COM DEV Announces Final Results of Special Committee Review of Stock Option Granting Practices

CAMBRIDGE, ON, Nov. 20 /CNW/ - Com Dev International Ltd. ("Com Dev" or the "Company"), announced today that as a result of recommendations made by the Special Committee established to review the Company's historical stock option granting practices, the Board of Directors has implemented the following measures:

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    1.  The exercise price with respect to 635,779 stock options granted to
        certain executive officers and senior management of Com Dev on
        July 4, 2006 has been increased from $4.44 per share to $5.14 per
        share. None of these options had been exercised.

    2.  433,400 stock options were granted on December 1, 1999, at an
        exercise price of $4.70. As a result of the Special Committee's
        review, these options should have been priced at $5.70. 70,130 of
        these options were exercised by 33 employees resulting in a benefit
        to such employees equal to $70,130. Given the large number of
        employees involved, their importance to the Company's ongoing
        operations, the role of options as an integral element of employee
        compensation, and the relative size of the amounts involved, the
        Company will take no action with respect to this matter. The
        remaining options expired unexercised.

    3.  As part of an acquisition transaction, the Company granted 350,000
        stock options on August 11, 1999 to employees of the acquired
        company. These options were purported to have been granted with an
        exercise price of $4.70 per share on a date when the stock price was
        $6.00. However, they were effectively granted on a date when the
        stock price was $4.70. All of these options were exercised. The
        difference between the grant date and the effective date of grant
        resulted in the presumed benefit to the option recipients of
        $455,000. However, given that: (i) none of the recipients of the
        option grant are currently employees of Com Dev, or have any role in
        ongoing Com Dev operations; (ii) the business that was acquired went
        bankrupt, and (iii) the options granted were a component of the
        agreed purchase consideration, the Company believes that the
        purported benefit does not constitute any loss to the Company, and in
        any event is not recoverable from the recipients.

    4.  The Compensation Committee is drafting a stock option granting manual
        to establish specific procedures for the recommendation, approval and
        granting of stock options. When completed, this manual will help to
        ensure that the Company conducts its stock option granting process in
        a formal, predictable and transparent manner, and that the Company
        generates and retains all necessary and proper documentation with
        respect to such stock option grants. The implementation of this new
        process and the adoption by the directors of the Special Committee's
        recommendations regarding stock option grants will require some
        administrative changes to the Company's stock option plan, approval
        for which the Company will seek at its next annual meeting of
        shareholders.
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The Company has met with staff of the Ontario Securities Commission (the "OSC") and staff of the Toronto Stock Exchange ("TSX") to discuss the results of the Special Committee's review and the Company's proposed remediation measures. The OSC has issued warning letters to the Company and to the Chairman, Mr. Keith Ainsworth, admonishing the Company for its past stock option granting practices. The Company has co-operated fully with the OSC's review of the Company's stock option granting practices. The OSC has advised the Company that it does not intend to initiate any proceedings against the Company or any of its executive officers or directors. In addition, (i) the Chairman has agreed to take the Director's Education Program offered by the Institute of Corporate Directors, and (ii) the Chairman and the members of the Compensation Committee have attended or will attend a half day course on stock based compensation that is offered by the TSX.

Since the Company has determined that no adjustment to, or restatement of, the Company's historical financial statements will be required as a result of the Special Committee's review of the Company's stock option granting practices, the Board of Directors is satisfied that it has taken all steps necessary to ensure that future stock option grants will be made in accordance with the Company's stock option plan, as amended, and the policies of the Toronto Stock Exchange.

About COM DEV

COM DEV International Ltd. (www.comdevintl.com) is a leading global designer and manufacturer of space hardware subsystems. With facilities in Canada, the United Kingdom and the United States, COM DEV manufactures advanced products and subsystems that are sold to major satellite prime contractors for use in communications, space science, remote sensing and military satellites.

This news release may contain certain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from results indicated in any forward-looking statements. The Company cautions that, among other things, in view of the rapid changes in communications markets and technologies, and other risks including the cost and market acceptance of the Company's new products, the level of individual customer procurements and competitive product offerings and pricing, and general economic circumstances, the Company's business prospects may be materially different from forward-looking statements made by the Company.

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