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Sanmina Executives Exit Over Backdating

The company says most options recently granted are suspect.
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Sanmina-SCI

(SANM) - Get Sanmina-SCI Corporation Report

said one of its executives has resigned after an investigation found that most stock options granted in the last nine years were manipulated.

The special committee that conducted the options inquiry pinpointed one former and one current member of management for the accounting errors, but did not name them. The current member of the management resigned, the company said.

"The special committee found that most stock option grants to executives and other employees between 1997 and 2006 were not correctly dated or accounted for," Sanmina said in a statement.

The electronics manufacturing services firm will

restate its financial results, resulting in noncash compensation expenses. The company has not determined the amount of the charges.

On recommendation from the special investigating committee, the board also immediately adopted a set of controls on the company's options grant practices, including establishing fixed dates for all equity-based awards and prohibiting awarding options grants to executives during blackout periods.

The board also agreed to require evidence of the date of approval for new hires, promotion and discretionary options grants and mandate approval of the compensation committee before issuing any other grants.

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"I regret that our stock options program was not properly administered in the past and I apologize to our stockholders, employees, and customers for any impact or concerns these issues may have caused," Sanmina CEO Jure Sola said in a statement. "With this investigation now behind us, we expect to refocus our management's attention on servicing the needs of our customers and improving our operating efficiencies."

Sanmina, which is

delinquent in its

Securities and Exchange Commission

filings, has met with officials from

Nasdaq

regarding its plan to complete its financial records and return to compliance. The listings qualification panel has not made a decision on Sanmina's request.

The company said it is still cooperating with the SEC and the U.S. Attorney for the Northern District of California, who have requested documents on the company's options grant practices.

Sanmina shares were off by 3 cents to $3.90 in recent trading on Thursday.