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Invitation to the Annual General Meeting

Stock Exchange Release Published 10/01/2006

The shareholders of KONE Corporation are hereby summoned to the Annual General Meeting to be held at the Finlandia Hall, address Mannerheimintie 13, Helsinki, Finland on Monday, 27 February, 2006 at 2:00 p.m.

Shareholder registration will begin at 1:00 p.m.

The meeting shall decide on the following matters:

1. Matters pertaining to the Annual General Meeting as stated in Article 13 of KONE’s Articles of Association:

  • presentation of the parent company and consolidated financial statements ,as well as the auditors’ reports
  • approval of the parent company and consolidated financial statements
  • measures occasioned by the profit or loss according to the approved consolidated financial statements
  • granting of discharge from liability to the members of the Board of Directors and the President
  • the number of members of the Board of Directors and their remuneration
  • the number of auditors and their remuneration
  • election of the ordinary and possible deputy members of the Board of Directors and the auditors.

The financial statement for the accounting period 1 June–31 December, 2005 as well as the Board of Directors’ proposal for distribution of dividends will be published on 27 January, 2006. The proposal of the Nomination Committee concerning the number of Board Members, their remuneration and the individual proposed, as well as the proposal of the Audit Committee concerning the number of auditors, their remuneration and the auditors proposed will be published on 15 February, 2006 at the latest.

2. Proposal by the Board of Directors to authorize the Board of Directors to decide to repurchase KONE’s own shares with assets distributable as profit as follows:

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 to be transferred for other purposes or to be cancelled.

Altogether no more than 12,785,000 shares may be repurchased, of which no more than 1,905,000 are class A shares and 10,880,000 are 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.

The class A shares shall be purchased in proportion to the existing shareholdings at the price equivalent to the average price of class B shares paid in the Helsinki Stock Exchange at the time of purchase. Any holder who wants to offer his class A shares to the Company must state his intention in writing to the Board of Directors. The Company may deviate from the obligation of purchasing shares in proportion to the shareholding if all the holders of class A shares give their permission.

Class B shares shall be purchased at public trading in the Helsinki Stock Exchange at the market price. The purchase price will be paid to the shareholders according to rules of the Helsinki Stock Exchange and the rules of the Finnish Central Securities Depository Ltd. The shares are not repurchased in proportion to the holdings of the shareholders as they are purchased in public trading.

As the class B shares are to be purchased in public trading, no information on the effect on the shareholding and the division of voting rights is available before the purchase. The repurchase of shares decreases the non-restricted equity of the Company.

This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.

3. Proposal by the Board of Directors to authorize the Board of Directors to decide to distribute any shares repurchased by KONE as follows:

The authorization is limited to a maximum of 1,905,000 class A shares and 10,880,000 class B shares repurchased by the Company. 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 distribution of the shares in public trading in the Helsinki Stock Exchange to be used as compensation in possible acquisitions.

The shares shall be distributed at least at the market price quoted for class B shares in the Helsinki Stock Exchange at the moment of their transfer.

This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.

Information

KONE’s financial statements and the proposals by the Board of Directors concerning the authorizations to repurchase and distribute own shares may be inspected by shareholders one week prior to the Annual General Meeting at KONE headquarters at Kartanontie 1, Helsinki and on the Company’s internet site at www.kone.com/agm. Copies of the documents will be sent to shareholders upon request, and they will also be available at the Meeting.

Right to participate

In order to take part in the Annual General Meeting, shareholders must be registered in the shareholders’ register maintained by the Finnish Central Securities Depository by 17 February, 2006. Shareholders who have placed their shares in trust must temporarily re-register the shares in their own names by 17 February, 2006 in order to participate in the Meeting.

Notification of participation

A shareholder who wishes to attend the Meeting must notify the Company no later than 4:00 p.m. on 22 February, 2006. Notification can be made:

  • on KONE’s internet pages at www.kone.com/agm;
  • by mail: KONE Corporation, Share register, Kartanontie 1, 00330 Helsinki, Finland;
  • by telefax: + 358 20 475 4309; or
  • by telephone: +358 20 475 4332.

Shareholders are also requested to notify the Company of any proxies for the Annual General Meeting so that the proxies are in the Company’s possession by 22 February, 2006.

Helsinki, 9 January, 2006
The Board of Directors

Sender:

KONE Corporation

Tapio Hakakari
Director, Secretary to the Board

Minna Mars
Senior Vice President, Corporate Communications & IR

For further information, please contact:
Tapio Hakakari, Director, Secretary to the Board, tel. +358 (0)204 75 4226

KONE is the world’s fourth largest elevator and escalator company and provides complete and innovative solutions for the installation, maintenance and modernization of elevators and escalators and the maintenance of automatic building doors. KONE provides safe and easy access to hundreds of millions of people daily in all parts of the world. 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.

www.kone.com