Elcoteq SE’s Annual General Meeting took place in Helsinki, Finland, on March 23, 2006. The Meeting confirmed the consolidated and parent company’s income statements and balance sheets for the financial year 2005 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 0.66 euros per share on the financial year January 1 - December 31, 2005.

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 28 and May 12, 2006 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.

Board meeting

  • Convening after the Annual General Meeting, the Board of Directors elected Antti Piippo as its chairman and Juha Toivola as the deputy chairman.
  • Antti Piippo was elected chairman of the Nomination Committee and Henry Sjöman, Jorma Vanhanen and Juha Toivola as this committee's other members.
  • Antti Piippo was elected chairman of the Working Committee and Henry Sjöman, Jorma Vanhanen and Juha Toivola as this committee's other members.
  • Juha Toivola was elected chairman of the Compensation Committee and Martti Ahtisaari, Heikki Horstia and Eero Kasanen as this committee's other members.
  • The Board elected Juha Toivola chairman of the Audit Committee and Martti Ahtisaari, Heikki Horstia and Eero Kasanen as this committee's other members.

Auditor

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. The auditors are paid a fee appropriate to the scope of their work.

Dividend


The Meeting decided to pay a dividend of 0.66 euros per share. The dividend will be paid to shareholders who are registered on the record date, March 28, 2006, in the company's shareholder register maintained by the Finnish Central Securities Depository Ltd. The dividend payment date is April 4, 2006.

Board’s authorizations

The Annual General meeting authorized the Board of Directors to float one or several convertible bonds and/or to issue stock options and/or to raise the share capital in one or several installments through a rights issue within one year from the Annual General Meeting. When issuing convertible bonds, stock options or new shares the Board shall be entitled to issue at most 6,234,315 new Series A shares of nominal value 0.40 euros per share for subscription. However, the valid and unexercised authorizations of the Board of Directors concerning the total number of share capital increases and the votes carried by the new shares issued shall not exceed one-fifth of the Company's total registered share capital and aggregate number of votes carried by the shares at the time of the authorization and the Board's decision to raise the share capital.

The Meeting also authorized the Board of Directors within one year from the Annual General Meeting to purchase or dispose of the Company’s own shares, of nominal value 0.40 euros per share, to the extent that the nominal value of the purchased shares and the votes carried by these shares shall not exceed five (5) percent of the Company’s share capital and the aggregate number of votes conferred by all the shares.

The authorizations will remain in force for one year until March 23, 2007. The Board’s proposals approved by the Meeting are provided in full in the attachments.

The Meeting's decisions were carried unanimously.

ELCOTEQ SE

Reeta Kaukiainen
Director, Communications and Investor Relations


Attachments: Proposals of the Board of Directors approved by the Annual General Meeting

Attachment 1

THE PROPOSAL OF THE BOARD OF DIRECTORS THAT THE BOARD BE AUTHORIZED TO FLOAT ONE OR SEVERAL CONVERTIBLE BONDS AND/OR TO ISSUE STOCK OPTIONS AND/OR TO RAISE THE SHARE CAPITAL THROUGH A RIGHTS ISSUE

The proposal of the Board of Directors that the Board be authorized to float one or several convertible bonds and/or to issue stock options and/or to raise the share capital in one or several installments through a rights issue within one year from the Annual General Meeting. When issuing convertible bonds, stock options or new shares the Board shall be entitled to issue at most 6,234,315 new Series A shares of nominal value 0.40 euros per share for subscription. However, the valid and unexercised authorizations of the Board of Directors concerning the total number of share capital increases and the votes carried by the new shares issued shall not exceed one-fifth of the Company's total registered share capital and aggregate number of votes carried by the shares at the time of the authorization and the Board's decision to raise the share capital. The Company's share capital may be increased by at most 2,493,726 euros under this authorization.

The authorization contains the right to deviate from the pre-emptive subscription right of shareholders, referred to in Chapter 4 § 2 of the Finnish Companies Act, to subscribe for new shares, convertible bonds or stock options, as well as the right to decide on the prices of such subscriptions, those entitled to make subscriptions, the terms of subscription, and the terms of the convertible bonds and stock options. The Board is permitted to deviate from shareholders' pre-emptive subscription right on condition that the company has sound financial grounds for doing so, such as financing an acquisition, other development of the company's business operations or capital financing arrangements, or incentive schemes for personnel. Should the share capital be raised by the issue of new shares, the Board of Directors shall be entitled to decide that the shares may also be subscribed through payment of consideration in kind or on other specific conditions. The Board may not exercise this authorization in the interests of a member of the Company's inner circle.

The authorization will remain in force for one year from the decision of the Annual General Meeting on March 23, 2006 until March 23, 2007.

Attachment 2

THE PROPOSAL OF THE BOARD OF DIRECTORS THAT THE BOARD BE AUTHORIZED TO PURCHASE THE COMPANY’S SHARES

The Board of Directors proposes that the Annual General Meeting decide to authorize the Board to purchase the Company’s own shares in one or several installments. The Company may purchase at most 1,558,578 Series A shares, of nominal value 0.40 euros per share, using distributable funds and otherwise than in proportion to the holdings of the shareholders. The authorization includes the right to decide on purchasing the Company’s shares at the market price formed during public trading in each case. However, the aggregate nominal value of the shares so purchased, and the aggregate number of the votes carried by these shares, shall not exceed five (5) percent of the Company’s total share capital and votes. The shares may be purchased to develop the Company’s capital structure, for use as consideration in the event of an acquisition or other structural arrangements, or for use in potential incentive schemes, or otherwise for the purpose of their disposal or nullification.

All the holders of the Series K shares have consented to the K shares in their possession not being purchased under this decision.

The authorization will remain in force for one year from the decision of the Annual General Meeting on March 23, 2006 until March 23, 2007.

Attachment 3

THE PROPOSAL OF THE BOARD OF DIRECTORS THAT THE BOARD BE AUTHORIZED TO DISPOSE OF THE COMPANY’S SHARES

The authorization granted to the Board includes the right to dispose of at most 1,558,578 of the Company’s own shares, of nominal value 0.40 euros per share, to the extent that the nominal value of the purchased shares and the votes carried by these shares shall not exceed five (5) percent of the Company’s total share capital and of votes. The authorization includes the right to decide to whom and in what order the Company’s shares shall be disposed of, and the right to dispose of the shares otherwise than in proportion to the pre-emptive rights of the shareholders. The shares may be disposed of in the manner decided by the Board and to the extent determined by the Board as consideration in the event of an acquisition or other structural arrangements, or in conjunction with measures taken to develop the capital structure, or in conjunction with incentive schemes, or they may be sold through public trading. The Board of Directors will decide on the disposal price of the shares and the principles for determining this price. The shares may be disposed of in exchange for consideration other than cash.

The authorization will remain in force for one year from the decision of the Annual General Meeting on March 23, 2006 until March 23, 2007.