DALLAS: Affiliated Computer Services Inc. a major provider of
business process outsourcing and information
technology solutions, announced Monday its chief executive and chief
financial officer have quit following an internal investigation into historical stock option practices found that both of them violated the company's code of ethics for senior financial officers.
The company said Mark A King and Warren D. Edwards, chief executive and chief financial officer respectively, have entered into separation agreements with the company and that its board of directors has appointed Lynn Blodgett, its current executive vice president and chief operating officer and a director since September 2005 as president and chief executive officer and John Rexford, who has been its executive vice president for
corporate development as executive vice president and chief financial officer and as a director with immediate effect.
The company had carried out the investigation following an informal inquiry by the U.S. Securities and Exchange Commission and a subpoena from a grand jury in the southern district of New York. It reviewed the company's stock option practices from 1994 through 2005. The company said it expects a non-cash
compensation expense of $51 relating to incorrect accounting measurement dates, in addition to tax-related expenses.
King and Edwards had resigned effective yesterday, 26 November.
The company said in a statement the two had used "hindsight to select favorable grant dates'' on options after chairman Darwin Deason authorized the issue of the option grants. It said another unidentified manager was also aware of the proceedings.
The company informed the SEC and the attorney's office about the developments, it said.
The internal investigation was overseen by a special committee of the board of the company, consisting of all independent members of the board and a counsel.
