Administration October 11, 2006

CNET Executives Resign Due to Options Probe

October 11, 2006 (PLANSPONSOR.com) - CNET announced the resignation of its chairman and CEO, Shelby Bonnie, as well as its general counsel and head of human resources, as a result of an internal probe of stock option practices.
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The Wall Street Journal reports that CNET said Wednesday its internal review found “deficiencies” in the way options were granted, including some instances of backdating of grants, during the period from the company’s IPO in 1996 through at least 2003. A number of executives, including Bonnie, the former chief financial officer, the company’s general counsel and senior vice president of human resources, “bear varying degrees of responsibility for these deficiencies,” the company said, according to the WSJ.

The company said those who received backdated options have agreed to have them re-priced to the fair market value of the correct date. Bonnie offered an apology for the options problems.

CNET began its internal probe into options practices in May when it announced the Securities and Exchange Commission had begun an informal inquiry (See CNET Latest to Face SEC Stock Option Inquiry ).

The company announced in July it plans to restate financial results for 2003 – 2005 to correct accounting errors the company made in recording stock-based compensation (See CNET to Restate Financial Results ).

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