Witness (NASDAQ:WITS)
Historical Stock Chart
From Jun 2019 to Jun 2024
Witness Systems (NASDAQ:WITS), a leading global provider of
workforce optimization software and services, announced the results of
the investigation of stock option grants and practices by the Special
Committee of independent directors established in August 2006.
The Special Committee’s investigation focused
primarily on the period February 2000 (when the company went public)
through the end of August 2002. The Special Committee did not find fraud
or intentional misrepresentation in the financial reporting of the
option grants that it analyzed, but did find inaccuracies in the
determination of measurement dates for option grants affecting the
company’s accounting and disclosures. In
response to the Special Committee’s findings
and recommendations, the company, working with its independent auditors,
is evaluating corrections to measurement dates and other related
accounting issues and is quantifying the financial and tax impact of
those inaccuracies and corrections. The company currently has until
January 19, 2007 to regain compliance with Nasdaq listing requirements.
Based on its preliminary analysis, the company does not expect the
impact to be materially different from what the company has previously
projected.
In response to the findings and recommendations of the Special
Committee, and in an effort to strengthen its corporate governance
mechanisms, the Board has voted to separate the positions of chairman of
the Board and chief executive officer and has elected Mr. Dan
Lautenbach, a member of the company’s Board
since 2002 and a member of the Special Committee, as Chairman of the
Board, effective immediately. Mr. Lautenbach succeeds Mr. David Gould,
who has voluntarily agreed to step down as chairman.
In addition, following the Special Committee’s
findings and recommendations, Mr. Gould also voluntarily agreed to
resign from his positions as chief executive officer and as a member of
the company’s Board effective January 3, 2007.
Mr. Gould’s resignation was tendered on
December 1 and was accepted by the Board on December 6, 2006. The
company and Mr. Gould are negotiating further terms of his departure.
The Board expressed its appreciation for Mr. Gould’s
contributions to the company during his tenure as chief executive
officer. During that time, the company increased total revenue from
approximately $23 million in 1999 to expected revenue of more than $200
million in calendar 2006.
To replace Mr. Gould, the Board yesterday appointed Mr. Nicholas
Discombe, who has been the company’s
president and chief operating officer since April 2003, as the company’s
new chief executive officer and as a member of the company’s
Board. Both appointments will be effective upon Mr. Gould’s
departure. Prior to April 2003, Mr. Discombe served as president and
chief executive officer and a director of Eyretel PLC, a technology
company listed on the London Stock Exchange.
In further response to the Special Committee’s
recommendations, and in a further effort to strengthen the company’s
management and controls and corporate governance mechanisms, the company
plans in the future to realign certain responsibilities in the legal and
financial reporting areas.
The Special Committee’s report also noted the
role of a former financial officer in the company’s
option grants and option granting practices during a portion of the
period of the Special Committee’s
investigation. Because the individual in question is no longer employed
by the company and left the company several years ago, no action was
taken.
Said Mr. Gould: “I am leaving the company
well positioned in the market and in very capable hands. Nick has been
instrumental in the company’s success since
2003, and ensures a smooth transition for our people, stockholders and
customers. I am proud of the success that Witness has achieved during
the past seven years, establishing itself as the leader in our market.”
The company currently plans to hold a conference call at 5 p.m. Eastern
Time on Wednesday, January 3, 2007, at which time it will report
preliminary financial results for 2006 and comment on the outlook for
2007.
About Witness Systems
Witness Systems (NASDAQ:WITS) is the worldwide leader in software and
services that help businesses capture customer intelligence and optimize
their workforce performance. The company’s
Impact 360™ solution
features quality monitoring, compliance and IP recording, workforce
management, performance management and eLearning. Primarily deployed in
contact centers – as well as the
remote, branch and back offices of global organizations –
the workforce optimization solution captures, analyzes and enables users
to share and act on cross-functional information across the enterprise.
With Impact 360, organizations can improve interactions and the
underlying back-office processes that enhance the customer experience
and build customer loyalty. For more information, visit us at www.witness.com.
Cautionary Note Regarding Forward-looking Statements: Information
in this release that involves expectations, plans, intentions or
strategies regarding the future are forward-looking statements that are
not facts and involve a number of risks and uncertainties. They are
identified by words such as “will,”
“anticipates,” “expects,”
“intends,” “plans,”
“believes,” “estimates,”
and similar expressions and statements about present trends and
conditions that may extend into the future. These statements are based
upon information available to Witness Systems as of the date of this
release, and the company assumes no obligation to update any such
forward-looking statement. Forward-looking statements believed true when
made may ultimately prove to be incorrect. These statements are not
guarantees of future performance and are subject to risks, uncertainties
and other factors, some of which are beyond our control and may cause
actual results to differ materially from our current expectations. Some
of the factors that could cause actual future results to differ
materially from current expectations include the possibility that the
company, in consultation with its auditors, will determine that the
financial impact of measurement date corrections will be greater than
currently expected; that additional issues as to measurement dates for
option awards may arise; and that regulatory review and litigation
relating to such matters may impact the company’s
preliminary analysis. Additional factors that could cause actual future
results to differ materially from current expectations include the
company’s ability to compete successfully in
the future; fluctuations and changes in customer demand and preferences;
the timing of orders; the company’s ability
to manage its growth; the risk of new product introductions and customer
acceptance of new products; the rapid technological change which
characterizes the company’s markets; the
risks associated with international sales as the company expands its
markets, including the risks associated with foreign currency exchange
rates; the risk of distraction and other consequences that might result
from the management changes announced in this release; litigation and
regulatory scrutiny of the company’s option
granting practices and related developments; as well as other risks
identified under the caption “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
in the company’s Form 10-K for the year ended
December 31, 2005 and its Form 10-Q for the quarter ended March 31,
2006, and in Current Reports on Form 8-K filed by the company since
August 11, 2006.
Witness, Impact 360, Improve Everything and the Witness logo are the
trademarks (registered or otherwise) of Witness Systems, Inc. protected
by laws of the U.S. and other countries. All other trademarks mentioned
in this document are the property of their respective owners.