Elcoteq - Company Announcement

ELCOTEQ LAUNCHES A NEW INCENTIVE PLAN

ELCOTEQ SE	   Stock Exchange Release October 24, 2007 at 8.45 am (EET)

ELCOTEQ LAUNCHES A NEW INCENTIVE PLAN

The Board of Directors of Elcoteq SE has decided to approve an incentive plan
for the motivation and commitment of the company's key personnel by means of a
share subscription plan. 

The potential reward from the plan is based on reaching the targets set by the
Board of Directors for the Group's consolidated income before taxes for the
full year 2008. Based on the achieved targets the company would issue a maximum
of 1,500,000 new series A shares of which 50% would be issued during March 2009
and the remaining 50% during November 2009. 

The new series A shares, if any, will be issued under the authorization granted
to the Board of Directors by the Annual General Meeting on March 22, 2007. The
same meeting decided to transfer the company domicile to the Grand Duchy of
Luxembourg which takes place on January 1, 2008. Therefore, it is foreseen that
the issue of new series A shares due to the share subscription plan in 2009
will be carried out under Luxembourg law and in accordance with the new
Articles of Association of Elcoteq SE approved at the Annual General Meeting of
March 22, 2007. 

Enclosure: Terms and Conditions of the Share Subscription Plan 2007

ELCOTEQ SE

Tuula Hatakka
Senior Vice President, Treasury, Communications and Investor Relations

Further information:
Tuula Hatakka, tel. +358 10 413 1808

About Elcoteq
Elcoteq SE is a leading electronics manufacturing services (EMS) company with
original design manufacturing (ODM) capabilities in the communications
technology field. Elcoteq provides global end-to-end solutions consisting of
product development, NPI, manufacturing, supply chain management, and
after-sales services for the whole lifecycle of its customers' products. These
products include terminal products such as mobile phones and set-top boxes as
well as communications network equipment such as base-stations, tower-top
amplifiers, and microwave systems. The company operates in 16 countries on four
continents and employs some 23,000 people. Elcoteq's consolidated net sales for
2006 totaled 4.3 billion euros. Elcoteq SE is listed on the Helsinki Stock
Exchange.  For more information visit the Elcoteq website at www.elcoteq.com. 






 
Enclosure: Terms and Conditions of the Share Subscription Plan 2007

A.	PURPOSE OF THE PLAN

An important component of Elcoteq's philosophy is to recognize superior
performance and to reward it accordingly. The Plan is intended to encourage
ownership of Shares by key employees of the Company and its Affiliates at mid
to senior management levels in order to attract high performers, to induce them
to work for the benefit of the Company or an Affiliate, and to provide
additional incentive for such key employees to promote the success of the
Company or an Affiliate. 

The Company notes that the Beneficiaries may be subject to insider trading
rules and regulations and may also be subject to criminal liability if such
insider rules and regulations are violated. 


B.	DEFINITIONS

Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Plan, have the following meanings: 

Administrator shall have the meaning set forth in Article 3.1. of the Plan.

Affiliate shall mean any corporation, company or other entity such that the
Company directly or indirectly, through one or more intermediaries, owns or
controls more than fifty per cent (50%) of the voting power or outstanding
securities and shares of such corporation, company or other entity. 

Beneficiary shall mean individuals who are offered Shares under the Plan.  
 
Board of Directors shall mean the Board of Directors of the Company as provided
for in the current articles 29-31 of the Articles of Association of the
Company. 

Business Day shall mean a day (other than a Saturday or a Sunday) on which
banks are open for business in Luxembourg and Finland. 

Company shall mean Elcoteq SE, a Societas Europaea having its registered office
in Luxembourg as from January 1, 2008. 

Compensation Committee shall mean a committee which has been delegated the
authority over the administration of the Plan by the Board of Directors of the
Company. 

Employee shall mean any individual employed by the Company or an Affiliate.

Heirs shall mean the legal heirs of a deceased Beneficiary, as applicable in
the relevant jurisdiction. 

Issue Date shall have the meaning set forth in Article 6.2. of the Plan. 

Plan shall mean the Elcoteq SE Share Subscription Plan 2007.

Profit Before Taxes shall mean Income before taxes in Elcoteq's consolidated
income statement. 

Share shall mean an ordinary series A share of the Company issued in accordance
with the Plan, which, if duly accepted, entitles a Beneficiary to ordinary
series A shares of the Company. 


C.	TERMS AND CONDITIONS OF THE PLAN

Article 1: Eligibility 

1.1.	The Administrator will, in its sole discretion, name the Beneficiaries of
the Plan, provided, however, that each Beneficiary must be an Employee of the
Company or of an Affiliate at the time a Share is granted. In granting Shares,
the Company takes into account the IPE rating, Hay Points and specific Profit
Before Taxes targets for the year 2008. 

1.2.	The Plan comes into effect on October 23, 2007. Beneficiaries will be
eligible to receive a percentage of 1,500,000 Shares based on the amount of
Profit Before Taxes achieved in 2008 (the “2008 Shares”). 50% of the 2008
Shares shall be distributed during March 2009 and the remaining 50% of the 2008
Shares shall be distributed during November 2009. 

1.3.	A Beneficiary has to be an Employee of the Company or an Affiliate. New
and promoted Employees shall be granted Shares on a pro rata basis. 

1.4.	Beneficiaries on long-term justified leaves such as parental leave,
student leave, as the case may be, and who retire will be prorated based on the
time they worked. 

1.5.	A Beneficiary's rights to receive Shares expire and are forfeit if his/her
relationship as an Employee with the Company or an Affiliate has terminated for
any reason other than as a result of death or disability to work or retirement
of the Beneficiary. 

1.6.	In the event a Beneficiary leaves the Company or an Affiliate due to death
or inability to work, he/she (in the case of death, his/her Heirs) retains the
rights under the Plan on a pro rata basis. The Heirs are required to notify the
Company of their position, and if the Company deems it necessary, to prove such
position through a certificate or document acceptable to the Company which
confirms the details of the Beneficiary's Heirs and their respective rights in
the inheritance. 


Article 2: Term 

2.1.	The term of the Plan is from October 23, 2007 until November 2009. The
Administrator may terminate the Plan at any time, provided, however, that any
such termination will be made in accordance with the Beneficiary's rights
provided for in Article 10.2. of the Plan. 


Article 3: Administration of the Plan

3.1.	The Administrator of the Plan will be the Board of Directors of the
Company, except to the extent the Board of Directors delegates its authority to
its Compensation Committee, in which case the Compensation Committee shall be
the Administrator, provided however that the Compensation Committee's task is
to advise the Board of Directors on the Plan. Subject to the 

provisions of the Plan, the Administrator is authorized under the control and
responsibility of the Board of Directors to: 

a.	determine in its sole discretion, taking into account the Group's Profit
Before Taxes targets, the number of Shares which may be issued from time to
time, provided that the maximum of Shares that can be issued according to this
Plan is one million five hundred thousand (1,500,000), or the equivalent of
such number of Shares after the Administrator has interpreted the effect of any
adjustment as provided for in article 9 of the Plan; 

b.	determine in its sole discretion, taking into account IPE rating, Hay Points
and the Group's Profit Before Taxes targets, (i) which Employees of the Company
or an Affiliate shall be designated as Beneficiaries and determine (ii) the
number of Shares that shall be granted to each Beneficiary; 

c.	interpret the provisions of the Plan and to make all rules and
determinations which it deems necessary or advisable for the execution and
administration of the Plan. 

3.2.	The Administrator's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or are eligible to
receive, Shares under the Plan (whether or not such persons are similarly
situated).  The Administrator shall not be liable for any action or
determination made in good faith with respect to the Plan or any Share granted.
The Administrator shall not be liable for any adverse tax consequences the Plan
may have with regard to Beneficiaries. 


Article 4: Allocation of Shares

4.1.	The Administrator determines, in its sole discretion and without
justification, taking into account IPE rating, Hay Points and the Group's
Profit Before Taxes targets, the number of Shares that shall be granted to a
Beneficiary. Each Beneficiary shall be informed on the allocation of the Shares
by way of a letter from the President and CEO of the Company. 

4.2.	No Beneficiary to whom a Share has been granted shall have rights as a
shareholder of the Company with respect to any Shares covered by such Share
before the Issue Date. 


Article 5: Acceptance of Shares

5.1.	Each Share, if duly accepted, entitles a Beneficiary, upon issuance, to
one ordinary series A share of the Company. 

5.2.	Participation to the Plan shall be accepted or rejected by the Beneficiary
giving irrevocable written communication to the Company, by way of returning a
prefilled acceptance notice that will be received by each Beneficiary.
Participation to the Plan is deemed to be accepted upon receipt by the Company
of the Beneficiary's acceptance notice. The burden of proof with regard to the
receipt 


by the Company of the acceptance notice rests with the Beneficiary. The
Beneficiary is to complete and personally sign the acceptance notice.
Acceptance notices that are not fully filled in are void. 

5.3.	The acceptance notice must be returned to the Company within 30 days of
the date of the acceptance notice. Acceptance notices received after more than
30 days of the acceptance notice date are void and the Beneficiary's rights
under the Plan with regard to such Shares forfeit without restitution or
indemnification, notwithstanding the Administrator's right to dispose freely of
such Shares subsequently under the Plan. 


Article 6: Issue of Shares

6.1.	The Shares under the Plan shall be issued by the Company during March 2009
and November 2009. The Company undertakes to issue the Shares reasonably
promptly, it being understood that the issuance of Shares may be delayed by the
Company as the Company deems necessary or appropriate in order to comply with
any law or regulation which requires the Company to take any actions with
respect to the Shares prior to their issuance. The Shares shall be issued at
par value. The Company shall use its available reserves to cover the par value
of the Shares and the Beneficiaries shall not be required to pay such par value
of the Shares issued to them. The Company shall ask its shareholders to renew
(or expand) the authorized capital of the Company, if necessary. 

6.2.	The Shares are issued and the Beneficiary becomes the legal owner of the
Shares on the date that the Board of Directors resolves to issue the Shares
under the authorized share capital of the Company (the “Issue Date”). 

6.3.	The Shares will be in book-entry form only. 


Article 7: Transferability of Shares 

7.1.	A Share granted to a Beneficiary shall not be transferable in any way by
the Beneficiary prior to the Issue Date, other than to his/her Heirs but are
freely transferable thereafter. 


Article 8: Dissolution or Liquidation of the Company

8.1.	Upon the dissolution or liquidation of the Company, all Shares granted
under this Plan which as of such date shall not have been accepted will
terminate and become null and void, provided that the rights of a Beneficiary
have not otherwise terminated and expired. 


Article 9: Adjustments

9.l.	A Beneficiary's rights with respect to any Share(s) allocated to him or
her hereunder which has/have not previously been exercised shall be adjusted if
a spin off, split up, combination or exchange of shares or the like results in
a change in the number or kind of shares outstanding immediately prior to such
event. The Administrator may appropriately adjust the aggregate number and kind
of Shares subject to the Plan or the aggregate number and kind of Shares
subject to each outstanding Share. Such adjustments shall be conclusive and
binding on all parties. The determination of which of the treatments set forth
above to provide shall be made by the Administrator and its determinations
shall be final, binding and conclusive. 


Article 10: Amendments to the Plan

10.1.	The Plan may be amended by the Administrator, including, without
limitation, (i) to the extent necessary to qualify any or all outstanding
Share(s) granted under the Plan for favorable tax treatment as may be afforded
under applicable tax laws, (ii) to the extent necessary to comply with the laws
of foreign countries in which the Company and its Affiliates have employees,
(iii) to the extent necessary to change the shares that will be issued upon
acceptance of the Shares to another class of stock, be it ordinary or
preferred, of either the Company, an Affiliate or a corporation, company or
other entity that controls the Company. 

10.2.	Any modification or amendment of the Plan shall not, without the consent
of a Beneficiary, materially adversely affect his or her rights under a Share
previously accepted except as required by applicable law. For the sake of
clarity, Article 10.2. does not apply to the adjustments provided for in
Article 9.1. 


Article 11: Withholding

11.1.	In the event that any national or local income taxes, employment taxes,
insurance contribution withholdings or other amounts are required by applicable
law or governmental regulation to be withheld from the Beneficiary's salary,
wages or other remuneration in connection with the grant or the exercise of a
Share, the Company may withhold from the Beneficiary's compensation, if any, or
may require that the Beneficiary advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Beneficiary, the amount
of such 
withholdings unless a different withholding arrangement is authorized by the
Administrator and permitted by law. 


Article 12: Share Properties 

12.1.	Nothing in this Plan shall be deemed to prevent the Company or an
Affiliate from terminating the employment or directorship of a Beneficiary, nor
to prevent a Beneficiary from terminating his or her own employment or
directorship or to give any Beneficiary a right to be retained in employment,
directorship or other service by the Company or any Affiliate for any period of
time. The Plan is not intended to be, and shall not be deemed to be a
substitute for any other deferred compensation, incentive compensation or bonus
plans of the Company or any other plan, practice or arrangement for the payment
of compensation, that may now or hereafter be in effect for Beneficiaries, and
any such plan, practice or arrangement may be continued or authorized and
payment thereunder made independently of the Plan. The Plan does not create any
rights and shall not create any acquired rights for the Beneficiaries other
than those expressly provided for. The Shares shall constitute a special
incentive payment to the Beneficiary and shall not be taken into account in
computing the amount of salary or compensation of the Beneficiary for the
purpose of determining any benefits under any pension, retirement,
profit-sharing, bonus, life insurance or other benefit plan of the Company or
under any agreement between the Company and the Beneficiary. 

12.2.	The Shares shall carry no anti-dilution protection.


Article 13: Severability

13.1.	The invalidation or non-enforceability of one or more provisions of the
Plan shall not affect the validity or enforceability of any other provision of
the Plan, which shall remain in full force and effect. 


Article 14: Applicable Law
	
14.1.	This Plan is governed by, and shall be construed and enforced in
accordance with, the law of Luxembourg without giving effect to the conflict of
law principles thereof. The courts of Luxembourg have exclusive jurisdiction in
respect of the Plan. 


Article 15: Order of Priority of Language Versions of the Plan

15.1.	In a case the different language versions of this Plan contradict with
each other, the English version of the Plan shall prevail.