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ANNUAL GENERAL MEETING 2009

The Annual General Meeting of KONE was held Monday February 23, 2009.

  • The shareholders of KONE Corporation are hereby summoned to the Annual General Meeting to be held at Finlandia Hall, Mannerheimintie 13, Helsinki, on Monday February 23, 2009 at 11:00 am. Shareholder registration will begin at 10:00 am.

    The meeting shall decide on the following matters:

    1. Matters pertaining to the Annual General Meeting as stated in Article 10 of KONE’s Articles of Association and in Chapter 5 of the Companies Act:

    The company’s Board of Directors proposes that for the financial year 2008 a dividend of EUR 0.645 be paid for each of the class A shares and a dividend of EUR 0.65 be paid for each of the outstanding class B shares and that the date of record for dividend distribution be February 26, 2009 and that the dividend be paid March 5, 2009.

    The Board of Directors’ Nomination and Compensation Committee proposes that eight (8) Board Members and one (1) deputy Member be elected, whereby Matti Alahuhta, Anne Brunila, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-Lindfors, Juhani Kaskeala, Shunichi Kimura and Sirpa Pietikäinen be elected as Board Members and Jussi Herlin as deputy Member, subject to their consent.

    In addition, the Nomination and Compensation Committee proposes that the Board Members’ compensation be kept unchanged, whereby compensation would be as follows: Chair of the Board of Directors EUR 54,000, Vice Chair EUR 42,000, Board Members EUR 30,000 and deputy Member 15,000 per year, as well as an EUR 500 fee per meeting for each Member for Board and Committee meetings. The Board of Directors’ Audit Committee proposes that authorized public accountants PricewaterhouseCoopers Oy and Heikki Lassila be elected as Auditors.

    2. Authorization of the Board of Directors to decide on the repurchase of treasury shares and on the distribution of the repurchased treasury shares

    The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the repurchase of no more than 25,570,000 treasury shares with assets from the company’s unrestricted equity so that a maximum of 3,810,000 class A shares and a maximum of 21,760,000 class B shares may be repurchased. The consideration to be paid for the repurchased shares with respect to both class A and class B shares will be determined based on the trading price determined for class B shares on the NASDAQ OMX Helsinki on the date of repurchase.

    Class A shares will be repurchased in proportion to holdings of class A shareholders at a price equivalent to the average price for the company’s class B shares on the NASDAQ OMX Helsinki on the date of repurchase. Any holder wishing to offer his or her class A shares for repurchase by the company must state his or her intention to the company’s Board of Directors in writing. The company may deviate from the obligation to repurchase shares in proportion to the shareholders’ holdings if all the holders of class A shares give their consent. Class B shares will be purchased in public trading on the NASDAQ OMX Helsinki at the market price as per the time of purchase.

    The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the distribution of treasury shares in the possession of the company so that the authorization is limited to 3,810,000 class A shares and 21,760,000 class B shares. The Board of Directors is authorized to decide to whom the shares will be given, i.e. distribute shares in a directed manner in deviation from the shareholders’ pre-emptive rights.

    The Board of Directors proposes that the authorizations remain in effect for a period of one year following the date of decision of the General Meeting.

    Availability of Documents

    The Company’s financial statements and the proposals of the Board of Directors are available to the shareholders one week prior to the General Meeting at the company’s main office at Kartanontie 1, Helsinki, and on the company’s web pages at www.kone.com/corporate/en/Investors/AGM2009. Copies of the documents will be sent to the shareholders upon request, and they will also be available at the General Meeting.

    Right to participate

    In order to participate in the General Meeting, shareholders must be registered in the company’s shareholder register maintained by the Finnish Central Securities Deposit at the latest on February 13, 2009. In order to participate in the General Meeting, holders of nominee-registered shares must contact their account operator in order for the shareholder to be temporarily registered in the shareholder register at the latest on February 13, 2009.

    Declaration of Intention to Attend

    A shareholder who wishes to attend the General Meeting must declare his or her intention to attend to the company no later than 4:00 pm on February 18, 2009. The declaration can be made:

    a. via KONE’s web pages at www.kone.com/corporate/en/Investors/AGM2009,
    b. by letter to KONE Corporation, Share Register, PL 7, 02151 Espoo, Finland,
    c. by telefax to +358 20 475 4523, or
    d. by phone to +358 20 475 4336.

    Shareholders are requested to notify the company of any proxies for the General Meeting so that the proxies are in the company’s possession by the end of the registration period on February 18, 2009.

    Helsinki, January 23, 2009
    Board of Directors

  • At the General Meeting, the following matters will be considered:

    1. Opening of the meeting

    2. Election of Chair and Secretary for the meeting

    3. List of votes

    4. Election of person to check the minutes and persons to control the counting of the votes

    5. Legitimacy and quorum of the meeting

    6. Review by CEO & President and presentation of Financial Statements 2008, including consolidated financial statements, the Board of Directors´ Report and the Auditor’s report

    7. Approval of the Financial Statements

    8. Use of the profit shown on the balance sheet – distribution of dividends

    The Board of Directors proposes that a dividend of EUR 0.645 be paid on the class A shares and a dividend of EUR 0.65 be paid on the class B shares. The date of record for dividend distribution will be February 26, 2009 and dividends will be paid on March 5, 2009.

    9. Granting of discharge from liability to the Board Members, the deputy Member and the CEO & President

    10. Deciding on the number of Members and deputy Members of the Board of Directors

    The Nomination and Compensation Committee of the Board of Directors proposes that eight (8) Board Members and one (1) deputy Member be elected.

    11. Deciding on the remuneration payable to the Members and deputy Members of the Board

    The Nomination and Compensation Committee of the Board of Directors proposes an annual compensation of EUR 54,000 for the Chair of the Board, EUR 42,000 for the Vice Chair, EUR 30,000 for the Board Members and EUR 15,000 for the deputy Member. In addition, a fee of EUR 500 is proposed for attendance at Board and Committee meetings.

    12. Election of the Board Members and deputy Members

    The Nomination and Compensation Committee of the Board of Directors proposes that Matti Alahuhta, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-Lindfors and Sirpa Pietikäinen be re-elected as Board Members and that Jussi Herlin be re-elected as deputy Member of the Board.

    The Nomination and Compensation Committee of the Board of Directors proposes that Anne Brunila, Juhani Kaskeala and Shunichi Kimura be elected as new Members of the Board.

    13. Deciding on the number of Auditors

    The Audit Committee of the Board of Directors proposes that two (2) Auditors be elected.

    14. Deciding on Auditor remuneration

    The Audit Committee of the Board of Directors proposes that the Auditors be reimbursed according to their invoice based on the performed Audit Proposal process.

    15. Election of the Auditors

    The Audit Committee of the Board of Directors proposes that authorized public accountants PricewaterhouseCoopers Oy and Heikki Lassila be elected as Auditors.

    16. Authorization of the Board of Directors to decide on the repurchase of treasury shares

    17. Authorization of the Board of Directors to decide on the distribution of repurchased treasury shares

    18. Closing of the Meeting

    Coffee is served in the lobby after the Meeting.

  • Proposal by the Board of Directors to authorize the Board of Directors to decide on the repurchase of treasury shares

    The company’s Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the repurchase of no more than 25,570,000 treasury shares with assets from the company’s unrestricted equity so that a maximum of 3,810,000 class A shares and a maximum of 21,760,000 class B shares may be repurchased. The consideration to be paid for the repurchased shares with respect to both class A and class B shares will be determined based on the trading price determined for class B shares on the NASDAQ OMX Helsinki on the date of repurchase.

    Class A shares will be repurchased in proportion to holdings of class A shareholders at a price equivalent to the average price paid for the company’s class B shares on the NASDAQ OMX Helsinki on the date of repurchase. Any holder wishing to offer his or her class A shares for repurchase by the company must state his or her intention to the company’s Board of Directors in writing. The company may deviate from the obligation to repurchase shares in proportion to the shareholders' holdings if all the holders of class A shares give their consent. Class B shares will be purchased in public trading on the NASDAQ OMX Helsinki at the market price as per the time of purchase.

    The Board of Directors proposes that the authorization remain in effect for a period of one year following the date of decision of the General Meeting.

    Proposal by the Board of Directors to authorize the Board of Directors to decide on the distribution of the repurchased treasury shares

    The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the distribution of treasury shares in the possession of the company so that the authorization is limited to 3,810,000 class A shares and 21,760,000 class B shares. The Board of Directors is authorized to decide to whom the shares will be given, i.e. distribute shares in directed manner in deviation from the shareholders’ pre-emptive rights.

    The Board of Directors proposes that the authorization remain in effect for a period of one year following the date of decision of the General Meeting.

    The Board of Directors’ Nomination and Compensation Committee of KONE Corporation will propose to the Annual General Meeting of KONE Corporation, to be held February 23, 2009, that the number of board members be eight, with an additional deputy member.

    The Nomination and Compensation Committee will propose that Anne Brunila, Juhani Kaskeala and Shunichi Kimura be elected as new Board members. Antti Herlin (Chairman of the Board), Sirkka Hämäläinen-Lindfors (Vice Chairman), Matti Alahuhta, Reino Hanhinen, Sirpa Pietikäinen and Jussi Herlin (as a Deputy Member) would continue on the Board. From the current Board members, Masayuki Shimono and Iiro Viinanen would resign from the Board. KONE extends its gratitude to both Mr. Shimono and Mr. Viinanen for their significant contribution as Members of the Board.

    Anne Brunila, D.Sc. (Econ.), born 1957, has served as President of the Finnish Forest Industries Federation since 2006. She is also a member of the Board of Sampo plc, The Research Institute of the Finnish Economy, the Finnish Business and Policy Forum and Aalto University Foundation. Previously, she has served as the General Director of the Finnish Ministry of Finance and in several advisory and executive positions in the Bank of Finland and the European Commission.

    Juhani Kaskeala, Admiral, born 1946, has served as Commander of the Finnish Defence Forces and as a member of the Military Committee of the European Union since 2001. During his earlier military career, he has served as Military Assistant to the President of the Republic of Finland and as a Defence Attaché in London, the Hague and Brussels.

    Shunichi Kimura, born 1951, has served as President and CEO of Toshiba Elevator and Building Systems Corporation, alliance partner of KONE, since June 2008. He has previously served in different positions in the Toshiba Group since 1975.

  • Minutes of the AGM

    This document is an unofficial translation from the Finnish original. In the event of any discrepancies between the Finnish and English versions, the Finnish version shall prevail.

    Matters relating to the Annual General Meeting

    KONE Corporation’s Annual General Meeting was held in Helsinki on February 23, 2009. The meeting approved the financial statements and discharged the responsible parties from liability for the financial period January 1–December 31, 2008.

    The Annual General Meeting approved dividends of EUR 0.645 for each of the 38,104,356 class A shares and EUR 0.65 for the 214,643,060 outstanding class B shares. The date of record for dividend distribution is February 26, 2009, and dividends will be payable on March 5, 2009.

    The number of Members of the Board of Directors was confirmed as eight and it was decided to elect one deputy Member. Re-elected as Members of the Board were Matti Alahuhta, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-Lindfors and Sirpa Pietikäinen and as deputy Member Jussi Herlin. As new Members of the Board of Directors were elected Anne Brunila, Juhani Kaskeala and Shunichi Kimura.

    The Annual General Meeting confirmed an annual compensation of EUR 54,000 for the Chairman of the Board, EUR 42,000 for the Vice Chairman, EUR 30,000 for Board Members and EUR 15,000 for the deputy Member. In addition, a compensation of EUR 500 was approved for attendance at Board and Committee meetings.

    Authorized public accountants Heikki Lassila and PricewaterhouseCoopers Oy were nominated as auditors.

    Authorization to acquire and distribute own shares

    The Board of Directors’ proposal that the Annual General Meeting authorize the Board of Directors to repurchase KONE’s own shares was approved. 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.

    Further, the Board of Directors’ proposal that the Annual General Meeting authorize the Board of Directors to decide on the distribution of any shares repurchased by the company was approved. The authorization is limited to a maximum of 3,810,000 class A shares and 21,760,000 class B shares. The Board shall have the right to decide to whom to issue the shares, i.e. to issue shares in deviation of the pre-emptive rights of shareholders. These authorizations shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.

    Decisions by the Board of Directors

    At its meeting held after the Annual General Meeting, the Board of Directors elected from among its members Antti Herlin as its Chair and Sirkka Hämäläinen-Lindfors as Vice Chair.

    Antti Herlin was elected as Chairman of the Audit Committee. Sirkka Hämäläinen-Lindfors and Anne Brunila were elected as independent Members of the Audit Committee.

    Antti Herlin was elected as Chairman of the Nomination and Compensation Committee. Reino Hanhinen and Juhani Kaskeala were elected as independent Members of the Nomination and Compensation Committee.

    The Board of Directors stated also at its meeting that from the new Members of the Board Anne Brunila and Juhani Kaskeala are independent of both the Company and of significant shareholders. Shunichi Kimura was evaluated to be independent of significant shareholders.