DEQ reduces board of directors' cost and issues stock options at us$ 1.10

DEQ's Board of Directors has reduced the annual approximate fixed monetary cost for the board from us $ 120,000 to us$ 20,000 for an annual cost savings of us$ 100,000. As well, DEQ has issued stock options to the three new directors as per the new compensation plan described below.

The company issued a total of 75,000 stock options in accordance with the stock option plan of the Corporation to the three new directors elected at the annual shareholders' meeting on May 28th 2008 to align them with the new compensation plan. Each of the three new board members (Mike Telesmanic, Alexandre Lattès and Hervé Eschasseriau) has been granted 25,000 stock options each.

Each option will confer to its holder the right to subscribe one common share of DEQ Systems Corp. at an exercise price of one dollar ten cents per share. Stock options are fully vested as of the date of grant. The remaining two independent directors were not issued additional stock options as they received the monetary compensation in 2008 as per the 2008 director compensation plan.

As well, the Board of Directors has put in place a compensation package for employees and has issued a total of 925,000 stock options in accordance with the stock option plan of the Corporation. The stock options were granted to the following members of management team.

Earle G. Hall, President and CEO was issued 300,000 stock options, Francois Proulx, CFO and COO was issued 150,000 stock options, Genevieve Cossette, Chief Legal Officer was issued 145,000 stock options, Paul Omohundro, Vice-President, Sales was issued 50,000 stock options and David Jacques, Chief Technology Officer was issued 25,000 options and other employees were granted a total of 255,000 stock options. Each option will confer to its holder the right to subscribe one common share of DEQ Systems Corp. at an exercise price of one dollar ten cents per share. Employee stock options are vested at 20% per year for 5 years.

“The management team has done an incredible job to migrate the business model to an accretive patent royalty structure built upon a stable cost base”, stated Mike Telesmanic, DEQ's Chairman of the Board.

“The Board of Directors is proud of management's continued efforts to control cost while continually increasing recurring revenues. Therefore, we have decided to align our own cost in the same manner as management has done by reducing our fixed cost and to increase the number of stock options so that any significant compensation earned by a director will be from the added value created,” Telesmanic added.

“This unprecedented decision by the Board of Directors is very motivating for the management team” stated Earle G. Hall, President and CEO of DEQ. “Our Board has seen our efforts and results in 2008 and our quest to create value for our shareholders. Their decision to migrate to value added compensation is a clear sign of their desire to create value. Our decision to issue stock options at us$ 1.10 in the current market conditions is a sign as well our belief in our business plan and the value we continue to create.”