Market announcement

Title

NOTICE CALLING SPECIAL GENERAL MEETING OF SHAREHOLDERS

Message

The management board of AS MERKO EHITUS (registry code 11520257) hereby calls a
special general meeting of shareholders of AS MERKO EHITUS, having its seat at
Järvevana tee 9G, Tallinn, 11314. The general meeting will be held on Friday 31
October 2008 at 2.30 p.m. in the Vega conference hall of the Nordic Hotel Forum
(Viru väljak 3, Tallinn). 

The set of shareholders entitled to take part in the general meeting will be
determined as at 11.59 p.m. on 21 October 2008. Registration for the general
meeting will start at 2 p.m. on 31 October 2008. 

The special general meeting is called on the initiative of the supervisory
board. The reason for calling the general meeting is the need to streamline the
management structure of AS MERKO EHITUS. 

The agenda of the general meeting:

1. Election of additional members of the supervisory board
The supervisory board proposes that, in addition to the current supervisory
board members, Indrek Neivelt and Olari Taal be elected as new members of the
supervisory board of AS MERKO EHITUS. 

The term of authority of the new supervisory board members will commence as
from the adoption of a respective resolution of the general meeting. 

2. Remuneration of supervisory board members
The supervisory board proposes that the supervisory board members be
remunerated as follows: 

The monthly remuneration to be paid to the chairman of the supervisory board is
55,000 EEK. The monthly remuneration to be paid to supervisory board members is
50,000 EEK. Subject to submission of relevant expense receipts, supervisory
board members shall be compensated for reasonable costs and expenses incurred
by them in the discharge of their duties, incl. transport, travel and training
expenses and other expenses. 

The new terms of remuneration of supervisory board members shall take effect as
from the date following the date of adoption of the general meeting's pertinent
resolution. 

The reason for introducing the new system of remuneration is changing the
remuneration system of supervisory board members so that the members will be
paid a fixed amount of remuneration each month, simplifying the current system. 

3. Termination of current authorisation agreements signed with supervisory
board members 
The supervisory board proposes that the currently effective authorisation
agreements signed with supervisory board members be terminated. 

This resolution is necessitated by the introduction of the new rate of
remuneration of supervisory board members. 

4. Appointment of a representative of AS MERKO EHITUS for termination of
authorisation agreements signed with supervisory board members 

The supervisory board proposes that the chairman of the management board, Tiit
Roben, be appointed as the representative of AS MERKO EHITUS for termination of
the agreements referred to in clause 3 above. 


5. Amendment of the articles of association:
The supervisory board proposes that:
5.1. Article 25 be changed and formulated as follows: “The supervisory board
shall plan the activities of the Company, organise the management of the
Company and supervise the activities of the management board. The supervisory
board shall notify the general meeting of the results of a review. The
supervisory board is among other things competent to: 
25.1 approve the strategy of the Company;
25.2 approve the Company's 3-year development plan;
25.3 approve the Company's annual budget;
25.4 approve the Company's management structure;
25.5 review the results of the Company's performance;
25.6 review and evaluate the annual report of the Company;
25.7 decide on the conclusion of transactions and conduct of legal disputes
between the Company and its management board members, as well as appoint the
Company's representative in such transactions and disputes.” 
5.2. Article 26 be changed and formulated as follows: “The supervisory board
shall give orders to the management board for organisation of the management of
the Company. Consent of the supervisory board is required by the management
board for conclusion of transactions which fall beyond ordinary course of the
Company's business. Consent of the supervisory board is required by the
management board for conclusion of transactions, which bring about: 
26.1 making of investments into new lines of business and making of investments
which exceed the sums earmarked for investments in the annual budget; or 
26.2 setting or winding up of a business abroad, including foundation or
acquisition of companies, branches or permanent business establishments abroad
or dissolution, closure or transfer thereof; or 
26.3. setting or winding up of a subsidiary with a share capital of over
500,000 euros; or 
26.4. acquisition or divestment of minority holdings in companies, which do not
directly support the principal activity of the Company; or 
26.5 granting of loans to third parties or securing of an obligation of a third
party, except if the transaction entails granting of a loan to a subsidiary or
associated company or securing of an obligation of a subsidiary or associated
company. 
The provisions of the Commercial Code §317 (1) 1)-7) will not be additionally
applied in definition of the transactions beyond ordinary course of business.” 
The above amendment is necessary for changing the responsibilities of the
supervisory board such that it would be a body primarily responsible for
strategic management. The approval, or withholding of approval, of major
transactions performed in ordinary course of business would be the
responsibility of the group's directorate to be set up by the supervisory board
(see the next proposal for amendment of the articles of association). 

5.3. Article 27 be changed and formulated as follows:

“The supervisory board may set up a group's directorate, which stands
independent of the supervisory board. The principal function of the group's
directorate shall be developing positions regarding the Group's strategy and
business as well as granting or denial of authorisations to the management
board for conclusion of transactions defined by the supervisory board. The
transactions defined by the supervisory board as transactions subject to
authorisation by the group's directorate are not regarded as transactions
beyond ordinary course of business, for the conclusion of which the management
board requires prior consent of the supervisory board. The formation and
competence of the group's directorate, election of the members of the group's
directorate as well as work organisation and other issues related to the
group's directorate shall be stipulated in the rules of the group's directorate
enacted by a resolution of the supervisory board. The supervisory board shall
exercise supervision over the activities of the group's directorate.” 

This amendment is necessary for enhancing supervision over the conclusion of
transactions with the assets of the Company by the management board, since,
pursuant to the proposal for amendment of the articles of association set forth
in clause 5.2 above, the management board would not need the consent of the
supervisory board for the conclusion of certain transactions anymore. 

The amendments of the articles of association described in clause 5 shall take
effect upon their registration in the commercial register. 


6. Deciding on the conclusion of transactions with supervisory board members 
The supervisory board proposes that consent be given to the election of
supervisory board members to the group's directorate referred to in clause 5.3
above and to the conclusion of authorisation agreements between supervisory
board members and AS MERKO EHITUS in case there should be a need to engage
supervisory board members as members of the group's directorate. 

Information on the terms of remuneration contained in the authorisation
agreements is available on the website of AS MERKO EHITUS at www.merko.ee. 


7. Appointment of a representative of AS MERKO EHITUS for conclusion of
transactions between supervisory board members and AS MERKO EHITUS 

The supervisory board proposes that the chairman of the management board, Tiit
Roben, be appointed as the representative of AS MERKO EHITUS for signing of the
agreements referred to in clause 6 above. 


On registration, shareholders as legal entities are requested to submit an
extract from a relevant (commercial) register, with whom the legal entity has
been registered (Estonian legal entities are requested to submit a copy of the
registry card B, which may not be older than 15 days), which sets out a
person's right to represent the shareholder (at law) along with the person's
identification document; other representatives shall submit proper
authorisation letters (granted by transaction) along with an extract from a
relevant (commercial) register and an identification document of the
representative. Shareholders as natural persons are requested to submit a
passport or identity card; their representatives are requested to submit
additionally proper authorisation letters. 

The documents of a foreign legal entity (except authorisation letter) shall be
legalised or apostilled by the Ministry of Foreign Affairs or a foreign mission
of the Republic of Estonia. 

The draft articles of association, information regarding the proposed new
members of the supervisory board, and the terms of remuneration contained in
the authorisation agreements will be available for examination from 23 October
2008 at http://www.merko.ee/. The aforementioned documents will be available
for examination from 23 October 2008 at the seat of AS MERKO EHITUS situated at
Järvevana tee 9G, Tallinn, on workdays from 8 a.m. to 5 p.m. 

Questions concerning the items on the agenda can be asked by an email to
merko@merko.ee. The questions and answers will be posted on the website of AS
MERKO EHITUS. 


Alar Lagus
Member of the Management Board
6 805 109
alar.lagus@merko.ee