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Selectica CEO, Its Ex-CFO, Is Ousted

Special committee says Stephen Bennion knew of stock-options backdating, but finds no evidence of wrongdoing. He gets VP post.
Stephen TaubAugust 27, 2007

Software company Selectica ousted board chairman and CEO Stephen Bennion, who it said “was aware of or involved with” stock-option backdating practices in his prior post as CFO. Bennion was made vice president and general manager, a post that “will not involve accounting or financial reporting responsibilities,” the company said in a press release.

The San Jose-based provider of enterprise contract lifecycle management and sales configuration products named Robert J. Jurkowski as chairman and CEO. Jurkowski, a Selectica board member since 2006, has 25 years of experience in the enterprise software industry, and previously was CEO of Intacct Corp.

Bennion, said Selectica, agreed to a board request to resign as “a remedial measure” after a special committee probe of the company option practices. He will no longer serve on the board.

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In a separate announcement, the company said the investigation found that the company lacked “contemporaneous evidence” supporting a significant number of the recorded option grants, and that it may have incorrectly measured the effective dates for a number of its option grants.

The company said Bennion had received an option grant with a grant date that appeared to have been retrospectively selected, although it stressed that Bennion did not select the grant date and did not exercise the options. The committee “did not conclude, based on the evidence, that Mr. Bennion engaged in intentional wrongdoing or understood that the Company’s stock option granting practices would result in a misstatement of the Company’s financial results,” according to the release. The affected grants include those to employees, officers and former directors.

Selectica’ stock surged more than 7 percent when it began trading on Monday. The company now has a $50 million market value.

The Committee reviewed grants made on 165 separate grant dates from the day before the company’s stock first began trading on March 10, 2000, through Dec. 31, 2006. It said that it expects to record additional non-cash compensation expense that may require it to restate a number of its financial statements.