Companies Responding To Stock Option Investigations (8/2)

August 08, 2007, 1:13 a.m. EDT 10 Min Read

DOW JONES NEWSWIRES

The Securities and Exchange Commission is currently investigating about 140companies in its expanding probe of stock-option granting practices, The WallStreet Journal reported. On March 5, the Journal reported that the stock optionsscandal helped boost by 50% the number of companies filing their annual reportslate.

In response to these and other reports, many companies have begun examiningtheir own stock-option granting practices to ensure backdating didn't occur.

In the past week, some companies cited in investigations or those that haveengaged internal investigations have issued statements.

Below are some of their responses, as well as other developments:

CNET Networks Inc. (CNET) said Wednesday the SEC converted an informal inquiryinto its stock-option practices into a formal investigation, and servedsubpoenas on some former officers in connection with the probe. The SanFrancisco online media company that owns TV.com, GameSpot and CNET.com said itis cooperating with the agency.

On Monday, the judge overseeing an options-backdating lawsuit against UnitedHealth Group Inc. (UNH) extended his order barring former chief executiveWilliam McGuire from exercising stock options, but he did allow the company topay McGuire up to $3 million from an executive savings plan. McGuire held stockoptions valued at $1.78 billion at the end of 2005, although they are worthsignificantly less now because of a 21% drop in the company's share price.

Jurors began deliberating Monday about whether to convict the former chiefexecutive of Brocade Communications Systems Inc. (BRCD) of felony securitiesfraud in the first stock-option backdating case to go to trial.

On Monday, the former chief executive of Engineered Support Systems, MichaelShanahan Sr., and his son, Michael Shanahan Jr., pleaded not guilty to fraudcharges alleging illegal options backdating. The St. Louis defense contractorwas acquired by DRS Technologies Inc. (DRS) in 2006.

Landry's Restaurants INc. (LNY) said Monday it completed a review of its paststock-option awards and concluded no intentional misconduct took place bycurrent, or former executives at the firm. The company said some unnamedexecutives agreed to pay back the difference between the recorded and backdateddates.

Affymetrix Inc. (AFFX) on Monday restated its net income for the fourthquarter of 2005 to $24.8 million, or 35 cents a share. The Santa Clara, Calif.,company filed an amended report with the SEC to provide additional informationregarding the nature of the errors and documentation lapses found during itsreview of past stock option practices. Last year, Affymetrix said that it wouldrestate its financial statements for certain options granted between 1997 and1999.

On July 27, Fuel Systems Solutions Inc. (FSYS) said it was "more likely thannot" to restate its financial results from fiscal 2001 through fiscal 2005 toinclude additional stock-based compensation charges discovered in an optionsbackdating probe. The Santa Ana, Calif., holding company said the actual impactof the restatements has yet to be determined, but financial statements since Jan. 1, 2001, should no longer be relied upon.

Pediatrix Medical Group Inc. (PDX) said July 26 a review by its auditcommittee identified 56 stock option grants made on seven dates between April1997 and August 2000 which appear to have been backdated. In all, the committeefound 640 grants required revised measurement dates, variable accounting orrecognition of compensation expense. No instances of backdating were identifiedafter August 2000. The committee found no intentional misconduct by any ofSunrise, Fla.-based Pediatrix's current executives and learned that thebackdating was directed by a former officer. As a result of the committee'sfindings Pediatrix will have to record non-cash, pre-tax compensation expensefor the period from Jan. 1, 1995, to March 31, 2006, of about $33 million.

Coherent Inc. (COHR) said July 26 that a special committee charged withreviewing options grants between Jan. 1, 1995, and Sept. 30, 2006, determinedthere was no intentional wrongdoing by current directors, Chief Executive JohnAmbroseo or Chief Financial Officer Helene Simonet. The company said the reviewmay result in noncash charges, which could require restatements for some of theaffected periods.

The following is a list of all the other companies that have commented on thestock option investigations:

Adobe Systems Inc. (ADBE) Actel Corp. (ACTL) Active Power Inc. (ACPW) Activision Inc. (ATVI) Affiliated Computer Services Inc. (ACS)Agile Software Corp. (AGIL) Alkermes Inc. (ALKS) Altera Corp. (ALTR) American Technology Corp. (ATCO) American Tower Corp. (AMT) Amkor Technology Inc. (AMKR) Atmel Corp. (ATML) Analog Devices Inc. (ADI) Apollo Group Inc. (APOL) Apple Inc.'s (AAPL) Applied Micro Circuits Corp. (AMCC) Applied Signal Technology Inc. (APSG) ArthroCare Corp. (ARTC) Aspen Technology Inc. (AZPN) Asyst Technologies Inc. (ASYT) Autodesk Inc. (ADSK) Back Yard Burgers Inc. (BYBI) BEA Systems Inc. (BEAS) Bed Bath & Beyond Inc. (BBBY) Bell Microproducts Inc. (BELM) Biomet Inc. (BMET) Black Box Corp. (BBOX) Blue Coat Systems Inc. (BCSI) Boston Communications Group Inc. (BCGI) Broadcom Corp. (BRCM) Brooks Automation Inc. (BRKS) CA Inc. (CA) Cablevision Systems Corp. (CVC)Caremark Rx Inc. (CMX) CEC Entertainment Inc. (CEC) Ceradyne Inc. (CRDN) Cheesecake Factory Inc. (CAKE) Children's Place Retail Stores Inc. (PLCE) Chordiant Software Inc. (CHRD) Cirrus Logic Inc. (CRUS) Citrix Systems Inc. (CTXS) Clorox Co. (CLX) Comverse Technology Inc. (CMVT) Computer Sciences Corp. (CSC) Copart Inc. (CPRT) Corinthian Colleges Inc. (COCO) Costco Wholesale Corp. (COST) Crown Castle International Corp. (CCI) CVS/Caremark Corp. (CVS) Cyberonics Inc. (CYBX) Dean Foods Co. (DF) Delta Petroleum Corp. (DPTR) Digital River Inc. (DRIV)Ditech Networks Inc. (DITC) Dot Hill Systems Corp. (HILL) DRS Technologies Inc. (DRS) Dycom Industries Inc. (DY) Eclipsys Corp. (ECLP) Electronic Arts Inc. (ERTS) Electronic Clearing House Inc. (ECHO) Electronics For Imaging Inc. (EFII) Embarcadero Technologies Inc. (EMBT) Emcore Corp. (EMKR) Endocare Inc. (ENDO) Equinix Inc. (EQIX) Epix Pharmaceuticals Inc. (EPIX) EPlus Inc. (PLUS) Extreme Networks Inc. (EXTR) F5 Networks Inc. (FFIV) Family Dollar Stores Inc. (FDO) First American Corp. (FAF) Forrester Research Inc. (FORR) Fossil Inc. (FOSL) Foundry Networks Inc. (FDRY)Fresenius Medical Care AG KGAA (FMS) Gap Inc. (GPS) Gensym Corp. (GNSM) Getty Images Inc.'s (GYI)Glenayre Technologies Inc. (GEMS) Greater Bay Bancorp (GBBK)Green Mountain Capital Inc. (GMOC) Hain Celestial Group Inc. (HAIN) Hansen Natural Corp. (HANS) HCC Insurance Holdings Inc. (HCC) Hewlett-Packard Co. (HPQ) Home Depot Inc. (HD) Hudson Highland Group Inc. (HHGP) IBasis Inc. (IBAS) Insight Enterprises Inc. (NSIT) Integrated Silicon Solution Inc. (ISSI) Internap Network Services Corp. (INAP) Interpublic Group of Cos . (IPG) Interwoven Inc. (IWOV) Intuit Inc. (INTU) Jabil Circuit Inc. (JBL)Juniper Systems Inc. (JNPR) Jupitermedia Corp. (JUPM) J2 Global Communications Inc. (JCOM)KB Home Inc. (KBH)Keane Inc. (KEA) Keithley Instruments Inc. (KEI) King Pharmaceuticals Inc. (KG)KLA-Tenor Corp. (KLAC) Knobias Inc. (KNBS) Kopin Corp. (KOPN)KOS Pharmaceuticals Inc. (KOSP) Krispy Kreme Doughnuts Inc. (KKD)KV Pharmaceuticals Co. (KVA) Lam Research Corp. (LRCX) Linear Technology Corp. (LLTC) L-3 Communications Holdings Inc. (LLL) Macrovision Corp. (MVSN) Management Network Group Inc. (TMNG) Marvell Technology Group Ltd. (MRVL) Mattel Inc. (MAT) Maxim Integrated Products Inc. (MXIM) McAfee Inc. (MFE) MDC Partners Inc. (MDCA) Meade Instruments Corp. (MEAD) Medarex Inc. (MEDX) Mercury Interactive Corp. (MERQ) Michaels Stores Inc. (MIK)Microislet Inc. (MII) Microtune Inc. (TUNE)Mills Corp. (MLS) Mips Technologies Inc. (MIPS) Molex Inc. (MOLX) Monster Worldwide Inc. (MNST)M-Systems Flash Disk Pioneers Ltd. (FLSH)Nabi Biopharmaceuticals Inc. (NABI) Nabors Industries Ltd. (NBR) Network Appliance Inc. (NTAP)Newpak Resources Inc. (NR) Novell Inc. (NOVL) Novellus Systems Inc. (NVLS) Nvidia Corp. (NVDA) Nyfix Inc. (NYFX) O.I. Corp. (OICO) Openwave Systems Inc. (OPWV) Oracle Corp. (ORCL) Orbital Sciences Corp. (ORB) PacificNet Inc. (PACT) Palm Inc. (PALM) Par Pharmaceutical Cos . (PRX) Peet's Coffee and Tea Inc. (PEET) Petroleum Development Corp. (PETD) PMC-Sierra Inc. (PMCS) Pool Corp. (POOL) Power Integrations Inc. (POWI) Progress Software Corp. (PRGS) Quest Software Inc. (QSFT) Qwest Communications International Inc. (Q) QuickLogic Corp. (QUIK) Rackable Systems Inc. (RACK) Radio One Inc. (ROIA) Rambus Inc. (RMBS)Redback Networks Inc. (RBAK) ReGen Biologics Inc. (RGBI) Research In Motion Ltd. (RIMM) Royal Gold Inc. (RGLD)RSA Security Inc. (RSAS)SafeNet Inc. Sanmina-SCI Corp. (SANM) Sapient Corp. (SAPE) ScanSource Inc. (SCSC) Selectica Inc. (SLTC) Semtech Corp. (SMTC) Sepracor Inc. (SEPR) Sharper Image Corp. (SHRP) Shaw Group Inc. (SGR) Sigma Designs Inc. (SIGM) Silicon Image Inc. (SIMG) Silicon Storage Technology Inc. (SSTI) SPX Corp. (SPW) Sonic Solutions (SNIC) Sonus Networks Inc. (SONS) SPSS Inc. (SPSS)Stolt-Nielsen S.A. (SNSA) Sun-Times Media Group Inc. (SVN) Sunrise Senior Living Inc. (SRZ) Superior Industries International Inc. (SUP) Sycamore Networks Inc. (SCMR) Take-Two Interactive Software Inc. (TTWO) Tetra Tech Inc. (TTEK) Management Network Group Inc. (TMNG) Thoratec Corp. (THOR) THQ Inc. (THQI) Thomas Group Inc. (TGIS)Transaction Systems Architects Inc. (TSAI) Trident Microsystems Inc. (TRID) Triquint Semiconductor Inc. (TQNT) TurboChef Technologies Inc. (OVEN) Tyco International Ltd. (TYC) Ulticom Inc. (ULCM) UTStarcom Inc. (UTSI) Valeant Pharmaceuticals International (VRX) Verint Systems Inc. (VRNT) VeriSign Inc.'s (VRSN) Vitesse Semiconductor Corp. (VTSS) Voxware Inc. (VOXW) Walt Disney Co. (DIS) Waste Connections Inc. (WCN) Western Digital Corp. (WDC) Westwood One Inc. (WON) Wet Seal Inc. (WTSLA) Wind River Systems Inc. (WIND) Wireless Facilities Inc. (WFII)Witness Systems Inc. (WITS) Xilinx Inc. (XLNX) Zarlink Semiconductor Inc. (ZL) Zoran Corp. (ZRAN)