BlackBerry-maker Research in Motion to restate results, co-CEO surrenders chairman's post

(AP) BlackBerry maker Research In Motion Ltd. said Monday that co-CEO Jim Balsillie will surrender the chairman's post as the mobile device maker disclosed it needs to cut roughly $250 million from past earnings reports due to improper accounting for backdated stock options.

Balsillie and co-Chief Executive Michael Lazaridis have agreed to pay RIM up to 5 million Canadian dollars each, or about $4.25 million apiece at current exchange rates, "to assist RIM in defraying costs" from the options investigation and restatement, a company news release said.

RIM's stock price, which has more than doubled since mid-2006 amid soaring BlackBerry sales, recovered quickly from an early slide. The stock fell 91 cents to $135.06 in morning trading on the Nasdaq Stock Market after sliding as much as 3.5 percent to $131.18 in the early going.

The Waterloo, Ontario-based maker of the popular handheld Internet device said a special committee determined that all options granted prior to Feb. 27, 2002, were accounted for incorrectly.

The special committee did not find intentional misconduct on the part of any director or officer, but said hindsight was used to select grant dates with favorable pricing for the employee recipients.

Balsillie has voluntarily stepped down as chairman, and Dennis Kavelman will be moving from his position as chief financial officer to become the chief operating officer of administration and operations. Balsillie will remain co-CEO with Lazaridis and will also stay on as a director.

The company said Balsillie was directly involved in approving grants following the company's initial public offering in 1997, including grants that have been found to have been accounted for incorrectly. Balsillie's role in approving grants decreased over time as more responsibility for approving certain grants was given to Kavelman and other employees.

"Consistent with current best practices in corporate governance, the roles of chairman and CEO are being separated," the firm said.

John Richardson was named lead director of the board, which will now have two additional directors, or a total of nine members.

Based on the recommendation of the special committee which conducted the review, the board has determined that no employees should be asked to leave the company as a result of the investigation, however.

The company said it will restate its annual financial statements for the years 2004, 2005 and 2006 and for the first quarter of 2007.

It said it will also make an adjustment of about $8 million to boost its tax expense for the tax accounting for deductible stock options.

A new oversight committee of the board comprised of independent directors has been created to examine executive compensation, trading by insiders and hiring practices, among other matters.

Brian Bidulka was named chief accounting officer. He is currently corporate controller.

(New thruout to RECAST, UPDATE with CEO's paying company, ADD stock price, correct spelling of Lazaridis. CHANGES dateline to New York. ADDS byline.)