KV Pharmaceutical Company Reports Results of Special Independent Committee Review of Stock Opt...( ST. LOUIS Oct. 11 /- KV Pharmaceu...),Health

ST. LOUIS, Oct. 11 /PRNewswire-FirstCall/ -- KV Pharmaceutical Company (NYSE: KVa/KVb) announced today the results of the independent investigation by the Special Committee of the Board of Directors concerning historical stock option granting practices and related accounting.

On October 11, 2007, KV's Board of Directors unanimously accepted a final report on the previously submitted findings on the internal investigation of the Company's historical stock option grant practices. The investigation was conducted by a Special Committee of independent board members appointed by the Company's Board of Directors with the assistance of independent legal counsel and forensic accounting experts engaged by the Special Committee.

The investigation concluded that no employee, officer or director of the Company engaged in any intentional wrongdoing or was aware that the Company's policies and procedures for granting and accounting for stock options were materially non-compliant with U.S. Generally Accepted Accounting Principles (GAAP). The investigation also found no intentional violation of law or accounting rules with respect to the Company's historical stock option granting practices. Further, the Special Committee found that the Company's stock option granting and accounting practices, beginning April 2, 2006 are appropriate.

The Special Committee, however, concluded that certain compensation expenses resulting from the historical stock option granting practices followed by the Company during the period between 1996 and 2006 were not recorded in accordance with U.S. GAAP because they reflected incorrect measurement dates for financial accounting purposes. The option granting practices consistently followed under the Company's procedures for administering the Incentive Stock Option Plans (the plans) consisted of granting options based on the lowest price between the award date and the end of the quarter for existing employees and the first date of empl
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