Monster Worldwide Files Restated Historical Financial Statements

Monster Worldwide today announced that it has filed with the United States Securities and Exchange Commission (SEC) an amended annual report for the year ended December 31, 2005, an amended quarterly report for the quarter ended March 31, 2006, and a quarterly report for the quarter ended June 30, 2006. The filing of these reports satisfies the conditions for continued listing established by NASDAQ’s listing qualification panel. The Company plans to file with the SEC within the next two weeks, a quarterly report for the quarter ended September 30, 2006, at which time it will be current in all of its SEC filings.

As discussed in greater detail below, the Company has restated its historical financial statements to reflect the results of an investigation into its historical stock option grant practices, and has recorded a cumulative charge of $339.6 million ($271.9 million net of tax) on stock options granted between 1997 and March 31, 2003. The Company has also amended Part III of its annual report to more fully reflect transactions with Andrew McKelvey, the Company’s former Chief Executive Officer, as a result of an inquiry conducted by management and the Board of Directors following his departure.

Background
On June 12, 2006, the Company announced that a committee of independent directors of the Board of Directors (the Special Committee), assisted by independent legal counsel and outside accounting experts, was conducting an independent investigation to review the Company’s historical stock option grant practices and related accounting. The Special Committee and its advisors conducted an extensive review of the Company’s historical stock option grants and related accounting, including an assessment and review of the Company’s accounting policies, internal records, supporting documentation and e-mail communications, as well as interviews with current and former employees and current and former members of the Company’s executive management and Board of Directors.

On July 26, 2006, the Company announced that although the Special Committee investigation had not yet reached a conclusion, the Company cautioned shareholders and the investing public against relying on previously published financial statements. On October 25, 2006, the Company announced that its Audit Committee, after consultation with senior management, the Special Committee and the Company’s independent registered public accounting firm, determined that the consolidated financial statements and related financial information contained in its Annual Reports on Form 10-K through December 31, 2005 should no longer be relied upon.

The Special Committee has determined that the exercise price of a substantial number of stock option grants during the periods between 1997 through March 31, 2003 differed from the fair market value of the underlying shares on the measurement date. In most cases, the original date assigned to the grant corresponded to the date as of which a unanimous written consent (UWC) was executed by the members of the Compensation Committee of the Company’s Board of Directors, but the date of that consent did not correspond to the actual date on which the identities of the individual optionees and the number of shares underlying each option was determined. The Company believes that the dates as of which the UWCs were dated were earlier than the dates on which they were actually executed. In a significant number of instances, the stock price on the assigned date (the date as of which the UWC was executed) was lower, sometimes substantially lower, than the price on the date the award may be deemed to have actually been determined. The Company believes that this practice was done intentionally, by persons formerly in positions of responsibility at the Company for the purpose of issuing options at a higher intrinsic value than would have otherwise been the case.

Restatement Methodology
Historically, the Company has generally accounted for stock option grants as if the options were granted at an exercise price no less than fair market value as indicated by the closing price of a share of the Company’s common stock trading on the NASDAQ National Market on either the as of date reflected on the relevant UWC of the Compensation Committee of the Board of Directors or the date of minutes of an actual Compensation Committee meeting (Minutes). A majority of stock options granted during the period under review were granted pursuant to UWCs. The UWCs, by their terms, typically referred to an attached Schedule A listing the specific names of the grantees and the number of shares subject to each option. The UWCs that have been located by the Company, however, either have no Schedule A annexed to them, or where one is attached, it frequently does not match the Company’s electronic stock option database.

The Company has therefore concluded that neither the as of dates referenced on Compensation Committee UWCs, nor the dates of Minutes can be relied on as proper option grant measurement dates. The Company has been unable to ascertain with any degree of certainty when, if ever, UWCs or Minutes with full, complete and final Schedule As were reviewed and approved by the Compensation Committee.

In light thereof, the Company has concluded that the most appropriate and accurate source of data to determine option grant measurement dates is the electronic record of option grant information resident in its electronic stock option database program known as Transcentive, which went into use in late 1998. The entry into Transcentive of the specific grantee information as to each stock option grant constituted an acknowledgement by the Company to the grantee of the grantee’s legal entitlement to the grant and, in the absence of authoritative information as to when grants were actually approved by the Company provides an appropriate measurement date framework based on entitlement. For option grants made subsequent to the implementation of Transcentive, the Company has calculated the restated intrinsic value using a grant measurement date based on when the option data was entered into the database program (the Creation Date). For options granted prior to the implementation of Transcentive, the new measurement date was determined by applying the average lag time between the as of date and the Creation Date for options granted subsequent to the implementation of Transcentive to the originally utilized measurement date in order to approximate a reliable measurement date. The average lag period between the date as of which UWCs were executed and the date that options purportedly granted by such consents were inputted into the Company’s Transcentive system was ninety-seven days. For grants prior to December 1998, the Company has therefore used measurement dates equating to ninety-seven days following the date as of which the UWC relating to such options were executed.

Given the volatility of the Company’s common stock, the use of another measurement date could have resulted in a substantially higher or lower cumulative compensation expense. This in turn would have caused net income or loss to be different than amounts reported in the restated consolidated financial statements.

Findings
Based on the findings of the Special Committee, management of the Company has concluded that the Company’s consolidated financial statements as of December 31, 2005 and 2004 and for the years ended December 31, 2005, 2004 and 2003, the selected financial information as of and for the years ended December 31, 2002 and 2001 and the quarterly periods in 2005 and 2004 should be restated to record additional non-cash stock based compensation expenses and related income tax effects, resulting from the stock option review. As of December 31, 2005, the Company had accelerated substantially all unvested outstanding stock options in order to mitigate compensation expense that would have been required upon the effectiveness of SFAS 123R beginning January 1, 2006. Accordingly, the 2006 periods will not be materially affected as a result of this restatement.

The restatement of the Company’s previously issued financial statements reflects the following:

a) the recognition of non-cash stock based compensation expense and related income tax effects related to stock options affected by the grant dating issues; and

b) adjustments to previously recognized income tax benefits as a result of certain stock options that were granted to certain of the Company’s executive officers with exercise prices that were less than the fair market value of the Company’s common stock on the actual date of grant and, therefore, did not qualify as deductible performance-based compensation in accordance with Internal Revenue Code section 162(m) (IRC 162(m)).

The Company has notified the Internal Revenue Service of the stock option review. Under Section 162(m), stock options that are in-the-money at the time of grant do not qualify as performance-based compensation. The Company is not entitled to a deduction for the compensation expense related to the exercise of those options held by officers who are covered by IRC 162(m).

In connection with the restatement, the Company has recorded cumulative non-cash stock based compensation of $339.6 million through December 31, 2005, offset by a cumulative income tax benefit of $67.7 million, totaling $271.9 million on an after-tax basis.

(a) Non-cash stock based compensation expenses have been recorded as adjustments to the Salaries and related line item in our consolidated statements of operations for each period.

(b) The cumulative effect of the stock option adjustments from January 1, 1997 through December 31, 2000 is reflected as an adjustment to retained deficit in the 2001 period.

The effects of these restatements are reflected in the financial statements and other supplemental data, including the unaudited quarterly data for 2005 and 2004 and selected financial data, included in the amended Form 10-K/A. Monster Worldwide has not amended and does not intend to amend any of its previously filed annual reports on Form 10-K for the periods affected by the restatement or adjustments other than in this Annual Report on Form 10-K/A or any of its previously filed Quarterly Reports on Form 10-Q for any period prior to December 31, 2005.

The Company was unable to timely file its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2006 and September 30, 2006, primarily due to the unavailability of reliable financial information for the 2005 periods. The Company’s Form 10-Q for the quarter ended June 30, 2006 has been filed concurrently with the Company’s amended Form 10-K/A as well as the Company’s Form 10-Q/A for the quarter ended March 31, 2006. The Company expects to file a Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 within the next two weeks of this filing date.

On October 6, 2006, Andrew J. McKelvey resigned from his positions as Chairman of the Board and Chief Executive Officer. The Board of Directors of the Company named William M. Pastore, the Company’s then President and Chief Operating Officer, as its Chief Executive Officer and as a director. On that date the Board established an Executive Committee consisting of Salvatore Iannuzzi, chair, John Gaulding and Ronald Kramer to act for the Board in overseeing the Company’s affairs and to perform the functions of the Chairman. Mr. McKelvey kept his seat on the Board of Directors and was named Chairman Emeritus. On October 29, 2006, Andrew J. McKelvey resigned as a member of the Board of Directors and as Chairman Emeritus. Mr. McKelvey and his legal counsel have advised the Special Committee of the Board of Directors that Mr. McKelvey had declined to be interviewed by the Special Committee on the previously agreed date and that Mr. McKelvey would not provide assurance he would appear at a later date.

Following Mr. McKelvey’s resignation and at the direction of management and the Board of Directors, the Company’s internal audit department and outside counsel examined certain transactions between the Company and Mr. McKelvey or entities or individuals affiliated with him. As a result of that examination, the Company has determined to expand the disclosure of related party transactions by including in the Form 10-K/A the information required by Part III that in the original filing on Form 10-K had been incorporated by reference to the Company’s Proxy Statement. The Company has recently received reimbursement from Mr. McKelvey in the amount of $533,046, which includes interest, for certain expenses paid by the Company during the periods 1996 through 2006. The Company continues to seek reimbursement, plus interest, on certain other items.

On November 22, 2006, the Company’s Board of Directors, with concurrence from the Special Committee, announced that it has terminated for cause Myron Olesnyckyj, the Company’s former Senior Vice-President, General Counsel and Secretary. Mr. Olesnyckyj was suspended from his position on September 19, 2006. The action was a result of the Special Committee’s review of the Company’s historical stock option grant practices.

The Company’s Board of Directors and senior management believe that the practices discussed related to the granting of options during the periods 1997 through March 31, 2003 are contrary to the high ethical standards they believe should apply to all of the Company’s business practices.

Although the investigation is substantially complete, the Special Committee continues to analyze the facts disclosed by its investigation in order to make comprehensive recommendations to the Board regarding remedial steps, and is in the process of determining what remedial recommendations it will make. It expects to make those recommendations in the first quarter of 2007.

This press release should be read in conjunction with the Annual Report on Form 10-K/A and the Quarterly Reports on Forms 10-Q/A and Form 10-Q referred to in the release.