KONE has a share-based incentive plan for the company’s senior management (President and CEO, members of the Executive Board and other top management), consisting of approximately 40 individuals. The potential reward is based on the annual growth in both sales and earnings before interest and taxes (EBIT). The reward is to be paid as a combination of class B shares and cash equivalent of the taxes and similar charges that are incurred. The plan prevents participants from transferring the shares during the fifteen-month period following the termination of each fiscal year. As part of the share-based incentive plan, a long-term target for the management´s ownership has been set. In April 2010, a total of 311,375 class B shares were granted to the management as a reward due to the achievement of the targets for the year 2009. Respectively, a total of 219, 000 class B shares will be granted in April 2011 due to achievement of the targets for the year 2010.
Authority to purchase own shares
The Shareholders’ Meeting held in March 2010 authorized the Board of Directors to repurchase and redistribute the company’s own shares.
The shares may be repurchased among others in order to develop the capital structure of the Company, finance or carry out possible acquisitions, implement the Company’s share-based incentive plans, or to be transferred for other purposes or to be cancelled. Altogether no more than 25,570,000 shares may be repurchased, of which no more than 3,810,000 may be class A shares and 21,760,000 class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of its own shares that the Company is allowed to possess.
The class B shares can be purchased at public trading in the NASDAQ OMX Helsinki Oy at the market price. The class A shares shall be purchased outside public trading at the price equivalent to the average price of class B shares paid in the NASDAQ OMX Helsinki Oy at the time of purchase.
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