Annual General Meeting of Seco Tools AB

The shareholders in Seco Tools Aktiebolag are hereby invited to attend the Annual General Meeting at 2:00 p.m. on Tuesday, May 2, 2006, at Folkets Hus in Fagersta, Sweden. NOTIFICATION Shareholders who wish to participate in the Meeting must notify the Board by writing to Seco Tools AB, Finance Department, SE-737 82 Fagersta, Sweden; by telephone +46 (0)223-401 01 weekdays 9:00 a.m. -12:00 p.m. and 1:00-4:00 p.m., by fax +46 (0)223-402 00 or by Internet via Seco Tools’ website (www.secotools.com/notification). Notification must be received by Seco Tools AB not later than 3:00 p.m. on Tuesday, April 25, 2006. To be eligible to participate in the Meeting, shareholders must be registered in the share register maintained by VPC AB (the Swedish Central Securities Depository) on Tuesday, April 25, 2006. In order to be entitled to participate in the Meeting, shareholders whose shares are registered in the name of a trustee must temporarily re-register the shares in their own name with VPC AB not later than Tuesday, April 25, 2006. Note that this procedure also applies to shareholders who use bank custody accounts and/or who trade via the Internet. When registering, please provide your name, personal identity or corporate registration number, address and telephone number, and the names of any assistants. If participation is to be made through proxy, a form of proxy must be submitted prior to the Meeting. AGENDA 1. Opening of the meeting. 2. Election of the Chairman of the Meeting. 3. Drawing up of the voting list. 4. Approval of the Agenda. 5. Address by the President. 6. Approval of the voting list. 7. Election of minutes-checkers. 8. Determination of whether the Meeting has been duly convened. 9. Presentation of the annual report, the audit report, the consolidated financial statements and consolidated audit report. In connection with this, the Board Chairman will report on the work of the Board of Directors, the Compensation Committee and the Audit Committee during the year. 10. Decision regarding adoption of the income statements and balance sheets of the Parent Company and the Group. 11. Decision regarding discharge from liability for the members of the Board of Directors and the President. 12. Decision regarding appropriation of the Company’s profits according to the adopted balance sheet and decision on the record date for dividends. 13. Decision regarding the number of Board members and deputies. 14. Decision regarding fees to be paid to the Board of Directors and Auditors. 15. Election of Board members and the Board Chairman. 16. Approval of the Board’s proposed decision on amendment of the Articles of Association. 17. Adoption of the Board’s proposed principles for remuneration and other terms of employment for the executive management. 18. Proposed Nominating Committee, etc., ahead of the 2007 Annual General Meeting. PROPOSALS FOR DECISION Item 12 – Dividend and record date The Board proposes a regular dividend of SEK 17.00 per share and an extra dividend of SEK 10.00 per share. The proposed record date is May 5, 2006. If the Meeting approves this proposal, the dividend will be disbursed by VPC (the Swedish Central Securities Depository) on May 10, 2006. Items 2, 13-15 – Chairman of the Annual General Meeting, number of Board members, fees to the Board and Auditors and election of Board members The Nominating Committee, which has consisted of committee chairman Lars Pettersson (Sandvik AB), Ramsay J. Brufer (Alecta), Mats Guldbrand (AMF), Marianne Nilsson (Robur) and Board Chairman Gunnar Björklund, has held two minuted meetings. Through the committee chairman and the Board Chairman, the Nominating Committee has received information about the Board’s self-assessment of its work. The Nominating Committee has determined that the current size of the Board is the most appropriate and has otherwise based its recommendations for election of the Board Chairman and Board members on the competencies and experience required by the Company. The Nominating Committee has found that the sitting Board meets these criteria. One Board member, Magnus Brändeskär, has declared an intention to vacate his position on the Board. Following discussions on the required qualifications for the new member and after conducting interviews, the Nominating Committee recommends election of Annika Bäremo, LL.B. and employed by Sandvik AB as company lawyer since 2000. The Nominating Committee proposes the following: Item 2: Election of Board Chairman Gunnar Björklund as Chairman of the Annual General Meeting. Item 13: Eight regular Board members and no deputies. Item 14: Payment of total Board fees of SEK 1,600,000, of which SEK 400,000 to the Chairman and SEK 200,000 to each Board member not employed by the Company. It is also proposed that total fees of SEK 175,000 be paid for work in the Audit Committee. It is further proposed that fees to the auditors be paid according to current account. Item 15: Re-election of Board members Gunnar Björklund, Stefan Erneholm, Jan-Erik Forsgren, Anders Ilstam, Carina Malmgren Heander, Carl-Erik Ridderstråle and Kai Wärn, and election of Annika Bäremo. Election of Gunnar Björklund as Chairman of the Board. Item 16 – Approval of the Board’s proposed decision on amendment of the Articles of Association, including a change in the share’s quota value through a 5-for-1 split A) The Board proposes that the Meeting approve amendments to the Articles of Association, partly with respect to the provisions in the new Swedish Companies Act effective as of 1 January 2006. The proposed amendments involve, in all material respects, the following. • Removal of the reference to the Banking Business Act and the Act on Financing Operations from the Company’s object of operations (§ 2). • Removal of the rule regarding the par value of the share and replacement with a rule stating that the number of shares shall be not less than 140 million and not more than 560 million (§ 5). • Removal of the rule specifying the term of office of a Board member at one year (§ 7). • Removal of the rule specifying the term of office of the auditors at four years (§ 8). • Amendment of the rules for notice of General Meeting so that notice shall always be given in the form of an announcement in the Official Gazette (Post- och Inrikes Tidningar), in Svenska Dagbladet and in a daily newspaper published in Fagersta or Västerås (§ 10). • Amendment of the rule stating that shareholders who wish to participate in the Meeting must be included in the transaction of the complete share register ten days prior to the Meeting to five weekdays prior to the Meeting (§ 11). • Removal of the rule regarding the right to exercise the full number of votes for all shares held or represented (§ 12). • Removal of the rule stating that the Chairman of the Board or the person assigned by the Board shall open and preside over the Meeting until the Chairman of the Meeting is elected (§ 13). • Amendment of the rule on record day reservation so that it corresponds to the definition of VPC company according to Chapter 1, 10 § of the new Swedish Companies Act (§ 16, new § 15). B) Furthermore, the Board proposes that the share’s quota value (share capital divided by the number of shares) be changed through a 5-for-1 split, whereby the number of shares in Seco Tools will be increased from 29,093,538 to 145,467,690. The above proposals must be put before the Meeting for decision, and must be supported by shareholders representing at least two thirds of the number of votes exercised and two thirds of the number of votes represented at the Meeting. Item 17 – Adoption of the Board’s proposed principles for remuneration and other terms of employment for the executive management The proposal, which essentially corresponds to the remuneration principles applied in earlier years, is designed to ensure that the company can offer a globally market-based level of compensation that enables Seco Tools to attract and retain qualified staff for its executive management. Matters related to remuneration to the executive management are prepared by the Remuneration Committee and are submitted to the Board for decision on a yearly basis. The total remuneration package consists of fixed salary, an annual variable salary component, pension benefits and other benefits. Fixed salary, which is individual and differentiated on the basis of responsibilities and performance, is set according to market-based principles and is subject to yearly review. The variable portion is based on the attainment of annual performance targets. The targets are primarily related to the company’s results, but also to individually measurable goals in the individual’s area of responsibility. For the executive management, the variable portion may not exceed 30-60 % of fixed salary. Pension benefits for members of the executive management normally consists of three parts, a basic component comprising the ITP plan with a contractual retirement age of 65 years, a supplementary premium-based pension and a defined benefit pension payable between the ages of 60 and 65 years for the President and between 62 and 65 years for other members of the executive management. Termination benefits are payable in the event of termination of employment on the part of Seco Tools, provided that termination is not due to criminal negligence. Any income from employment is deducted from the termination benefits, which correspond to between 12 and 18 monthly salaries for individuals under the age of 55 years and between 18 and 24 monthly salaries for individuals over the age of 55 years. Item 18 - Proposed Nominating Committee, etc., ahead of the 2007 Annual General Meeting The Nominating Committee proposes the following: The Nominating Committee shall consist of the Board Chairman and one representative appointed by each of the Company’s four largest shareholders. The Chairman is convener. The composition of the Nominating Committee shall be announced as soon as it has been established, and not later than six months before the 2007 Annual General Meeting. The chairman of the Nominating Committee shall be the member representing the largest shareholder. The Nominating Committee shall serve until the composition of the next Nominating Committee has been announced. No fees shall be paid to the members of the Nominating Committee. The Nominating Committee shall also propose a chairman of the AGM, the number of Board members, fees to Board members and auditors, election of Board members and the Board Chairman, and make recommendations regarding the appointment and duties of a Nominating Committee ahead of the 2008 AGM. The Company shall be responsible for all reasonable expenses associated with performance of the Nominating Committee’s responsibilities. In the event that a member leaves the Nominating Committee before completing his/her assignment, a replacement may be appointed by the same shareholder if deemed necessary. In the event that a shareholder who has appointed a member to the Nominating Committee no longer holds shares in the company, or has significantly reduced its holding, such member may resign and a representative for the shareholder next in order of size be given the opportunity to replace this member. Shareholders representing approximately 80% of the share capital and approximately 95% of the voting rights for all shares in Seco Tools AB have stated their intention to vote in favour of the proposals of the Board and the Nominating Committee as stated above. DOCUMENTS The annual report, audit report, the Board of Directors’ complete proposal for amendment of the Articles of Association, principles for remuneration and other terms of employment for the executive management, etc., will be available two weeks prior to the Meeting at Seco Tools AB and on the Company’s website www.secotools.com. These documents will be sent free of charge to those shareholders who so request. Fagersta, Sweden, March 2006 SECO TOOLS AKTIEBOLAG; (publ) The Board of Directors For additional information, contact Kai Wärn, President and CEO, tel: +46 (0)223-401 10 or Tomas Eliasson, CFO, tel: +46 (0)223-401 20. E-mail can be sent to investor.relations@secotools.com Previously published information is available under the section “Investor Relations” at the Seco Tools’ website (www.secotools.com). Seco Tools AB’s corporate registration number is 556071-1060 and the address is Seco Tools AB, SE-737 82 Fagersta, Sweden. The telephone number for the Group’s head office is +46 (0)223-400 00.