Transaction Systems Architects, which makes electronics payments processing software, disclosed that errors related to stock-option grants will require a restatement for fiscal years 1995 to 2002.
The company also acknowledged control weaknesses and other deficiencies, elaborating that in a number of instances, the chief financial officer and not the compensation committee selected grant dates for options awards. “The company’s then CFO [used] hindsight in selecting grant dates,” stated the company.
An internal review of the period in question, stated Transaction Systems, found that management consultations with board members regarding option grants were not properly documented in all instances, and the record of the board’s decisions was, in a number of instances, inconsistent and incomplete. The review found no evidence of intentional misconduct, however.
Transaction Systems’ CFO during the period in question, Dwight Hanson, left the company in 2003. He could not immediately be reached for comment.
Transaction Systems stressed that no member of current senior management was involved in the option-grant practices under review.
The company stated that it will take non-cash adjustments of about $17 million related to stock-based compensation, though the sum may change; most will be applied to financial statements for fiscal years 1995 to 2001. Transaction Systems added that its restatement may include adjustments unrelated to stock options, though these adjustments are not expected to exceed a total of $1 million from 1995 to date.