KONE Corporation: Notice to the General Meeting
KONE Corporation, stock exchange release, February 2, 2022 at 2.00 p.m. EET
KONE Corporation: Notice to the General Meeting
Notice is given to the shareholders of KONE Corporation of the Annual General Meeting to be held on Tuesday 1 March 2022 at 11.00 a.m. at the premises of Castrén & Snellman Attorneys Ltd, Eteläesplanadi 14, 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 8 May 2021. 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 will organize a virtual event for its shareholders on 1 March 2022 at 11.30 a.m. after the General Meeting. In the virtual event, the resolutions made at the General Meeting and the review by the President and CEO will be presented. 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. 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 can 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 that 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 2021
As participation in the General Meeting is possible only in advance, the Annual Review published on 2 February 2022, 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 2021 a dividend of EUR 1.7475 is paid for each class A share and a dividend of EUR 1.7500 is paid for each class B share. Further, the Board proposes that an extra dividend of EUR 0.3475 is paid for each class A share and an extra dividend of EUR 0.3500 is paid for each class B share. The date of record for dividend distribution is proposed to be 3 March 2022 and the dividend is proposed to be paid on 10 March 2022.
9. Resolution on the discharge of the members of the Board of Directors and the President and CEO from liability for the financial year 2021
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 2 February 2022, 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 kept unchanged: Chairman of the Board of Directors EUR 220,000, Vice Chairman EUR 125,000 and board members EUR 110,000 per year. According to the proposal, 40 percent of the annual compensation will be paid in class B shares of KONE Corporation and the rest in cash. The Nomination and Compensation Committee proposes in addition that a separate annual compensation is paid to the members of the board committees: Chairman of the Audit Committee: EUR 20,000 and members of the Audit Committee: EUR 10,000, and Chairman of the Nomination and Compensation Committee: EUR 20,000 and members of the Nomination and Compensation Committee: EUR 10,000. The annual compensation of the members of the board committees will be paid in cash. In addition, it is proposed that annual compensation is not paid to a board member who is employed by the company. Possible travel expenses are proposed to be reimbursed according to the travel policy of the company.
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 nine 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 Jennifer Xin-Zhe Li are re-elected to the Board of Directors and Krishna Mikkilineni and Andreas Opfermann are elected as new members to the Board of Directors.
The proposed new member of the Board of Directors, Mr. Krishna Mikkilineni, Ph.D. (Electrical and Computer Engineering), B.Tech. (Electronics and Communications Engineering), born 1959, a U.S. citizen, has previously served in different positions in Honeywell International Inc. both in the U.S.A. and India since 1985 until 2019. His latest positions were Chief Technology Officer, Chief Information Officer, Chief of Integrated Supply Chain & Customer Service globally across the Honeywell Corporation. Prior to that, he was President of Honeywell Technology Solutions. He currently serves as a Senior Advisor for various start-ups, and is a general partner in a Venture Capital fund and a board member in a Private Equity firm. He actively manages a private philanthropic foundation focused on education and elder care. Based on the evaluation of KONE Board of Directors, Krishna Mikkilineni is independent of both the company and of significant shareholders.
The proposed new member of the Board of Directors, Mr. Andreas Opfermann, Ph.D. (Physics and Mathematics), a German citizen, has served in Linde plc since 2005, currently as Executive Vice President, Clean Energy since 2021. He has previously served in Linde in different management positions in Technology, Innovation and Clean Energy and was also responsible for Corporate Strategy, R&D, Americas and Northern Europe. Prior to Linde, Mr Opfermann worked at McKinsey & Company 1999-2005. Based on the evaluation of KONE Board of Directors, Andreas Opfermann is independent of both the company and of significant shareholders.
Of the proposed members of the Board of Directors, Matti Alahuhta, Susan Duinhoven, Iiris Herlin, Ravi Kant and Jennifer Xin-Zhe Li 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 members of the Board of Directors are presented on the company’s website at https://www.kone.com/en/investors/annual-general-meetings/.
14. Resolution on the remuneration of the auditors
The Audit Committee of the Board of Directors proposes to the General Meeting that the auditor to be elected is reimbursed as per their invoice.
15. Resolution on the number of auditors
The Audit Committee of the Board of Directors proposes to the General Meeting that one auditor is elected for the company for a term ending at the conclusion of the following annual general meeting.
16. Election of auditors
The Audit Committee of the Board of Directors proposes to the General Meeting that audit firm Ernst & Young Oy be elected as the auditor of the company for a term ending at the conclusion of the following annual general meeting.
17. Authorizing the Board of Directors to decide on the repurchase of the company’s own shares
The Board of Directors proposes to the General Meeting that the General Meeting authorizes the Board of Directors to decide on the repurchase of no more than 52,930,000 treasury shares with 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 proposed maximum number of shares corresponds to approximately 10 percent of the company’s registered number of shares and votes for each share class at the time of the proposal. The consideration to be paid for the repurchased shares with respect to both class A and class B shares will be determined based on the trading price determined for class B shares on public trading on the date of repurchase.
Class A shares will be repurchased in proportion to holdings of class A shareholders at a price equivalent to the average price paid for the company’s class B shares on public trading on the date of repurchase. Any shareholder wishing to offer 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 at the market price as per the time of repurchase.
The Board of Directors proposes that the authorization will be valid until the conclusion of the following annual general meeting, however, at the latest until 30 June 2023. 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 2 March 2021.
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 2023. The authorization terminates the authorization to decide on the issuance of shares given to the Board of Directors by the General Meeting on 2 March 2021.
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/. A 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 15 March 2022.
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 17 February 2022, 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 9 February 2022 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 22 February 2022 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 9 February 2022 and 4.00 p.m. on 22 February 2022 in the following ways:
a) through the company's website at https://www.kone.com/en/investors/annual-general-meetings/
Private individuals will log into 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. If an entity is using Suomi.fi e-Authorization, the registration of the authorized person requires strong electronic identification with online banking codes or mobile ID.
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 9 February 2022 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 9 February 2022 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 22 February 2022 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.
Entities can also use Suomi.fi e-Authorization service instead of a traditional power of attorney. To do so an entity must authorize its representative in Suomi.fi e-Authorization at the address: https://www.suomi.fi/e-authorizations by using the mandate “Representation at the General Meeting”. In connection with the registration to the meeting, the authorized person must identify him/herself in Euroclear Finland Ltd’s general meeting services through strong electronic identification after which the e-Authorization is automatically verified.
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. 17 February 2022, 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 24 February 2022 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.
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 7 February 2022 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 9 February 2022 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 15 February 2022, 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 18 February 2022 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 2 February 2022, 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 11,433,525 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, 2 February 2022
KONE Corporation
THE BOARD OF DIRECTORS
About KONE
At KONE, our mission is to improve the flow of urban life. As a global leader in the elevator and escalator industry, KONE provides elevators, escalators and automatic building doors, as well as solutions for maintenance and modernization to add value to buildings throughout their life cycle. Through more effective People Flow®, we make people's journeys safe, convenient and reliable, in taller, smarter buildings. In 2021, KONE had annual sales of EUR 10.5 billion, and at the end of the year over 60,000 employees. KONE class B shares are listed on the Nasdaq Helsinki Ltd. in Finland.
www.kone.com