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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 30, 2005
ENDWAVE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
000-31635 95-4333817
(Commission File No.) (IRS Employer Identification No.)
776 PALOMAR AVENUE
SUNNYVALE, CALIFORNIA 94085
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 522-3100
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
In December 2004, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment"
("SFAS 123(R)"). SFAS 123(R) will require that compensation cost related to
share-based payment transactions, including the issuance of stock options, be
recognized in the financial statements. Endwave Corporation ("Endwave") is
required to adopt the revised standard in the first quarter of 2006. Currently,
Endwave accounts for its share-based payment transactions under the provisions
of APB 25, which does not require the recognition of compensation cost in the
consolidated statement of operations in the financial statements.
In response to the accounting standard referenced above, on December 30, 2005,
Endwave's Board of Directors unanimously approved accelerating the vesting of
certain eligible options. Eligible options are defined as unvested stock options
held by current employees, including executive officers, with an exercise price
of $21.00 per share or higher. No options held by non-employee directors were
subject to such acceleration. The closing market price of Endwave's common stock
on December 29, 2005, the last full trading before the date of the acceleration,
was $11.64 per share. The following table summarizes the options subject to
acceleration:
AGGREGATE NUMBER OF SHARES WEIGHTED AVERAGE
OF COMMON STOCK ISSUABLE EXERCISE PRICE
UNDER ELIGIBLE OPTIONS PER SHARE
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Total Named Executive Officers (1) 137,348 $ 29.53
Total All Other Employees 201,647 $ 26.42
Total (2) 338,995 $ 27.68
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(1) Consists of current executive officers named in the Summary Compensation
Table in Endwave's 2005 Proxy Statement filed with the Securities and
Exchange Commission on September 12, 2005.
(2) The eligible options represent approximately 26% of total outstanding
options.
The decision to accelerate vesting of these options was made to avoid
recognizing compensation cost in the statement of operations in future financial
statements upon the effectiveness of SFAS 123(R). It is estimated that the
maximum future compensation expense that would have been recorded in the
statement of operations, but that will not be recorded as a result of such
acceleration, based on Endwave's implementation date for SFAS 123(R) of January
1, 2006, is approximately $4.4 million. Endwave will report the impact of the
acceleration in its 2005 financial statements in a pro forma footnote
disclosure, as permitted under the transition guidance provided by the Financial
Accounting Standards Board.
ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(d) Exhibits:
Exhibit No. Exhibit Title
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99.1 Press Release issued January 5, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENDWAVE CORPORATION
Dated: January 5, 2006 By: /s/ JULIANNE M. BIAGINI
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Julianne M. Biagini
Title: Executive Vice President and
Chief Financial Officer
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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99.1 Press Release issued January 5, 2006.