Three executives at Mercury Interactive Corp. resigned after an internal investigation revealed that the company had allegedly manipulated stock options over the past decade.

Chief executive Amnon Landan, chief financial officer Douglas Smith and general counsel Susan Skaer stepped down from the company, which provides testing services for corporate software applications. An internal committee from Mercury's board of directors was formed this summer after the Securities and Exchange Commission announced in November 2004 that it would be looking into stock option practices at Silicon Valley companies.

That committee believes that the executives manipulated the dates of option grants from 1995 to the present to boost their chances of profiting, or to reduce their tax liability. In a statement, Mercury said that the misdating occurred on options granted to all levels of employees.

As a result of the options scandal, the company must file amended current and past financial statements, and it faces the possible delisting of its stock if restated reports are not filed by month's end. Mercury named Tony Zingale, the company's president and chief operating officer, to replace Landan.

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