SiliconBeat

NVIDIA (ticker:NVDA), the Santa Clara chipmaker, filed an 8-K on Wednesday disclosing that the U.S. Securities and Exchange Commission had wrapped up its investigation into the company’s options dating practices. The result: No charges will be filed.

Last November, the company said it was restating seven years worth of earnings and taking total charges of $190.2 million for compensation expenses after an internal investigation revealed some stock options backdating.

Poor, poor PDL BioPharma (ticker: PDLI). As we’ve blogged about in recent weeks, the company’s CEO stepped down under pressure from Third Point, one of its largest shareholders. And while Third Point still has concerns,  it’s also been reducing its holdings in recent weeks.

But here comes a new antagonist. On Wednesday, Highland Capital Management, a Dallas-based fund, filed a schedule 13-D disclosing that it’s been gobbling up PDL stock in recent weeks and now owns 6. 1 million shares that cost about $145 million, giving it control of 5.2 percent of the company.

The filing also disclosed a letter the firm sent to PDL’s board stating several requests. Chief among those: They want Dr. Patrick Gage to resign as Chairman of the Board of Directors. Gage just took over as interim CEO following the resignation of former CEO Mark McDade.

The letter is dated Sept. 25. Apparently it’s just being released now because Highland has increased its stake above 5 percent. So we’ll see how Gage handle’s a two-front assault from Highland and Three Point.

Remember Ayds, the diet candy that was once popular for its alleged appetite suppressing properties? Its fortunes went south when the disease known as AIDS popped up on the public’s radar. Both the candy and the medical condition were pronounced the same.

That memory came to us after reading a droll piece by Jonathon Weil, a columnist with Bloomberg News, who wrote about the terminology used by the Financial Accounting Standards Board regarding different methods companies may use to value assets on their balance sheets.

It’s a topic that is on many accounting minds these days as the value of many investment instruments tied to subprime mortgages remain an unfolding mystery.

Level 1 would be the most reliable way: go online and get a market quote for a stock or bond. That is known as “mark-to-market.” But what happens when that’s not possible? Level 2 refers to the method used to value an asset that has no easily quotable price by inferring a value using other “observable” inputs.

And then, as Weil writes, “there is the dreaded Level 3,” where valuations “are based on ‘unobservable’ inputs reflecting a company’s ‘own assumptions about the assumptions that market participants would use in pricing the asset or liability.’ Or, as I like to say, mark-to-make-believe.”

As Weil writes, this nomenclature is particularly unfortunate for the company called Level 3 Communications, the Broomfield, Colo., supplier of telecommunications and information services.

PDL BioPharma filed the terms of its employment agreement Tuesday with interim chief executive, L. Patrick Gage, who took over Oct. 1 after PDL’s previous CEO, Mark McDade quit following a long and bitter dispute with the company’s biggest shareholder, Third Point, a New York City hedge fund.

Gage, who had previously served as chairman of PDL’s board, will get $650,000 annually and is eligible for a bonus worth up to 75 percent of his salary. He will also be granted an option to buy 100,000 shares, effective two trading days after the company releases results for its quarter ended Sept. 30, which is scheduled for Thursday.

Gage, who is 65 and a venture partner with Flagship Ventures based in Cambridge, Mass., will be paid up to $5,000 per month for the costs of a temporary residence here, and while he’s looking for that will also be reimbursed for “reasonable food and hotel lodging expenses” until November 15, 2007 for trips to the Bay Area.

(Hmmm, Boston or San Francisco for the winter? You decide.)

PDL will also cover the expense of up to two round-trip airline flights per month between the Bay Area and any airport in “reasonable proximity to his current home” and will pay the costs for a rental car while he’s here.

The compensation committee also approved an extra payment of $12,500 to Gage for his service as chairman from Aug. 19 to Sept. 28, that was in addition the compensation he was already entitled to as a non-employee director and chairman. (He was paid $53,500 in fees and given a stock grant valued at $152,080 in 2006.) As an employee, Gage will no longer receive extra compensation for his service as a director.

The company sent its offer letter to Gage on Oct. 24, but four days later the offer was revised after discussions with Gage, who perhaps was having buyers remorse. The revision included a provision so that if Gage were to resign as an employee of the company but continue to serve on its board, the number of vested shares in his new-hire option grant would be immediately increased by 50,000, and the vesting date would be set back to Oct. 1, 2007, instead of the grant date following the earnings release.

Earlier this month the querulous shareholder, Third Point, sold 5.3 million shares of PDL for $116.9 million, cutting its stake in the company to 5.1 percent from 9.7 percent.

Third Point Chief Executive Daniel Loeb sent the PDL board a letter after the sales saying that, despite the encouraging news of the board’s efforts to sell the company, it was “disappointed that the sale processis still being led by a Board that does not include a Third Point representative, and that Patrick Gage remains the Company’s CEO, despite having demonstrated his unsuitability.”

Loeb went on to say that Third Point remains one of PDL’s largests shareholders. “We will be carefully watching developments, and assessing our options, as events unfold.”

Adaptec and its recent nemesis and largest shareholder, Steel Partners, declared a cease fire Friday afternoon when the Milpitas maker of computer storage products said it would nominate three of Steel’s representatives to its board of directors, while the New York private investment firm agreed to withdraw its opposing slate of five nominees.

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Back in early August, we posted about some stock sales by William Campbell, a director at Apple (ticker:AAPL). We were impressed that it was his first stock sale in 20 years.

But it turns out we were mistaken because there were previous stock sales by Campbell that we didn’t know about. Unfortunately for Apple, Campbell apparently didn’t know about them either.

In a Form 4 filed on Friday and flagged for us by our colleague Troy Wolverton, Campbell disclosed that one of his investment managers bought and sold a few thousand shares that he neglected to mention. Not much money, but Campbell should have reported those sales in Form 4s that were never filed.

In a footnote, Campbell explained that a routine survey by Apple uncovered the error. The sales occurred in an account run an “independent investment manager” on behalf of Campbell and his wife, who were unaware of the sales. After learning about the sales, there was a review which discovered that two transactions created some “disgorgable” (which is by far our favorite word that turns up in securities filings) profits which Campbell has since, well, disgorged. In lay terms, that means he gave the profits back to Apple. (The form doesn’t say exactly how much).

And if there was ever anyone who could use a few extra bucks these days, it’s Apple.

MIPS Technologies (ticker:MIPS) is just one in a long line of Silicon Valley companies that got its hand caught in the options backdating cookie jar.

Fortunately, it didn’t let that little nuisance stop it from rewarding its executives with nice bonuses. In a proxy filed on Thursday, MIPS, which makes embedded processors, said that executives got bonuses that exceeded their targets because operating results exceeded targets. Makes sense so far.

Except then the company also noted that it ignored the impact of the restatements on those results, saying “these charges were not taken into account by the Board of Directors in the operating plan for 2007.” So since the board didn’t plan for them, they don’t count.

In the case of CEO John E. Bourgoin, that means that on top of his $400,000 salary in 2007, he also got a bonus $550,477.

Those pesky regulators are at it again.

This time, their victim is West Marine (ticker:WMAR), the Watsonville-based maker of boating supplies. The company had already disclosed that it was restating several years worth of earnings thanks to some accounting, er, issues.

But in an 8-K filed on Thursday, West Marine said that the U.S. Securities and Exchange Commission began an informal inquiry back in August into that restatement. The company turned over a pile of documents to the SEC in October.

How bad could this be? West Marine admittedly has no idea. But it can say that it will be costly, and a royal pain in the rump:

“We expect the inquiry to affect our results of operations and, in particular, our selling, general and administrative expense line item as we incur significant costs to, among other things, respond to the staff’s requests. Such costs will be incurred on an ongoing basis as the staff conducts its informal inquiry. However, the outcome of this matter cannot be predicted at this time, and consequently, we cannot estimate the impact on subsequent quarters that the costs associated with this SEC informal inquiry will have on our results of operations.”

Synaptics co-founder Federico Faggin told the company last month that he would retire as a director “not later than the next annual meeting of stockholders” in 2008. That took place Tuesday, the same day that shares of the Santa Clara maker of touch pads and other products for electronic devices hit an all-time high of $54.23.

Faggin, a Silicon Valley luminary who also co-founded the chip companies Cygnet Technologies and Zilog, was once employed by the legendary Fairchild Semiconductor and was department manager of research and development at Intel in the early 1970s when the world’s first microprocessor was developed.

He served as Synaptics chief executive for eleven years and had been a director since its inception. He patiently grew the company, which waited 17 years before going public in 2002. He even bought 2,000 shares of the company’s stock in the IPO.

The company’s fortune has been hitched to some degree by its vendor relationship with Apple, to whom it supplies technology used in its computers and handheld devices. Its shares dropped 22 percent in February 2005 the day after rival Cypress Semiconductor won a contract to furnish touchpads in some of Apple’s notebook computers. The recent success of Apple’s iPhone has led to the expectation that touch technology will spread to other handheld devices.

Of the $22.8 million worth of Synaptics shares Faggin has sold since its IPO, $16.9 million have been sold since the company reported fiscal 2007 fourth quarter results in August that showed profits more than tripling from the year-before quarter to $7.4 million on a 64 percent increase in sales. He leaves the company owning   still owns 662, 516 shares currently worth $33 million.

Investors clearly expect good things from Synaptics. It’s price-to-earnings ratio, which averaged 29 over the last five years, is now up to 52. It’s shares closed Wednesday at $50.07, losing 5.2 percent on  for the first day without Faggin.

For some reason, big corporations and banks like to use cute little fake names when they do big, hairy deals. Don’t ask us why. We think some of these folks could probably be spending more times out doors. But, that’s just us.

Still, we couldn’t help noticing one of these recently. And frankly, we smell a rat.

In an 8-K filed on Tuesday, Agilent Technologies (ticker:A) noted that it was amending the terms of a deal with Merrill Lynch that involves a complex financial arrangement worth $1.5 billion. Yawn, right? But here’s the potential outrage factor.

Under the terms of the original deal, Merrill Lynch’s fake name for the deal was “Fenway Capital, LLC.” But Merrill Lynch wanted to change that name to “Ebbets Funding, PLC.” Infidels! The decision to switch from the beloved name of the Boston Red Sox’s home field to that of the late, Brooklyn Dodgers indicates a deeper conspiracy. And worse, an insult, nay, a rebuke from the New York-based investment bank to Sox lovers everywhere.

Rise up, Red Sox Nation. And demand justice.