Annual general meeting 2006

The Annual General Meeting of KONE was held Monday February 27, 2006.

The shareholders of KONE Corporation are hereby summoned to the Annual General Meeting to be held at the Finlandia Hall, address Mannerheimintie 13, Helsinki, Finland on Monday, 27 February, 2006 at 2:00 p.m. Shareholder registration will begin at 1:00 p.m.
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:
- presentation of the parent company and consolidated financial statements ,as well as the auditors’ reports
- approval of the parent company and consolidated financial statements
- measures occasioned by the profit or loss according to the approved consolidated financial statements
- granting of discharge from liability to the members of the Board of Directors and the President
- the number of members of the Board of Directors and their remuneration
- the number of auditors and their remuneration
- election of the ordinary and possible deputy members of the Board of Directors and the auditors.
The financial statement for the accounting period 1 June–31 December, 2005 as well as the Board of Directors’ proposal for distribution of dividends will be published on 27 January, 2006. The proposal of the Nomination Committee concerning the number of Board Members, their remuneration and the individual proposed, as well as the proposal of the Audit Committee concerning the number of auditors, their remuneration and the auditors proposed will be published on 15 February, 2006 at the latest.
2. Proposal by the Board of Directors to authorize the Board of Directors to decide to repurchase KONE’s own shares with assets distributable as profit as follows:
The shares may be repurchased in order to develop the capital structure of the Company, finance or carry out possible acquisitions, implement the Company’s share-based incentive plans, or to be transferred for other purposes or to be cancelled.
Altogether no more than 12,785,000 shares may be repurchased, of which no more than 1,905,000 are class A shares and 10,880,000 are class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of own shares that the Company is allowed to possess. The proposed amount corresponds to nearly 10 percent of the share capital of the Company and the total voting rights.
The class A shares shall be purchased in proportion to the existing shareholdings at the price equivalent to the average price of class B shares paid in the Helsinki Stock Exchange at the time of purchase. Any holder who wants to offer his class A shares to the Company must state his intention in writing to the Board of Directors. The Company may deviate from the obligation of purchasing shares in proportion to the shareholding if all the holders of class A shares give their permission.
Class B shares shall be purchased at public trading in the Helsinki Stock Exchange at the market price. The purchase price will be paid to the shareholders according to rules of the Helsinki Stock Exchange and the rules of the Finnish Central Securities Depository Ltd. The shares are not repurchased in proportion to the holdings of the shareholders as they are purchased in public trading.
As the class B shares are to be purchased in public trading, no information on the effect on the shareholding and the division of voting rights is available before the purchase. The repurchase of shares decreases the non-restricted equity of the Company.
This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.
3. Proposal by the Board of Directors to authorize the Board of Directors to decide to distribute any shares repurchased by KONE as follows:
The authorization is limited to a maximum of 1,905,000 class A shares and 10,880,000 class B shares repurchased by the Company. The Board of Directors is authorized to decide to whom and in which order the repurchased shares will be distributed. The Board of Directors may decide on the distribution of repurchased shares otherwise than in proportion to the existing pre-emptive right of shareholders to purchase the Company’s own shares.
The repurchased shares may be used as compensation in acquisitions and in other arrangements as well as 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 has also the right to decide on the distribution of the shares in public trading in the Helsinki Stock Exchange to be used as compensation in possible acquisitions.
The shares shall be distributed at least at the market price quoted for class B shares in the Helsinki Stock Exchange at the moment of their transfer.
This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.
Information
KONE’s financial statements and the proposals by the Board of Directors concerning the authorizations to repurchase and distribute own shares may be inspected by shareholders one week prior to the Annual General Meeting at KONE headquarters at Kartanontie 1, Helsinki and on the Company’s internet site at www.kone.com/agm. Copies of the documents will be sent to shareholders upon request, and they will also be available at the Meeting.
Right to participate
In order to take part in the Annual General Meeting, shareholders must be registered in the shareholders’ register maintained by the Finnish Central Securities Depository by 17 February, 2006. Shareholders who have placed their shares in trust must temporarily re-register the shares in their own names by 17 February, 2006 in order to participate in the Meeting.
Notification of participation
A shareholder who wishes to attend the Meeting must notify the Company no later than 4:00 p.m. on 22 February, 2006. Notification can be made:
- on KONE’s internet pages at www.kone.com/agm;
- by mail: KONE Corporation, Share register, Kartanontie 1, 00330 Helsinki, Finland;
- by telefax: + 358 20 475 4309; or
- by telephone: +358 20 475 4332.
Shareholders are also requested to notify the Company of any proxies for the Annual General Meeting so that the proxies are in the Company’s possession by 22 February, 2006.
Helsinki, 9 January, 2006
The Board of Directors
At the General Meeting, the following matters will be considered:
1. Opening of the meeting
2. Election of chairman and secretary for the meeting
3. Election of one person to audit the minutes
4. Legitimacy and quorum of the meeting
5. List of votes
6. Presentation of Financial Statements for the accounting period 1 June-31 December, 2005 including the Income Statement, Balance Sheet and Board Report as well as the Consolidated Income Statement and Consolidated Balance Sheet
7. Presentation of the Independent Auditors’ report concerning the Group and parent company
8. Approval of the Income Statement, the Balance Sheet, the Consolidated Income Statement and Consolidated Balance Sheet
9. Actions in consequence of profit or loss in accordance with the approved Balance Sheet
10. Granting of discharge from liability for the Board Members and the President
11. Deciding on the number of the Members and deputy Members of the Board of Directors
12. Deciding on the remuneration payable to the Members of the Board
13. Election of the Board Members and, if necessary, deputy Members
14. Deciding on the number of the Auditors
15. Deciding on the Auditor remuneration
16. Election of the Auditors
17. Proposal by the Board of Directors to authorize the Board of Directors to decide on repurchasing KONE’s own shares with assets distributable as profit
18. Proposal by the Board of Directors to authorize the Board of Directors to decide on distributing any shares repurchased by KONE
19. Other possible matters
20. Closing of the Meeting
Dividend
KONE Corporation’s Board proposes that dividends for the accounting period 1 June–31 December, 2005 be EUR 0.99 for each class A share and EUR 1.00 per class B share.
KONE Nomination Committee’s Proposal for Composition of Board, and Audit Committee’s Proposal for Auditors
KONE Corporation’s Nomination Committee proposes to KONE Corporation’s Annual General Meeting on 27 February, 2006 that eight members be elected to the Board of Directors.
The Nomination Committee proposes that Sirpa Pietikäinen be elected as a new Board Member. In making the Board member selections, attention is paid to the candidates’ broad and mutually complementary experience, know-how, and their views of both KONE’s and other businesses. Sirpa Pietikäinen’s, M.Sc. (Econ.), born 1959, work experience includes serving as a Member of Parliament and in the Ministry of the Environment in Finland. Specifically, she brings knowledge of sustainable development, housing politics, and community planning issues to the Board.
The Nomination Committee also proposes that Antti Herlin, Sirkka Hämäläinen-Lindfors, Matti Alahuhta, Jean-Pierre Chauvarie, Reino Hanhinen, Masayuki Shimono and Iiro Viinanen be re-elected to the Board. Jean-Pierre Chauvarie, Reino Hanhinen, Sirkka Hämäläinen-Lindfors, Sirpa Pietikäinen and Iiro Viinanen are independent of the corporation.
Gerhard Wendt, who has served on the Board from 1979, did not wish to be considered for re-election. KONE extends its gratitude to Mr. Wendt for his significant contribution in developing the company both as President (1989-1994) and as Board Member.
The Nomination Committee proposes a monthly salary of EUR 4,000 for the Chairman of the Board, EUR 3,000 for the Vice Chairman, and EUR 2,000 for Board Members. In addition, compensation of EUR 500 is proposed for attendance at Board and Committee meetings.
The term of the board ends at the next Annual General Meeting. Tapio Hakakari will continue as secretary to the Board.
KONE’s Audit Committee proposes to KONE Corporation’s Annual General Meeting on 27 February, 2006 that two auditors be elected. The proposed auditors are authorized public accountants Heikki Lassila and PricewaterhouseCoopers Ltd.
Proposal by the Board of Directors to authorize the Board of Directors to decide to repurchase KONE’s own shares with assets distributable as profit as follows:
The shares may be repurchased in order to develop the capital structure of the Company, finance or carry out possible acquisitions, implement the Company’s share-based incentive plans, or to be transferred for other purposes or to be cancelled.
Altogether no more than 12,785,000 shares may be repurchased, of which no more than 1,905,000 are class A shares and 10,880,000 are class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of own shares that the Company is allowed to possess. The proposed amount corresponds to nearly 10 percent of the share capital of the Company and the total voting rights.
The class A shares shall be purchased in proportion to the existing shareholdings at the price equivalent to the average price of class B shares paid in the Helsinki Stock Exchange at the time of purchase. Any holder who wants to offer his class A shares to the Company must state his intention in writing to the Board of Directors. The Company may deviate from the obligation of purchasing shares in proportion to the shareholding if all the holders of class A shares give their permission.
Class B shares shall be purchased at public trading in the Helsinki Stock Exchange at the market price. The purchase price will be paid to the shareholders according to rules of the Helsinki Stock Exchange and the rules of the Finnish Central Securities Depository Ltd. The shares are not repurchased in proportion to the holdings of the shareholders as they are purchased in public trading.
As the class B shares are to be purchased in public trading, no information on the effect on the shareholding and the division of voting rights is available before the purchase. The repurchase of shares decreases the non-restricted equity of the Company.
This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.
Proposal by the Board of Directors to authorize the Board of Directors to decide to distribute any shares repurchased by KONE as follows:
The authorization is limited to a maximum of 1,905,000 class A shares and 10,880,000 class B shares repurchased by the Company. The Board of Directors is authorized to decide to whom and in which order the repurchased shares will be distributed. The Board of Directors may decide on the distribution of repurchased shares otherwise than in proportion to the existing pre-emptive right of shareholders to purchase the Company’s own shares.
The repurchased shares may be used as compensation in acquisitions and in other arrangements as well as 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 has also the right to decide on the distribution of the shares in public trading in the Helsinki Stock Exchange to be used as compensation in possible acquisitions.
The shares shall be distributed at least at the market price quoted for class B shares in the Helsinki Stock Exchange at the moment of their transfer.
This authorization shall replace the authorization granted by the Extraordinary Shareholders’ Meeting on 17 June, 2005 and shall remain in effect for a period of one year from the date of decision of the Annual General Meeting.
Matters Relating to the Annual General Meeting
KONE Corporation’s Annual General Meeting was held in Helsinki on 27 February, 2006. The meeting approved the financial statements and discharged the responsible parties from liability for the financial period 1 June–31 December, 2005.
The Annual General Meeting approved dividends of EUR 0.99 for each of the 19,052,178 class A shares and EUR 1.00 for the 108,428,422 outstanding class B shares. The date of record for dividend distribution is 2 March, 2006, and dividends will be payable on 9 March, 2006. The rest of the distributable equity, EUR 1,078 million, will be retained and carried forward.
The number of members of the Board of Directors was confirmed at eight. Sirpa Pietikäinen was elected as new member of the Board. Re-elected as full members of the Board were Matti Alahuhta, Jean-Pierre Chauvarie, Reino Hanhinen, Antti Herlin, Sirkka Hämäläinen-Lindfors, Masayuki Shimono and Iiro Viinanen. The term of the Board ends at the next Annual General Meeting.
The Annual General Meeting confirmed a monthly salary of EUR 4,000 for the Chairman of the Board, EUR 3,000 for the Vice Chairman, and EUR 2,000 for Board Members. In addition, compensation of EUR 500 was approved for attendance at Board and Committee meetings.
Authorized public accountants Heikki Lassila and PricewaterhouseCoopers Oy were nominated as auditors.
Authorization to Acquire and Distribute Own Shares
The Board of Directors’ proposal that the Annual General Meeting authorize the Board of Directors to repurchase KONE’s own shares with assets distributable as profit was approved. The shares may be repurchased in order to develop the capital structure of the Company, finance or carry out possible acquisitions, implement the Company’s share-based incentive plans, or they may be transferred for other purposes or cancelled.
Altogether no more than 12,785,000 shares may be repurchased, of which no more than 1,905,000 are to be class A shares and 10,880,000 class B shares, taking into consideration the provisions of the Companies Act regarding the maximum amount of own shares that the Company is allowed to possess. The proposed amount corresponds to nearly 10 percent of the share capital of the Company and the total voting rights.
In addition, the Board of Directors’ proposal that the Annual General Meeting authorize the Board of Directors to decide on the distribution of any shares repurchased by the company was approved. The Board of Directors is authorized to decide to whom and in which order the repurchased shares will be distributed. The Board of Directors may decide on the distribution of repurchased shares otherwise than in proportion to the existing pre-emptive right of shareholders to purchase the Company’s own shares.
The repurchased shares may be used as compensation in acquisitions and in other arrangements as well as 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 has also the right to decide on the sale of the shares in public trading on the Helsinki Stock Exchange with the proceeds to be used as compensation in possible acquisitions. The shares shall be distributed at least at the market price quoted for class B shares on the Helsinki Stock Exchange at the moment of their transfer.
These authorizations shall remain in effect for a period of one year from the date of decision of the Annual General Meeting. Precise information about the authorization to acquire and distribute own shares can be found in the invitation to the Annual General Meeting, which has been published on the KONE website at www.kone.com.
Decisions by the Board of Directors
At its meeting held after the Annual General Meeting, the Board of Directors elected from among its members Antti Herlin as its Chairman and Sirkka Hämäläinen-Lindfors as Vice Chairman.
Antti Herlin was elected as Chairman of the Audit Committee. Sirkka Hämäläinen-Lindfors and Iiro Viinanen were elected as independent members of the Committee.
It was decided that the Nomination and Compensation Committees be combined into a single committee. Antti Herlin was elected as Chairman of the Nomination and Compensation Committee. Reino Hanhinen and Sirkka Hämäläinen-Lindfors were elected as independent members of the Committee.
Jukka Ala-Mello, who previously served as one of the corporation’s auditors, was invited to serve as Secretary to the Board. Tapio Hakakari, who served as Secretary to the Board since 1998, had indicated that he was no longer available for the position. The Board expressed its appreciation to Hakakari for his significant contribution during his period of service.