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Invitation to the Extraordinary Shareholders’ Meeting of KONE Corporation

Stock Exchange Release Published 02/05/2005

The shareholders of New KONE Corporation (Business ID 1927400-1), to be established in connection with the demerger of Kone Corporation (Business ID 0110139-9), are hereby summoned to the Extraordinary Shareholders’ Meeting to be held at Merisali of Hotel Kalastajatorppa, address Kalastajatorpantie 1, Helsinki, Finland on Friday, 17 June, 2005 at 11.00 a.m. Shareholder registration will begin at 10:00 a.m.
The meeting shall decide on the following matters:

1. Addition to the Board of the Directors

KONE Corporation’s Nomination Committee has proposed to the Extraordinary Shareholders’ Meeting, that the number of members to New KONE Corporation’s Board of Directors be raised to eight (8), and that the new member of the Board be Reino Hanhinen, (M.Sc. (Eng), D.Sc. (Tech.) h.c.). In accordance with the Demerger Plan, the other members of the Board are Matti Alahuhta, Jean-Pierre Chauvarie, Antti Herlin, Sirkka Hämäläinen-Lindfors, Masayuki Shimono, Gerhard Wendt and Iiro Viinanen.
Reino Hanhinen, b. 1943, M.Sc. (Eng.), D.Sc. (Tech.) h.c., is the President and CEO of YIT Corporation since 1987 and Group CEO since 2000. He has held several positions in YIT Corporation since 1968. Hanhinen is a member of YIT's Board of Directors since 1988 and Chairman, 1989–2000.

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

The Company’s own repurchased shares shall be used as compensation in possible acquisitions and in other arrangements as well as to develop the Company’s capital structure.
Altogether no more than 6,367,000 shares may be repurchased, of which no more than 952,000 are class A shares and 5,415,000 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 per cent 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 free equity of the Company.
This authorization shall remain in effect for a period of one year from the date of decision of the Extraordinary Shareholders’ Meeting.

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

The authorization is limited to a maximum of 952,000 class A shares and 5,415,000 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 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 remain in effect for a period of one year from the date of decision of the Extraordinary Shareholders’ Meeting.
Information
Documents concerning the proposals to repurchase and distribute the Company’s own shares may be inspected by the shareholders one week prior to the Extraordinary Shareholders’ Meeting at the Company headquarters at Kartanontie 1, Helsinki and on the Company’s internet site www.konecorp.com/agm.
Right to participate
In order to take part in the Extraordinary Shareholders’ Meeting, shareholders must be registered in the shareholders’ register maintained by the Finnish Central Securities Depository by 7 June, 2005. Shareholders who have placed their shares in trust must temporarily re-register the shares in their own names by 7 June, 2005 in order to participate in the meeting.
Notifying of participation
A shareholder who wishes to participate in the Extraordinary Shareholders’ Meeting must notify the Company not later than 4:00 p.m. on 13 June, 2005. Notification can be made by:

  • Mail to: KONE Corporation, Share register, Kartanontie 1, 00330 Helsinki, Finland;
  • Telefax: + 358 20 475 4309;
  • Telephone: +358 20 475 4332 / Ulla Silvonen; or
  • Completing the electronic registration form available at www.konecorp.com/agm

Shareholders are also requested to notify the Company of any proxies for the Extraordinary Shareholders’ Meeting so that they are in the Company’s possession by 13 June, 2005.
Helsinki, 2 May, 2005
The Board of Directors
Sender:
KONE Corporation
Tapio Hakakari
Director, Secretary to the Board of Directors
Minna Mars
Senior Vice President, Corporate Communications & IR
www.konecorp.com