GALION, Ohio, Oct. 2 /PRNewswire-FirstCall/ -- PECO II, Inc. (Nasdaq: PIII), a full-service provider of engineering and installation on- site services and a manufacturer of communications power systems and equipment to the communications industry, announced today that the Board of Directors has approved a proposal under which half of Chairman, President and Chief Executive Officer John G. Heindel's base salary for the remainder of 2007 will be paid in restricted stock instead of cash.

'This action reflects my strong confidence in PECO II's future, building on the progress we have already demonstrated in revenue growth, operating performance and new products, as well as the benefits of our strategic outsourcing initiative and our cost-reduction initiative, ' said Heindel. 'Our shareholders can be assured of our continued commitment to enhancing the value of their investment in this Company.'

For the period October 1 to December 31, 2007 , half of Heindel's base salary will be payable in cash. The other half will be payable in the form of 46,428 shares of the Company's restricted stock, which will vest in three installments during that period.

About PECO II, Inc.

PECO II, headquartered in Galion, Ohio, provides engineering and on-site installation services and designs, manufactures and markets communications power systems and power distribution equipment. As the largest independent full-service provider of telecommunications power systems, the Company provides total power quality and reliability solutions, and supports the power infrastructure needs of communications service providers in the local exchange, long-distance, wireless, broadband and Internet markets. Additional information about PECO II can be found at www.peco2.com.

SOURCE PECO II