Cirrus Logic CEO quits after backdating probe

LOS ANGELES -- Cirrus Logic Inc., a maker of microchips for video and audio players, said chief executive David French resigned after an internal inquiry found he backdated stock-option grants.

Michael L. Hackworth, 66, cofounder and former president and CEO, was named acting chief, the Austin, Texas-based company said yesterday. French, 50, leaves five days after Cirrus disclosed plans to restate more than five years of results because of errors in accounting for grants.

French "influenced the grant process with a view toward the stock price," Cirrus said. He didn't "appreciate the significance" of manipulating the dates, and Cirrus will record as much as $24 million in costs to correct the grants. The company reported Jan. 31 that sales in its latest quarter fell 6.2 percent to $45.3 million.

French joined Cirrus in 1998 as president and chief operating officer and won the CEO job a year later. He was previously a vice president and general manager of Norwood-based chip maker Analog Devices Inc.

Cirrus filed a termination contract with French "to buy peace" between the two parties by avoiding litigation, according to a regulatory filing. Cirrus will give French $477,600 in compensation in six months. French may have to repay up to $100,000 in bonuses if the restatements show he didn't meet financial targets, and agreed to amend any tax return and pay all applicable taxes if required.

The company canceled two option packages from 2000 and 2001 that total 300,000 shares. Cirrus also canceled half the unvested stock options granted after February of 2002, without identifying how many shares this entails.

Chief financial officer Thurman Case didn't return a call.