DECISIONS MADE AT THE ANNUAL GENERAL MEETING OF KESKO CORPORATION
Kesko Corporation’s Annual General Meeting held on 10 April 2000 adopted the financial statements for 1999, discharged those accountable from their responsibilities, decided to pay a dividend of EUR 1.50 per share, accepted the Board of Directors’ proposal for the management’s warrant scheme and decided to sell the shares in the joint account.
DECISIONS BY THE ANNUAL GENERAL MEETING
1. Adoption of the financial statements
Kesko Corporation’s income statement and balance sheet and the consolidated income statement and balance sheet for 1999 were adopted.
2. Payment of dividends
A decision was made to pay a dividend of EUR 1.50 per share for Kesko Corporation’s shares. The record date will be 13 April 2000 and the dividends will be payable from 20 April 2000.
3. Discharge from responsibilities
Those accountable were discharged from their responsibilities for the financial period of 1999.
- The Supervisory Board continues to consist of the following members:
Kallio Matti, retailer, Helsinki
Kasanen Eero, Dr.Sc.(Econ.), Helsinki
Loukko Hannu, retailer, Kauhajoki
Näppi Hannele, retailer, Jyväskylä
Pitkänen Paavo, M.A., Helsinki
Sivonen Kalevi, retailer, Vantaa
Suila Keijo, B.Sc.(Econ.), Helsinki
Takamäki Heikki, retailer, Pirkkala
Toivakka Jukka, retailer, Mikkeli
- Auditors
The auditors elected are:
SVH PricewaterhouseCoopers Oy, Certified Public Accountants; Auditor with principal responsibility Pekka Nikula, B.Sc. (Econ.), CPA, and Mauno Tervo, B.Sc. (Econ.), CPA.
- Management’s warrant scheme for the year 2000
A decision was made to issue warrants entitling to the subscription of the company’s B shares to the upper and middle management of Kesko Group. This deviation from the shareholders’ pre-emptive right is part of the management’s incentive programme.
There will be two classes of warrants issued, warrants B and warrants C, both without consideration. There will be 3,825,000 warrants B issued and 2,015,000 warrants C issued, i.e. a total of 5,840,000 warrants. Each warrant B and C entitles to the subscription of one B share of Kesko. The warrant scheme will comprise about 450 persons, and the number of warrants issued to each person will depend on his or her duties.
The share subscription period shall begin on 1 November 2002 for warrants B and on 1 November 2003 for warrants C, and shall end on 31 March 2006 for all warrants. The share subscription price for warrant B shall be the trade volume weighted average price of Kesko’s B share on the Helsinki Exchanges during March 2000 with an addition of 15 percent, and for warrant C the corresponding average price of the B share during March 2001 with an addition of 15 percent. From the share subscription price shall be deducted the amount of the dividend distributed after the period for the determination of the share subscription price has ended but before the date of subscription for shares.
Complete terms of the warrant scheme in enclosure 1.
7. The sale of shares in the joint account
A decision was made to sell Kesko Corporation’s A and B shares in a joint book-entry securities account for the benefit of their owners in the way referred to in Article 3a of Chapter 3a of the Companies Act.
In connection with the changeover to the book-entry system, shareholders had to have their ownership recorded in the book-entry register. A joint book-entry securities account was opened for the shares with no ownership record in a book-entry register. According to Article 3a of Chapter 3a of the Companies Act, a company included in the book-entry securities system may decide to sell the company’s shares in the joint account for the benefit of their owners. The shares may not be sold before one year has elapsed from notification of the selling decision. After the sale, a shareholder has right, against a share certificate, to draw a sum corresponding to his shares from the funds gained.
On 5 April 2000, according to the shareholder register, the number of Kesko’s A shares in the joint account totalled 56.345, which is 0,18% of all A shares, and the number of B shares totalled 50.310, which is 0,09% of all B shares.
For further information, please contact CFO Juhani Järvi, telephone +358 10 5311.
KESKO CORPORATION
Corporate Communications
Erkki Heikkinen
Director
DISTRIBUTION
The Helsinki Exchanges
Main news media
ENCLOSURE 1
CONDITIONS FOR WARRANTS FOR UPPER AND MIDDLE MANAGEMENT OF KESKO 2000
1. WARRANTS
Warrant B entitles to subscription of one (1) B-share in Kesko Corporation during the subscription period from 1 November 2002 to 31 March 2006 for a subscription price corresponding to the trade volume weighted average price of Kesko’s B-share at the Helsinki Exchange during March 2000 with an addition of fifteen (15) per cent. From the share subscription price shall be deducted the amount of the dividend distributed after 31 March 2000.
Warrant C entitles to subscription of one (1) B-share in Kesko Corporation during the subscription period from 1 November 2003 to 31 March 2006 for a subscription price corresponding to the trade volume weighted average price of Kesko’s B-share at the Helsinki Exchange during March 2001 with an addition of fifteen (15) per cent. From the share subscription price shall be deducted the amount of the dividend distributed after 31 March 2000.
2. SUBCSRIPTION OF WARRANTS
2.1 Right to warrants
Warrants B shall be issued to the current and future employees of Kesko Group who according to the classification of duties applied by the Group belong to the upper or middle management. Warrants B that are to be distributed to the management after the subscription period for warrants B has ended, shall be issued to Sincera Oy ("Sincera"), a subsidiary of Kesko Corporation ("Kesko" or the "Company").
Sincera shall have the secondary right of subscription for such warrants B which are not subscribed for during the actual subscription period for warrants B. Sincera shall exercise its secondary right of subscription within one week from the expiry of the actual subscription period.
Warrants C shall be issued to Sincera for subscription. There is no secondary right of subscription for warrants C.
The shareholders’ pre-emptive right to subscription shall be deviated from since the warrants are intended as a part of the incentive program for the middle and upper management of Kesko Group. Warrants are issued to Sincera in order to be able to flexibly distribute warrants even to those members of the management who join the company first after the subscription period has ended.
2.2 Number of warrants and subscription price
There are three million eight hundred and twenty-five thousand (3,825,000) warrants B to be issued.
There are two million fifteen thousand (2,015,000) warrants C to be issued.
Warrants B and C are offered for subscription without consideration.
2.3 Procedure for the subscription of warrants and transfer to book-entry system
The Board of Directors of Kesko shall further determine the persons entitled to subscription of warrants B and shall send them a written subscription offer prior to the commencement of the subscription period for the warrants.
The subscription period for the warrants shall be 2 May 2000 to 22 May 2000. The subscriptions shall take place at the Financial Department of Kesko’s head office (address Satamakatu 3, Helsinki) or by forwarding a subscription list to the Financial Department before the end of the subscription period.
The Board of Directors of Kesko decides upon the acceptance of subscriptions in accordance with the resolutions passed by the Annual General Meeting. The Board may reject a subscription entirely or partly.
The Board may decide upon the transfer of the warrants as book-entries to the book-entry system of the Finnish Central Securities Depository Ltd and on the resulting technical amendments to these terms and conditions. If the warrants have not been transferred to the book-entry system as the prohibition to assign the warrants under Section 2.7 below ceases to apply, Kesko shall upon written request deliver warrant certificates to the warrant holder.
2.4 Warrants of Sincera
By the subscription or other acceptance of warrants Sincera undertakes not to distribute the warrants B and C otherwise than in accordance with the instructions of the Board of Directors of Kesko. The instructions of the Board of Directors may include provisions as to, inter alia, the recipients of the warrants, number of warrants, the time of distribution and the compensation payable.
Sincera may not pledge or assign the warrants otherwise than in accordance with the above. There are no other restrictions as to the assignability of the warrants applicable after the prohibition under Section 2.7 has ceased to apply.
2.5 Maximum number of warrants B to be subscribed and distributed
The Board of Directors of Kesko decides upon the acceptance of the subscriptions of warrants B and instructions regarding the distribution of warrants to Sincera in accordance with the principles of the warrant program.
The Board may accept the subscription of warrants B by persons belonging to the inner circle of the Company or give instructions as to the distribution of such warrants up to the following total amounts:
CEO of Kesko 100,000 warrants B;
Members of the Board and other persons belonging to the inner circle 50,000 warrants B.
2.6 Maximum number of warrants C distributed
The Board of Directors of Kesko decides upon the distribution of warrants C in accordance with the principles of the warrant program and gives instructions thereof to Sincera.
The Board of Directors may give instructions as to the distribution of warrants C to persons belonging to the inner circle of the Company up to the following total amounts:
CEO of Kesko 50,000 warrants C;
Members of the Board and other persons belonging to the inner circle 25,000 warrants C.
2.7 Prohibition to assign and obligation to offer warrants
Warrants B may not be pledged or assigned without the written instructions or permit of Kesko prior to 1 November 2002. Thereafter the warrants are freely assignable.
Warrants C may not be pledged or assigned without the written instructions or permit of Kesko prior to 1 November 2003. Thereafter the warrants are freely assignable.
The Board of Directors decides upon granting permission for the assignment or pledge of a warrant on grounds justifiable by the principles of the warrant program.
Should a warrant holder cease to be employed by or in the service of the Kesko Group before the above prohibition to assign the warrants has ceased to apply, such person shall without delay offer to the Company or to a party appointed by the Company free of charge the warrants for which the prohibition has not yet ceased.
3. SHARE SUBSCRIPTION
3.1 Right to subscribe new shares
Each warrant B and C entitles to subscribe for one (1) B-share in Kesko.
Sincera does not, as the subsidiary of Kesko, have the right to share subscription.
The book-value equivalent of Kesko’s share is two (2) euro. As a result of the subscriptions based on warrants B and C the number of shares in Kesko may be increased by a maximum of 5,840,000 shares, and share capital of the Company by a maximum of 11,680,000 euro.
- Subscription price
The share subscription price for warrant B shall be the trade volume weighted average price of Kesko’s B-share at the Helsinki Exchange during March 2000 with an addition of fifteen (15) per cent. From the share subscription price shall as per the dividend record date be deducted the amount of the dividend distributed after 31 March 2000 but before the date of subscription for shares.
The share subscription price for warrant C shall be the trade volume weighted average price of Kesko’s B-share at the Helsinki Exchange during March 2001 with an addition of fifteen (15) per cent. From the share subscription price shall as per the dividend record date be deducted the amount of the dividend distributed after 31 March 2000 but before the date of subscription for shares.
The share subscription price shall nevertheless always amount to at least the book-value equivalent of the share.
Payment of shares subscribed shall be effected on subscription.
3.3 Subscription period
The subscription period for warrant B is 1 November 2002 – 31 March 2006.
The subscription period for warrant C is 1 November 2003 – 31 March 2006.
3.4 Procedure for share subscriptions and transfer to book-entry system
The share subscriptions shall take place at the Financial Department in Kesko’s head office (address Satamakatu 3, Helsinki) or possibly at an other location notified by the Board of Directors.
The warrant holder shall convey the warrant certificates based on which the subscription takes place, provided that the warrants have not been transferred to the book-entry system.
Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber.
3.5 Shareholder rights
The shares shall entitle to dividend for the financial year during which they were subscribed and paid for. Other shareholder rights shall commence when the increase of the share capital has been registered with the Trade Register.
3.6 Share issues, convertible bonds and warrants before share subscription
Should Kesko, before the subscription for shares, increase its share capital through an issue of new shares, or issue convertible bonds or warrants in such a manner that the subscription or receiving of these is based on the shareholding in Kesko, a warrant holder shall have the same right as or an equal right to that of a shareholder. Equality is reached in the manner determined by the Board of Directors by adjusting the amount of shares available for subscription, the subscription price or both of these.
Should Kesko, before the subscription for shares, increase its share capital by way of a bonus issue, the subscription ratio shall be amended so that the ratio to the share capital of shares to be subscribed for by virtue of warrants remains unchanged. If the number of shares that can be subscribed for by virtue of one warrant should be a fraction, the fractional part shall be taken into account by reducing the subscription price.
4. OTHER TERMS
4.1 Rights in certain cases
If Kesko reduces its share capital before the subscription of shares, the subscription right accorded by the terms of the warrant shall be adjusted accordingly as specified in the resolution to reduce the share capital.
If Kesko is placed in liquidation before the subscription of shares, the warrant holder shall be given an opportunity to exercise his subscription right before the liquidation begins within a period of time determined by the Board of Directors.
If Kesko resolves to merge in an other company as the company being acquired or in a company to be formed in a combination merger or if the Company resolves to be divided, the warrant holder shall before the merger or division be given the opportunity to subscribe for the shares within the period of time determined by the Board of Directors. After such date no subscription right shall exist.
If Kesko, after the beginning of the period of subscription, resolves to acquire its own shares by an offer made to all shareholders, the warrant holders shall be made an equivalent offer. In other cases acquisition of the Company’s own shares does not require the Company to take any action in relation to the warrants.
In case a situation as referred to in Chapter 14 Section 19 of the Finnish Companies Act, in which a shareholder possesses over 90% of the shares in Kesko and therefore has the right and obligation to redeem the shares of the remaining shareholders, the warrant holders shall be entitled to use their right of subscription by virtue of the warrant within a period of time determined by the Board of Directors.
If the book-value equivalent of the share is changed while the share capital remains unchanged, the subscription terms shall be amended so that the total book-value equivalent of the shares available for subscription and the total subscription price remain the same.
Converting the Company from a public company into a private company will not affect the terms and conditions of the warrants.
4.2 Other matters
Disputes arising in relation to the warrants shall be settled by arbitration in accordance with the Arbitration Rules of the Central Chamber of Commerce.
Other matters related to the warrants are decided on by the Board of Directors.
The warrant documentation is kept available for inspection at the Financial Department of Kesko’s head office (address Satamakatu 3, Helsinki.)
