Notice is given to Kesko Corporation's shareholders of the Annual
General Meeting to be held at the Helsinki Fair Centre's congress
wing, Messuaukio 1 (congress wing entrance), Helsinki, on Monday,
26 March 2007 at 13.00 hrs.
The matters to be dealt with at the Annual General Meeting and
those listed below will be on the agenda of the Meeting:
1. Presentation of the financial statements, the annual report and
the audit report, and adoption of the financial statements
2. Use of profit
The Board of Directors proposes that a dividend of €1.50 per share
be paid for the year 2006 on the basis of the adopted balance
sheet. The dividend shall be paid to shareholders registered in
the Company's register of shareholders kept by the Finnish Central
Securities Depository Ltd on 29 March 2007. The Board of Directors
proposes that the dividend pay date be 5 April 2007. In addition,
the Board of Directors proposes that €300,000.00 be reserved for
charitable donations.
3. Discharging the Board of Directors' members and the Managing
Director from liability
4. Fees of the Board of Directors' members and auditors, and
reimbursement basis
The Board of Directors proposes that the auditor be paid according
to invoice.
5. Number and election of the Board of Directors' members
According to the Articles of Association, the company's Board of
Directors is formed of at least five (5) but no more than eight
(8) members. The Annual General Meeting held on 27 March 2006
decided that the number of Board members is seven (7), and seven
(7) members were elected to the Board for terms expiring in 2009,
at the close of the third Annual General Meeting after the
election, in accordance with the Articles of Association.
6. Number and election of auditors
The Board of Directors proposes, on the recommendation of the
Audit Committee, that the auditor be the firm of auditors
PricewaterhouseCoopers Oy, Authorised Public Accountants, who have
announced Pekka Nikula, APA, to be their auditor with principal
responsibility.
7. Proposal by the Board of Directors to amend the Articles of
Association
(Appendix 1)
The Board of Directors proposes that the Articles of Association
be amended. Most of the amendments are due to the new Companies
Act. The most important amendments are the removal of rules on
minimum and maximum capital, and that the company has one (1)
auditor which should be a firm of auditors authorised by the
Central Chamber of Commerce.
8. Share issue authorisation (Appendix 2)
The Board of Directors proposes that the Annual General Meeting
authorise the Board to decide about the issuance of new B shares.
New B shares could be issued against payment either to company
shareholders in proportion to their existing shareholdings
regardless of whether they consist of A or B shares, or, deviating
from shareholders' pre-emptive rights, to be used as consideration
in possible company acquisitions, other company business
arrangements, or to finance investments. The company must have a
weighty financial reason for deviating from pre-emptive rights.
The number of new shares issued would be 20,000,000 at the
maximum.
The authorisation would include an authorisation for the Board of
Directors to decide about share subscription price, to issue
shares against non-cash consideration, and to decide about other
matters relating to share issues.
The authorisation would be valid for two (2) years after the
decision of the Annual General Meeting.
9. Granting stock options (Appendix 3)
The Board of Directors proposes that the Annual General Meeting
decide about granting stock options for no consideration to the
Kesko Group management and other key persons and to Sincera Oy, a
subsidiary wholly owned by Kesko Corporation. The company has a
weighty financial reason for granting stock options because they
are part of Kesko's share-based incentive plan. Options are
intended to motivate the management and other key persons to work
on a long-term basis in order to increase shareholder value, and
to align their interests with those of their employer. The
aggregate number of options would be 3,000,000 at the maximum. The
options would give right to subscribe for an aggregate maximum of
3,000,000 new B shares of the company. The share subscription
price of a stock option would be based on the trade volume
weighted average price of a Kesko Corporation B share on the
Helsinki Stock Exchange in April 2007, 2008 and 2009. The exercise
period for 2007A options would be from 1 April 2010 to 30 April
2012, for 2007B options from 1 April 2011 to 30 April 2013, and
for 2007C options from 1 April 2012 to 30 April 2014.
10. Shareholder's proposal
One of the shareholders, FIM Maltti Erikoissijoitusrahasto,
proposes that new subsections 3-7 be added to §4 of the Articles
of Association (if the Annual General Meeting approves the Board
of Directors' proposal to amend the Articles of Association, new
subsections 4-8 to §3) as follows:
"An A share shall be converted into a B share at the request of
the shareholder, or in case of nominee registered shares, at the
request of the administrator of the nominee registration
registered in the book entry securities register, if the
conversion can be made within the limits of the maximum quantities
established for the share series in these Articles of Association.
The decision about the conversion of shares shall be made by the
company's Board of Directors. A written document requesting the
conversion submitted to the Board of Directors shall specify the
number of shares to be converted and the book-entry account to
which the book entry securities corresponding to the shares have
been registered.
A conversion request can be submitted at any other time except
after the company's Board of Directors has made a decision to
convene an Annual General Meeting. A request submitted between the
said decision and the next Annual General Meeting shall be
considered to have been submitted and shall be handled after the
Annual General Meeting and, if the said Annual General Meeting
makes decisions concerning the distribution of funds, share issue
or other share-based right or share redemption, the record date
established in such decisions. A conversion charge, in the amount
decided by the Board of Directors not exceeding the actual cost
incurred by the company from the conversion, shall be paid to the
company.
A share conversion request can be withdrawn until the date on
which the conversion notice is entered in the Trade Register.
The company shall submit the share conversion notice for
registration without delay. The conversion shall take effect as
soon as the notice has been registered. The company shall also
notify the Trade Register of changes in the share series resulting
from the conversion, and make any statutory notifications to the
authorities and other registrars required for the validation of
the conversion. The party requesting the conversion and the
administrator of the book-entry securities system shall be
notified of the conversion registration.
The Board of Directors has the right to give more detailed
instructions about the conversion procedure."
Display for public inspection
The financial statements and the proposals will be available for
inspection by shareholders from 7 March 2007 on the company's
Internet pages at www.kesko.fi/Investors, and at the company's
main office at Satamakatu 3, Helsinki. Copies of the documents
will be sent to shareholders on request. They will also be
available at the Annual General Meeting.
Right to attend
Shareholders have the right to attend the Annual General Meeting
if they are registered as shareholders in the company's register
of shareholders kept by the Finnish Central Securities Depository
Ltd on Friday, 16 March 2007, and have notified of their
attendance to the Annual General Meeting not later than Monday, 19
March 2007 at 16.00.
Registering in the shareholder register
Holders of nominee-registered shares can be temporarily registered
in the company's register of shareholders on 16 March 2007 for the
purpose of attending the Annual General Meeting. The request for
registration shall be made well in advance to the administrator of
the nominee registration.
Registration for the Annual General Meeting
Shareholders wishing to attend the Annual General Meeting shall
notify the company not later than 19 March 2007, at 16.00 hours,
either
- by mail to Kesko Corporation, Legal Affairs, Satamakatu 3, FI-
00016 Kesko,
- by telephone +358 1053 23211,
- by fax +358 1053 23421,
- by e-mail to taina.hohtari @ kesko.fi, or
- through the Internet pages at http://www.kesko.fi/Investors
following the instructions given there.
The notifications must be received by the end of the registration
period. Shareholders are requested to advise their names, identity
numbers or business IDs.
Proxies
Any proxies authorising the holders to attend the Annual General
Meeting shall be sent to the above mailing address by the end of
the registration period. Shareholders may use the proxy form at
www.kesko.fi/Investors in giving the authorisation.
Helsinki, 6 February 2007
KESKO CORPORATION'S BOARD OF DIRECTORS
Further information is available from Anne Leppälä-Nilsson,
General Counsel, telephone +358 1053 22347.
Kesko Corporation
Paavo Moilanen
Senior Vice President, Corporate Communications
DISTRIBUTION
Helsinki Stock Exchange
Main news media
APPENDICES
Appendix 1 (Translation)
PROPOSAL BY KESKO CORPORATION'S BOARD OF DIRECTORS
TO AMEND THE ARTICLES OF ASSOCIATION
Kesko Corporation's Board of Directors proposes to the Annual
General Meeting to be held on 26 March 2007 that the Articles of
Association be amended. The Board of Directors estimates that the
most important amendments would be the removal of the rules on
minimum and maximum capital, and that the company would have one
(1) auditor who shall be a firm of auditors authorised by the
Central Chamber of Commerce.
In addition, the Board of Directors proposes that the Annual
General Meeting decide to authorise the Board of Directors to make
any technical amendments to the Articles of Association that may
be required in connection with the registration of the Articles of
Association to the Trade Register.
KESKO CORPORATIONS' ARTICLES OF ASSOCIATION (PROPOSAL)
§ 1
Company name and domicile
The company name is Kesko Oyj, which is Kesko Abp in Swedish,
Kesko Corporation in English and Kesko AG in German.
The company domicile is Helsinki.
§ 2
Line of business
The company acts as the parent company of the Kesko Group and
conducts the operations specified later both by itself and through
subsidiaries and joint ventures.
The company carries on wholesale trade in consumer goods and
capital goods. The company has consumer goods and other products
made for it, and acts as an intermediary for raw materials,
machines and equipment. The company also engages in distribution,
forwarding, department store trade and other retail trade and
restaurant business.
The company provides services which support entrepreneurial-based
retail trade in particular. The company develops business and co-
operation concepts for the retail trade, arranges the building of
business premises and information management systems and sells and
leases them, and acts as an intermediary for the products and
services needed in retail trading.
The company engages in real estate and securities investment, as
well as other investment activity. The company can also carry out
other operations related to the business operations specified in
this section.
§ 3
Shares
The company has A shares and B shares. Concerning A shares the
minimum number is one (1) and the maximum number two hundred and
fifty million (250,000,000), while concerning B shares the minimum
number is one (1) and the maximum number two hundred and fifty
million (250,000,000), provided that the total number of shares is
at minimum two (2) and at maximum four hundred million
(400,000,000).
Each A share entitles the holder to ten (10) votes and each B
share to one (1) vote.
The company's shares are included in the book-entry securities
system.
§ 4
Board of Directors
The company has a Board of Directors, which is responsible for
company management and the appropriate organisation of operations.
The Board of Directors is formed of at least five (5) but no more
than eight (8) members.
The term of the Board of Directors' members is three (3) years so
that the term begins at the close of the General Meeting electing
the members and expires at the close of the third (3rd) subsequent
Annual General Meeting.
The Board of Directors elects a Chairman from among its members.
The Board of Directors meets at the Chairman's request. The Board
has a quorum when more than a half (1/2) of its members are
present. If the votes are evenly divided, the opinion with which
the Chairman agrees shall become the decision.
§ 5
Managing Director
The company has a Managing Director who is the Chief Executive
Officer.
§ 6
Auditor
The company has one (1) auditor who shall be a firm of auditors
authorised by the Central Chamber of Commerce.
The term of the auditor is the company's financial period and the
auditor's duties terminate at the close of the Annual General
Meeting following the election.
§ 7
Right of representation
The members of the Board of Directors, and the persons authorised
by the Board of Directors, are entitled to sign for the company,
always two (2) jointly.
§ 8
Financial period
The company's financial period is the calendar year.
§ 9
Notice of meeting
An invitation to a General Meeting shall be given to shareholders
by means of an announcement which shall be published in at least
two (2) national newspapers. The announcement shall be published
at the earliest two (2) months and at the latest one (1) week
before the date referred to in § 2.2 of chapter 4 of the Finnish
Companies Act.
To have the right to attend a General Meeting, shareholders shall
register with the company not later than on the date stated in the
announcement of the meeting, which date may not be earlier than
ten (10) days prior to the meeting.
§ 10
Annual General Meeting
The Annual General Meeting shall be held by the end of June each
year. The following matters shall be on the agenda of the meeting:
Presentation of:
1. the financial statements including the consolidated
financial statements, and the annual report
2. the audit report;
Decisions on:
3. the adoption of the financial statements;
4. the use of the profit shown in the balance sheet;
5. the discharge from liability of the members of the Board
of Directors and the Managing Director;
6. the fees and the basis for the reimbursement of expenses
to the members of the Board of Directors and the auditors;
7. the number of the Board of Directors' members;
Election of:
8. the members of Board of Directors when needed and
9. the auditor.
Appendix 2 (Translation)
PROPOSAL BY KESKO CORPORATION'S BOARD OF DIRECTORS FOR SHARE ISSUE
AUTHORISATION TO BE GIVEN TO THE BOARD OF DIRECTORS
Kesko Corporation's Board of Directors proposes to the Annual
General Meeting to be held on 26 March 2007 that the Board of
Directors is authorised to decide about the issuance of new B
shares on the following terms and conditions:
The maximum number of shares issued
By virtue of authorisation, the Board of Directors is authorised
to decide about the issuance of up to 20,000,000 new B shares. The
shares will not have a nominal value.
Issue for consideration
New B shares can only be issued against payment ("Issue for
consideration").
Subscription right and directed issue
The new shares can be issued:
· to the company's existing shareholders in proportion to
their existing shareholdings regardless of whether they consist of
A or B shares; or,
· in a directed issue deviating from shareholders' pre-
emptive rights in order for the issued shares to be used as
consideration in possible company acquisitions, other company
business arrangements, or to finance investments.
The company must have a weighty financial reason for deviating
from pre-emptive rights.
Subscription price and its recognition in the balance sheet
The Board of Directors decides about the subscription price of the
issued shares.
The Board of Directors also has the authority to issue shares
against non-cash consideration.
The subscription price is recognised in the reserve of invested
non-restricted equity.
Validity of authorisation
The share issue authorisation will be valid for two (2) years
after the decision by the General Meeting.
Other terms
The Board of Directors shall make decisions concerning any other
matters relating to share issues.
Appendix 3
PROPOSAL BY KESKO CORPORATION'S BOARD OF DIRECTORS TO THE ANNUAL
GENERAL MEETING TO GRANT STOCK OPTIONS
Kesko Corporation's Board of Directors proposes to the Annual
General Meeting to be held on 26 March 2007 that it decide on
granting stock options to the management of Kesko Corporation and
other Group companies, other key persons of the Group and Sincera
Oy, a subsidiary wholly owned by Kesko Corporation, on the
following terms and conditions.
In addition, the Board of Directors proposes that the Annual
General Meeting decide to authorise the Board of Directors to make
any technical amendments to the terms and conditions of the stock
options that may be required in connection with the registration
of the options to the Trade Register.
KESKO CORPORATION'S STOCK OPTION SCHEME 2007 TERMS AND CONDITIONS
(PROPOSAL)
I STOCK OPTION TERMS AND CONDITIONS
1. Number of stock options
Kesko Corporation ("the Company") shall grant a maximum of
3,000,000 options which entitle to subscribe for a maximum number
of 3,000,000 new Company B shares in aggregate.
2. Stock options
1. Of the stock options 1,000,000 shall be marked with the symbol
2007A, 1,000,000 with the symbol 2007B and 1,000,000 with the
symbol 2007C.
2. The stock options shall be issued in the book-entry securities
system.
3. Granting stock options
1. As decided by the Board of Directors, the stock options shall
be granted for no consideration to the management of the Company
and the other Group companies ("Kesko"), and to the rest of the
key Kesko personnel ("Option recipients").
2. To Sincera Oy ("Sincera"), a wholly owned subsidiary of the
Company, shall be granted those options which, by virtue of the
Board of Directors' decision, shall not be granted to the Option
recipients. The Company's Board of Directors shall decide about
granting options first granted to Sincera, or options returned to
it, to Option recipients employed by Kesko or to be hired by
Kesko.
3. At the issuing stage, all 2007B and 2007C options, and those of
2007A options not granted to Option recipients, shall be granted
to Sincera.
4. The Company shall notify Option recipients about their
eligibility in writing. Options shall be granted as soon as the
Option recipient has accepted the offer made by the Company.
5. Since the options are intended to be part of Kesko's share-
based incentive system, the Company has a statutory weighty
financial reason for granting options.
4. Transferability of options and obligation to offer options
1. The options for which the share subscription period specified
at Section II.2 has not begun must not be transferred to a third
party or pledged. The stock options are freely transferable after
the relevant share subscription period has begun. In case an
Option recipient transfers his or her stock options, he or she is
obliged to inform the Company without delay about the transfer in
writing. The above notwithstanding, the Board of Directors may
accept the transfer of stock options even prior to such date.
2. If an Option recipient ceases to be employed by the Kesko
Group, for any reason other than his or her death, he or she must
without delay offer, with no consideration, to the Company or to a
party ordered by the Company, those stock options which were not
exercisable by virtue of Section II.2 on the last day of his or
her employment. However, the Board of Directors may, in individual
cases, decide that the Option recipient may keep all or some of
the options under offering obligation.
3. Regardless of whether the Option recipient has or has not
offered his or her options to the Company or a party ordered by
the Company, the Company may inform the Option recipient in
writing that he or she has lost the options. Regardless of whether
the Company or a party ordered by the Company has or has not been
offered the stock options, the Company has right to apply for a
transfer and to transfer all options under offering obligation
from the Option recipient's book-entry account to an account
indicated by the Company without the consent of the Option
recipient. In addition, the Company has right to register any
option transfer restrictions and other restrictions concerning the
stock options to the Option recipient 's book-entry account
without his or her consent.
II SHARE SUBSCRIPTION TERMS AND CONDITIONS
1. Right to subscribe for new shares
1. Each stock option entitles its holder to subscribe for one (1)
new Kesko B share. As a result of the subscriptions, the number of
the Company shares may be increased by a maximum of 3,000,000 new
B shares. The share subscription price shall be recognised in the
reserve of invested non-restricted equity.
2. Sincera cannot subscribe for shares with stock options.
2. Subscription and payment
1. Subscription periods shall be:
- for stock option 2007A 1 April 2010 - 30 April 2012,
- for stock option 2007B 1 April 2011 - 30 April 2013 and
- for stock option 2007C 1 April 2012 - 30 April 2014.
2. The share subscription shall take place at the main office of
the Company or at some other location to be notified later by the
Company. Payment for shares shall be effected upon subscription to
the bank account appointed by the Company. The Company shall
decide on all matters concerning share subscription.
3. Subscription price
1. The subscription price shall be:
- for stock option 2007A, the trade volume weighted average
quotation of the Company B share on the Helsinki Stock Exchange
between 1 April and 30 April 2007,
- for stock option 2007B, the trade volume weighted average
quotation of the Company B share on the Helsinki Stock Exchange
between 1 April and 30 April 2008 and
- for stock option 2007C, the trade volume weighted average
quotation of the Company B share on the Helsinki Stock Exchange
between 1 April and 30 April 2009.
2. The subscription price of stock options shall be reduced in
special situations at times specified hereinafter at Sections
II.7.1 - II.7.2. The subscription price per share must
nevertheless always be at least €0.01.
4. Registration of stock options and shares
The stock options with which shares have been subscribed are
removed from the holder's book-entry account and the shares
subscribed for and fully paid are registered in the holder's book-
entry account.
5. Shareholder rights
Dividend rights of the shares and other shareholder rights
commence after the shares have been entered in the Trade Register.
6. Share issues, options and other special rights before share
subscription
If the Company, prior to share subscription, decides to issue
shares or new stock options or other special rights entitling to
shares, stock option holders shall have the same or equal rights
with shareholders. Equality is ensured in the manner determined by
the Board of Directors, i.e. by adjusting the quantities of shares
available for subscription, or share subscription prices, or both.
7. Rights in certain cases
1. If the Company distributes dividends or funds from the reserve
of invested non-restricted equity, from the subscription price of
a stock option is deducted the amount of the dividend or
distributable invested non-restricted equity decided after the
beginning of the period for the determination of the subscription
price but before the subscription as at the record date for each
dividend distribution or other distribution of funds.
2. If the Company reduces its share capital by distributing share
capital to shareholders, from the subscription price of a stock
option is deducted the amount of distributable share capital
decided after the beginning of the period for the determination of
the subscription price but before the subscription, as at the
record date of repayment of share capital.
3. If the Company is placed in liquidation before the share
subscription, the stock option holder is given an opportunity to
subscribe for the shares with his or her options before the
liquidation begins within a period of time determined by the Board
of Directors. If the Company is removed from the register prior to
the share subscription, the option holder has the same or equal
rights with a shareholder.
4. If the Company decides to merge into another company as the
company being acquired, or into a company to be formed in a
combination merger, or if the Company decides to demerge, the
stock option holders are given, prior to the merger or demerger,
the right to subscribe for the shares with his or her stock
options in a manner and within a period of time determined by the
Board of Directors. If the transfer of stock options is prohibited
by virtue of the above Section I.4.1, the stock option holder is,
however, entitled to transfer his or her stock options prior to
the merger or demerger within a period of time determined by the
Board of Directors. The provisions of Chapter 16 Section 13 of the
Finnish Companies Act shall be applied to the redemption of the
stock options.
5. A buy-back or redemption of own shares by the Company, or the
acquisition of stock options or other special rights entitling to
shares by the Company, shall not affect the position of stock
option holders. However, if the Company decides to acquire or
redeem own shares from all shareholders, stock option holders
shall be made an equal offer.
6. In case, before the end of subscription period, a situation
referred to in Chapter 18 Section 1 of the Finnish Companies Act
arises, in which a shareholder holds over 90% of all shares of the
Company and therefore has the right and obligation to redeem all
shares of the Company, the stock option holders are reserved the
right to subscribe for the shares with their stock options within
a period of time determined by the Company's Board of Directors.
Option holders are also entitled to sell their options to the
redeemer notwithstanding the transfer restriction referred to at
item I.4.1. A shareholder whose ownership of Company shares and
voting rights have exceeded 90%, is entitled to buy the stock
options of the option holder, and when a shareholder exercises
this right the stock option holder is under obligation to sell
them to the shareholder at a current price.
7. If the Company, prior to the share subscription, decides to
combine its share series, stock option holders have equal rights
with the holders of the Company's B shares.
III OTHER TERMS AND CONDITIONS
1. These terms and conditions are governed by Finnish law. Any
disputes concerning stock options shall be settled by arbitration
in accordance with the Rules of the Arbitration Institute of the
Central Chamber of Commerce of Finland.
2. The Company's Board of Directors shall decide on other matters
relating to options and may impose binding rules on Option
recipients.
3. The Company is entitled to withdraw, with no consideration, the
stock options which have not been transferred or with which shares
have not been subscribed for, if the stock option holder acts
against these terms and conditions, decisions made or orders given
by the Company Board of Directors on the basis of these terms and
conditions, or applicable law or orders of the authorities.
4. These terms and conditions have been prepared in Finnish,
Swedish and English. In case of any discrepancy between the
Finnish, Swedish and English terms and conditions, the Finnish
terms and conditions shall apply.
5. The stock option documentation is available for inspection at
the Company's main office in Helsinki.