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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 Tuesday 2 March 2021 at 11.00 a.m. at Hotel Kämp’s Symposion meeting venue, Pohjoisesplanadi 29, Helsinki. The company’s shareholders may participate in the General Meeting and exercise their shareholder rights only by voting in advance and by submitting counterproposals and asking questions in advance. Instructions for shareholders are provided in section C. Instructions for the participants in the General Meeting.
The Board of Directors of the company has resolved on exceptional meeting procedures based on the so-called temporary act which came into force on 3 October 2020. In order to prevent the spread of the COVID-19 pandemic, the Board of Directors has resolved to take the measures allowed by the said legislation so that the General Meeting can be held in a predictable manner while ensuring the health and safety of the shareholders, employees and other stakeholders of the company.
It will not be possible to participate in the General Meeting in person at the meeting venue, and no video link to the meeting venue during the meeting will be provided. The company’s Board of Directors, President and CEO and other management members will not be present at the meeting venue during the General Meeting.
The company organizes a virtual event for its shareholders on 2 March 2021 at 11.30 a.m. after the General Meeting. In the virtual event, resolutions made at the General Meeting and the review by the President and CEO will be presented. The shareholders will also have the possibility to ask questions from the management of the company. These questions are not questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act, but such questions to the General Meeting need to be asked in advance as further described below. More information on the possibility to participate in the virtual event will be found on KONE’s website at https://www.kone.com/en/investors/annual-general-meetings/. The event is not part of the General Meeting, and it will be held only in Finnish.
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
Attorney Merja Kivelä will serve as chairperson of the meeting. In the event Merja Kivelä is prevented from serving as the chairperson for a weighty reason, the Board of Directors will appoint the person they deem the most suitable to serve as the chairperson.
3. Election of person to scrutinize the minutes and to supervise the counting of votes
The company’s legal counsel Heta Rönkkö will scrutinize the minutes and supervise the counting of the votes. In the event Heta Rönkkö is prevented from scrutinizing the minutes and supervising the counting of the votes for a weighty reason, the Board of Directors will appoint the person they deem the most suitable to scrutinize the minutes and supervise the counting of the votes.
4. Recording the legality of the meeting
5. Recording the attendance at the meeting and adoption of the list of votes
Shareholders who have voted in advance within the advance voting period and who are entitled to participate in the General Meeting in accordance with Chapter 5, Sections 6 and 6 a of the Limited Liability Companies Act will be deemed shareholders participating in the meeting. The list of votes will be adopted according to the information provided by Euroclear Finland Ltd.
6. Presentation of the annual accounts, the report of the Board of Directors and the auditor’s report for the year 2020
As participation in the General Meeting is possible only in advance, the Annual Review published on 28 January 2021, which includes the company’s annual accounts, consolidated accounts, the report of the Board of Directors and the auditor’s report is deemed to have been presented to the General Meeting. The document is available on the company’s website.
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 2020 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. Further, the Board proposes that an extra dividend of EUR 0.4975 is paid for each class A share and an extra dividend of EUR 0.50 is paid for each class B share. The date of record for dividend distribution is proposed to be 4 March 2021 and the dividend is proposed to be paid on 11 March 2021.
9. Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial year 2020
10. Consideration of the Remuneration Report for governing bodies
As participation in the General Meeting is possible only in advance, the Remuneration Report published by a stock exchange release on 28 January 2021, is deemed to have been presented to the General Meeting. The Remuneration Report is available on the company’s website.
11. 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 increased as follows: Chairman of the Board of Directors EUR 220,000 (previously EUR 60,000), Vice Chairman EUR 125,000 (EUR 50,000) and board members EUR 110,000 (EUR 45,000) 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. 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.
12. 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 eight board members are elected.
13. Election of members of the Board of Directors
The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that Matti Alahuhta, Susan Duinhoven, Antti Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Juhani Kaskeala are re-elected to the Board of Directors and Jennifer Xin-Zhe Li is elected as a new member to the Board of Directors.
The proposed new member of the Board of Directors, Jennifer Xin-Zhe Li, MBA, University of British Columbia, Vancouver, Canada and bachelor’s degree, Tsinghua University, Beijing China, is born in 1967 and is a Canadian citizen. She has served since 2018 as General Partner of Changcheng Investments Partners (for private investment). She has previously served as CEO of Baidu Capital, China 2017–2018, CFO of Baidu, China 2008–2017 and in different positions in General Motors (GM) since 1994 (2005–2008 Controller, North American Operations, GMAC U.S., 2004–2005 CFO, GM China, 2001–2004 Controller and Treasurer, GM China, 1999–2001 Corporate Finance Member, GM Singapore, 1994–1999 Senior Financial analyst, both at GM U.S. and GM Canada). She is currently Member of the Board of Directors of ABB Ltd, Philip Morris International Inc., U.S., Flex Ltd, Singapore/U.S. and HSBC Asia, Hong Kong. Based on the evaluation of the Board of Directors, Jennifer Xin-Zhe Li, is independent of both the company and of significant shareholders.
Of the proposed members of the Board of Directors, Matti Ala¬huhta, Susan Duinhoven, Iiris Herlin, Ravi Kant and Juhani Kaskeala 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/.
14. Resolution on the remuneration of the auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the remuneration for the auditor for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now proposes to the General Meeting that the auditor to be elected is reimbursed as per their invoice.
15. Resolution on the number of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the number of auditors for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now 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.
16. Election of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020. Therefore, the Audit Committee of the Board of Directors now 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.
17. Authorizing the Board of Directors to decide on the repurchase of the company’s own shares
The Board of Directors proposes that the General Meeting authorizes the Board of Directors to decide on the repurchase of no more than 52,930,000 treasury shares with assets from 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 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 Nasdaq Helsinki Ltd 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 Nasdaq Helsinki Ltd on the date of repurchase. Any shareholder 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 Nasdaq Helsinki Ltd at the market price as per the time of purchase.
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 2022. The authorization terminates the authorization to decide on the repurchase of the company’s own shares given to the Board of Directors by the General Meeting on 25 February 2020.
18. 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 2022. The authorization terminates the authorization to decide on the issuance of shares given to the Board of Directors by the General Meeting on 25 February 2020.
19. Closing of the meeting
B. Documents of the General Meeting
The proposals for resolutions by the Board of Directors and its committees relating to the agenda of the General Meeting, the Remuneration Report, this notice and the 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/. Copy of the Annual Review will be sent to shareholders upon request. The minutes of the General Meeting are available on the above-mentioned website no later than 16 March 2021.
C. Instructions for the participants in the General Meeting
In order to prevent the spread of the COVID-19 pandemic, the General Meeting will be organized so that the shareholders and their proxy representatives are not allowed to participate in the General Meeting at the meeting venue. The company’s shareholders can participate in the General Meeting and exercise their shareholder rights only in advance in accordance with the instructions set out below.
1. Shareholders recorded in the shareholders’ register
Each shareholder, who is registered in the shareholders’ register of the company held by Euroclear Finland Ltd on the record date of the General Meeting, which is 18 February 2021, has the right to participate in the General Meeting. A shareholder, whose shares are registered on his/her personal Finnish book-entry account, is registered in the shareholders’ register of the company. Shareholders can participate in the General Meeting only by voting in advance and by submitting counterproposals and asking questions in advance as further described below.
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.
2. Notification of participation and voting in advance
Notification of participation may be submitted, and advance voting will begin at 12.00 noon on 4 February 2021 following the deadline for submitting counterproposals as further set out in section 5 below. A shareholder registered in the shareholders’ register of the company, who wishes to participate in the General Meeting, must register for the General Meeting and vote in advance no later than by 23 February 2021 at 4.00 p.m. by which time the notice of participation and advance votes need to be received.
A shareholder, whose shares are registered on his/her Finnish book-entry account, can submit the notice of participation and vote in advance on certain matters on the agenda between 12.00 noon on 4 February 2021 and 4.00 p.m. on 23 February 2021 in the following ways:
a) through the company's website at https://www.kone.com/en/investors/annual-general-meetings/
Private individuals will login the system through strong electronic identification with online banking codes or mobile ID. Entities will need the number of the shareholder’s book-entry account together with the business ID or other identification code for the login.
b) by mail or email
A shareholder may send the advance voting form available on the company’s website or corresponding information to Euroclear Finland Ltd by letter to Euroclear Finland Ltd, Yhtiökokous / KONE Corporation, P.O. Box 1110, FI-00101 Helsinki, Finland or by email at yhtiokokous@euroclear.eu. The advance voting form will be available on the company’s website as of 4 February 2021 at the latest.
If the shareholder participates in the General Meeting by submitting the advance votes to Euroclear Finland Ltd by mail or email, the submission of votes before the end of the notification of participation and advance voting period also constitutes due registration for the General Meeting, provided that the required information for the participation listed above is given.
The voting instructions will be available on the company’s website at https://www.kone.com/en/investors/annual-general-meetings/. Additional information is also available by telephone in the number +358(0)20 770 6873 between 9.00 a.m. and 4.00 p.m. from Monday to Friday.
In connection with the registration, a shareholder or a proxy representative shall provide required personal information. The personal information provided to KONE Corporation or Euroclear Finland Ltd will only be used in connection with the General Meeting, the virtual event organized after the General Meeting and registrations related to them.
3. Proxy representative and powers of attorney
A shareholder may participate in the General Meeting and exercise his or her rights at the meeting by way of proxy representation. Shareholders, who do not vote in advance personally, are requested, due to the COVID-19 pandemic, to exercise shareholders’ rights through a centralized proxy representative designated by the company by authorizing Attorney Teresa Kauppila from Castrén & Snellman Attorneys Ltd or a person appointed by her, to represent the shareholder at the General Meeting in accordance with the shareholder’s voting instructions. Authorizing the designated proxy representative will not accrue any costs for the shareholder, excluding possible postal fees for proxy documents. Further information about the designated proxy representative is available at https://www.castren.fi/people/teresa-kauppila/.
Shareholders may also participate in the General Meeting and exercise their rights at the meeting by way of another proxy representative. A proxy representative shall produce a dated proxy document or otherwise demonstrate his/her right to represent the shareholder at the General Meeting in a reliable manner. When a shareholder participates in the General Meeting by means of several proxy representatives representing a shareholder with shares in different book-entry accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration for the General Meeting.
Proxy and voting instruction templates are available on the company’s website at https://www.kone.com/en/investors/annual-general-meetings/ on 4 February 2021 at the latest. Any proxy documents are to be delivered primarily by email to agm@kone.com or by mail to the address KONE Corporation, Share Register, P.O. Box 7, FI-02151 Espoo, Finland. The proxy documents must be received before the end of the notification of participation period, i.e. at the latest by 23 February 2021 at 4.00 p.m. Proxy representatives of shareholders are also required to vote in advance in the manner instructed in this notice.
Submitting a proxy to the company before the end of the notification of participation period constitutes due registration for the General Meeting, provided that the required information for the participation listed in this notice is given. Submitting a proxy and voting instructions, that have been granted to the proxy representative designated by the company, before the end of the notification of participation period constitutes both due registration for the General Meeting as well as voting in advance, provided that the required information listed in this notice is given.
Holders of nominee registered shares are advised to follow the instructions of their custodian bank regarding proxies as further described in section 4. If a holder of nominee registered shares wishes to be represented by some other person than his/her custodian, the representative must present to the company a dated proxy demonstrating the right to represent the shareholder.
4. 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 he or she on the record date of the General Meeting, i.e. 18 February 2021, is entitled to be registered in the shareholders’ register held by Euroclear Finland Ltd. 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 held by Euroclear Finland Ltd at the latest by 25 February 2021 by 10.00 a.m. This registration is sufficient 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 without delay necessary instructions regarding the registration in the temporary shareholder’s register of the company, the issuing of proxy documents and registration for the General Meeting from his/her custodian bank. The account management organization 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 the time stated above. The account management organization of the custodian bank shall also arrange voting in advance on behalf of the holder of nominee registered shares within the registration period applicable to holders of nominee registered shares.
Further information is available on the company’s website at https://www.kone.com/en/investors/annual-general-meetings/.
5. Other instructions and information
Shareholders who hold at least one hundredth of all the shares in the company have a right to make counterproposals on the agenda items, to be placed for a vote. Such counterproposals are required to be sent to the company by email to agm@kone.com no later than by 2 February 2021 at 10.00 a.m. In connection with making a counterproposal, shareholders are required to provide adequate evidence of their shareholding. The counterproposal will be placed for a vote subject to the shareholder having the right to participate in the General Meeting and that the shareholder holds at least one hundredth of all shares in the company on the record date of the General Meeting. Should the counterproposal not be placed for a vote at the meeting, advance votes in favor of the proposal will not be taken into account. The company will on 4 February 2021 publish on its website at https://www.kone.com/en/investors/annual-general-meetings/ the counterproposals, if any, that may be voted on.
A shareholder has the right to ask questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act with respect to the matters to be considered at the General Meeting. Such questions may be delivered by email to agm@kone.com or by mail to the address KONE Corporation, Share Register, P.O. Box 7, FI-02151 Espoo, Finland no later than 4.00 p.m. on 16 February 2021, by which time the questions must have been received. Such questions from shareholders and the company’s management’s answers to them, and any counterproposals that have not been placed for a vote will be available on the company’s website at https://www.kone.com/en/investors/annual-general-meetings/ on 19 February 2021 at the latest. In connection with asking questions and making counterproposals, shareholders are required to provide adequate evidence of their shareholding.
On the date of this notice 28 January 2021, 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 11,006,006 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.
In Helsinki, 28 January 2021
KONE Corporation
THE BOARD OF DIRECTORS
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At the General Meeting, the following matters will be considered:
1. Opening of the meeting
2. Calling the meeting to order
Attorney Merja Kivelä will serve as chairperson of the meeting. In the event Merja Kivelä is prevented from serving as the chairperson for a weighty reason, the Board of Directors will appoint the person they deem the most suitable to serve as the chairperson.
3. Election of person to scrutinize the minutes and to supervise the counting of votes
The company’s legal counsel Heta Rönkkö will scrutinize the minutes and supervise the counting of the votes. In the event Heta Rönkkö is prevented from scrutinizing the minutes and supervising the counting of the votes for a weighty reason, the Board of Directors will appoint the person they deem the most suitable to scrutinize the minutes and supervise the counting of the votes.
4. Recording the legality of the meeting
5. Recording the attendance at the meeting and adoption of the list of votes
Shareholders who have voted in advance within the advance voting period and who are entitled to participate in the General Meeting in accordance with Chapter 5, Sections 6 and 6 a of the Limited Liability Companies Act will be deemed shareholders participating in the meeting. The list of votes will be adopted according to the information provided by Euroclear Finland Ltd.
6. Presentation of the annual accounts, the report of the Board of Directors and the auditor’s report for the year 2020
As participation in the General Meeting is possible only in advance, the Annual Review published on 28 January 2021, which includes the company’s annual accounts, consolidated accounts, the report of the Board of Directors and the auditor’s report is deemed to have been presented to the General Meeting. The document is available on the company’s website.
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 2020 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. Further, the Board proposes that an extra dividend of EUR 0.4975 is paid for each class A share and an extra dividend of EUR 0.50 is paid for each class B share. The date of record for dividend distribution is proposed to be 4 March 2021 and the dividend is proposed to be paid on 11 March 2021.
9. Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial year 2020
10. Consideration of the Remuneration Report for governing bodies
As participation in the General Meeting is possible only in advance, the Remuneration Report published by a stock exchange release on 28 January 2021, is deemed to have been presented to the General Meeting. The Remuneration Report is available on the company’s website.
11. 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 increased as follows: Chairman of the Board of Directors EUR 220,000 (previously EUR 60,000), Vice Chairman EUR 125,000 (EUR 50,000) and board members EUR 110,000 (EUR 45,000) 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. 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.
12. 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 eight board members are elected.
13. Election of members of the Board of Directors
The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that Matti Alahuhta, Susan Duinhoven, Antti Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Juhani Kaskeala are re-elected to the Board of Directors and Jennifer Xin-Zhe Li is elected as a new member to the Board of Directors.
The proposed new member of the Board of Directors, Jennifer Xin-Zhe Li, MBA, University of British Columbia, Vancouver, Canada and bachelor’s degree, Tsinghua University, Beijing China, is born in 1967 and is a Canadian citizen. She has served since 2018 as General Partner of Changcheng Investments Partners (for private investment). She has previously served as CEO of Baidu Capital, China 2017–2018, CFO of Baidu, China 2008–2017 and in different positions in General Motors (GM) since 1994 (2005–2008 Controller, North American Operations, GMAC U.S., 2004–2005 CFO, GM China, 2001–2004 Controller and Treasurer, GM China, 1999–2001 Corporate Finance Member, GM Singapore, 1994–1999 Senior Financial analyst, both at GM U.S. and GM Canada). She is currently Member of the Board of Directors of ABB Ltd, Philip Morris International Inc., U.S., Flex Ltd, Singapore/U.S. and HSBC Asia, Hong Kong. Based on the evaluation of the Board of Directors, Jennifer Xin-Zhe Li, is independent of both the company and of significant shareholders.
Of the proposed members of the Board of Directors, Matti Ala¬huhta, Susan Duinhoven, Iiris Herlin, Ravi Kant and Juhani Kaskeala 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/.
14. Resolution on the remuneration of the auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the remuneration for the auditor for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now proposes to the General Meeting that the auditor to be elected is reimbursed as per their invoice.
15. Resolution on the number of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the number of auditors for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now 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.
16. Election of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020. Therefore, the Audit Committee of the Board of Directors now 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.
17. Authorizing the Board of Directors to decide on the repurchase of the company’s own shares
The Board of Directors proposes that the General Meeting authorizes the Board of Directors to decide on the repurchase of no more than 52,930,000 treasury shares with assets from 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 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 Nasdaq Helsinki Ltd 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 Nasdaq Helsinki Ltd on the date of repurchase. Any shareholder 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 Nasdaq Helsinki Ltd at the market price as per the time of purchase.
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 2022. The authorization terminates the authorization to decide on the repurchase of the company’s own shares given to the Board of Directors by the General Meeting on 25 February 2020.
18. 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 2022. The authorization terminates the authorization to decide on the issuance of shares given to the Board of Directors by the General Meeting on 25 February 2020.
19. Closing of the meeting
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Proposals
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 2020 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. Further, the Board proposes that an extra dividend of EUR 0.4975 is paid for each class A share and an extra dividend of EUR 0.50 is paid for each class B share. The date of record for dividend distribution is proposed to be 4 March 2021 and the dividend is proposed to be paid on 11 March 2021.
Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial year 2020
Consideration of the Remuneration Report for governing bodies
As participation in the General Meeting is possible only in advance, the Remuneration Report published by a stock exchange release on 28 January 2021, is deemed to have been presented to the General Meeting. The Remuneration Report is available on the company’s website.
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 increased as follows: Chairman of the Board of Directors EUR 220,000 (previously EUR 60,000), Vice Chairman EUR 125,000 (EUR 50,000) and board members EUR 110,000 (EUR 45,000) 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. 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.
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 eight board members are elected.
Election of members of the Board of Directors
The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that Matti Alahuhta, Susan Duinhoven, Antti Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Juhani Kaskeala are re-elected to the Board of Directors and Jennifer Xin-Zhe Li is elected as a new member to the Board of Directors.
The proposed new member of the Board of Directors, Jennifer Xin-Zhe Li, MBA, University of British Columbia, Vancouver, Canada and bachelor’s degree, Tsinghua University, Beijing China, is born in 1967 and is a Canadian citizen. She has served since 2018 as General Partner of Changcheng Investments Partners (for private investment). She has previously served as CEO of Baidu Capital, China 2017–2018, CFO of Baidu, China 2008–2017 and in different positions in General Motors (GM) since 1994 (2005–2008 Controller, North American Operations, GMAC U.S., 2004–2005 CFO, GM China, 2001–2004 Controller and Treasurer, GM China, 1999–2001 Corporate Finance Member, GM Singapore, 1994–1999 Senior Financial analyst, both at GM U.S. and GM Canada). She is currently Member of the Board of Directors of ABB Ltd, Philip Morris International Inc., U.S., Flex Ltd, Singapore/U.S. and HSBC Asia, Hong Kong. Based on the evaluation of the Board of Directors, Jennifer Xin-Zhe Li, is independent of both the company and of significant shareholders.
Of the proposed members of the Board of Directors, Matti Ala¬huhta, Susan Duinhoven, Iiris Herlin, Ravi Kant and Juhani Kaskeala 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/.
Resolution on the remuneration of the auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the remuneration for the auditor for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now proposes to the General Meeting that the auditor to be elected is reimbursed as per their invoice.
Resolution on the number of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020 and in the same context also the number of auditors for the financial year 2021 was resolved. Therefore, the Audit Committee of the Board of Directors now 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.
Election of auditors
In the beginning of 2020, KONE finalized the mandatory audit firm selection procedure concerning the audit for the financial year 2021. Consequently, audit firm Ernst & Young Oy was elected as the auditor of the company for the financial year 2021 already in the General Meeting 2020. Therefore, the Audit Committee of the Board of Directors now 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.
Authorizing the Board of Directors to decide on the repurchase of the company’s own shares
The Board of Directors proposes that the General Meeting authorizes the Board of Directors to decide on the repurchase of no more than 52,930,000 treasury shares with assets from 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 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 Nasdaq Helsinki Ltd 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 Nasdaq Helsinki Ltd on the date of repurchase. Any shareholder 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 Nasdaq Helsinki Ltd at the market price as per the time of purchase.
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 2022. The authorization terminates the authorization to decide on the repurchase of the company’s own shares given to the Board of Directors by the General Meeting on 25 February 2020.
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 2022. The authorization terminates the authorization to decide on the issuance of shares given to the Board of Directors by the General Meeting on 25 February 2020.
Proposed members of the Board of Directors
The Nomination and Compensation Committee of the Board of Directors proposes to the General Meeting that Matti Alahuhta, Susan Duinhoven, Antti Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Juhani Kaskeala are re-elected to the Board of Directors and Jennifer Xin-Zhe Li is elected as a new member to the Board of Directors.
The proposed new member of the Board of Directors, Jennifer Xin-Zhe Li, MBA, University of British Columbia, Vancouver, Canada and bachelor’s degree, Tsinghua University, Beijing China, is born in 1967 and is a Canadian citizen. She has served since 2018 as General Partner of Changcheng Investments Partners (for private investment). She has previously served as CEO of Baidu Capital, China 2017–2018, CFO of Baidu, China 2008–2017 and in different positions in General Motors (GM) since 1994 (2005–2008 Controller, North American Operations, GMAC U.S., 2004–2005 CFO, GM China, 2001–2004 Controller and Treasurer, GM China, 1999–2001 Corporate Finance Member, GM Singapore, 1994–1999 Senior Financial analyst, both at GM U.S. and GM Canada). She is currently Member of the Board of Directors of ABB Ltd, Philip Morris International Inc., U.S., Flex Ltd, Singapore/U.S. and HSBC Asia, Hong Kong. Based on the evaluation of the Board of Directors, Jennifer Xin-Zhe Li, is independent of both the company and of significant shareholders.
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Decisions taken by KONE Corporation's Annual General Meeting and Board of Directors
Matters relating to the Annual General Meeting
KONE Corporation's Annual General Meeting was held in Helsinki on March 2, 2021. The meeting was held based on the so-called temporary act so that shareholders participated in the meeting and exercised their shareholder rights only by voting in advance and by submitting counterproposals and asking questions in advance.
The meeting approved the financial statements, considered the Remuneration Report for governing bodies and discharged the responsible parties from liability for the financial period January 1-December 31, 2020.
The General Meeting approved dividends in line with the Board of Director's proposal of EUR 1.7475 for each of the 76,208,712 class A shares and EUR 1.75 for each of the outstanding 442,336,257 class B shares and an extra dividend of EUR 0.4975 for each of the 76,208,712 class A shares and an extra dividend of EUR 0.50 for each of the outstanding 442,336,257 class B shares. The date of record for dividend distribution is March 4, 2021 and dividends will be payable on March 11, 2021.
The number of Members of the Board of Directors was confirmed as eight. Re-elected as Members of the Board were Matti Alahuhta, Susan Duinhoven, Antti Herlin, Iiris Herlin, Jussi Herlin, Ravi Kant and Juhani Kaskeala. Jennifer Xin-Zhe Li was elected as a new member to the Board of Directors.
The General Meeting confirmed an annual compensation of EUR 220,000 for the Chairman of the Board, EUR 125,000 for the Vice Chairman and EUR 110,000 for Board Members. Of the annual remuneration, 40 percent will be paid in class B shares of KONE Corporation and the rest in cash. In addition, it was resolved that compensation is not paid to a board member who is employed by the company.
Audit firm Ernst & Young Oy was nominated as the auditor for the term 2021.
Other decisions by the General Meeting
The General Meeting approved the authorization for the Board of Directors to repurchase KONE's own shares. Altogether no more than 52,930,000 shares may be repurchased, of which no more than 7,620,000 may be class A shares and 45,310,000 class B shares. The authorization will be valid until the conclusion of the following annual general meeting, however, at the latest until 30 June 2022.
Furthermore, the General Meeting authorized 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 referred to in chapter 10 section 1 of the Finnish Companies Act. 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 authorization will be valid until the conclusion of the following annual general meeting, however, at the latest until 30 June 2022.
Decisions by the Board of Directors
At its meeting held after the General Meeting on March 2, 2021, the Board of Directors elected from among its members Antti Herlin as its Chairman and Jussi Herlin as Vice Chairman.
Ravi Kant was elected as Chairman and Matti Alahuhta and Jussi Herlin as members of the Audit Committee. Ravi Kant and Matti Alahuhta are independent of both the company and of significant shareholders.
Antti Herlin was elected as Chairman and Matti Alahuhta, Jussi Herlin and Juhani Kaskeala as members of the Nomination and Compensation Committee. Matti Alahuhta and Juhani Kaskeala are independent of both the company and of significant shareholders.
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Shareholders had the right to ask questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act with respect to the matters to be considered at the General Meeting by delivering such questions to the company no later than 4.00 p.m. on 16 February 2021. Below such questions from shareholders and the company’s management’s answers to them.
Question: Should KONE split its share?
Answer:The liquidity of KONE share has been good and thus there have been no grounds for conducting a split.
Question: Should KONE pay dividend in multiple installments?
Answer: Thus far the feedback on paying the dividend in one installment has been positive. Also, from the cash management perspective there has been no need for several installments. Multiple installments would also result in additional administration expenses.
Question: Does KONE have any crypto currencies on its balance sheet? What is KONE’s view on bitcoin and other crypto currencies?
Answer: KONE does not have crypto currencies on its balance sheet. According to KONE’s investment policy, the company only invests in highly liquid interest rate funds and deposits in banks with high creditworthiness. Crypto currencies are not part of the asset classes included in KONE’s investment policy.
Question: Item 11 in the annual general meeting agenda suggests a significant increase (2.4-3.7 times previous remuneration) in the remuneration of the Board of Directors. Could you specify the reasons for the increase?
Answer: The principles for determining the level of remuneration for the Board of Directors are reasonableness and competitiveness in order to ensure a diverse and competent Board of Directors. The proposed increase is based on a comparison among a Nordic peer group which includes industrial companies with market value and/or scope of operations of same magnitude as KONE.
The remuneration of the Board of Directors has been significantly below the level in the peer group, and the increases in KONE’s Board of Director’s remuneration have been very moderate during recent years. The proposed increase will bring the remuneration to a more competitive level.
Question: Item 11 of the Annual General Meeting agenda. What kind of peer group was used to evaluate the level of remuneration of the Board of Directors? What are the reasons given to the public for the increase in remuneration?
Answer: The peer group used includes Nordic industrial companies with market value and/or scope of operations of same magnitude as KONE.
The principles for determining the level of remuneration for the Board of Directors are reasonableness and competitiveness in order to ensure a diverse and competent Board of Directors.
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Questions and answers to practical matters regarding KONE Corporation’s General Meeting 2021
1. How can shareholders participate in a General Meeting that is organized through exceptional meeting procedures based on the Act on temporary derogation from e.g. the Limited Liability Companies Act (the so-called temporary act)?
The company’s shareholders can participate in the General Meeting and exercise their shareholder rights only by voting in advance and by submitting counterproposals and asking questions in advance as further described in the notice convening the General Meeting.
A shareholder can submit the notice of participation and vote in advance as further described in the notice convening the General Meeting, either through the company’s website, or by mail or email. The registration link and the advance voting form for registering by mail or email will be added to this page as the registration begins.
It is not necessary to separately register for the General Meeting for a shareholder to be able to submit counterproposals and ask questions.
2. Why does the registration and advance voting begin only on 4 February 2021, and not immediately upon publishing the notice convening the General Meeting?
According to the so-called temporary act, shareholders who hold at least one hundredth of all the shares in the company have a right to make counterproposals on the agenda items, to be placed for a vote. Therefore, registration and advance voting on certain matters on the agenda can only begin after the time period reserved for submitting such counterproposals has ended.
3. How can shareholders ask questions with respect to the matters to be considered at the General Meeting?
A shareholder can exercise their right to ask questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act by asking questions in advance as further described in the notice convening the General Meeting. Such questions may be delivered by email to agm@kone.com or by mail to the address KONE Corporation, Share Register, P.O. Box 7, FI-02151 Espoo, Finland no later than 4.00 p.m. on 16 February 2021, by which time the questions must have been received.
Questions from shareholders and the company’s management’s answers to them, and any counterproposals that have not been placed for a vote, will be available on the company’s website on 19 February 2021 at the latest.
In order to ask questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act, a shareholder is not required to register for the General Meeting nor vote in advance.
4. How long is the period for the advance voting?
The advance voting starts at 12.00 noon on 4 February 2021 and it lasts until 4.00 p.m. on 23 February 2021 by which time the notice of participation and advance votes need to be received by Euroclear Finland Oy.
5. Is it possible to vote in advance without strong electronic identification (without online banking codes or mobile ID)?
Yes, you can use the advance voting form available on the company’s website. The form must be returned in a completed and signed form either as an attachment in an email or by letter to the email address / address shown in the form. The form will be added to this page as the registration begins.
6. Can the General Meeting be followed via a video connection / webcast?
The General Meeting cannot be followed via a video connection / webcast. The company organizes a virtual event for its shareholders after the General Meeting. In the virtual event resolutions made at the General Meeting and the review by the President and CEO will be presented. The shareholders will also have the possibility to ask questions from the management of the company. These questions are not questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act, but such questions to the General Meeting need to be asked in advance as further described in the notice convening the General Meeting.
More information on the possibility to participate in the virtual event will be found below in the response to question number 8 and further down this page at Information about the virtual event. The event is not part of the General Meeting and it will be held only in Finnish.
7. Will the President and CEO and/or members of the Board of Directors give speeches during the General Meeting?
No, they will not give speeches during the General Meeting. Resolutions made at the General Meeting and the review by the President and CEO will be presented in the virtual event which will be held after the General Meeting. The event is not part of the General Meeting.
8. Is it possible to participate in the webcast without participating in the General Meeting?
You can also participate only in the virtual event which is organized for the shareholders after the General Meeting through the registration link. The link to the online registration will be added to this page as the registration begins. Once the login is completed, please choose “webcast” in the invitation menu. A shareholder who has submitted its participation to the webcast will be able to watch the webcast through a link sent to them by email. After the registration has ended, an email with the link to the webcast will be sent to those shareholders who have registered for the event.
A 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 18 February 2021, has the right to participate in the webcast. Please also see answer in the question number 6 “Can the General Meeting be followed via a video connection / webcast?”
Registration to the virtual event / webcast is open until 4.00 pm on 23 February 2021.
9. Is the webcast accessible for everybody or only to the shareholders?
The virtual event organized after the General Meeting is only for the shareholders of the company and it is not accessible by other audience. A shareholder who has submitted its participation to the webcast will be able to watch the webcast through a link sent to them by email. After the registration has ended, an email with the link to the webcast will be sent to those shareholders who have registered for the event.
A 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 18 February 2021, has the right to participate in the webcast.
10. Is it possible to present questions to the management of the company during the webcast?
The shareholders will have a possibility to ask questions from the management of the company in the virtual event organized after the General Meeting through a form in the webcast window. The company will answer as many questions as possible during the time reserved for the webcast. The virtual event will be held only in Finnish.
The questions presented in the virtual event after the General Meeting are not questions referred to in Chapter 5, Section 25 of the Limited Liability Companies Act, but such questions to the General Meeting need to be asked in advance as further described in the notice convening the General Meeting. Please also see answer in the question number 3 “How can shareholders ask questions with respect to the matters to be considered at the General Meeting?”
11. What is the Board of Directors’ dividend proposal to the General Meeting and when is the dividend paid?
The Board of Directors proposes that for the financial year 2020 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. Further, the Board proposes that an extra dividend of EUR 0.4975 is paid for each class A share and an extra dividend of EUR 0.50 is paid for each class B share. The date of record for dividend distribution is proposed to be 4 March 2021 and the dividend is proposed to be paid on 11 March 2021.
12. Information on changes in withholding taxation of dividends for nominee registered shares
Changes in the withholding taxation of dividends paid to holders of nominee registered shares enter into force 2021. As a starting point, withholding tax of 35% will be withheld from dividend payments made on nominee registered shares. In case the custodians are registered with the Finnish Tax Administration’s Register of Authorised Intermediaries, lower withholding tax can be applied based on the required additional information collected. Any tax withheld in excess can be reclaimed after the year of the dividend payment by submitting a refund application to the Finnish Tax Administration, either on paper (form for corporate entities here, and for individuals here), or electronically (pending updates). You may also be able to receive a refund already during the year of dividend payment via your registered custodian. Please contact your custodian for further information.
Additional information on withholding tax reclaims can be obtained from the Tax Administration either by e-mail whtreclaims@vero.fi (for corporations only) or via the Tax Administration general telephone and chat helplines (for both individuals and corporations). Please note that KONE does not process withholding tax reclaims.
Dividends paid to Finnish tax resident holders of nominee registered shares may as of 2020 have been subject to withholding of 50% tax prepayment (ennakonpidätys). Any excess tax prepayment will be credited in the normal tax assessment process where the shareholder reports their dividend income to the Finnish Tax Administration.
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Notice of the General Meeting published 28 January 2021
Deadline for shareholders’ counterproposals 2 February 2021 at 10:00 a.m. EET
Registration and advance voting begin 4 February 2021 at 12:00 noon EET
Deadline for shareholders’ advance questions 16 February 2021 at 4:00 p.m. EET
Record date of the General Meeting 18 February 2021
Answers to advance questions of the shareholders 19 February 2021
Registration and advance voting end 23 February 2021 at 4:00 p.m. EET
Deadline for proxy documents 23 February 2021 at 4:00 p.m. EET
General Meeting 2 March 2021 at 11:00 a.m. EET
Proposed date of record for dividend distribution 4 March 2021
Proposed payment date for dividend distribution 11 March 2021
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The company organized a virtual event for its shareholders on 2 March 2021 at 11.30 a.m. after the General Meeting. In the virtual event resolutions made at the General Meeting and the review by the President and CEO were presented. The event was not part of the General Meeting, and it was held only in Finnish.
Recording of the virtual event (in Finnish)
