Advanced Communication Devices
In November 2001, the Company completed the purchase of Advanced Communication Devices Corporation (“ACD&rdquo for $21.3 million, comprised of approximately one million shares of the Company’s common stock valued at $19.9 million, $0.9 million of vested common stock options valued using the Black-Scholes pricing model, and $0.5 million of acquisition-related expenses. ACD was a System on Chip (“SoC&rdquo semiconductor company focusing on LAN and IP switching technology whose then current markets included Taiwan, China and Korea. In addition, the Company adopted an incentive plan providing for the issuance of shares of common stock valued at $5 million to ACD employees who will continue to perform services for the Company. The acquisition has been accounted for as a purchase and the results of operations have been included in the Company’s consolidated financial statements since the acquisition.
In association with its acquisition of ACD, the Company allocated $0.1 million to tangible net assets acquired, $4.3 million to identified intangible assets, $4.7 million of in-process research and development costs were charged to the Company’s results of operations, as no alternative future use existed at the balance sheet date and $12.2 million was charged to goodwill, as this was the excess of costs of acquiring ACD over the fair value of identified net assets acquired.