and restricted stock or
RSU awards then outstanding under the 2005 Plan.
The 2007 Plan provides that grants may be awarded to an officer or employee, a consultant or advisor, or a non-employee director of the Company or its
subsidiaries. Stock options and RSU awards issued under the 2007 Plan generally vest 25 percent after one year, and the balance vest ratably on a quarterly basis
over the following three years and expire if not exercised by the seventh anniversary of the grant date. RSU awards have no exercise price or expiration date.
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Source: ADVANCED MICRO DEVIC, 10-K, February 26, 2008