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VeriSign Restates; CFO Resigns

Following the filing of restated financials to account for misdated stock-option grants, the finance chief of the Internet company resigns.
Sarah JohnsonJuly 13, 2007

After more than 10 years as VeriSign’s CFO, Dana Evan resigned earlier this week. Her resignation comes just as the Internet company released restated financials to account for misdated stock-option grants, and several weeks after former CEO Stratton Sclavos resigned.

The company took a noncash, stock-based compensation charge of $160 million to adjust for stock options granted between 2002 and 2005 and restated its financials for that period. VeriSign has said its year-long review of its past stock-option granting process turned up no intentional wrongdoing by its senior management, including Sclavos and Evan.

On Thursday the company named former controller Bert Clement to the CFO post. In May VeriSign replaced Sclavos with CFO William Roper Jr., who was once the finance chief of Science Applications International Corp. and Intelogic Trace Inc.

Sclavos and Evan were two of five VeriSign executives whose stock options were repriced following the company’s investigation into its options-granting process. The internal investigation was triggered by a research report and a subpoena from the Department of Justice, as well as an inquiry from the Securities and Exchange Commission. The company repriced five of Evan’s grants awarded from 2000 to 2002 totaling 380,000 shares.

VeriSign’s investigators found 8,164 stock-option grants with incorrect measurement dates, the company reported in its delayed filings for last year’s annual and quarterly reports. In several cases, a stock price for the option-grant date was changed without being properly disclosed. Some dates were selected after the fact to reflect a lower share price.