QPR SOFTWARE PLC STOCK EXCHANGE BULLETIN FEBRUARY 23, 2005 AT 2.00 PM NOTICE FOR ANNUAL SHAREHOLDERS? MEETING; AUTHORISATION TO DECIDE ON THE INCREASE OF SHARE CAPITAL, AND STOCK OPTIONS 2005/I Notice is hereby given to the shareholders of QPR Software Plc that the Annual Shareholders? Meeting will be held on Tuesday March 15, 2005 starting at 9:00 a.m. at company?s headquarters S?rn?isten rantatie 27 A, 00500 Helsinki, Finland. The following matters will be addressed at the meeting: 1. Matters to be submitted to the Annual Shareholders? Meeting pursuant to Article 11 of the Articles of Association 2. Authorisation of the Board of Directors to decide on the increase of share capital The Board of Directors proposes that the Shareholders? Meeting shall, by revoking the previous unused authorisations to increase the share capital, authorise the Board of Directors to decide, until 15 March 2006, on the increase of share capital through one or more new issues and/or on one or more convertible bonds and/or granting option rights in one or more instalments. The Board of Directors? proposal for the maximum amount of authorisation is EUR 265,377, i.e. 2,412,518 shares in total. Regarding a new issue the Board of Directors would be granted authorisation to decide that shares may be subscribed against property given as a subscription in kind, by using the right to set-off or otherwise according to certain terms. As proposed by the Board of Directors, the increase in share capital by means of a new issue would be carried out according to the Board?s decision, at the price set by the Board and on the Board?s other terms. The Board would be authorised to deviate from the pre-emptive subscription rights of shareholders when increasing share capital by means of a new issue, convertible bonds and/or granting option rights provided that there exists an important financial reason from the company?s point of view. 3. Stock options 2005/I The Board of Directors proposes that the Shareholders? Meeting shall decide to issue stock options to be granted to QPR Services Oy, which is a subsidiary fully owned by QPR Software Plc. The Board of Directors shall later on decide upon the further distribution of the stock options granted to QPR Services Oy to managing directors, members of the Board of Directors and management group as well as key personnel of QPR Software Plc and its subsidiaries. QPR Services Oy shall not be entitled to subscribe for shares in the Company by virtue of the stock options. It is proposed that the shareholders? pre-emptive right to subscription be deviated from since the stock options are intended to form part of the company?s incentive and commitment program for the management. The number of stock options issued will be 200,000, a maximum of 100,000 of which may be distributed to persons belonging to the inner circle of the company. In total, the stock options will entitle to the subscription of a maximum of 200,000 shares in the company. The share subscription price of the stock options shall be EUR 0.70 per share. Notwithstanding the previous, the Board of Directors of the company has the right, when allocating the stock options, to decide that the subscription price is higher than the before mentioned, however, not higher than EUR 2.00 per share. The share subscription period for the stock options shall be 11 November 2006 - 15 February 2007. The Board of Directors shall have the right to decide that the share subscription period will start a later than above mentioned when options are allocated to persons belonging to the inner circle of the company. As a result of the share subscriptions made against the stock options, the share capital of the company may be increased by a maximum of EUR 22,000. The Board of Directors shall resolve on other matters relating to the subscriptions of the stock options. Distribution of profits The Board of Directors proposes that no dividend shall be paid. The Board of Directors proposes further that the profit, EUR 88,309, from the last accounting period shall be entered in the company?s Profit Margin account. Documents Copies of the company?s financial statements and the proposals of the Board of Directors and attachments thereto will be available for shareholders inspection as from 1 March 2005 at the company?s principal office at S?rn?isten rantatie 27 A, 00500 Helsinki, and copies of them will be sent to the shareholders upon request. Participation and Registration The right to take part in the Annual Shareholders? Meeting is held by shareholders who have been registered in the shareholders? register of the company as maintained by the Finnish Central Securities Depository on 4 March 2005 at the latest. Shareholders who wish to take part in the Annual Shareholders? Meeting shall inform the company of their participation on 10 March 2005, 16:00 p.m. at the latest either in writing to QPR Software Plc, S?rnaisten rantatie 27 A, 00500 Helsinki, by phone to +358 (0)9 4785 4224, by facsimile +358 (0)9 4785 4222 or by email to taina.tummavuori@qpr.fi. Written registration letters or messages must arrive before the registration period expires. Possible powers of attorney are requested to be delivered to the above address at the time of registration. Annual report 2004 QPR Software Plc?s annual report 2004 will be published in Finnish on Friday 25 February 2005 and will be available on the company?s internet pages at www.qpr.com/investors/. Copies of annual report 2004 will also be available at company?s headquarters S?rn?isten rantatie 27 A, 00500 Helsinki, Finland (Tel. +358-(0)9-478 5411). In Helsinki 23 February 2005 QPR SOFTWARE PLC Board of Directors APPENDIX THE PROPOSALS OF THE BOARD OF DIRECTORS The Board of Directors of QPR Software Plc (the "Company") proposes that the Annual Shareholders? Meeting of the Company to be held on 15 March 2005 shall decide on the following matters. The Company has one (1) share class and each share is attached with one (1) vote in the meetings of shareholders. The book- counter value of the Company?s shares is EUR 0.11. I. The authorisation for the Board of Directors to increase share capital The Board of Directors proposes that the Shareholders? Meeting of the Company to be held on 15 March 2005 shall, by revoking the previous unused authorisations to increase the share capital, authorise the Board of Directors to decide on the increase of the share capital through a new issue, granting option rights and/or taking out convertible loans under the following terms: - authorisation is valid for one (1) year starting from the decision in which the Board of Directors shall be authorised to decide on the increase of the share capital, i.e. until 15 March 2006; - according to the authorisation the share capital may be increased by means of one or more new issues in a way that the maximum amount of the increase of share capital shall be EUR 265,377, i.e. 2,412,518 shares in total; - the Board of Directors is authorised to deviate from the shareholders? pre-emptive subscription right provided that there exists an important financial reason from the perspective of the Company, such as using shares, convertible loans and/or option rights in a corporate acquisitions or other corporate arrangements, with broadening the scope of shareholders, creating incentives and/or binding objectives for the Company?s personnel or developing the business activities as well as arrangements relating to the Company?s capital maintenance; - the Board of Directors is authorised to decide on the subscription price, those who are entitled to subscribe new shares and other terms; and - when increasing the share capital by means of a new issue other than related to the option rights the Board of Directors is entitled to decide on that the shares may be subscribed against property given as a subscription in kind or otherwise under certain terms and conditions or by using the right to set-off. II. Stock options 2005/I I TERMS AND CONDITIONS OF THE STOCK OPTIONS 1. Number of Stock Options The number of stock options issued shall be 200,000, and they entitle to subscribe for a total of 200,000 shares in the Company. 2. Stock Options The stock options shall, in deviation from the shareholders? pre- emptive right to subscription, be granted to QPR Services Oy, which is a fully owned subsidiary of QPR Software Plc. The Board of Directors shall later on decide upon the further distribution of the stock options granted to the Subsidiary to the managing directors, members of the Board of Directors, members of the management group and to key personnel of QPR Software Plc and its subsidiaries. The Subsidiary shall not be entitled to subscribe for shares in the Company by virtue of the stock options. It is proposed that the shareholders? pre-emptive right to subscription be deviated from since the stock options are intended to form part of the Company?s and QPR Group?s incentive and commitment program for the management. Therefore weighty financial reasons from the perspective of the Company exist. The Board of Directors shall be entitled to distribute stock options from the Subsidiary also to persons belonging to the inner circle of the Company as defined in the Chapter 1 Article 4 of the Companies Act. However, not more than 100,000 of the stock options may be distributed to the person belonging to the inner circle of the Company. The ownership of the inner circle of all the shares and votes in the Company is described in Section I. 3. The persons to whom stock options shall be distributed shall be notified in writing by the Company about the offer of stock options. 3. The ownership of the inner circle The ownership of the shares and votes of the persons belonging to the inner circle of the Company, to whom the stock options may be distributed, prior to the issue of options and the possible subscription of shares pursuant to the options is presented in the table below: Subscriber belonging to Ownership prior the Previously issued the inner circle subscription of and not yet options exercised options Leskinen Vesa-Pekka 12.43% 0 Junkkonen Kari Juhani 4.24% 7,500 Piekkola Asko 2.62% 0 Tirkkonen Timo 1.99% 40,000 Lehto Teemu Samuli 1.69% 30,000 Kanninen Matti Juhani 1.22% 0 Virtanen Tony Antero 1.36% 0 Malmi Teemu 1.37% 0 Moilanen Jane 0.00% 0 The persons belonging to the inner circle of the Company to whom stock options may be distributed thus own, taking into consideration the previously issued options, the total of 27.40 percent of the share capital and votes in the Company. Provided that 100,000 of the stock options issued to the Subsidiary shall be further distributed to the persons belonging to the inner circle and all the stock options are fully exercised, the ownership of the persons belonging to the inner circle may increase up to 27.77 percent of the share capital and votes in the Company. 4. Subscription of the stock options The options shall be subscribed into a separate subscription list during a subscription period starting on 15 March 2005 and ending on 15 April 2005. The subscriptions shall be made in the Company?s head office and possibly at another location to be determined later. The Board of Directors shall be entitled to extend the subscription period. The options will be given free of charge. 5. Approval of the subscriptions The Board of Directors shall decide the date and procedure of the approval of the subscriptions. The Board of Directors shall decide on the procedure and approval of the subscriptions in the event of a possible over-subscription and under-subscription. 6. Stock option certificates Stock option certificates shall, upon request, be delivered to the stock option owner after the registration of the options. The Company shall issue the maximum of 200,000 certificates. The Company shall hold the possibly issued stock option certificates on behalf of the stock option owner until the beginning of the share subscription period in accordance with Section II. 2. 7. Transfer of Stock Options The stock options are freely transferable, when the share subscription period has begun in accordance with Section II. 2. The stock options and/or stock option certificates may not be pledged or transferred to a third party prior to the beginning of the share subscription period. The Board of Directors may, as an exception to the above, permit the transfer of a stock option also before such date. This restriction shall be recorded on each issued certificate. 8. Termination of the employment or service Should a stock option owner cease to be employed by or in the service of the Company or a company belonging to the QPR Group, for any other reason than the death of the employee, or the retirement of the employee, such person shall, without delay, offer to the Company or its order, free of charge, the stock options for which the share subscription period in accordance with Section II.2 had not begun at the last day of such person?s employment or service. The Board of Directors has, however, the right to decide on an exception to the above-mentioned obligation, given that there is a special reason. 9. Resignation of the member of the Board of Directors Should a member of the Board of Directors who is not also employed by or in the service of the Company or the QPR Group, resign from the Board of Directors, such person shall, without delay, offer to the Company or its order, free of charge, the stock options for which the share subscription period in accordance with Section II.2 had not begun at the day of resignation. The Board of Directors has, however, the right to decide on an exception to the above-mentioned obligation, given that there is a special reason. II SHARE SUBSCRIPTION TERMS AND CONDITIONS 1. Right to Subscribe for New Shares Each stock option entitles its owner to subscribe for one (1) share in the Company. The book equivalent value of each share is EUR 0.11. As a result of the subscriptions the number of shares may be increased by a maximum of 200,000 new shares and the share capital of the Company by a maximum of EUR 22,000. The Subsidiary shall not be entitled to subscribe for shares in the Company by virtue of the stock options. 2. Share Subscription and Payment The share subscription period shall start on 1 November 2006 and end on 15 February 2007. The Board of Directors shall have the right to decide that the share subscription period will start a later than above mentioned when options are allocated to the inner circle of the Company. The share subscription shall take place at the head office of the Company or possibly at another location to be determined later. Subscription price for the subscribed shares shall be paid when the shares are subscribed. The Board of Directors shall decide on the approval of the share subscriptions. 3. Share Subscription Price The share subscription price shall be EUR 0.70 per share. The share subscription price has been determined on the basis of the trade volume weighted average price of the Company?s share during a 12 month period (11 February 2004 ? 12 February 2005), EUR 0.54, by increasing it by EUR 0.16 (30%). When allocating the options, the Board of Directors has the right to decide that the subscription price is higher than the above. The subscription price shall, however, not be more than EUR 2.00. From the share subscription price shall, as per the dividend record date, be deducted the amount of the dividend decided after 15 March 2005 but before the share subscription. The share subscription price shall nevertheless always amount to at least the book equivalent value of the share. 4. Registration of Shares Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber. The Company will accept subscriptions in the meetings of the Board of Directors, which meets on a regular basis, and will register on the basis of the accepted subscriptions the increases in the share capital without delay and in accordance with the Companies Act and will submit the new shares to public trade with the existing shares of the Company. The Board of Directors does not have the obligation to accept subscriptions made after the ending of the financial year, before the annual general meeting. 5. Shareholder Rights Shares shall entitle to a dividend for the financial year in which the share subscription takes place. Other shareholder rights shall commence when the increase of the share capital has been entered into the Trade Register. 6. Bonus issue Should the Company before the end of the share subscription period decide to increase its share capital by means of a bonus issue of new shares, the subscription price and number of shares to be subscribed pursuant to the options shall be adjusted in accordance with the following formulas: New subscription price will be the result of the following calculation: the subscription price prior to the bonus issue shall be multiplied by the number of the shares prior to the bonus issue and the result of such calculation shall be divided by the number of the shares after the bonus issue. Shares to be subscribed after the bonus issue will be the result of the following calculation: the number of the shares to be subscribed pursuant to the options prior to the bonus issue shall be multiplied by the number of the shares after the bonus issue and the result of such calculation shall be divided by the number of the shares prior to the bonus issue. Should the Company before the end of the share subscription period decide to increase its share capital without increasing the number of the shares, it shall not have an effect on the subscription right of shares pursuant to the options. 7. The change of the number of the shares without changing the share capital Should the Company before the end of the share subscription period decide to change the number of its shares while the share capital remains unchanged, the formulas set forth in II 6. above shall be applied to the adjustment of the subscription price and number of shares to be subscribed pursuant to the options. 8. Share Issues, Convertible Bonds and Stock Options before Share Subscription Should the Company, before the share subscription, increase its share capital through an issue of new shares, or issue of new 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 will be 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 number of shares that can be subscribed for by virtue of one stock option be a fraction, the fractional part shall be taken into account by reducing the share subscription price. Should the increase of share capital, issue of convertible loan or options be made in deviation of the pre-emptive subscription right of the shareholders, such increase or issue shall not have an effect on the terms and conditions of the options. 9. Rights in Certain Cases If the Company reduces its share capital before the share subscription, the subscription right accorded by the terms and conditions of the stock options shall be adjusted accordingly as specified in the resolution to reduce the share capital. Should the Company decide to change from a public company into a private company the stock option owner shall be given an opportunity to exercise his subscription right during a period determined by the Board of Directors before such change to a private company. If the Company resolves to merge in another company as the company being acquired or in a company to be formed in a combination merger, or if the Company resolves to be divided, the stock option owner shall, before the merger or division, be given the right to convert his/her stock options to stock options of the acquiring company within a period of time determined by the Board of Directors. The conversion ratio shall be equal to the position given to the shareholder in the merger or division plan. After such date no subscription right shall exist. In the event the acquiring company does not have stock options to offer, or the Board of Directors otherwise so decide, the stock option owner shall, before the merger or division, be given the right to subscribe for the shares with his/her stock options within a period of time determined by the Board of Directors. After such date no subscription right shall exist. In the above situations the stock option owner has no right to require that the Company redeems the stock options from him/her. If the Company is placed in liquidation before the share subscription, the stock option owner shall be given an opportunity to exercise his subscription right before the liquidation begins within a period of time determined by the Board of Directors. After such date no subscription right shall exist. 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 Company?s own shares does not require the Company to take any action in relation to the stock options. In case a situation, as referred to in Chapter 14 Section 19 of the Finnish Companies Act, where a shareholder has the right and obligation to redeem the shares of the remaining shareholders, arise, stock option owners shall have corresponding obligation to that of the shareholders to offer all of their stock options for redemption to the redeeming shareholder or if the redeeming shareholder is a company listed in the Helsinki Stock Exchange it may alternatively offer to the stock option owner its own new stock options. Should the shareholder entitled to redeem the shares decide not to redeem the stock options or not to offer its own new options, the stock options owners shall be entitled to exercise all stock options immediately, even if the subscription period of the shares pursuant to the stock options has not begun. Should the share of the Company cease to be publicly traded on the Helsinki Stock Exchange, an opportunity to use subscription rights within a time stipulated by the Board of Directors shall be reserved to the holders of the stock option before the trading of the Company's shares ends. Once the trading ends, the right to subscribe for shares with the stock options shall lapse. If the counter book value of the share is changed before the share subscription while the share capital remains unchanged, the terms and conditions of subscription shall be amended so that the total counter book value of the shares available for subscription and the total subscription price remain the same. III OTHER MATTERS 1. Acceptance of subscription and other matters The Board of Directors decides on the acceptance of the subscriptions of the options and the shares and other matters relating to the issue and subscription of the options. The Board of Directors may decide on the minor amendments and specifications to these terms and conditions, especially relating to the preconditions set forth for of the registration of the options. 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. The documentation for the stock options may be viewed at the Company's head office, QPR Software Plc, S?rn?isten rantatie 27 A, 00500 Helsinki. 2. Dispute resolution Disputes arising out of the stock options will be settled by arbitration in accordance with the Arbitration Rules of the Finnish Central Chamber of Commerce. The arbitration tribunal shall consist of one (1) arbitrator. These terms and conditions have been made in Finnish and English. In case of any discrepancy between the Finnish and English terms and conditions, the Finnish terms and conditions are decisive III. Board of Directors proposal for distribution of profits The Board of Directors proposes that no dividend shall be paid. The Board of Directors proposes further that the profit from the last accounting period, EUR 88,309, shall be entered in the Company?s Profit Margin Account. QPR SOFTWARE PLC Board of Directors Additional information Timo Tirkkonen Chairman of the Board Tel. +358-(0)40 5751 553 Matti Kanninen Managing Director QPR Software Plc. Tel. +358-(0)9-478 5411 email: matti.kanninen@qpr.com www.qpr.com DISTRIBUTION Helsinki Stock Exchange, Main Media Neither this press release nor any copy of it may be taken, transmitted into or distributed in the United States of America or its territories or possessions.