Stock Exchange & Press Releases 2006

The Board of Directors has on 14 February 2006 agreed to propose to the Annual General Meeting of Shareholders to be held on 15 March 2006 that stock options, which commit their recipients to long-term shareholding in the Company, be issued to the new Chairman of the Board of Directors of Elektrobit Group Plc. to be elected after the Meeting of Shareholders, as well as to the new CEO of Elektrobit Group Plc.

 

The maximum total number of stock options issued shall be 1,750,000. All of the stock options shall be marked with the symbol 2006A. The Chairman of the Board shall be granted 750,000 stock options and the CEO shall be granted 1,000,000 stock options, free of charge.

 

The prerequisite for receiving of the stock options is that the Chairman of the Board has, directly or through a company controlled by him, purchased 75,000 shares and the CEO has, directly or through a company controlled by him, purchased 100,000 shares before receiving of the stock options.

 

The share subscription price for the stock option shall be the trade volume weighted average quotation of the share on the Helsinki Stock Exchange between 1 March 2006 and 31 March 2006. From the share subscription price of the stock options shall, as per the dividend record date, be deducted the amount of the dividend decided after the beginning of the period for determination of the share subscription price but before share subscription. The share subscription price shall, nevertheless, always amount to at least the book equivalent value of the share.

 

The share subscription period for stock options 2006A shall be 1 May 2009 - 31 May 2012.

 

As a result of the share subscriptions with the 2006A stock options, the share capital of Elektrobit Group Plc. may be increased by a maximum total of EUR 175,000 and the number of shares by a maximum total of 1,750,000 new shares.

 

The people to whom the stock options are issued belong to the inner circle of the Company. The total share ownership of these people does not exceed 1.0% of the Company's shares and voting rights of the shares at the moment.

 

The stock options now issued can be exchanged for shares constituting a maximum total of 1.3% of the Company's shares and voting rights of the shares after the potential share capital increase.

 

The purpose of the stock options is to encourage the stock option recipients to work on a long-term basis in order to increase the shareholder value. The purpose of the stock options is also to commit them to the Company by an obligation to return the stock options without compensation for possible accrued value, in accordance with the terms and conditions.

 

 

Oulunsalo, February 15, 2006

 

Elektrobit Group Plc.

The Board of Directors

 

 

FURTHER INFORMATION:

Juha Sipilä

Chairman of the Board of Directors

Elektrobit Group Plc.

Tel. +358 400 284 774

 

 

DISTRIBUTION:

Helsinki Exchanges

Main media offices

 

 

ENCLS               Proposal by the Board of Directors with Enclosures

 

The Board of Directors proposes that stock options, which commit their recipients to long-term shareholding in the Company, be issued by the General Meeting of Shareholders to the new Chairman of the Board of Directors of Elektrobit Group Plc. to be elected after the Meeting of Shareholders, as well as to the new President and CEO of Elektrobit Group Plc, on the terms and conditions attached hereto.

 

The stock options shall, in deviation from the shareholders' pre-emptive subscription rights, be issued to the new Chairman of the Board of Directors of Elektrobit Group Plc. to be elected after the Meeting of Shareholders, as well as to the new President and CEO of Elektrobit Group Plc. It is proposed that the shareholders' pre-emptive subscription rights be deviated from since the stock options are intended to form a part of the incentive and commitment program for these individuals. The purpose of the stock options is to encourage them to work on a long-term basis to increase shareholder value.

 

The maximum total number of stock options issued shall be 1,750,000. All of the stock options shall be marked with the symbol 2006A. The Chairman of the Board shall be granted 750,000 stock options and the CEO shall be granted 1,000,000 stock options, free of charge.

 

The prerequisite for receiving of the stock options is that the Chairman of the Board has, directly or through a company controlled by him, purchased 75,000 shares and the CEO has, directly or through a company controlled by him, purchased 100,000 shares before receiving of the stock options.

 

The share subscription price for the stock option shall be the trade volume weighted average quotation of the share on the Helsinki Stock Exchange between 1 March 2006 and 31 March 2006.

From the share subscription price of the stock options shall, as per the dividend record date, be deducted the amount of the dividend decided after the beginning of the period for determination of the share subscription price but before share subscription. The share subscription price shall, nevertheless, always amount to at least the book equivalent value of the share.

 

The share subscription period for stock options 2006A shall be 1 May 2009 - 31 May 2012.

 

As a result of the share subscriptions with the 2006A stock options, the share capital of Elektrobit Group Plc. may be increased by a maximum total of EUR 175,000 and the number of shares by a maximum total of 1,750,000 new shares.

 

The people to whom the stock options are issued belong to the inner circle of the Company. The total share ownership of these people does not exceed 1.0% of the Company's shares and voting rights of the shares at the moment.

 

The stock options now issued can be exchanged for shares constituting a maximum total of 1.3% of the Company's shares and voting rights of the shares after the potential share capital increase.

 

 

ENCLS               Terms and Conditions of the Stock Options 2006A

 

In its meeting on 14 February 2006 the Board of Directors of Elektrobit Group Plc. ("the Board of Directors") has resolved to propose to the Annual General Meeting of Shareholders of Elektrobit Group Plc. to be held on 15 March 2006 that stock options, which commit their recipients to long-term shareholding in Elektrobit Group Plc. ("the Company"), be issued to the new Chairman of the Board of Directors to be elected after the above-mentioned Meeting of Shareholders ("the Chairman of the Board") as well as to the new President and CEO of the Company ("the CEO"), on the following terms and conditions:

 

 

 

The maximum total number of stock options issued shall be 1,750,000, which entitle their owners to subscribe for a maximum total of 1,750,000 shares in the Company ("share").

 

 

All of the stock options shall be marked with the symbol 2006A ("stock options").

 

The stock options shall be granted when the Chairman of the Board and the CEO sign the confirmation on acceptance forms. Stock option certificates shall, upon request, be delivered to them at the beginning of the share subscription period with the stock options, unless the stock options have been transferred to the book-entry securities system.

 

 

The stock options shall, in deviation from the shareholders' pre-emptive subscription rights, be issued to the Chairman of the Board and to the CEO free of charge. It is proposed that the shareholders' pre-emptive subscription rights be deviated from since the stock options are intended to form part of the incentive and commitment program for the Chairman of the Board and the CEO ("the stock option owners").

 

 

The Chairman of the Board shall be granted 750,000 stock options and the CEO shall be granted 1,000,000 stock options.

 

The prerequisite for receiving of the stock options is that the Chairman of the Board has, directly or through a company controlled by him, purchased 75,000 shares and the CEO has, directly or through a company controlled by him, purchased 100,000 shares before receiving of the stock options.

 

 

The stock options are freely transferable, when the share subscription period with the stock options has begun. The Board of Directors may, however, permit the transfer of stock options also before such date. The Company shall keep the stock options on behalf of a stock option owner, until the beginning of the share subscription period. A stock option owner has the right to acquire possession of the stock options when the share subscription period with the stock options begins. Should a stock option owner transfer his stock options, such person is obliged to inform the Company about the transfer in writing, without delay.

 

If the Chairman of the Board shall not be re-elected at the Annual General Meeting of Shareholders of the Company in 2007, he shall, without delay, offer to the Company or its order, free of charge, 400,000 stock options. If the Chairman of the Board shall not be re-elected at the Annual General Meeting of Shareholders of the Company in 2008, he shall, without delay, offer to the Company or its order, free of charge, 200,000 stock options. The Board of Directors can, however, in these cases decide that the Chairman of the Board can keep such stock options, or a part of them, which are under the offering obligation.

 

If the Chairman of the Board dies before the year 2009 Annual General Meeting of Shareholders of the Company, the Board of Directors can decide that his estate or heir or beneficiary is entitled to keep such stock options, or a part of them, which are under the offering obligation.

 

If the service of the CEO in the Group ends before 1 May 2009, he shall, without delay, offer to the Company or its order, free of charge, all of his stock options. The Board of Directors can, however, in this case decide that the CEO can keep such stock options, or a part of them, which are under the offering obligation.

 

If the CEO retires statutorily or dies before 1 May 2009, the Board of Directors can decide that he or his estate or heir or beneficiary is entitled to keep such stock options, or a part of them, which are under the offering obligation.

 

Regardless of whether a stock option owner has offered his stock options to the Company or its order or not, the Company is entitled to inform a stock option owner in writing that a stock option owner has lost his stock options on the basis of the above-mentioned reasons. Should the stock options be transferred to the book-entry securities system, the Company has the right, whether or not the stock options have been offered to the Company or its order, to request and get transferred all the stock options under the offering obligation from a stock option owner's book-entry account to the book-entry account appointed by the Company, without the consent of a stock option owner. In addition, the Company is entitled to register transfer restrictions and other restrictions concerning the stock options to a stock option owner's book-entry account, without the consent of a stock option owner.

 

The Board of Directors shall decide on the further distribution of stock options potentially returned to the Company or its order, to the key personnel of the Company or its subsidiaries who are of great importance for the Group.

 

 

 

 

Each stock option entitles its owner to subscribe for one (1) new share. The book equivalent value of the share is EUR 0.10. As a result of the share subscriptions the share capital of the Company may be increased by a maximum total of EUR 175,000 and the number of shares by a maximum total of 1,750,000 new shares.

 

 

The share subscription period for stock options 2006A shall be 1 May 2009 - 31 May 2012.

 

Share subscriptions shall take place at the head office of the Company or possibly at another location to be informed later. The subscriber shall transfer the respective stock option certificates with which he subscribes for shares to the Company, or, in the case of the stock options having been transferred to the book-entry securities system, the stock options with which shares have been subscribed for, shall be deleted from the subscriber's book-entry account. Upon subscription, payment for the shares subscribed for, shall be made to the bank account appointed by the Company. The Company shall decide on all measures concerning the share subscription.

 

 

The share subscription price for the stock option shall be the trade volume weighted average quotation of the share on the Helsinki Stock Exchange between 1 March 2006 and 31 March 2006.

 

From the share subscription price of the stock options shall, as per the dividend record date, be deducted the amount of the dividend decided after the beginning of the period for determination of the share subscription price but before share subscription. The share subscription price shall, nevertheless, always amount to at least the book equivalent value of the share.

 

 

Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber.

 

 

The dividend rights of the shares and other shareholder rights shall commence when the increase of the share capital has been entered into the Trade Register.

 

 

Should the Company, before the share subscription, increase its share capital through an issue of new shares, or an issue of convertible bonds or stock options, a stock option owner shall have the same right as, or an equal right to, that of a shareholder. Equality is reached in the manner determined by the Board of Directors by adjusting the number of shares available for subscription, the share subscription price or both of these.

 

Should the Company, before the share subscription, increase its share capital by way of a bonus issue, the subscription ratio shall be amended so that the ratio to the share capital of shares to be subscribed by virtue of the stock options remains unchanged. If the number of shares that can be subscribed for by virtue of one stock option is a fraction, the fractional part shall be taken into account by reducing the share subscription price.

 

 

If the Company reduces its share capital before the share subscription, the subscription right accorded by the terms of the stock options shall be adjusted accordingly, as specified in the resolution to reduce the share capital.

 

If the Company is placed in liquidation before the share subscription, a stock option owner shall be given an opportunity to exercise his share subscription right before the liquidation begins, within a period of time determined by the Board of Directors.

 

If the Company resolves to merge into another company as the company being acquired or into a company to be formed in a combination merger, or if the Company resolves to be divided, the stock option plan shall be replaced by a new stock option plan issued by the companies involved in the merger or, if the dividing company so decides, by a new stock option plan issued by the recipient company, on the basis of which the recipient company's new shares can be subscribed for, in accordance with the corresponding terms and conditions. If the stock option plan is replaced by a new stock option plan issued by the recipient company, the stock option owners shall have no right to require that the stock options be redeemed in accordance with Chapter 14 Section 3 in the Companies Act. Alternatively, by the resolution of the Board of Directors, the stock option owners shall be given the right to subscribe for the shares with his stock options, before the merger or division, within a period of time determined by the Board of Directors. No subscription right shall exist after the expiry of the period of time. Also in this situation, the stock option owners shall have no right to require that the stock options be redeemed in accordance with Chapter 14 Section 3 in the Companies Act.

 

If the Company, after the beginning of the share subscription period, resolves to acquire its own shares by an offer made to all shareholders, the stock option owners shall be made an equivalent offer. In other cases, acquisition of the own shares does not require the Company to take any action in relation to the stock options.

 

If a redemption right and obligation to all of the Company's shares, as referred to in Chapter 14 Section 19 of the Finnish Companies Act, arises to any of the shareholders, before the end of the share subscription period, on the basis that a shareholder possesses over 90% of the shares and the votes of the shares of the Company, or if a situation, as referred to in Chapter 6 Section 6 of the Finnish Securities Market Act, arises to any of the shareholders, the stock option owners shall be given a possibility to use their right of subscription by virtue of the stock options, within a period of time determined by the Board of Directors, or they shall be given an equal possibility to that of shareholders to sell their stock options to the redeemer, irrespective of the transfer restriction defined in Section I.5 above. A shareholder who possesses over 90% of the shares and votes of the shares of the Company has the right to purchase the stock option owner's stock options at their market value.

 

If the number of the Company's shares is changed, while the share capital remains unchanged, the share subscription terms and conditions of the stock options shall be amended so that the relative proportion of shares available for subscription with the stock options to the total number of the Company's shares, as well as the share subscription price total, remain the same.

 

Converting the Company from a public company into a private company shall not affect the terms and conditions of the stock options.

 

 

The laws of Finland shall be applied to these terms and conditions. Disputes arising in relation to the stock options shall be settled by arbitration in accordance with the Arbitration Rules of the Central Chamber of Commerce.

 

The Board of Directors may decide on the transfer of the stock options to the book-entry securities system at a later date and on the resulting technical amendments to these terms and conditions, including those amendments and specifications to the terms and conditions which are not considered essential. Other matters related to the stock options shall be decided on by the Board of Directors. The stock option documentation shall be kept available for inspection at the head office of the Company.

 

The Company shall be entitled to withdraw the stock options which have not been transferred, or with which shares have not been subscribed for, free of charge, if a stock option owner acts against these terms and conditions, or against the regulations given by the Company on the basis of these terms and conditions, or against applicable law, or against the regulations of the authorities.

 

These terms and conditions have been made in Finnish and English. In the case of any discrepancy between the Finnish and English terms and conditions, the Finnish terms and conditions shall decide.