Stock Exchange & Press Releases 2005

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Elektrobit Group Oyj - ELEKTROBIT GROUP PLC.'S ANNUAL GENERAL SHAREHOLDERS' MEETING

February 15, 2005

ELEKTROBIT GROUP PLC.'S ANNUAL GENERAL SHAREHOLDERS' MEETING


The meeting shall resolve on:
 
1 Matters to be decided upon under Article 11 of the Articles of Association.
 
2 Board of Directors' proposal on granting authorization to the Board of Directors
 
The Board of Directors proposes that the Board of Directors be authorized to increase the share capital by a new issue or by taking convertible loans in one or more installments. In the new issue or taking of convertible loans, a right can be given to subscribe for a maximum total of 126,105,100 shares, the book equivalent value of which is 0.02 euro per share, and of which a maximum of 5,000,000 shares may be used to create incentives for the personnel. On the basis of the authorization the share capital may be increased by a maximum of 2,522,102 euro. The total proposed amount corresponds to approximately 20 per cent of the currently registered share capital and the total voting rights of the company. 
 
The authorization is proposed to be effective until the next Annual General Shareholders' Meeting or until March 17, 2006, whichever is earlier.
 
The authorization includes the right to deviate from the shareholders' pre-emptive right of subscription for new shares, convertible loans or option rights set out in Chapter 4, Section 2 of the Companies Act, as well as the right to decide on the persons entitled to subscription, the terms of subscription and the terms of the convertible loans. Furthermore, the authorization includes the right to decide on the subscription prices. A deviation from the shareholders' pre-emptive subscription right requires that there is a weighty financial reason for this, such as an arrangement associated with the development of the company's business or capital structure, the financing of acquisitions, or incentives for the personnel. A resolution to this effect shall not, however, be made for the benefit of a party belonging to the inner circle of the company as defined in Chapter 1, Section 4, Subsection 1 of the Companies Act. When the share capital is increased by a new issue not based on a convertible loan, the Board of Directors is authorized to decide that the shares may be subscribed against contribution in kind, by means of set-off or on other specific terms and conditions.
 
Granting of option rights
The Board of Directors has decided to propose to the Annual General Meeting that option rights with a commitment to shareholding be granted to Elektrobit Group's management and a subsidiary fully owned by Elektrobit Group Plc.
 
Deviating from the shareholders' pre-emptive subscription rights, the option rights will be offered to Elektrobit Group's management and a fully-owned subsidiary of the company. Deviation from the shareholders' pre-emptive subscription right is proposed because the option rights are intended to be a part of the Group's incentive and commitment scheme for the management.
 
The maximum number of option rights to be granted would be 22,500,000. The option rights will be divided into option rights 2005A, 2005B, 2005C and 2005D, and, by decision of the Board of Directors, will be granted to the management currently employed by Elektrobit Group or recruited to the Group at a later time. At the time of issuance, any option rights not distributed to current management will be granted to a subsidiary fully owned by Elektrobit Group Plc.
 
Reception of option rights 2005A requires that the recipient of options has acquired a number of Elektrobit shares decided in advance by the Board of Directors. The option rights 2005B, 2005C and 2005D include prerequisites linked to the Group's financial targets. The share subscription period associated with these option rights may not begin if the criteria specified by the Board of Directors before distributing these option rights are not fulfilled. The criteria shall support the profitable growth of the Group and the efficient management of working capital. Any option rights 2005B, 2005C and 2005D for which the criteria specified by the Board of Directors are not fulfilled will become void. The shareholding program associated with the option scheme requires the management involved to use a part of the income received through the option rights to acquire shares in the company as decided by the Board of Directors in connection with the decision to distribute option rights.
 
The share subscription price for option rights 2005A shall be the mean price of Elektrobit shares on the Helsinki Exchanges, weighted by trading volume, on the 20 trading days following the publication of the Interim Report for January-March 2005; for option rights 2005B, the volume-weighted mean trading price on the 20 trading days following the publication of the Interim Report for January-September 2005; for option rights 2005C, the volume-weighted mean trading price on the 20 trading days following the publication of the Interim Report for January-September 2006; and for option rights 2005D, the volume-weighted mean trading price on the 20 trading days following the publication of the Interim Report for January-September 2007. However, the subscription price of shares subscribed with option rights 2005B, 2005C and 2005D shall be at least equal to the subscription price of shares subscribed with option rights 2005A. The Board of Directors is entitled to increase the share subscription price before its first decision on distributing option rights in each category.
 
On each record date for dividends the subscription prices of shares to be subscribed with the option rights will be reduced by the amount of any dividends regarding which the decision to distribute is made between the start of the price-setting period and the subscription of shares.
 
The share subscription period for option rights 2005A is from April 1, 2008, to April 30, 2010; for option rights 2005B, from April 1, 2009, to April 30, 2011; for option rights 2005C, from April 1, 2010, to April 30, 2012; and for option rights 2005D, from April 1, 2011, to April 30, 2013.
 
Subscriptions made using the 2005 option rights may increase the share capital of Elektrobit Group Plc. by a maximum of 90,000 euro and the number of shares by a maximum of 22,500,000 new shares.
 
Some of the persons entitled to option rights belong to the company's inner circle. These persons currently hold a maximum of 20% of the company's shares and associated voting rights.
 
The proportion of the shares to be subscribed using the new option rights will be 3.4% of the company's shares and associated voting rights after the allowed increase in share capital.
 
The Board of Directors will be authorized to make any other decisions regarding the matter.
 
Combination of shares
 
The record date for the combination is estimated to be April 8, 2005. The combination of shares will be executed pro rata the existing shareholdings in accordance with Chapter 3, Section 4a of the Companies Act. The combination will be executed provided the holdings of all shareholders are divisible by five (5) on the date of execution. In order to ensure the divisibility, certain shareholders have agreed, under certain terms and conditions, to gratuitously transfer some of their shares to shareholders whose holdings are not divisible by five (5) on the record date. If the number of shares required for ensuring the divisibility of holdings on the record date substantially differs from the number indicated by the list of shareholders on the date of publishing the Board of Directors' proposal, the shareholders committed to transfer their shares are entitled to withdraw from their obligation if permitted by the Board of Directors' assessment done on the respective date. In this case, the decision to combine the shares will not be executed and the company will issue separate information on abandoning the execution. The intention is that the combined shares would be registered in the shareholders' book-entry accounts and trading of the combined shares would begin on April 11, 2005 (estimated), once the prerequisites for executing the combination have been fulfilled and the combination of shares has been registered in the Trade Register. The company will separately agree with the custodians on the procedure applicable to nominee-registered shares.
 
If the combination of shares is executed in accordance with the proposal above the Board of Directors shall be authorised accordingly to adjust:
1)       the parts concerning the book equivalent value of the share and the number of shares to be issued in accordance with the proposed authorisation to issue new shares or take a convertible loan; and
2)       the parts concerning subscription price and the amounts of option rights to be granted in accordance with the proposed option scheme.
Both of the above mentioned resolutions shall be adjusted in accordance with the impacts of the combination of shares.
 
The combination of shares will require no action by the shareholders.
 
The Board of Directors will be authorized to make any other decisions regarding the matter.
 
The composition of the Board of Directors in 2005
Shareholders representing in total more than 20 per cent of the company's shares and votes have announced to the company that they will propose to the Annual General Meeting to be held on March 17, 2005, that the number of members of the Board of Directors be confirmed as four (4). They will also propose that the following persons, who have given their consent, be elected to the Board of Directors for the term in accordance with the Articles of Association: Juha Sipilä, Tapio Tammi, Eero Halonen and Matti Lainema. If the Annual General Meeting decides to elect the above persons to the Board of Directors, they are likely to appoint Juha Sipilä as their Chairman on the basis of recommendation by the same shareholders.
 
Documents for shareholders' review
Documents relating to the closing of accounts and proposals of the Board of Directors, with their enclosures, are available for shareholders' review at the Company's main office at Automaatiotie 1, 90460 Oulunsalo, Finland, beginning March 10, 2005. Upon request, copies of the above-mentioned documents will be delivered to shareholders by mail.
 
Right to participate
A shareholder has the right to attend the Annual General Shareholders' Meeting if he/she has been entered as a shareholder in the Company's shareholder register maintained by the Finnish Central Securities Depository Ltd. on March 7, 2005. Holders of nominee-registered shares intending to participate in the Annual General Shareholders' Meeting must notify their custodian well in advance of their intention and comply with the instructions provided by the custodian. The registration in the shareholder register must be valid on March 7, 2005.
 
Notification of participation
A shareholder wishing to participate in the Annual General Shareholders' Meeting must notify the company of the intention to participate no later than 12:00 noon on March 9, 2005, either by mail (address: Elektrobit Group Plc, Annual General Meeting, P.O. Box 45, 90461 Oulunsalo, Finland), by phone (+ 358 40 344 3322), by telefax (+358 8 570 1304) or by e-mail (yhtiokokous@elektrobit.com). The notification of participation must arrive before the closing of the registration period. Shareholders are requested to submit any proxies to the company before the closing of the registration period.
 
Dividend payment
The Board of Directors has decided to propose to the Annual General Shareholders' Meeting that a dividend of 0.012 euro per share be distributed for the year 2004. The dividend will be paid to those shareholders who are recorded in the shareholders' register maintained by the Finnish Central Securities Depository Ltd. on March 22, 2005, which is the record date for the dividend. The Board of Directors proposes to the Annual General Shareholders' Meeting that the dividend be paid on Thursday, March 31, 2005.
 
Annual report
The Annual Report will be available from March 10, 2005, onwards on the company's website at www.elektrobit.com/investors and can be ordered from Elektrobit Group Plc, P.O. Box 45, 90461 Oulunsalo, Finland.
 
Oulunsalo, February 15, 2005
 
Elektrobit Group Plc.
Board of Directors