Elcoteq SE's Annual General Meeting took place in Helsinki, Finland, today, on March 22, 2007. The Meeting confirmed the consolidated and parent company's income statements and balance sheets for the financial year 2006 and discharged the members of the Board of Directors and the President and CEO from liability for the financial year. The Meeting also approved the Board's proposal to distribute a dividend of 0.20 euros per share on the financial year January 1 - December 31, 2006. The Meeting approved the proposals of the Board of Directors requesting authorization to issue at most 15,527,573 Series A shares and/or specific rights entitling to shares pursuant to Chapter 10 §1 of the Finnish Companies Act, and to purchase the company's own shares. The Meeting decided after voting, that the company's domicile will be transferred from the city of Lohja in Finland to the Grand Duchy of Luxembourg. The transfer is currently expected to take place on January 1, 2008. Composition of the Board of Directors and Fees The Meeting elected seven members to the Board of Directors. The composition of the Board remained unchanged. The following persons were re-elected: President Martti Ahtisaari; Mr Heikki Horstia, Vice President, Treasurer, Wärtsilä Corporation; Dr Eero Kasanen, Rector of the Helsinki School of Economics; Mr Antti Piippo, principal owner and founder-shareholder of Elcoteq SE; Mr Henry Sjöman, founder-shareholder of Elcoteq SE; Mr Juha Toivola, MSc, and Mr Jorma Vanhanen, founder-shareholder of Elcoteq SE. The terms of office of the Board members extend until the end of the following Annual General Meeting. Ahtisaari, Horstia, Kasanen and Toivola are independent Board members, and they represent more than half of the Board's members. The Meeting approved the Nomination Committee's proposal to pay the Board members an annual fee of 60,000 euros. Sixty percent of this fee is to be paid in cash and forty percent in shares; with respect to the latter payment, the Elcoteq shares must be acquired between April 27 and May 11, 2007 within the limits set by rules governing insider trading. The acquired shares may not be surrendered before the following Annual General Meeting unless the individual's Board membership ends earlier. The Meeting also decided that the full-time chairman of the Board will be paid an additional fee of 45,000 euros per month and the deputy chairman an additional fee of 10,000 euros per month. Auditors On the proposal of the Board's Audit Committee, the firm of authorized public accountants KPMG Oy Ab under the supervision of principal auditor Mr Mauri Palvi (APA) continues as the company's auditors. From January 1, 2008 the auditors will be KPMG Audit S.à.r.l. until the end of the following Annual General Meeting. The auditors are paid a fee appropriate to the scope of their work. Dividend The Meeting decided to pay a dividend of 0.20 euros per share. The dividend will be paid to shareholders who are registered on the record date, March 27, 2007, in the company's shareholder register maintained by the Finnish Central Securities Depository Ltd. The dividend payment date is April 3, 2007. Board Authorizations The Meeting authorized the Board of Directors to issue, in one or several installments, Series A shares and/or to issue specific rights entitling to shares pursuant to Chapter 10 §1 of the Finnish Companies Act, in the total amount of 15,527,573 Series A shares. Based on the authorization to issue shares, the Board may issue either new shares or those in the company's possession. The authorization becomes void on transfer of the company's domicile on January 1, 2008. Furthermore, the Meeting authorized the Board of Directors to purchase at most 1,576,994 of the company's own Series A shares in public trading in order to develop the company's capital structure, to use as consideration in corporate acquisitions or when the company acquires assets related to its business, and as part of the company's personnel incentive scheme, in the manner and scope determined by the Board, and otherwise to dispose of or nullify these shares. The purchase price of the shares to be purchased shall be based on the share price in public trading such that the subscription price corresponds to the fair value of the shares formed in public trading at the time of purchase. The holders of the company's Series K shares have given their approval to the effect that the decision will not be used to purchase the Series K shares in their possession. The purchase of own shares will reduce the company's distributable funds. The authorization becomes void on transfer of the company's domicile on January 1, 2008. The proposals of the Board of Directors are given in full in the enclosures to this release. Transfer of Domicile to Luxembourg The Meeting voted on the proposal of the Board of Directors to transfer the company's domicile from the city of Lohja in Finland to the city of Luxembourg in the Grand Duchy of Luxembourg as set out in the Report by the Board of Directors on Elcoteq SE's Transfer of Domicile. Before the proposal was put to the vote, President and CEO Jouni Hartikainen described the background, reasons, implications and process concerning the transfer of domicile. He also noted that Elcoteq had received a statement from the Luxembourg authorities to the effect that the company does not need to pay capital duty in conjunction with the transfer; this would have amounted to 1% of the company's net assets. 14,245,296of the shares and 109,438,296 of the votes, i.e. 99.95% of the votes cast, were in favor of the transfer of domicile to Luxembourg and 57,850 of the shares and 57,850 of the votes, i.e. 0.05% of the votes cast, were opposed to the transfer. The transfer of domicile was subject to the condition that 2/3rds of the votes cast and the shares represented at the meeting were in favor of the Board's proposal to transfer the domicile. Since this condition was met, Elcoteq SE's domicile is currently expected to be transferred to Luxembourg on January 1, 2008 as set out in the Report of the Board of Directors on Elcoteq SE's Transfer of Domicile. The company's shareholders, holders of option rights and holders of other specific rights to shares have the right, pursuant to Chapter 16 §3 of the Finnish Companies Act, to demand redemption of their shares, option rights or other specific rights to shares. At the Meeting, 13 shareholders demanded the redemption of altogether 8,100 shares. Also, 7 holders of option rights have demanded the redemption of altogether 14,600 option rights. The company will submit a written redemption offer to the shareholders demanding redemption of shares. Under the Finnish Companies Act, creditors whose receivables arose before registration of the Transfer Proposal in the Trade Register (January 2, 2007) have the independent right to oppose the transfer of domicile. This right expires on April 16, 2007. The minutes of the Annual General Meeting will be on display for inspection by shareholders at Elcoteq SE's office in Espoo, Finland, (Sinimäentie 8B, FI-02630 Espoo, Finland) from April 5, 2007. ELCOTEQ SE Reeta Kaukiainen Director, Communications and Investor Relations Further information: Reeta Kaukiainen, Director, Communications and Investor Relations, tel. +358 50 522 0924 Sari Kolu, Director, General Counsel, Corporate Legal Affairs, tel. +358 10 413 1248 Enclosures: Enclosure 1 PROPOSAL OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING ON MARCH 22, 2007 THAT THE BOARD BE AUTHORIZED TO ISSUE 15,527,573 SERIES A SHARES AND/OR SPECIFIC RIGHTS ENTITLING TO SHARES PURSUANT TO CHAPTER 10 §1 OF THE FINNISH COMPANIES ACT. Proposal of the Board of Directors that the Board be authorized to issue, in one or several installments, Series A shares and/or to issue specific rights entitling to shares pursuant to Chapter 10 §1 of the Finnish Companies Act, in the total amount of 15,527,573 Series A shares. Based on the authorization to issue shares, the Board may issue either new shares or those in the company's possession. The authorization includes the right, pursuant to Chapter 9, §3 of the Finnish Companies Act, to disapply the pre-emptive right of the shareholders, as well as the right to decide on the subscription prices, on how the subscription prices are divided between the share capital and non-restricted shareholders' equity reserve, on those entitled to subscribe for shares and the conditions of such subscription, and on other conditions. The pre-emptive subscription right of the shareholders may be disapplied provided that the company has important financial grounds for doing so, such as the financing of acquisitions, other arrangements related to developing the company's business operations or capital adequacy, or the motivation of its employees. When issuing shares and/or specific rights entitling to shares pursuant to Chapter 10 §1 of the Finnish Companies Act, the Board shall have the right to decide that the shares be subscribed as payment in kind or on other specific conditions. The Board further proposes that this authorization remain in effect for five years from the date of decision, that is until March 22, 2012; however, should the company's domicile be transferred to the Grand Duchy of Luxembourg as set out in the Transfer Proposal signed by the Board of Directors on December 21, 2006, this authorization shall become void when the transfer is effected. Enclosure 2 PROPOSAL OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING ON MARCH 22, 2007 THAT THE BOARD BE AUTHORIZED TO PURCHASE OWN SHARES Proposal of the Board of Directors that the Meeting authorize the Board to purchase the company's own Series A shares using funds belonging to the company's non-restricted shareholders' equity on the terms and conditions stipulated below. The purchase of own shares will reduce the company's distributable funds. On the basis of this authorization the Board can decide to purchase the company's own Series A shares in order to develop the company's capital structure, to use as consideration in corporate acquisitions or when the company acquires assets related to its business, and as part of the company's personnel incentive scheme, in the manner and scope determined by the Board, and otherwise to dispose of or nullify these shares. The Board may purchase at most 1,576,994 Series A shares. The shares may be purchased upon the Board's decision in public trading. The purchase price of the shares to be purchased shall be based on the share price in public trading such that the subscription price corresponds to the fair value of the shares formed in public trading at the time of purchase. Implementation of this decision requires the approval of all the holders of the company's Series K shares to the effect that the decision will not be used to purchase the Series K shares in their possession. The Board further proposes that this authorization remain in force for 18 months from the decision of the Meeting, that is until September 22, 2008; however, should the company's domicile be transferred to the Grand Duchy of Luxembourg as set out in the Transfer Proposal signed by the Board of Directors on December 21, 2006, this authorization shall become void when the transfer is effected. Enclosure 3 PROPOSAL OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING ON MARCH 22, 2007 THAT THE COMPANY'S DOMICILE BE TRANSFERRED FROM THE CITY OF LOHJA IN FINLAND TO THE CITY OF LUXEMBOURG IN THE GRAND DUCHY OF LUXEMBOURG Proposal of the Board of Directors that the company's domicile be transferred from the City of Lohja in Finland to the City of Luxembourg in the Grand Duchy of Luxembourg in the manner described in the Transfer Proposal signed by the Board of Directors on December 21, 2006 and recorded in the Trade Register on January 2, 2007. The company's shareholders, holders of option rights and holders of other specific rights to shares shall have the right, pursuant to Chapter 16 §3 of the Finnish Companies Act, to demand redemption of their shares, option rights or other specific rights to shares.
DECISIONS OF ELCOTEQ SE'S ANNUAL GENERAL MEETING - COMPANY DOMICILE MOVES TO LUXEMBURG
| Source: Elcoteq