The shareholders of KONE Corporation are hereby summoned to the Annual General Meeting to be held at Finlandia Hall, Mannerheimintie 13, Helsinki, on Monday February 25, 2008 at 11:00 am. Shareholder registration will begin at 10:00 am.
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 the Companies Act:
The company’s financial statements for the 2007 financial period as well as the Board of Directors’ proposal for distribution of profits was published on January 25, 2008. The company’s Board of Directors proposes that a dividend of EUR 1.29 be paid for each of the 19,052,178 class A shares and EUR 1.30 for each of the outstanding 106,955,663 class B shares. If the General Meeting approves the Board of Directors’ proposal for dividends, the date of record for dividend distribution will be February 28, 2008 and dividends will be paid on March 6, 2008.
The Board of Directors’ Nomination and Compensation Committee proposes that the number of board members and the composition of the Board of Directors be kept unchanged. Therefore, Antti Herlin, Sirkka Hämäläinen-Lindfors, Matti Alahuhta, Reino Hanhinen, Sirpa Pietikäinen, Masayuki Shimono, and Iiro Viinanen would be elected, subject to their consent, as board members, and Jussi Herlin would be elected as a deputy member. In addition, the Nomination and Compensation Committee proposes that the board members be compensated as follows: Chair of the Board of Directors EUR 54,000, Vice Chair EUR 42,000, board members EUR 30,000, and deputy members EUR 15,000 per year, as well as an EUR 500 fee per meeting for Board and Committee meetings. The Board of Directors’ Audit Committee proposes that authorized public accountants PricewaterhouseCoopers Oy and Heikki Lassila be re-elected, subject to their consent, as auditors.
2. Amendment of the Articles of Association
The company’s Board of Directors proposes that the General Meeting decide to amend the Articles of Association due to the new Companies Act, which entered into force on September 1, 2006, as follows:
- the stipulations on the minimum and maximum amount of the company’s capital and number of shares and on the nominal value of the shares will be abolished, and the wording otherwise specified without amending the content (3 and 4 §)
- the stipulations concerning the record date will be abolished (5 §)
- the terminology concerning the representation of the company will be specified (8 §)
- references to the delivery dates for summons to General Meetings will be amended to correspond to the new Companies Act (11 §)
- the agenda of the Annual General Meeting of Shareholders will be amended to correspond to the new Companies Act (13 §)
- Articles 3, 4 and 5 as well as 8 and 9 of the Articles of Association will be combined so that the amended Articles of Association will consist of 12 Articles in total, and the numbering of the entire Articles of Association will be amended correspondingly.
3. Share split, i.e. increasing the number of shares through a share issue without payment
The company’s Board of Directors proposes that the number of shares in the company be increased by issuing new shares to the shareholders without payment in proportion to their holdings so that one class A share will be given for each class A share and one class B share will be given for each class B share. A total of 19,052,178 class A shares and 109,300,416 class B shares will be issued, so that after the share issue, there will be a total of 38,104,356 class A shares and a total of 218,600,832 class B shares. The share issue will be implemented in the book-entry system and does not require measures by the shareholders. The shareholders who are registered in the company’s shareholder register on the record date, February 28, 2008, are entitled to shares. New shares will produce shareholder rights as of the registration of the share issue, however, the new shares will not entitle their holders to the dividends to be decided in the General Meeting to be held on February 25, 2008. The New Shares are to be admitted to public trading and entered into the book-entry system on February 29, 2008.
4. Confirmation of the fulfillment of the share subscription criteria for the 2005C option rights and crediting the subscription price for the shares issued based on the 2005A, 2005B, 2005C, and 2007 option rights in part to the paid-up unrestricted equity reserve
The General Meeting of November 21, 2005 decided on issuing a maximum of 2,000,000 2005C option rights conditionally so that the share subscription period will only begin if the average net sales growth of the KONE Group for the 2006 and 2007 financial periods exceeds market growth and the Earnings Before Interest and Taxes (EBIT) of the KONE Group for the 2006 financial period exceeds the EBIT for the 2005 financial period and the EBIT for the 2007 financial period exceeds the EBIT for the 2006 financial period. The company’s Board of Directors proposes that the share subscription period for the 2005C option rights be confirmed to begin on April 1, 2008.
In addition, the company’s Board of Directors proposes that EUR 0.5 of the subscription price to be paid for the new shares issued based on the 2005A, 2005B, 2005C, and 2007 option rights (EUR 0.25 if the General Meeting approves the increase to the number of shares described above under section 3) be credited to the share capital, and that the remaining part be credited to the paid-up unrestricted equity reserve. Should the number of shares be increased, the number of shares to be subscribed for based on the 2005A, 2005B, 2005C and 2007 option rights will increase, and the share subscription price will decrease in the same proportion.
5. Authorization of the Board of Directors to decide on the repurchase of treasury shares and on the distribution of the repurchased treasury shares
The company’s Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the repurchase of no more than 12,785,000 treasury shares with assets from the company’s unrestricted equity so that a maximum of 1,905,000 class A shares and a maximum of 10,880,000 class B shares may be repurchased. 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 the OMX Nordic Exchange Helsinki on the date of repurchase.
Treasury shares may be repurchased in order to develop the company’s capital structure, to finance or carry out acquisitions or other transactions, to implement the company’s share-based incentive plans, to be transferred for other purposes, or to be cancelled. As a result of the share repurchase, the company’s distributable unrestricted equity will decrease.
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 the OMX Nordic Exchange Helsinki on the date of repurchase. Any holder wishing to offer his or her class A shares for repurchase by the company must state his or her 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 will be purchased in public trading on the OMX Nordic Exchange Helsinki at the market price as per the time of purchase. Class B shares will not be repurchased in proportion to the holdings of the shareholders as they will be repurchased in public trading.
The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the distribution of treasury shares in the possession of the company so that the authorization is limited to 1,905,000 class A shares and 10,880,000 class B shares. The Board of Directors is authorized to decide to whom the shares will be given, i.e. distribute shares in directed manner in deviation from the shareholders’ pre-emptive rights. The repurchased shares may be distributed as consideration in possible acquisitions and other transactions as well as be used 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 selling the treasury shares in public trading on the OMX Nordic Exchange Helsinki for the purpose of financing possible acquisitions. The shares will be distributed at least at the market price at the moment of their distribution, such price to be determined on the basis of the trading price for class B shares determined in public trading on the OMX Nordic Exchange Helsinki.
Should the General Meeting approve the increase to the number of shares described above under section 3, the number of shares subject to the authorization will increase correspondingly.
The Board of Directors proposes that the authorizations will replace the authorizations granted by the Annual General Meeting of February 26, 2007 and that they will remain in effect for a period of one year following the date of decision of the General Meeting.
Availability of Documents
The company’s financial statements and the proposals by the Board of Directors are available for inspection by the shareholders one week prior to the General Meeting at the company’s main office at Kartanontie 1, Helsinki, and on the company’s internet pages at www.kone.com/agm. Copies of the documents will be sent to the shareholders upon request, and they will also be available at the General Meeting.
Right to Participate
In order to participate in the General Meeting, shareholders must be registered in the company’s shareholder register maintained by the Finnish Central Securities Depository at the latest on February 15, 2008. In order to participate in the General Meeting, nominee-registered shareholders must contact their account operator in order for the shareholder to be temporarily entered into the shareholder register at the latest on February 15, 2008.
Declaration of Intention to Attend
A shareholder who wishes to attend the General Meeting must declare his or her intention to attend to the company no later than 4:00 pm on February 20, 2008. The declaration can be made:
- via KONE’s Internet pages at www.kone.com/agm,
- by letter to KONE Corporation, Share Register, PL 7, 02151 Espoo, Finland,
- by telefax to +358 20 475 4523, or
- by phone to +358 20 475 4548.
Shareholders are requested to notify the company of any proxies for the General Meeting so that the proxies are in the company’s possession by the end of the registration period on February 20, 2008.
Helsinki, January 25, 2008
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 customers with industry-leading elevators, escalators and innovative solutions for maintenance and modernization. KONE also provides maintenance services for automatic building doors. In 2007, KONE had annual net sales of EUR 4.1 billion and approximately 32,500 employees. KONE class B shares are listed on the OMX Nordic Exchange Helsinki in Finland.