Notice of Annual General Meeting of Telelogic AB (publ)

MALMÖ, Sweden – April 5, 2007 – Shareholders in Telelogic AB (publ) are hereby
summoned to the Annual General Meeting to be held on Thursday, 3 May 2007 at 3 p.m.
CET at Börshuset, Skeppsbron 2 in Malmö. For those interested, a presentation of one of
the Company’s areas of operations will be given at 14.30.

Notice of participation, etc
Shareholders who wish to participate in the general meeting must
- be recorded in the register of shareholders kept by VPC AB on Thursday, 26 April 2007; and
- notify the company of their intention to participate in the general meeting no later than 4 p.m. CET on Thursday, 26 April 2007.

Notice of participation shall be made
- in writing to Telelogic AB, Jenny Bothén, P.O. Box 4128, 203 12 Malmö, Sweden,
- by fax +46 40 650 65 55 or
- by email to jenny.bothen@telelogic.com.

The notice shall include name, personal/corporate identity number, address, telephone number, the number of shares held and, if applicable, the number of assistants (two at the most) that will accompany the shareholder at the general meeting. Shareholders who intend to be represented by proxy should submit a power of attorney and other authorization documents in connection with the notice of participation.

Shareholders whose shares are registered in the name of a nominee must temporarily register the shares in their own names in order to be entitled to participate in the general meeting. Such registration must be effected no later than on Thursday, 26 April 2007, and the shareholder must therefore inform the nominee well before this date.

Proposed agenda
1. Opening of the meeting.
2. Election of chairman of the meeting.
3. Preparation and approval of the voting list.
4. Approval of the agenda.
5. Election of one or two persons to verify the minutes.
6. Determination of whether the meeting has been duly convened.
7. Presentation of the annual report and the auditor’s report and the consolidated financial statements and the consolidated auditor’s report.
8. Resolutions regarding
a) adoption of the profit and loss statement and the balance sheet and the consolidated profit and loss statement and the consolidated balance sheet,
b) allocation of the company’s financial result in accordance with the adopted balance sheet, and
c) discharge of the members of the board of directors and the managing director from liability.
9. Determination of the number of board members and deputy board members.
10. Determination of fees for the board of directors and the auditor.
11. Election of the board of directors and the chairman of the board of directors.
12. Election of auditor.
13. Resolution on guidelines for remuneration of senior executives.
14. Resolution regarding nomination committee.
15. Resolution on authorization for the board of directors to resolve on new issues of shares, warrants and convertibles.
16. Resolution on authorization for the board of directors to acquire and transfer own shares.
17. Resolution on issue of call options in accordance with the group’s global option plan.
18. Resolution on authorization for the board of directors to resolve on new issues of warrants.
19. Resolution on authorization for the managing director to make such formal adjustments of the resolutions under item 15 and 18 that may be necessary in connection with the registration thereof.
20. Closing of the meeting.

Dividend (item 8b)

The board of directors proposes that no dividend is declared and that the result is carried forward.

Board of directors etc. (items 2 and 9-12)

The nomination committee, consisting of Annika Anderson (Fjärde AP-fonden), chairman, Anders Ljungqvist (AMF Pension), Åsa Nisell (Swedbank Robur Fonder), Peter Rönström (Lannebo Fonder), and Bo Dimert (chairman of the board of directors), proposes the following:

- Chairman of the general meeting: Bo Dimert.

- Number of board members: Six ordinary board members with no deputy board members.

- Fees for the board of directors: SEK 1,000,000, whereof SEK 400,000 to the chairman and SEK 150,000 each to the other board members who are not employed in the group.

- Fees for committee work: SEK 130,000 for work performed in the audit committee, whereof SEK 50,000 to the chairman and SEK 40,000 each to the other two members. SEK 100,000 for work performed in the remuneration committee, whereof SEK 40,000 to the chairman and SEK 30,000 each to the other two members. No fees shall be paid to members who are employed in the group.

- Board of directors: Re-election of Jörgen Centerman, Bo Dimert, Kjell Duveblad, Märtha Josefsson and Birgitta Klasén and Anders Lidbeck as board members. Maria Borelius has resigned from the board of directors in course of the year.

- Chairman of the board of directors: Re-election of Bo Dimert.

- Auditor: Election of the registered public accounting firm KPMG Bohlins AB with the authorized public accountant Eva Meltzig Henriksson as the auditor in charge.

- Fees for the auditor: Pursuant to approved invoices within the scope for the offer.

Guidelines for remuneration of senior executives (item 13)

The board of directors proposes guidelines, which in principle means that the company shall offer a total remuneration in line with the market, which enables the company to recruit and retain qualified senior executives. The remuneration to the senior executives shall consist of fixed salary, variable salary, call options pursuant to the company’s global option plan, pension and other benefits. The variable salary shall have a limit and be dependent on fulfillment of certain goals. Pension benefits shall comply with local market practice, which in Sweden means a pension premium approximately corresponding to what is applicable in the ITP-plan.

Nomination committee (item 14)

The nomination committee proposes that the current nomination committee shall remain in office until a new nomination committee has been appointed, that a new nomination committee shall be appointed by the chairman of the board procuring that the four largest shareholders as of 31 August 2007 are each offered to appoint one representative, that, in addition thereto, the chairman of the board shall be a member of the nomination committee, that the nomination committee shall appoint its chairman who shall not be a member of the board of directors, that the nomination committee’s term of office shall run until a new nomination committee has been appointed, and that the nomination committee shall carry out the tasks set out in the Swedish Code of Corporate Governance. If a shareholder representative no longer represents the relevant shareholder, or otherwise resigns before its duty is completed, the chairman of the board of directors shall offer, if deemed necessary, another shareholder representative a possibility to replace the resigning representative. If a shareholder representative represents a shareholder that has sold all or the main part of its shares in Telelogic, the nomination committee may resolve that the representative shall resign and, if deemed necessary by the nomination committee, to offer another shareholder representative a seat on the nomination committee.

Authorization for the board of directors to resolve on new issues of shares, warrants and convertibles (item 15)

The board of directors proposes that the general meeting extend the authorization given to the board of directors at the annual general meeting in 2006 so that the board of directors, for the period up until the next annual general meeting, is authorized to resolve on new issues, on one or several occasions, with or without deviation from the shareholders’ preferential rights, of up to 27,000,000 shares (which is equivalent to a dilution of up to 10 per cent), against payment in cash, in kind and/or with a right of set-off or otherwise on conditions. The board of directors is authorized to issue shares, warrants or to raise loans of up to SEK 700 million through issues of convertibles. The purpose of the authorization is to give the board of directors the possibility to finance acquisitions through new issues. New issues against payment in cash or with a right of set-off shall primarily entail preferential rights for the shareholders. Deviation from this shall only be made in the event of imminent acquisitions where time does not allow a new issue with preferential rights for the shareholders. In new issues with deviation from the shareholders’ preferential rights, the subscription price shall be set as close as possible to the stock exchange quotation at the time.

Authorization regarding acquisition and transfer of own shares (item 16)

The board of directors proposes that the board of directors is authorized, for the period up until the next annual general meeting, to resolve, on one or several occasions, on (a) acquisitions of own shares on the Stockholm Stock Exchange, and (b) transfers of own shares on the Stockholm Stock Exchange or in other manner than on the Stockholm Stock Exchange, including a right to resolve on deviation from the shareholders’ preferential rights and on provisions regarding payment in kind, with a right of set-off or other conditions. Acquisitions may be made with at most so many shares that the company’s holding of own shares after the acquisition amounts to not more than one tenth of all the shares in the company, however not more than 24,700,000 shares. The purpose of the proposal is to give the board of directors further options in taking action to improve the company’s capital structure and to enable to board of directors to transfer own shares as consideration in connection with acquisitions or in connection with the exercise of call options within the group’s global option plan. Transfers of own shares on the Stockholm Stock Exchange may only be made for the purpose of financing acquisitions and deviations from the shareholders’ preferential rights in transfers outside the Stockholm Stock Exchange may only be made in connection with acquisitions or for the delivery of shares pursuant to the terms for call options issued by the group. The board of directors’ intention is primarily to use generated cash flows to finance organic as well as acquisition driven growth. However, an authorization to execute repurchases also gives the company a possibility to transfer capital, which is not required for the business, to the shareholders and thereby to continuously adjust the company’s capital structure to the prevailing capital requirements.

Resolution on issue of call options in accordance with the group’s global option plan (item 17)

At the extraordinary general meeting held on 8 January 2001, it was resolved to adopt a global option plan, for the benefit of current and future employees in the group, based on call options which give the employee a right to acquire shares in the company. According to the plan, the call option’s strike price shall equal 115 per cent of the market value of a share in the company at the time of the issue of the call options. The call options may be exercised at the earliest two years and at the latest four and a half years from the issue. The call options shall vest by a third at a time, the first reference date for vesting being two years from the issue of the call options and second and third reference date being three and four years respectively from the issue of the call options. Vesting is conditional on the employee still being employed in the group at the reference date. Vesting is further conditional on that the company’s earnings per share are increasing with at least 10 per cent annually, whereby (i) earnings per share for the four full calendar quarters preceding the issue of the call options shall form the basis for the calculation of the profit growth, (ii) the annual increase of profit shall be calculated from the results from every past period of four full calendar quarters following thereafter, (iii) earnings per share shall be adjusted so that any effects of depreciation according to IFRS, due to acquisitions, are eliminated, and (iv) that call options which do not vest at a certain reference date are carried forward (rolled over) and can vest at a later reference date provided that the accumulated profit growth target is reached at that time. If acquisitions or other acquisition oriented measures affect earnings per share negatively in the short term, with the effect that the target for profit growth is not reached, the board of directors is nevertheless, in exceptional cases, entitled to approve vesting of call options as the acquisitions in question, in light of the company’s growth strategy, are deemed to be justified in the long term. Further, taking into account general factors such as the general market development, the board of directors is entitled to reduce the final number of call options that may be exercised.

In accordance with the terms of the group’s global option plan, the board of directors proposes that the general meeting resolve to issue (a) up to 2,500,000 call options to be allocated to the employees of the present group and (b) up to 2,000,000 call options to be allocated to employees in companies which are acquired. Senior executives and key employees in the group may not be allocated more than 200,000 call options each and other employees may not be allocated more than 25,000 call options each. When allocating call options, the employee’s performance, position and significance for the group shall inter alia be considered. Local adjustments are permitted in order to apply to specific rules and market conditions in the respective country. It is further proposed that the general meeting approves that shares and warrants are transferred to employees in connection with the exercise of the call options.

If all call options are exercised, including the call options which may only be allocated to employees in companies which are acquired, employees will acquire a number of shares in the company which is equivalent to a dilution of approximately 1.8 per cent, of which approximately 1.0 per cent refers to employees in the present group. Taking outstanding options from earlier option plans into account (options which expire before this annual general meeting is not included), the aggregate dilution, if all options are exercised, would amount to approximately 4.8 per cent, including 0.8 per cent to employees in companies potentially to be acquired.
The proposed resolution requires support from shareholders representing at least nine tenths of the votes cast and of the shares represented at the general meeting.

Authorization for the board of directors to resolve on new issues of warrants (item 18)

The board of directors proposes that the general meeting authorize the board of directors, for the period up to the next annual general meeting, to resolve on new issues, on one or several occasions, of up to 4,500,000 warrants, each warrant entitling the holder to subscribe for one share in the company. The company’s wholly owned subsidiaries within the group, shall be entitled to subscribe for the warrants with deviation from the shareholders’ preferential rights. In the event the authorization is fully used and all 4,500,000 warrants are exercised, the company’s share capital will increase with SEK 45,000. The reason for deviating from the shareholders’ preferential rights is to hedge the performance of the option undertakings in accordance with the option plan set out above, and to cover administrative costs and social security contributions and equivalent foreign taxes which may arise due to the option plan. A resolution in accordance with the proposal requires support from at least two thirds of the votes cast and of the shares represented at the general meeting.

Miscellaneous

The annual report, the auditor’s report and the board of directors’ complete proposals for resolutions in accordance with the above, will be available in the company’s office, and on the company’s website www.telelogic.com, not later than two weeks before the general meeting. Copies of the documents will be sent to shareholders who so request and state their postal address. The board’s full proposal for resolutions under items 17 and 18 above will be sent to each shareholder who notifies the company of his or her intention to participate in the general meeting.