The shareholders of KONE Corporation are hereby summoned to the Extraordinary Shareholders’ Meeting to be held at Helsinki Fair Centre, address Messuaukio 1, Helsinki, Finland on Monday, 21 November, 2005 at 2.00 p.m.
Shareholder registration will begin at 1:00 p.m.
Matti Alahuhta, President of KONE, will start the meeting with a business review, after which the meeting shall decide on the following matters:
1. The Board’s proposal for a share split
The Board proposes that, in order to improve share liquidity, the number of the company’s shares be increased in proportion to the holdings of the shareholders by doubling the number of shares from 63,867,465 to 127,734,930 shares without increasing the share capital. The number of class A shares will increase to 19,052,178 and the number of class B shares to 108,682,752. As a result, each share with the current accounting par value of EUR 1.00 will be split into two shares with accounting par values of EUR 0.50.
These share amounts include 42,180 new class B shares subscribed for with KONE 2005 option rights in October. The increase in the company’s share capital will be registered on or about 26 October, 2005.
2. The Board’s proposal to amend the terms of the KONE 2005 Option Plan
The Board proposes that in the event that the Extraordinary Shareholders’ Meeting approves the share split, the number of shares that can be subscribed for with KONE 2005A and 2005B option rights be increased in proportion to the split. The total accounting par value of shares to be subscribed and the total subscription price remain unchanged. As a result, one option right will entitle to subscription for six (6) class B shares to a price of EUR 8.04 per share.
3. The Board’s proposal to issue new option rights to key personnel of the KONE Group as well as to a wholly-owned subsidiary of KONE Corporation.
It is proposed that the shareholders’ pre-emptive subscription rights be deviated from since the option rights are to form a part of the incentive and commitment program for key personnel. In the event that the Extraordinary Shareholders’ Meeting approves the share-split proposal by the Board of Directors, the maximum number of option rights issued will be 2,000,000. One option right will entitle the holder to subscription of one KONE Corporation class B share and, in total, to subscription of a maximum of 2,000,000 shares. The option rights will be marked with the symbol 2005C.
The share subscription price for 2005C option rights shall be the trade volume weighted average price of the KONE Corporation B share on the Helsinki Stock Exchange between 24 October 2005 and 18 November 2005. After the subscription price has been determined and up until the time of share subscription, the amount of KONE Corporation’s dividend shall be deducted from the subscription price as per the dividend record date.
The share subscription period for 2005C option rights shall be 1 April 2008–30 April 2010. However, the share subscription period begins only if following criteria have been attained:
the average turnover growth of the KONE Group for financial years 2006 and 2007 exceeds market growth and the Earnings before Interest and Taxes (EBIT) of the KONE Group for the financial year 2006 exceeds the EBIT for the financial year 2005 and the EBIT for the financial year 2007 exceeds the EBIT for the financial year 2006. If the above mentioned criteria have not been attained, stock options 2005C expire in the manner decided by the Board of Directors.
As a result of subscriptions with 2005C option rights, the share capital of KONE Corporation can increase by a maximum of EUR 1,000,000 and the number of B shares by a maximum of 2,000,000 new class B shares.
Documents concerning the proposals for the increase in the number of shares, the amendment of the terms of KONE 2005 option plan and the issuance of new option rights 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 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 Extraordinary Shareholders’ Meeting, shareholders must be registered in the shareholders’ register maintained by the Finnish Central Securities Depository by 11 November, 2005. Shareholders who have placed their shares in trust must temporarily re-register the shares in their own names by 11 November, 2005 in order to participate in the meeting.
Notification of participation
A shareholder who wishes to attend the Meeting must notify the Company not later than 4:00 p.m. on 16 November 2005. Notification can be made:
- Through KONE’s internet pages at www.kone.com/agm;
- By mail to: 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 Extraordinary Shareholders’ Meeting so that the proxies are in the Company’s possession by 16 November, 2005.
Helsinki, 24 October, 2005
The Board of Directors
Director, Secretary to the Board
Senior Vice President, Corporate Communications & IR
For further information, please contact:
Tapio Hakakari, Director, Secretary to the Board, tel. +358 204 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.