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, 26 February 2007 at 11:00 a.m. Shareholder registration will begin at 10:00 a.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 and in Chapter 5 of Companies Act:
-presentation of the parent company and consolidated financial statements and Board of Directors´ Report ,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 parent company´s and consolidated balance sheet
-granting of discharge from liability to the members of the Board of Directors and the President & CEO
-the number of members and deputy 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 financial year 2006 as well as the Board of Directors’ proposal for distribution of dividends was published on 26 January 2007. The Board of Directors proposes that a dividend of EUR 0.99 be paid for each 19 052 178 class A share and EUR 1.00 for each outstanding 106 675 697 class B share. If the Annual General Meeting approves the Board of Directors´ proposal for dividends, the date of record for dividend distribution is 1 March 2007 and dividends will be paid on 8 March 2007. KONE Corporation´s Compensation and Nomination Committee proposes that the number of Board Members, the Board Members and their remuneration be kept otherwise unchanged, but that the number of members be decreased from the current eight to seven and one deputy member be elected. Therefore the Board Members Antti Herlin, Sirkka Hämäläinen-Lindfors, Matti Alahuhta, Reino Hanhinen, Sirpa Pietikäinen, Masayuki Shimono and Iiro Viinanen would be re-elected to the Board and Jussi Herlin would be elected a new deputy member. Of the current Board Members Jean-Pierre Chauvarie would not be re-elected. KONE´s Audit Committee proposes that authorised public accountants PricewaterhouseCoopers and Heikki Lassila be elected as auditors.
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:
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 may 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 its 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 minimum and maximum consideration for the shares to be purchased is determined for both class A and class B shares on the basis of the trading price for class B shares determined on the Helsinki Stock Exchange on the time of purchase.
The class A shares shall be purchased in proportion to the existing class A share 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 to purchase 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 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 Annual General Meeting on 27 February 2006 and shall remain in effect for a period of one year from the date of the 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:
The authorization is limited to a maximum of 1,905,000 class A shares and 10,880,000 class B shares. The Board of Directors is authorized to decide to whom and in which order the repurchased shares are 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 also has the right to decide on the distribution of the shares in public trading in the Helsinki Stock Exchange for the purpose of financing possible acquisitions.
The shares shall be distributed at least at the market price at the moment of their transfer determined on the basis of the trading price for class B shares determined in public trading in the Helsinki Stock Exchange.
This authorization shall replace the authorization granted by the Annual General Meeting on 27 February 2006 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.
4. Proposal by the Board of Directors to authorize the Board of Directors to decide to grant option rights in deviation from the shareholders’ pre-emptive subscription right to key personnel of the group and to a wholly owned subsidiary of the company
On the basis of this authorization, the Board of Directors may decide to grant to the key personnel of the group or to the company’s wholly owned subsidiary, Kone Capital Oy, option rights, which entitle to subscribe a maximum of 2,000,000 new class B shares. The company has a weighty financial reason to grant option rights, because the option rights are intended to form a part of the group’s incentive and commitment plan for key personnel.
This authorization will remain in force for one year following the decision of the Annual General Meeting.
KONE’s financial statements and the proposals by the Board of Directors concerning the authorizations to repurchase and distribute its 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 16 February 2007. Shareholders who have placed their shares in trust must contact their account operator in order for the shareholder to be temporarily re-registered in the shareholders’ register by 16 February 2007 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 21 February 2007. Notification can be made:
-on KONE’s internet pages at www.kone.com/agm;
-by mail: KONE Corporation, Share register, PL 7, 02151 Espoo, Finland;
-by telefax: + 358 (0)204 75 4523; or
-by telephone: +358 (0)204 75 4548.
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 21 February 2007.
Helsinki, 26 January 2007
THE BOARD OF DIRECTORS
Secretary to the Board
Senior Vice President,
Corporate Communications & IR
For further information, please contact:
Jukka Ala-Mello, Secretary to the Board, tel. +358 (0)204 75 4226
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. In 2006, KONE had annual net sales of EUR 3.6 billion and about 29,000 employees. Its class B shares are listed on the Helsinki Stock Exchange in Finland.