DEQ Systems Corp.

DEQ Systems Corp.

July 15, 2008 17:16 ET

DEQ Reduces Board of Directors Cost and Issues Stock Options at $1.10

LEVIS, QUEBEC--(Marketwire - July 15, 2008) - DEQ Systems Corp. (TSX VENTURE:DEQ) ("DEQ" or the "Company"), a leading provider of table game bonusing, jackpot and loyalty solutions, announces today it has dramatically reduced the cost of its board of directors and has issued stock options at $1.10 to certain directors and management staff.

DEQ's Board of Directors has reduced the annual approximate fixed monetary cost for the board from $120,000 to $20,000 for an annual cost savings of $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 (3) new board members (Mike Telesmanic, Alexandre Lattes and Herve Eschasseriau) has been granted 25,000 stock options each. Each option will confer to its holder the right to subscribe one (1) common share of DEQ Systems Corp. at an exercise price of one dollar ten cents ($1.10) 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 (1) common share of DEQ Systems Corp. at an exercise price of one dollar ten cents ($1.10) 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."

"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 $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."

DEQ's Board of Directors monetary cost in 2007 was $118,500 for 5 independent directors and $48,250 in director's consulting fees. Herve Eschasseriau, Governance Committee Chair led a proposition to reduce these costs dramatically. All remaining directors from before the Annual General Assembly received the amounts as per the 2008 column. All new directors including the Chairman of the Board have received compensation as per the 2009 column and all ongoing recurring costs such as board meetings or committee meetings pay all directors as per the 2009 column. These changes are effective as of May 28th, 2008. The projected 2009 monetary cost for the Board of Directors is approximately $20,000 which will incur an approximate annual savings of $100,000 for the company.

Director Category Position 2008 Plan 2009 Plan
Independent Director
Chairman - Annual Fee $20,000 $2,000
Director - Annual Fee $10,000 $1,000
Committee President
- Annual Fee $1,500 $1,000
Board meeting fee per
member per board $1,000 $100
Board committee meeting
fee per member $1,000 $100
Board member consulting
fee per day $1,000 $500

Stock options per
member per year 75,000 100,000
Non Independent
Stock options per
member per year 75,000 100,000


Founded in 1998, DEQ Systems Corp. (TSX VENTURE:DEQ) is a leader in the table game bonusing technology field. DEQ's patents, products and features include side bet bonusing games with progressive and random jackpot prizes, slot machine style mystery bonusing, multiple credit and denomination betting flexibility, dealer hand betting, electronic credit bank, electronic rake, baccarat hand tracking, multimedia animation and sound effects. DEQ has an extensive patent portfolio that is recognized in more than 50 countries such as the USA, Macau, Australia and Canada. DEQ's bonusing solutions and products are present in more than 200 casinos in over 30 countries. For further information, please visit

Forward-looking statements contained in this Press Release involve known and unknown risks, uncertainties and other factors that may cause actual results, performance and achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the said forward-looking statements. DEQ Systems Corp. has been selected in the TSX Venture 50 in 2008. "2008 Venture 50" is a trademark of TSX inc. and is used under license.

TSX Venture does not accept any responsibility regarding the accuracy of the information contained in this press release.

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