KONE Corporation: Notice to the General Meeting

KONE Corporation, stock exchange release, January 26, 2024 at 10.00 a.m. EET

KONE Corporation: Notice to the General Meeting

Notice is given to the shareholders of KONE Corporation of the Annual General Meeting to be held on Thursday 29 February 2024 beginning at 11.00 a.m. at Messukeskus Siipi Conference Centre, Rautatieläisenkatu 3, Helsinki. The reception of registered meeting participants and distribution of voting ballots will commence at the meeting venue at 10.00 a.m.

It is not possible for shareholders to vote in advance or participate in the General Meeting other than at the meeting venue. It is however possible for shareholders to register to follow the General Meeting via a webcast. More detailed information about the webcast is available in Section C. 4. Other instructions and information in this notice.

A. Matters on the agenda of the General Meeting

At the General Meeting, the following matters will be considered:

1. Opening of the meeting

2. Calling the meeting to order

3. Election of person to scrutinize the minutes and persons to supervise the counting of votes

4. Recording the legality of the meeting

5. Recording the attendance at the meeting and adoption of the list of votes

6. Presentation of the annual accounts, the report of the Board of Directors and the auditor's report for the year 2023

- Review by the President and CEO

The Annual Review which includes the company's annual accounts, consolidated accounts, the report of the Board of Directors and the auditor's report is available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/.

7. Adoption of the annual accounts

8. Resolution on the use of the profit shown on the balance sheet and the payment of dividends

The Board of Directors proposes that for the financial year 2023 a dividend of EUR 1.7475 is paid for each class A share and a dividend of EUR 1.75 is paid for each class B share. The date of record for dividend distribution is 4 March 2024 and the dividend is paid on 11 March 2024.

9. Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial period of 1 January - 31 December 2023

10. Consideration of the Remuneration Report for governing bodies

The Remuneration Report for governing bodies is available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/.

11. Consideration of the Remuneration Policy for governing bodies

The Remuneration Policy for governing bodies is attached to this notice (Annex 1) and available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/.

12. Resolution on the remuneration of the members of the Board of Directors

The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that the board members' annual compensation is kept unchanged: Chairman of the Board of Directors EUR 220,000, Vice Chairman EUR 125,000 and board members EUR 110,000 per year. According to the proposal, 40 percent of the annual compensation will be paid in class B shares of KONE Corporation and the rest in cash. The Nomination and Compensation Committee proposes in addition that a separate annual compensation is paid to the members of the board committees: Chairman of the Audit Committee: EUR 20,000 and members of the Audit Committee: EUR 10,000, and Chairman of the Nomination and Compensation Committee: EUR 20,000 and members of the Nomination and Compensation Committee: EUR 10,000. The annual compensation of the members of the board committees is proposed to be paid in cash. In addition, it is proposed that annual compensation is not paid to a board member who is employed by the company. Possible travel expenses are proposed to be reimbursed according to the travel policy of the company.

13. Resolution on the number of members of the Board of Directors

The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that nine board members are elected.

14. Election of members of the Board of Directors

The Nomination and Compensation Committee of the Board of Directors proposes that following persons are elected to the Board of Directors so that in case of possible vote each candidate shall be considered separately:  

a)    Matti Alahuhta (present member)
b)    Susan Duinhoven (present member)
c)    Marika Fredriksson (present member)
d)    Antti Herlin (present member)
e)    Iiris Herlin (present member)
f)    Jussi Herlin (present member)
g)    Timo Ihamuotila (new member)
h)    Ravi Kant (present member)
i)    Krishna Mikkilineni (present member)

The proposed new member of the Board of Directors, Mr. Timo Ihamuotila, Licentiate of Science (Finance), born 1966, a Finnish citizen, serves as CFO of ABB Ltd since 2017. Previously served as CFO of Nokia Corporation 2009-2016, Executive Vice-President, Sales, Markets of Nokia Corporation 2008-2009 and has held various other positions at Nokia Corporation, including Executive Vice-President, Sales and Portfolio Management, Mobile Phones 2007, Senior Vice-President, CDMA Business Unit, Mobile Phones 2004-2007, director positions in the finance function 1999-2004 and Manager of Dealing & Risk Management 1993-1996. He has also previously served as Vice-President of Nordic Derivatives Sales at Citibank plc 1996-1999 and Analyst, Assets and Liability Management at Kansallis-Osake-Pankki 1990-1993. Current key positions of trust are member of the board of SoftwareOne Holding AG and member of the board of Oras Invest Oy. Based on the evaluation of KONE Board of Directors, Timo Ihamuotila is independent of both the company and of significant shareholders.

Of the proposed members of the Board of Directors, Matti Alahuhta, Susan Duinhoven, Marika Fredriksson, Iiris Herlin, Ravi Kant and Krishna Mikkilineni are independent of the company. With the exception of Antti Herlin, Iiris Herlin and Jussi Herlin, the other Board members are independent of the company's significant shareholders.

The proposed new member of the Board of Directors is presented on the company's website at https://www.kone.com/en/investors/annual-general-meetings/.

15. Resolution on the remuneration of the auditors

The Audit Committee of the Board of Directors proposes to the General Meeting that the auditor to be elected is reimbursed as per their invoice approved by the company.

16. Resolution on the number of auditors

The Audit Committee of the Board of Directors proposes to the General Meeting that one auditor is elected for the company for a term ending at the conclusion of the following annual general meeting.

17. Election of auditors

The Audit Committee of the Board of Directors proposes to the General Meeting that audit firm Ernst & Young Oy be elected as the auditor of the company for a term ending at the conclusion of the following annual general meeting.

If Ernst & Young Oy will be elected as the auditor of the company, it will also carry out the assurance of the company's sustainability reporting for the financial year 2024 in accordance with the transitional provision of the act changing the Limited Liability Companies Act (1252/2023),and will be imbursed for this task as per their invoice approved by the company.

18. Authorizing the Board of Directors to decide on the repurchase of the company's own shares

The Board of Directors proposes to the General Meeting that the General Meeting authorizes the Board of Directors to decide on the repurchase of no more than 52,930,000 treasury shares with the company's unrestricted equity, so that a maximum of 7,620,000 class A shares and a maximum of 45,310,000 class B shares may be repurchased. The proposed maximum number of shares corresponds to approximately 10 percent of the company's registered number of shares and votes for each share class at the time of the proposal. The consideration to be paid for the repurchased shares with respect to both class A and class B shares will be determined based on the trading price determined for class B shares on public trading on the date of repurchase.

Class A shares will be repurchased in proportion to holdings of class A shareholders at a price equivalent to the average price paid for the company's class B shares on public trading on the date of repurchase. Any shareholder wishing to offer their class A shares for repurchase by the company must state their intention to the company's Board of Directors in writing. The company may deviate from the obligation to repurchase shares in proportion to the shareholders' holdings if all the holders of class A shares give their consent. Class B shares can be repurchased other than in proportion of shareholders' holdings. Class B shares will be repurchased at a price determined on public trading at the time of the repurchase.

The Board of Directors proposes that the authorization will be valid until the conclusion of the following annual general meeting, however, at the latest until 30 June 2025. The authorization terminates the authorization to decide on the repurchase of the company's own shares given to the Board of Directors by the Annual General Meeting on 28 February 2023.

19. Authorizing the Board of Directors to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares

The Board of Directors proposes to the General Meeting that the Board of Directors be authorized to decide on the issuance of shares as well as the issuance of options and other special rights entitling to shares referred to in Chapter 10, Section 1 of the Limited Liability Companies Act as follows:

The number of shares to be issued based on this authorization shall not exceed 7,620,000 class A shares and 45,310,000 class B shares. The Board of Directors decides on all the conditions of the issuance of shares and of special rights entitling to shares. The authorization concerns both the issuance of new shares as well as the transfer of treasury shares. The issuance of shares and of special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue).

The Board of Directors proposes that the authorization will be valid until the conclusion of the following annual general meeting, however, at the latest until 30 June 2025. The authorization terminates the authorization to decide on the issuance of shares given to the Board of Directors by the Annual General Meeting on 28 February 2023.

20. Closing of the meeting

B. Documents of the General Meeting

The aforementioned proposals of the Board of Directors and its committees relating to the agenda of the General Meeting, the Remuneration Report, the Remuneration Policy, this notice and Annual Review including company's annual accounts, consolidated accounts, the report of the Board of Directors and the auditor's report are on view at KONE Corporation's website at https://www.kone.com/en/investors/annual-general-meetings/. The proposals and other documents referred to above are also on view at the General Meeting. The minutes of the General Meeting are available on the above-mentioned website no later than 14 March 2024.

C. Instructions for the participants in the General Meeting

1. Shareholders recorded in the shareholders' register

Each shareholder, who is registered in the shareholders' register of the company held by Euroclear Finland Oy on the record date of the General Meeting, which is 19 February 2024, has the right to participate in the General Meeting. A shareholder, whose shares are registered on their personal Finnish book-entry account, is registered in the shareholders' register of the company. 

Registration to the General Meeting commences on 26 January 2024. A shareholder, who is registered in the shareholders' register of the company and who wants to participate in the General Meeting, shall register for the meeting no later than on 26 February 2024 at 3.00 p.m. by which time the notice must be received. Such notice can be given:

1. via KONE Corporation's website at https://www.kone.com/en/investors/annual-general-meetings/. Electronic registration requires strong identification of the shareholder or their legal representative or proxy with online banking credentials or mobile ID. If an entity is using Suomi.fi e-Authorization, the registration of the authorized person requires strong electronic identification with online banking credentials or mobile ID.
2. by e-mail to Innovatics Oy using the address: agm@innovatics.fi. Shareholders registering by e-mail shall include in the e-mail the registration form available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/ or equivalent information.
3. by mail to Innovatics Oy to the address Innovatics Oy, General Meeting / KONE Corporation, Ratamestarinkatu 13 A, FI-00520 Helsinki. Shareholders registering by mail shall include in the letter the registration form available on the company's website https://www.kone.com/en/investors/annual-general-meetings/ or equivalent information.

Any changes in the ownership of shares after the record date of the General Meeting do not affect the right to participate in the meeting or the number of votes of the shareholder.

In connection with the registration, a shareholder shall provide the information requested such as their name, date of birth or business identification number, address, telephone number and email address as well as the name of any assistant or proxy representative, as well as the date of birth of a proxy representative. The personal information is used only in connection with the General Meeting and with the processing of related necessary registrations.

Further information on registration is available by telephone during the registration period of the General Meeting by calling Innovatics Oy at +358 10 2818 909 on weekdays from 9.00 a.m. to 12.00 p.m. and from 13.00 p.m. to 16.00 p.m.

The shareholder, their authorized representative or proxy representative shall, to the extent necessary, be able to prove their identity and/or right of representation at the meeting venue.

2. Holders of nominee registered shares

A holder of nominee registered shares has the right to participate in the General Meeting by virtue of such shares, based on which they on the record date of the General Meeting, i.e. 19 February 2024, are entitled to be registered in the shareholders' register of the company held by Euroclear Finland Oy. The right to participate in the General Meeting requires, in addition, that the shareholder on the basis of such shares has been temporarily registered into the shareholders' register of the company held by Euroclear Finland Oy at the latest by 26 February 2024 by 10.00 a.m. This is considered as registration for holders of nominee registered shares wanting to participate in the General Meeting. Any changes in the ownership of shares after the record date of the General Meeting do not affect the right to participate in the meeting or the number of votes of the shareholder.

A holder of nominee registered shares is advised to request well in advance necessary instructions regarding the registration in the temporary shareholder's register of the company, the issuing of proxy documents and voting instructions and registration for the General Meeting from their custodian bank. The account manager of the custodian bank has to temporarily register a holder of nominee registered shares, who wants to participate in the General Meeting, into the shareholders' register of the company no later than by the time stated above.

In order to take into consideration possible voting instructions of a holder of nominee registered shares at the General Meeting, it requires that the shareholder has registered to the General Meeting and that the shareholder is present or represented at the General Meeting.

3. Proxy representative and powers of attorney

A shareholder may participate in the General Meeting and exercise their rights at the meeting by way of proxy representation. A proxy representative shall produce a dated proxy document or otherwise in a reliable manner demonstrate their right to represent the shareholder at the General Meeting. Proxy template is available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/. When a shareholder participates in the General Meeting by means of several proxy representatives representing the shareholder with shares in different securities accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration for the General Meeting.

Any proxy documents are requested to be submitted preferably as an attachment with the electronic registration or alternatively by mail to Innovatics Oy, General Meeting / KONE Corporation, Ratamestarinkatu 13 A, FI-00520 Helsinki or by e-mail to agm@innovatics.fi before the end of the registration period. In addition to submitting the proxy documents, the shareholder or their proxy representative shall register for the General Meeting in the manner described above in this notice.

Entities can also use Suomi.fi e-Authorization service instead of a traditional power of attorney. To do so an entity must authorize its representative in Suomi.fi e-Authorization at the address: https://www.suomi.fi/e-authorizations by using the mandate "Representation at the General Meeting". In connection with the electronic registration to the meeting, the authorized person must identify themself in the registration system through strong electronic identification after which the e-Authorization is automatically verified.

4. Other instructions and information

The meeting will be held in Finnish. Review by the President and CEO will be held in English.

Pursuant to chapter 5, section 25 of the Finnish Limited Liability Companies Act, a shareholder who is present at the General Meeting has the right to request information with respect to the matters to be considered at the General Meeting.

On the date of this notice 26 January 2024, the total number of shares in KONE Corporation is 529,395,860 shares constituted of 76,208,712 class A shares and 453,187,148 class B shares. Based on the Articles of Association, each class A share entitles its holder to one vote and each full ten class B shares entitle their holder to one vote, but each shareholder has a minimum of one vote. On the date of this notice, the company holds 12,159,159 treasury class B shares. Pursuant to the Limited Liability Companies Act, treasury shares or shares held by a subsidiary do not entitle to participation in the General Meeting.

Each shareholder, who is registered in the shareholders' register of the company held by Euroclear Finland Oy on the record date of the General Meeting, which is 19 February 2024, has a possibility to register to follow the General Meeting via a webcast. Instructions how to register as a follower for the webcast and how to follow the webcast are available on the company's website at https://www.kone.com/en/investors/annual-general-meetings/. The shareholders following the webcast may present written questions or comments during the General Meeting through a chat functionality provided in the webcast platform. Following the webcast or presenting written questions or comments is not considered participation in the General Meeting or using shareholders' right to request information or speak at the meeting in accordance with the Limited Liability Companies Act. Written questions presented in the chat are not questions referred to in the Limited Liability Companies Act. The written questions and comments presented in the chat will be brought to the audience of the General Meeting and answered in the General Meeting if the Chairperson of the meeting considers that appropriate.

The participants of the General Meeting are kindly notified that coffee will be served after the meeting.

In Helsinki, 26 January 2024

KONE Corporation

THE BOARD OF DIRECTORS

ANNEXES

Annex 1           Remuneration Policy

About KONE

At KONE, our mission is to improve the flow of urban life. As a global leader in the elevator and escalator industry, KONE provides elevators, escalators and automatic building doors, as well as solutions for maintenance and modernization to add value to buildings throughout their life cycle. Through more effective People Flow®, we make people's journeys safe, convenient and reliable, in taller, smarter buildings. In 2023, KONE had annual sales of EUR 11.0 billion, and at the end of the year over 60,000 employees. KONE class B shares are listed on the Nasdaq Helsinki Ltd. in Finland.

www.kone.com

Annex 1 Remuneration Policy