Wärtsilä Corporation, Notice to convene annual general meeting, 28
February 2008 at 9.45 am EET
The shareholders of Wärtsilä Corporation are hereby invited to the
Company's Annual General Meeting on Wednesday, 19 March 2008,
starting at 4.00 pm. The meeting will be held in the Congress Wing of
the Helsinki Fair Centre, Messuaukio 1, 00520 Helsinki, Finland.
Shareholders who have registered to attend the Annual General Meeting
shall be received from 2.30 pm onwards.
Agenda:
1. The matters stipulated in § 12 of the Articles of Association and
in Finnish Companies Act.
2. Proposal to amend the Articles of Association.
The Board of Directors proposes to the Annual General Meeting that
the Articles of Association be amended in their entirety. The primary
content of the amendments is as follows:
- The Object of the Company shall be amended to read as follows:"The company shall engage, either directly or through its
subsidiaries and associated companies, in the machine construction
and engineering industries, as well as in activities related to
energy production and distribution and in other industrial and
commercial business activities, including service, financing, design
and consulting activities related thereto. The company may deal in
securities and engage in other investment activities."
- The provisions concerning the Company's minimum and maximum share
capital, the nominal value of each share and the record date shall be
removed, and Articles 3, 4 and 11 concerning the Company's shares
shall be combined into a single article that shall read as follows:"The company's shares belong to Series A or Series B. The total
amount of shares of Series A may not be higher than 100,000,000 and
the total amount of shares Series B may not be higher than
200,000,000.
At the General Meeting, each Series A share shall carry ten (10)
votes, and each Series B share one (1) vote. The method of voting
shall be determined by the chairperson of the meeting.
The shares of the company are incorporated in the book-entry
securities system."
- The Article concerning one or several Executive Vice Presidents
shall be amended to refer to a single President's Deputy.
- The wording of the Article concerning the right to represent the
company shall be amended to conform with the new Finnish Companies
Act. The provisions concerning procuration shall be combined in the
same article.
- The article concerning Auditors shall be amended so that the
Company shall have one CPA-authorized auditor.
- The Summons to the Shareholders' General Meeting shall be published
not later than seventeen (17) days prior to the Meeting instead of
the period defined according to the old Finnish Companies Act.
- The list of matters to be covered by the Annual General Meeting
shall be amended to conform with the new Finnish Companies Act.
3. Proposal to combine the share series and pertaining to the related
directed free share issue and
amendment to the Articles of Association
The Board of Directors proposes to the Annual General Meeting that
the two share series be combined so that following the measures taken
to combine the share series the Company would have only a single
class of shares that is traded publicly and whose shares carry one
(1) vote each and have in all other ways equal rights. The
combination of share series involves a directed free share issue for
holders of Series A shares and amendments to the Articles of
Association.
The condition for the adoption of the proposal of the Board of
Directors is that the Annual General Meeting has resolved to amend
the Articles of Association in accordance with Item 2 in the Summons
to the Shareholders' General Meeting in such a way that the Company's
shares no longer carry a nominal value. The following itemized
proposals of the Board of Directors form an entity that requires the
adoption of all its individual items.
Shareholders representing more than half of the Company's A-shares
have in advance announced in writing that they support this proposal
and they have given their consent to the arrangement.
The Board of Directors proposes to the Annual General Meeting the
following measures to combine the share series:
Combination of share series
The Board of Directors proposes that the Company's share series be
combined without increasing share capital by removing the relevant
sections in the Articles of Association pertaining to the share
series as described below, wherein each Series A share would be
converted into a share corresponding to the current Series B share.
In connection with combining the share series, the Series A shares
that have been converted into shares corresponding to the current
Series B shares would be incorporated in the book-entry securities
system and are estimated to become traded publicly as of 27 March
2008. The record date for the combination of share series would be 26
March 2008. The combination of share series would not require any
actions by shareholders.
Directed free share issue
The Board of Directors proposes that, in connection with the
combination of share series, a free share issue be directed to
holders of Series A shares in such a way that, disapplying the
pre-emptive right of the shareholders, holders of Series A shares
would receive one (1) share free of charge for each nine (9) Series A
shares. Based on the combination of share series and the directed
free share issue a holding of nine (9) series A shares becomes a
holding of ten (10) company shares ("exchange ratio").
The Board has obtained a fairness opinion from UBS Limited and
according to the opinion the exchange ratio is fair from a financial
point of view to the Company's shareholders. The auditor of the
Company, KPMG Oy Ab, has given a statement confirming that the
grounds for not applying the pre-emptive rights of the shareholders
in the directed free share issue as per this proposal are in
accordance with the Finnish Companies Act.
Each holder of Series A shares as of the record date 26 March 2008
would have the right to receive new shares.
The new shares would be distributed among holders of Series A shares
in proportion to ownership and recorded directly to the holder's
book-entry securities account on the basis of information on the
record date and in accordance with the regulations and procedures of
the book-entry securities system.
If the number of Series A shares held by the holder of Series A
shares is not divisible by nine (9), the remaining shares will be
given to Nordea Bank Finland Plc to sell for the account of the
holders of Series A shares whose number of Series A shares is not
divisible by nine (9), as specified in more detail by the Board of
Directors and in accordance with the agreement between the Company
and Nordea Bank Finland Plc. The directed free share issue would not
require any actions by shareholders.
A maximum of 2,619,954 shares would be released in directed free
share issue.
The new shares will carry full rights from the moment they are
registered. For the sake of clarity it should be noted that the new
shares do not convey the right to the dividend to be decided by the
Annual General Meeting on 19 March 2008.
The Company's Board of Directors is authorized to resolve about other
terms and practical aspects of the directed free share issue.
Amendment to the Articles of Association
The Board of Directors proposes that the Annual General Meeting
resolve to remove the stipulations in the Articles of Association
concerning the different share series from Article 3 of the Articles
of Association in accordance with the changes to the Articles of
Association proposed in Item 2 in the Summons to the Shareholders'
General Meeting in such a way that Article 3 "The Shares" would read
as follows:"The shares of the company are incorporated in the book-entry
securities system."
Display of documents
The documents concerning the financial statements and the proposal of
the Board of Directors for the decisions mentioned in items 2 and 3
above will be available for inspection by shareholders for one week
before the meeting at the Company's head office. The Annual Report
for the financial period 2007 will be available as of 3 March 2008 on
the company's website, www.wartsila.com/Investors.
The Annual Report and copies of the documents and proposals mentioned
above will be available at the Annual General Meeting. They will also
be mailed to shareholders on request.
Election of the Board of Directors
The Nomination Committee of the Board of Directors proposes that the
Board of Directors should continue to have six (6) members. The
Nomination Committee proposes that Ms Maarit Aarni-Sirviö, Mr
Kaj-Gustav Bergh, Mr Kari Kauniskangas, Mr Antti Lagerroos, Mr Bertel
Langenskiöld, and Mr Matti Vuoria be elected as members.
Election of the Auditors
The Board of Directors recommends to the Annual General Meeting that
the firm of public auditors KPMG Oy Ab be appointed as the Company's
auditors for the financial year 2008.
Right to Attend
Shareholders registered no later than 7 March 2008 in the Company's
list of shareholders maintained by the Finnish Central Securities
Depository Ltd have the right to attend the Annual General Meeting.
Notification of Attendance
Shareholders wishing to attend the Annual General Meeting are
required to inform the Company thereof not later than 4.00 pm on 14
March 2008:
- either in writing to Wärtsilä Corporation, Share Register, P.O. Box
196, FIN-00531 Helsinki
- by e-mail yk@wartsila.com
- via the internet: www.wartsila.com/agm_register
- by fax +358 10 7095 283, or
- by telephone (09.00 am to 12.00 noon on weekdays) + 358 10 7095
282/Rahola.
Notification of participation must reach the Company before the
notification period expires at 4.00 pm on Friday 14 March 2008.
Letters authorizing a proxy to exercise a shareholder's voting right
at the Annual General Meeting should reach the Company before the
notification period expires.
Dividend Payment
The Board of Directors has proposed to the Annual General Meeting on
4 February 2008 that a dividend of EUR 2.25 per share be paid on the
2007 financial period. In addition the Board of Directors proposes
that an extra dividend of EUR 2.00 be paid on the 2007 financial
period.
The dividends will be paid to shareholders who are registered in the
list of shareholders maintained by Finnish Central Securities
Depository Ltd on the record date, which is 26 March 2008. The
payment date proposed by the Board for the dividends is 2 April 2008.
Helsinki, Finland, 27 February 2008
Board of Directors
ATTACHMENTS WHICH YOU ARE ADVICED TO READ
Proposal by the board of directors for the annual general meeting 19
march 2008 to amend the articles of association
Proposal of the board of directors to combine the share series and
pertaining to the related directed free share issue and amendments to
the articles of association
Proposal of the Board for distribution of an extra dividend
UBS Disclaimer
PROPOSAL BY THE BOARD OF DIRECTORS FOR THE ANNUAL GENERAL MEETING 19
MARCH 2008 TO AMEND THE ARTICLES OF ASSOCIATION
Proposal by the Board of Directors for the new Articles of
Association:
ARTICLES OF ASSOCIATION
ART. 1 NAME AND DOMICILE
The name of the company is Wärtsilä Oyj Abp, in English Wärtsilä
Corporation. The company is domiciled in the City of Helsinki.
ART. 2 OBJECT OF THE COMPANY
The company shall engage, either directly or through its subsidiaries
and associated companies, in the machine construction and engineering
industries, as well as in activities related to energy production and
distribution and in other industrial and commercial business
activities, including service, financing, design and consulting
activities related thereto. The company may deal in securities and
engage in other investment activities.
ART. 3 THE SHARES
The company's shares belong to Series A or Series B. The total amount
of shares of Series A may not be higher than 100,000,000 and the
total amount of shares Series B may not be higher than 200,000,000.
At the General Meeting, each Series A share shall carry ten (10)
votes, and each Series B share one (1) vote. The method of voting
shall be determined by the chairperson of the meeting.
The shares of the company are incorporated in the book-entry
securities system.
ART. 4 THE BOARD OF DIRECTORS
A Board comprising five to eight (5-8) ordinary directors shall be
responsible for the management of the company and the appropriate
organization of its operation. The term of the Board member shall
continue from their election until the closing of the subsequent
first Annual General Meeting.
The Board shall elect from among its members a Chairman and a Deputy
Chairman, who shall hold office until the close of the subsequent
Annual General Meeting.
ART. 5 PRESIDENT
The company shall have a President and, upon need, a President's
Deputy who are appointed by the Board.
ART. 6 RIGHT TO REPRESENT THE COMPANY
The Chairman of the Board and the President, each separately, and
Board members, two jointly, shall represent the company.
In addition the Board can grant procuration to specific individuals
in such a way that the holders of procuration may represent the
company, two jointly, or one holder of procuration together with a
member of the Board.
ART. 7 AUDITOR
The company shall have one CPA-authorized auditor.
The auditor's duties shall cease at the close of the subsequent
Annual General Meeting.
ART. 8 CONVOCATION
Summons to the Shareholders' General Meeting shall be published in
not less than two (2) daily newspapers, which are commonly
distributed in Finland, as determined by the Board. The summons shall
be published not earlier than two (2) months prior to the Meeting and
not later than seventeen (17) days prior to the Meeting.
Shareholders who have given prior notice of their attendance in a
General Meeting in the way indicated in the convocation shall have
the right to participate in the Meeting. The time period for giving
such notice shall not end earlier than ten (10) days prior to the
Meeting.
ART. 9 GENERAL MEETING OF SHAREHOLDERS
The Annual General Meeting shall be held in the company's place of
domicile not later than the end of June on a date determined by the
Board.
At the Annual General Meeting, the following shall be
decided
1. Approval of the financial statements and the consolidated
financial statements,
2. Use of the profit indicated by the balance sheet,
3. Discharge from liability of the President and members of the
Board,
4. Remuneration of Board members,
5. Number of Board members,
6. Remuneration of auditor,
7. Election of Board members and
8. Election of auditor;
discussed
9. Other issues included in the summons
ART. 10 FINANCIAL YEAR
The company's financial year shall be the calendar year.
Helsinki, 27 February 2008
Board of Directors
PROPOSAL OF THE BOARD OF DIRECTORS TO COMBINE THE SHARE SERIES AND
PERTAINING TO THE RELATED DIRECTED FREE SHARE ISSUE AND AMENDMENTS TO
THE ARTICLES OF ASSOCIATION
In accordance with the Articles of Association the Company's shares
belong to Series A or Series B, which differ in that Series A shares
carry ten (10) votes while Series B shares carry one (1) vote. The
total number of Series A shares is 23,579,587 and Series B shares
72,389,974. Both Series A and Series B shares are traded publicly on
the OMX Nordic Exchange Helsinki Main List.
The Board of Directors proposes to the Annual General Meeting that
the two share series be combined so that following the measures taken
to combine the share series the Company would have only a single
class of shares that is traded publicly and whose shares carry one
(1) vote each and have in all other ways equal rights. The
combination of share series involves a directed free share issue for
holders of Series A shares and partial amendment to the Articles of
Association.
The condition for the adoption of the proposal of the Board of
Directors is that the Annual General Meeting has resolved to amend
the Articles of Association in accordance with Item 2 in the Summons
to the Shareholders' General Meeting in such a way that the Company's
shares no longer carry a nominal value. The following itemized
proposals of the Board of Directors form an entirety that requires
the adoption of all its individual items.
Shareholders representing more than half of the Company's A-shares
have in advance announced in writing that they support this proposal
and they have given their consent to the arrangement
The Board of Directors proposes to the Annual General Meeting the
following measures to combine the share series:
Combination of share series
The Board of Directors proposes that the Company's share series be
combined without increasing share capital by removing the relevant
sections in the Articles of Association pertaining to the share
series as described below, wherein each Series A share would be
converted into a share corresponding to the current Series B share.
In connection with combining the share series, the Series A shares
that have been converted into shares corresponding to the current
Series B shares would be incorporated in the book-entry securities
system and are estimated to become traded publicly as of 27 March
2008. The record date for the combination of share series would be 26
March 2008. The combination of share series would not require any
actions by shareholders.
Directed free share issue
The Board of Directors proposes that, in connection with the
combination of share series, a free share issue be directed to
holders of Series A shares in such a way that, disapplying the
pre-emptive right of the shareholders, holders of Series A shares
would receive one (1) share free of charge for each nine (9) Series A
shares. Based on the combination of the share series and the directed
free share issue the ownership of nine (9) Series A shares changes to
be the ownership of ten (10) ordinary shares ("exchange ratio").
Each holder of Series A shares as of the record date 26 March 2008
would have the right to receive new shares.
The new shares would be distributed among holders of Series A shares
in proportion to ownership and recorded directly to the holder's
book-entry securities account on the basis of information on the
record date and in accordance with the regulations and procedures of
the book-entry securities system.
If the number of Series A shares held by the holder of Series A
shares is not divisible by nine (9), the remaining shares will be
given to Nordea Bank Finland Plc to sell for the account of the
holders of Series A shares whose number of Series A shares is not
divisible by nine (9), as specified in more detail by the Board of
Directors and in accordance with the agreement between the Company
and Nordea Bank Finland Plc. The directed free share issue would not
require any actions by shareholders.
A maximum of 2,619,954 shares would be released in directed free
share issue.
The new shares will carry full rights from the moment they are
registered. For the sake of clarity it should be noted that the new
shares do not convey the right to the dividend to be decided by the
Annual General Meeting on 19 March 2008.
The Company's Board of Directors is authorized to resolve about other
terms and practical aspects of the directed free share issue.
In considering the grounds for a directed free share issue, the Board
of Director has taken into consideration also the following factors:
that (i) listed companies in both Finland and internationally are
increasingly switching to the practice of having just one class of
shares, and combining the two share series is expected to improve the
trading turnover of the Company's shares when trading is focused on
one class of shares; (ii) the turnover of Series A shares has been
just 9% that of Series B shares over the past 12 months; (iii) the
combination of share series as proposed by the Board of Directors
would decrease the voting rights of previous Series A shares from
approximately 76.5% to approximately 26.6% and increase the voting
rights of previous Series B shares correspondingly from approximately
23.5% to approximately 73.4%; (iv) the premium that would be given to
holders of Series A shares in connection with the combination of
share series is customary and reasonable; and (v) the dilution
effect of the proposed share issue on the ownership proportion for
holders of Series B shares would be approximately 2.7%, which can
also be considered customary and reasonable in connection with the
combining of the share series.
The combination of share series and the connected directed free share
issue would simplify and clarify the Company's ownership structure
and standardize the rights connected with the shares. This is
expected to increase interest in the Company's shares and lead to an
increase in the turnover of the Company's shares. In addition, the
clarification of the ownership structure is expected to improve the
opportunities to use the Company's shares for raising financing.
It is the view of the Board of Directors that combining share series
is in the interests of the Company and all its shareholders. The
Board of Directors considers that, taking into consideration the
above, there are exceptional financial grounds in terms of the
Company and taking into consideration the interests of all its
shareholders for a directed share issue in order to combine the share
series.
The Board of Directors believes that the combination of share series
and the connected directed free share issue would create benefits for
holders of Series B shares and for the Company that are equal to
those for holders of Series A shares through the directed free share
issue. It is the view of the Board of Directors that combining share
series and the connected directed free share issue can be considered
reasonable in terms of the overall benefit for the Company and all
its shareholders.
The Board has obtained a fairness opinion from UBS Limited and
according to the opinion the exchange ratio is fair from a financial
point of view to the Company's shareholders. The auditor of the
Company, KPMG Oy Ab, has given a statement confirming that the
grounds for not applying the pre-emptive rights of the shareholders
in the directed free share issue as per this proposal are in
accordance with the Finnish Companies Act.
Amendments to the Articles of Association
The Board of Directors proposes that the Annual General Meeting
resolve to remove the stipulations in the Articles of Association
concerning the different share series from Article 3 of the Articles
of Association in accordance with the changes to the Articles of
Association proposed in Item 2 in the Summons to the Shareholders'
General Meeting in such a way that Article 3 "The Shares" would read
as follows:"The shares of the company are incorporated in the book-entry
securities system."
Helsinki, 27 February 2008
Board of Directors
PROPOSAL OF THE BOARD FOR DISTRIBUTION OF AN EXTRA DIVIDEND
The parent company's distributable funds total 361,451,221.40 euros
taken into consideration the Board's previous proposal for a dividend
of 2.25 euros/share made on 4 February 2008. There are 95,969,561
shares with dividend rights.
In addition to the proposal made on 4 February 2008, the Board
proposes to the Annual General Meeting that the company's
distributable earnings be disposed in the following way:
EUR
An extra dividend of 2.00 per share be paid, making a 191,939,122.00
total of
To be retained in shareholders' equity 169,512,099.40
Total 361,451,221.40
No significant changes have taken place in the company's financial
position since the end of the financial year. The company's liquidity
is good and in the opinion of the Board of Directors the proposed
extra dividend will not put the company's solvency at risk.
Helsinki, 27 February 2008
Board of Directors
UBS DISCLAIMER
In connection with the Transaction, UBS Limited ("UBS") rendered an
opinion to the Board of Directors of the Company, as of 27 February
2008, and based upon and subject to the factors, assumptions,
procedures, limitations and qualifications set forth in such opinion,
relating to the Exchange Ratio. In rendering its opinion, UBS assumed
and relied upon (without assuming any responsibility therefor), among
other things, at the direction of the Company, the assessments by the
Board of the Directors of the commercial benefits of the Transaction.
UBS's opinion did not address the relative merits of the Transaction
as compared to other business strategies or transactions that might
be available with respect to the Company's underlying business
decision to effect the Transaction. UBS's opinion is confidential and
was provided solely for the benefit of the Company's Boards of
Directors (acting in their capacity as such) in connection with the
Transaction and was not provided for the benefit of, and may not be
relied upon by, the shareholders of the Company or any other person.
UBS will receive a fee upon delivery of the opinion. In the past, UBS
and its predecessors have provided investment banking services to the
Company and received compensation for the rendering of such services.