Matters Relating to the Annual General Meeting
KONE Corporation’s Annual General Meeting was held in Helsinki on 27 February, 2006. The meeting approved the financial statements and discharged the responsible parties from liability for the financial period 1 June–31 December, 2005.
The Annual General Meeting approved dividends of EUR 0.99 for each of the 19,052,178 class A shares and EUR 1.00 for the 108,428,422 outstanding class B shares. The date of record for dividend distribution is 2 March, 2006, and dividends will be payable on 9 March, 2006. The rest of the distributable equity, EUR 1,078 million, will be retained and carried forward.
The number of members of the Board of Directors was confirmed at eight. Sirpa Pietikäinen was elected as new member of the Board. Re-elected as full members of the Board were Matti Alahuhta, Jean-Pierre Chauvarie, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-Lindfors, Masayuki Shimono and Iiro Viinanen. The term of the Board ends at the next Annual General Meeting.
The Annual General Meeting confirmed a monthly salary of EUR 4,000 for the Chairman of the Board, EUR 3,000 for the Vice Chairman, and EUR 2,000 for Board Members. In addition, 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 with assets distributable as profit was approved. The shares may be repurchased 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 they may be transferred for other purposes or cancelled.
Altogether no more than 12,785,000 shares may be repurchased, of which no more than 1,905,000 are to be class A shares and 10,880,000 class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of own shares that the Company is allowed to possess. The proposed amount corresponds to nearly 10 percent of the share capital of the Company and the total voting rights.
In addition, 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 Board of Directors is authorized to decide to whom and in which order the repurchased shares will be distributed. The Board of Directors may decide on the distribution of repurchased shares otherwise than in proportion to the existing pre-emptive right of shareholders to purchase the Company’s own shares.
The repurchased shares may be used as compensation in acquisitions and in other arrangements as well as to implement the Company’s share-based incentive plans in the manner and to the extent decided by the Board of Directors. The Board of Directors has also the right to decide on the sale of the shares in public trading on the Helsinki Stock Exchange with the proceeds to be used as compensation in possible acquisitions. The shares shall be distributed at least at the market price quoted for class B shares on the Helsinki Stock Exchange at the moment of their transfer.
These authorizations shall remain in effect for a period of one year from the date of decision of the Annual General Meeting. Precise information about the authorization to acquire and distribute own shares can be found in the invitation to the Annual General Meeting, which has been published on the KONE website at www.kone.com.
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 Chairman and Sirkka Hämäläinen-Lindfors as Vice Chairman.
Antti Herlin was elected as Chairman of the Audit Committee. Sirkka Hämäläinen-Lindfors and Iiro Viinanen were elected as independent members of the Committee.
It was decided that the Nomination and Compensation Committees be combined into a single committee. Antti Herlin was elected as Chairman of the Nomination and Compensation Committee. Reino Hanhinen and Sirkka Hämäläinen-Lindfors were elected as independent members of the Committee.
Jukka Ala-Mello, who previously served as one of the corporation’s auditors, was invited to serve as Secretary to the Board. Tapio Hakakari, who served as Secretary to the Board since 1998, had indicated that he was no longer available for the position. The Board expressed its appreciation to Hakakari for his significant contribution during his period of service.
Secretary to the Board of Directors
Senior Vice President, Corporate Communications & IR
For further information, please contact:
Minna Mars, SVP, Corporate Communications & IR, tel. +358 (0)204 75 4501
KONE is one of the world’s leading elevator and escalator companies. It provides its customers with industry-leading elevators and escalators and innovative solutions for their maintenance and modernization. KONE also provides maintenance of automatic building doors. KONE has annual net sales of approximately EUR three billion and about 27,000 employees. Its class B shares are listed on the Helsinki Exchanges.