3 top executives quit after options inquiry

Mercury Interactive Corp., which makes software to test computer programs, said three of its top executives resigned after a company investigation found that they manipulated the value of stock options for six years.

Chief executive Amnon Landan, chief financial officer Douglas Smith, and general counsel Susan Skaer resigned, effective immediately, Mountain View, Calif.-based Mercury said yesterday. The company named Anthony Zingale chief executive.

Mercury said by changing the dates of when options were granted, the officials were able to make it appear as if they made less money and reduce their taxes. Mercury said it found 49 instances since 1995 where the stated date of an option grant was different from when it was actually granted, and the new date was almost always one when Mercury shares traded at a lower price.

''Now the issue is one of the new leadership -- can they keep everyone focused, can they keep the wheels on the wagon?" said Richard Williams, an analyst with Garban Institution Equities.

The executives' actions are unacceptable, according to a committee of directors formed in June to investigate the options, after the Securities and Exchange Commission said it had begun an inquiry.

A Mercury spokeswoman declined to comment, and an SEC spokesman said the commission can't comment on whether Mercury is still under investigation.