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Cargotec Corporation: Notice of Extraordinary General Meeting 2020

2 november 2020 9:00 AM

CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 2 NOVEMBER 2020 AT 10:00 EET

Cargotec Corporation: Notice of Extraordinary General Meeting 2020

Notice is given to the shareholders of Cargotec Corporation (Cargotec or the Company) of an extraordinary general meeting to be held at 1:00 p.m. EET on Friday, 18 December 2020 at Cargotec’s headquarters at Porkkalankatu 5, Helsinki, Finland.

In order to prevent the spread of the COVID-19 pandemic, the board of directors of the Company has resolved on exceptional meeting procedures based on the Act (667/2020) on temporary derogation from, e.g. the Limited Liability Companies Act, to prevent the spread of the COVID-19 pandemic. The board has resolved to take the measures allowed by 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.

The Company’s shareholders and their proxy representatives may participate in the general meeting and exercise shareholder rights only by voting in advance and by asking questions in advance in accordance with this notice. Instructions for shareholders are provided in section C. Instructions for the participants in the general meeting.

It will not be possible to participate in the meeting in person at the meeting venue, and no video link to the meeting venue will be provided. The Company’s board of directors, CEO and other management will not participate in the meeting.

The Company will, on 11 December 2020, provide shareholders, on the Company’s website at www.cargotec.com/EGM, with a pre-recorded presentation in which the management of the Company present the transaction and address the questions submitted by the shareholders in advance. The presentation is not a part of the general meeting and will be in Finnish.

A. Matters on the agenda of the general meeting

At the meeting, the following matters will be considered:

1. Opening of the meeting

2. Calling the meeting to order

Attorney Pauliina Tenhunen will serve as chairperson of the meeting.

In the event Pauliina Tenhunen 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 scrutinise the minutes and persons to supervise the counting of votes

The Company’s General Counsel Outi Aaltonen will scrutinise the minutes and supervise the counting of the votes.

In the event Outi Aaltonen is prevented from scrutinising the minutes and supervising the counting of votes for a weighty reason, the board of directors will appoint the person they deem the most suitable to scrutinise the minutes and supervise the counting of 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 Oy.

6. Resolution on the merger of Cargotec Corporation and Konecranes Plc

Background

On 1 October 2020, Cargotec announced the merger of Cargotec and Konecranes Plc (Konecranes). The merger is intended to be implemented through an absorption merger in accordance with the Limited Liability Companies Act in which Konecranes will merge into Cargotec. As a result of the merger, all assets and liabilities of Konecranes shall be transferred without a liquidation procedure to Cargotec. Konecranes shall automatically dissolve as a result of the merger. In the merger, the shareholders of Konecranes shall receive new shares in Cargotec as merger consideration in proportion to their shareholdings.

The purpose of the merger is to create a global leader in sustainable material flow, with numerous valuable customer-facing brands bolstering its position across all its businesses in industries, factories, ports, terminals, road and sea-cargo handling. The merger is expected to be value-creating from geographical, product and services offering, employee, customer and shareholder perspectives. The combined company is expected to rely on the skills of both companies and the combination is expected to deliver benefits to all stakeholders. The combined company aims to be a leader in sustainable material flow through its vision based on decarbonisation, safety, productivity and efficiency as well as maximizing the lifetime value of the equipment and solutions of its customers.

More detailed information on the merger and its reasons is available in the merger release published on 1 October 2020.

In order to complete the merger, the board of directors of Cargotec proposes that the general meeting resolve (i) on the absorption merger of Konecranes into Cargotec in accordance with the merger plan dated 1 October 2020 approved by the board of directors of Cargotec and Konecranes and registered with the Trade Register on 29 October 2020 (Merger Plan) and approve the Merger Plan so that, as part of the merger resolution, the general meeting would also resolve, conditionally upon the completion of the merger, on the amendment of the articles of association of Cargotec and the issuance of shares in Cargotec as merger consideration to the shareholders of Konecranes, (ii) on the establishment of the shareholders’ nomination board conditionally upon the completion of the merger, and (iii) on authorising the board of directors of Cargotec to decide on an issue of shares without payment in which each shareholder in Cargotec will be issued new shares in the Company without payment in proportion to their holdings (share split).

Resolutions that are conditional on the completion of the merger will enter into force in connection with the registration of the completion of the merger. The planned completion date of the merger is 1 January 2022. The completion date may change in accordance with the Merger Plan.

As presented in the Merger Plan, the board of directors of Cargotec intends to propose to the general meeting to be convened before the completion of the merger certain decisions concerning the number, election and remuneration of the members of the board of directors of Cargotec conditionally upon the completion of the merger.

Current shareholders of Cargotec who, on the date of this notice, represent a total of approximately 45.4% of the outstanding shares in Cargotec and 76.6% of all of the votes carried by the outstanding shares, have undertaken under certain customary terms to participate in the extraordinary general meeting that will resolve on the merger and to vote in favour of the proposed resolutions.

The proposed resolutions form an entirety that requires the adoption of all its individual items by a single resolution.

The general meeting can only approve or reject the proposed resolutions but cannot alter the Merger Plan.

Resolution on the merger

In accordance with the Merger Plan, Konecranes will merge into Cargotec through an absorption merger so that all assets and liabilities of Konecranes shall be transferred without a liquidation procedure to Cargotec as set forth in the Merger Plan.

Cargotec’s board of directors proposes that the general meeting resolve on the merger of Konecranes into Cargotec in accordance with the Merger Plan and approve the Merger Plan.

In addition to the other matters described in the Merger Plan, the resolution on the merger includes the following key matters described in more detail in the Merger Plan:

(a) Amendment of the Articles of Association

The board of directors of Cargotec proposes to the general meeting that the articles of association of Cargotec be amended in accordance with the Merger Plan, conditionally upon the completion of the merger, as follows:

(i) Article 2, which concerns the Company’s line of business, shall be amended so as to better reflect the business of the combined company.
(ii) Article 5, which concerns the board of directors, shall be amended so that in future the chairperson and a possible deputy chairperson of the board of directors shall be elected by the general meeting rather than the board of directors. The reference to the Limited Liability Companies Act’s default provision that the board of directors has a quorum when more than half of the members are present shall also be removed as unnecessary.
(iii) Article 6, which concerns the managing director, shall be amended so that the article will include language on the possibility to elect a deputy managing director.
(iv) Article 9, which concerns auditing, shall be amended so that the maximum number of the Company’s auditors shall be reduced from three to two. The terminology used in the article shall also be changed to reflect currently valid legislation.
(v) Article 12, which concerns the annual general meeting, shall be amended so that the language stating that the annual general meeting must be held within three months from the end of the financial year shall be removed.

The proposed amended articles of association are included in full as an appendix of the Merger Plan.

The amendment will enter into force in connection with the registration of the completion of the merger.

As presented in the Merger Plan, the board of directors intends to propose to the general meeting to be convened before the completion of the merger that Cargotec’s trade name be changed conditionally upon the completion of the merger.

(b) Merger consideration

In accordance with the Merger Plan, the shareholders of Konecranes shall, after the share split referred to below, receive as merger consideration 2.0834 new class B shares and 0.3611 new class A shares in Cargotec for each share they hold in Konecranes.

In case the number of shares received by a shareholder of Konecranes as merger consideration is a fractional number, the fractions shall be rounded down to the nearest whole number. Fractional entitlements to new shares of Cargotec shall be aggregated and sold in public trading on Nasdaq Helsinki Ltd and the proceeds shall be distributed to shareholders of Konecranes entitled to receive such fractional entitlements in proportion to holding of such fractional entitlements. Any costs related to the sale and distribution of fractional entitlements shall be borne by Cargotec.

Based on the number of issued and outstanding shares in Konecranes on the date of this notice, a total of 28,575,453 new A shares and a total of 164,868,731 new B shares in Cargotec (after the share split described below) would be issued to shareholders of Konecranes as merger consideration. This would correspond to approximately 50% of the shares in the combined company.

Establishment of a Shareholders’ Nomination Board

The board of directors proposes that the general meeting resolve, conditionally upon the completion of the merger, to establish a permanent shareholders’ nomination board to prepare the election and remuneration of the board of directors (Nomination Board) and confirm the charter for the Nomination Board in accordance with Appendix 1 of this notice.

The main terms of the charter are following:

- The duties of the Nomination Board are to (i) prepare and present a proposal to the general meeting for the number of members of the board of directors, (ii) prepare and present a proposal to the general meeting for the chairperson, vice chairperson and members of the board of directors, (iii) prepare and present a proposal to the general meeting for the remuneration of the members of the board of directors (including the chairperson and the vice chairperson) in accordance with the remuneration policy for governing bodies, (iv) respond in the general meeting to the shareholders’ questions concerning the proposals prepared by the Nomination Board, (v) prepare and see to it that the Company has up to date principles on the diversity of the board of directors and (vi) see to the successor planning for the members of the board of directors.
- The Nomination Board has four members. The chairperson of the Company’s board of directors participates in the work of the Nomination Board as an expert without the right to participate in the Nomination Board’s decision making.
- The members of the Nomination Board are appointed so that the shareholder whose shares bestow the most votes in the Company (the Highest Voting Shareholder) is entitled to appoint one member and the three shareholders who own the most class B shares in the Company, but are not the Highest Voting Shareholder, are each entitled to appoint one member.
- The number of shares owned by the shareholders is determined on the basis of the Company’s shareholders’ register in accordance with the situation on the last day of August each year.
- Each year, the chairperson of the board of directors must request each of the four largest shareholders determined in the manner set forth above to appoint a member to the Nomination Board by the last day of September. A shareholder can appoint a member of the Company’s board of directors who is not the chairperson of the board of directors serving as an expert to the Nomination Board. If a shareholder does not exercise their appointment right, the right shall transfer to the next largest shareholder who would not otherwise have this right.
- The Nomination Board must make its decisions unanimously. If unanimity cannot be reached, the Nomination Board must inform the board of directors of this without delay.
- The Nomination Board must submit its proposals to be made to the general meeting to the board of directors no later than on the last day of the January preceding the annual general meeting.
- If a matter to be prepared by the Nomination Board is to be resolved on in an extraordinary general meeting, the Nomination Board must seek to submit its proposal to the board of directors in good enough time to be included in the notice convening the general meeting.

Because the charter provides that the number of shares owned by the shareholders is determined on the basis of the Company’s shareholders’ register in accordance with the situation on the last day of August each year, but the completion date of the merger may still change from what is presented in the Merger Plan, the board of directors proposes that the first election of members of the Nomination Board be carried out in deviation from the charter as follows:

(i) The number of shares owned by the shareholders is determined on the basis of the Company’s shareholders’ register in accordance with the situation on the registration date of the completion of the merger.
(ii) The chairperson of the board of directors must request each of the four largest shareholders determined in the manner set forth in the charter (taking into account the deviation provided for in item (i)) to appoint a member to the Nomination Committee within two weeks of the completion of the merger.
(iii) If the completion of the merger takes place after 1 November but before the annual general meeting to be held the following year, the Nomination Board must submit its proposals to be made to the annual general meeting to be held the following year to the Company’s board of directors in good enough time for them to be included in the notice convening the general meeting.

The charter of the Nomination Board shall be complied with in all other respects.

Authorising the board of directors to decide on a share issue without payment (share split)

The board of directors proposes that the general meeting authorise the board of directors to decide on a share issue without payment in which each shareholder in the Company will be issued new shares in the Company without payment in proportion to their holdings so that two (2) new class A shares in the Company would be issued for each existing class A share and two (2) new class B shares in the Company would be issued for each existing class B share.

Based on the situation on the date of this notice, a total of 19,052,178 new A shares in the Company and a total of 110,364,158 new B shares in the Company would be issued in the share issue without payment. The authorisation may be used only for the purpose of enabling the issuance of the merger consideration under the Merger Plan.

The board of directors is authorised to decide on other matters related to the share issue.

The share issue without payment will be executed in the book-entry system and does not require any actions to be taken by the shareholders.

The authorisation shall be effective until 31 December 2022.

The authorisation shall not invalidate earlier share issue authorisations.

7. Closing of the meeting

B. Documents of the general meeting

The Merger Plan and this notice, which includes all proposals for decisions on the matters on the agenda of the general meeting, with appendices, are available for the shareholders on Cargotec’s website at www.cargotec.com/EGM. The other documents that shall be kept available for the shareholders according to the Finnish Companies Act will be available on the website as of 18 November 2020 at the latest. Copies of these documents and of this notice will be sent to shareholders upon request.

In addition, Cargotec will draft a prospectus on the merger that will be published before the general meeting.

The minutes of the general meeting will be available on the website mentioned above as of 31 December 2020 at the latest.

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 organised so that the shareholders and their proxy representatives can participate in the meeting and exercise shareholder rights only by voting in advance and asking questions in advance in accordance with the instructions set out below.

The shareholders and their proxy representatives are not allowed to be present at the meeting venue. Shareholders and their proxy representatives cannot participate in the general meeting by means of real-time telecommunications.

1. Right to participate in the general meeting

In order to take part in the general meeting, shareholders must be registered in the Company’s shareholders' register on the record date of the general meeting, 8 December 2020.

Changes in the holding of shares that take place after the record date have no effect on the right to participate or to vote in the general meeting.

2. Registration in the shareholder register

A shareholder whose shares are registered on his/her personal Finnish book-entry account is registered in the shareholders' register of the Company. A holder of nominee-registered shares who wants to participate in the general meeting must be temporarily entered into the shareholder register of the Company by 10:00 a.m. EET on 15 December 2020. A holder of nominee-registered shares is advised to request the necessary instructions regarding the registration in the shareholder register of the Company and the issuing of proxy documents from his/her custodian bank well in advance. Being entered into the temporary shareholder register constitutes due registration for the general meeting.

The account management organisation of the custodian bank shall register a holder of nominee-registered shares who wants to participate in the general meeting into the temporary shareholders’ register of the Company and arrange advance voting on behalf of the holder of nominee-registered shares by the time stated above.

The temporary shareholders’ register of Cargotec Corporation as at the record date of 8 December 2020 is available at Euroclear Finland Oy, Urho Kekkosen katu 5 C, Helsinki, Finland from 16 December 2020.

3. Proxy representatives and powers of attorney

Shareholders may participate in the general meeting and exercise their rights at the meeting by way of proxy representation. Proxy representatives of shareholders are also required to vote in advance in the manner instructed in this notice.

For shareholders who do not vote in advance personally, the Company offers the opportunity to exercise shareholders’ rights by authorising a designated proxy representative, 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. Authorising 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 www.cargotec.com/EGM on 25 November 2020 at the latest. Any proxy documents are to be delivered primarily by email to ir@cargotec.com or by mail to the address Cargotec Corporation, EGM, PO Box 61, FI-00501 Helsinki, Finland. The proxy documents must be received before the end of the notification of participation period.

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 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.

A holder of nominee-registered shares is advised to follow the instructions of his/her custodian bank regarding proxies. 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.

4. Notification of participation and voting in advance

Notification of participation may be submitted, and advance voting will begin at 12:00 noon on 25 November 2020. Participation in the meeting requires that a shareholder entered into the Company’s shareholders’ register notify the Company of his/her participation and vote in advance no later than 4:00 p.m. EET on 15 December 2020, by which time the notification of participation and advance votes must be received.

In connection with submitting the notice of participation, a shareholder shall provide his/her name, personal/business identification number, address, telephone number or email address and the name of his/her potential proxy representative as well as the proxy representative’s personal identification number. The personal data provided by the shareholders is only used in connection with the general meeting and with the necessary processing of related registrations.

Shareholders with a Finnish book-entry account can submit the notice of participation and vote in advance on certain matters on the agenda between 12:00 noon EET on 25 November 2020 and 4:00 p.m. EET on 15 December 2020 in the following ways:

a) On Cargotec's website at www.cargotec.com/EGM
Electronic voting in advance requires the shareholder’s Finnish personal identification number/business ID and the number of the shareholder’s Finnish book-entry account. The terms and conditions and other instructions for advance voting will be available on the Company’s website at www.cargotec.com/EGM as of the beginning date of the advance voting, 25 November 2020, at the latest.

B) By mail or by email
A shareholder or his/her proxy representative may send the advance voting form available on the Company’s website or corresponding information to the Company by mail to the address Cargotec Corporation, EGM, PO Box 61, FI-00501 Helsinki, Finland or by email to the address ir@cargotec.com. The advance voting form will be available on the Company’s website as of 25 November 2020 at the latest.

The submission of the advance 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 listed above is given.

The voting instructions will be available on the Company’s website at www.cargotec.com/EGM as of 25 November 2020 at the latest. Additional information is also available by telephone in the number +358(0)20 770 6872 between 9:00 a.m. and 4:00 p.m. EET from Monday to Friday.

5. Other instructions and information

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 ir@cargotec.com or by mail to the address Cargotec Oyj, EGM, PO Box 61, FI-00501 Helsinki, Finland no later than 4:00 p.m. EET on 7 December 2020, by which time the questions must have been received. Such questions from shareholders and the Company’s management’s answers to them will be available on the Company’s website at www.cargotec.com/EGM on 10 December 2020 at the latest. In connection with asking questions, shareholders are required to provide adequate evidence of their shareholding.

The agenda of the general meeting does not contain items open to counterproposals.

The Company’s management will address the questions submitted by the shareholders in the pre-recorded presentation that will be available as of 11 December 2020 on the Company’s website at www.cargotec.com/EGM. The presentation is not part of the general meeting and will be in Finnish.

On the date of this notice, the total number of Cargotec Corporation’s class B shares is 55,182,079 and the total number of the unlisted class A shares is 9,526,089. Pursuant to the articles of association, each class A share entitles its holder to one vote and each full set of ten class B shares entitles its holder to one vote; however, each shareholder has a minimum of one vote. On the date of this notice, the Company holds a total of 224 840 of its own class B shares. Such shares held by the Company do not carry a right to participate in the general meeting.

Helsinki, 2 November 2020
Cargotec Corporation
Board of Directors

Cargotec (Nasdaq Helsinki: CGCBV) enables smarter cargo flow for a better everyday with its leading cargo handling solutions and services. Cargotec's business areas Kalmar, Hiab and MacGregor are pioneers in their fields. Through their unique position in ports, at sea and on roads, they optimise global cargo flows and create sustainable customer value. Cargotec's sales in 2019 totalled approximately EUR 3.7 billion and it employs around 12,000 people. www.cargotec.com

Attachment:

Charter of the Shareholders’ Nomination Board

Important notice

In a number of jurisdictions, in particular in Australia, Canada, South Africa, Singapore, Japan and the United States, the distribution of this notice may be subject to restrictions imposed by law (such as registration of the relevant offering documents, admission, qualification and other regulations). In particular, neither the merger consideration shares nor any other securities referenced in this notice have been registered or will be registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act) or the securities laws of any state of the United States and as such neither the Contemplated Merger consideration shares nor any other security referenced in this notice may be offered or sold in the United States except pursuant to an applicable exemption from registration under the U.S. Securities Act.

This notice is neither an offer to sell nor the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in the United States or any other jurisdiction in which such offering, solicitation or sale would be unlawful. This notice must not be forwarded, distributed or sent, directly or indirectly, in whole or in part, in or into the United States or any jurisdiction where the distribution of these materials would breach any applicable law or regulation or would require any registration or licensing within such jurisdiction. Failure to comply with the foregoing limitation may result in a violation of the U.S. Securities Act or other applicable securities laws.

The information contains forward-looking statements. All statements other than statements of historical fact included in the information are forward-looking statements. Forward-looking statements give the Company’s current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance, benefits of the merger, and business. These statements may include, without limitation, any statements preceded by, followed by or including words such as “expect”, “aim”, “intend”, “may”, “plan”, “would”, “could”, and other words and terms of similar meaning or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company’s control that could cause the Company’s actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which it will operate in the future.

Attachment

Charter of the Shareholders’ Nomination Board

CHARTER OF THE SHAREHOLDERS’ NOMINATION BOARD OF [●] PLC

1 Purpose of the Nomination Board

[●] Plc’s (the Company) shareholders’ nomination board (the Nomination Board) is a governing body appointed by the Company’s shareholders to prepare and present proposals on the number, election and remuneration of the members of the Company’s board of directors to the Company’s annual, and if necessary extraordinary, general meeting.

The Nomination Board must ensure that the Company’s board of directors and its members have sufficient expertise, knowledge and experience to meet the needs of the Company.

The Nomination Board shall comply with valid legislation and other applicable regulation in its activities.

The Nomination Board has been established until further notice until the Company’s general meeting resolves otherwise.

This charter presents the composition, appointment of members and procedural rules of the Nomination Board.

2 Composition and Appointment of Members of the Nomination Board

The Nomination Board has four members. The chairperson of the Company’s board of directors participates in the work of the Nomination Board as an expert without the right to participate in the Nomination Board’s decision making.

The members of the Nomination Board are appointed so that the shareholder whose shares bestow the most votes in the Company (the Highest Voting Shareholder) is entitled to appoint one member and the three shareholders who own the most B shares in the Company, but are not the Highest Voting Shareholder, are each entitled to appoint one member.

The number of shares owned by the shareholders is determined on the basis of the Company’s shareholders’ register in accordance with the situation on the last day of August each year.

The following principles shall also be applied when determining the shareholders entitled to appoint members to the Nomination Board:

(a) If the shareholders are obligated under the Securities Markets Act to take other parties’ holdings in the Company into account when stating changes to their percentage of holdings (Flagging Obligation), the holdings of such shareholders and such other parties shall be aggregated, provided that the shareholder submits a written request concerning the matter to the chairperson of the Company's board of directors no later than on the last business day of August. A reliable account of the grounds for the Flagging Obligation must be included with the request.

(b) If a holder of nominee registered shares wishes to exercise its appointment right, such holder must present a written request concerning the matter to the chairperson of the Company's board of directors no later than on the last business day of August. A reliable account of how many shares the holder of nominee registered shares owns must be included with the request.
If the shares owned by two shareholders bestow the same number of votes or two shareholders own the same number of shares and it is not possible for both shareholders to appoint members, the chairperson of the company’s board of directors will draw lots to determine which shareholder’s appointee will be appointed.

Each year, the chairperson of the board of directors must request each of the four largest shareholders determined in the manner set forth above to appoint a member to the Nomination Board by the last day of September. A shareholder can appoint a member of the Company’s board of directors who is not the chairperson of the board of directors serving as an expert to the Nomination Board. If a shareholder does not exercise their appointment right, the right shall transfer to the next largest shareholder who would not otherwise have this right.

The chairperson of the board of directors shall convene the first meeting of the Nomination Board, in which the Nomination Board will appoint its own chairperson from amongst its members. The member appointed by the Highest Voting Shareholder shall be appointed as the chairperson of the Nomination Board, unless the Nomination Board unanimously decides otherwise. The chairperson of the board of directors cannot serve as the chairperson of the Nomination Board.

A member appointed by a shareholder must resign from the Nomination Board if the appointing shareholder’s holdings change during the term of the Nomination Board in such a way that said shareholder is no longer among the Company’s ten largest shareholders. In such a situation, the Nomination Board must request the appointment of a new member by the next largest shareholder, determined on the day of the request, who has not appointed a member to the Nomination Board.

Shareholders that have appointed a member to the Nomination Board are entitled to change their appointee at any time.

The Company shall publish the composition of the Nomination Board and any changes to the composition in a stock exchange release.

The term of the members of the Nomination Board ends annually upon the appointment of new members of the Nomination Board.

The members of the Nomination Board (including the chairperson of the board of directors serving as an expert) are not remunerated for their membership in the Nomination Board. The travel expenses of the members (including the chairperson of the board of directors serving as an expert) will be compensated in accordance with the Company’s travel policy against receipts.

3 Decision Making

The meetings of the Nomination Board will be convened by the chairperson of the Nomination Board.

The Nomination Board shall have a quorum when more than half of its members are present. The Nomination Board shall not make a decision unless all of its members have been provided the opportunity to participate in the matter. For the avoidance of doubt, the presence of the chairperson of the Company’s board of directors, who serves as an expert on the Nomination Board, is not counted when determining quorum.

The Nomination Board must make its decisions unanimously. If unanimity cannot be reached, the Nomination Board must inform the Company’s board of directors of this without delay.

Minutes must be kept of all of the Nomination Board’s decisions. The minutes shall be dated, numbered and retained in a reliable manner. The chairperson of the Nomination Board and at least one member of the Nomination Board shall sign the minutes.

4 Duties

The duties of the Nomination Board are to:
- prepare and present a proposal to the general meeting for the number of members of the board of directors,
- prepare and present a proposal to the general meeting for the chairperson, deputy chairperson and members of the board of directors,
- prepare and present a proposal to the general meeting for the remuneration of the members of the board (including the chairperson and deputy chairperson) in accordance with the remuneration policy for governing bodies,
- respond in the general meeting to the shareholders’ questions concerning the proposals prepared by the Nomination Board,
- prepare and see to it that the Company has up to date principles on the diversity of the board of directors and
- see to the successor planning for the members of the board of directors.

5 Duties of the Chairperson

The duty of the chairperson of the Nomination Board is to direct the work of the Nomination Board is such a way that the Nomination Board reaches its goal efficiently and takes into account the shareholders’ expectations and the interests of the Company.

The chairperson of the Nomination Board:
- convenes the meetings of the Nomination Board and sees to it that the meetings are held on schedule,
- convenes extraordinary meetings if so required by the duties of the Nomination Board and in any case within 14 days of a request presented by a member of the Nomination Board and
- prepares the agenda for meetings and chairs the meetings.

6 Preparation of the Proposal for the Composition of the Board of Directors

6.1 Preparation of the Proposal in General

The Nomination Board will prepare the proposal for the composition of the board of directors to the Company’s annual general meeting and, if necessary, for the extraordinary general meeting. However, every shareholder in the Company can also make their own proposals directly to the general meeting in accordance with the Limited Liability Companies Act.

The Nomination Board can hear shareholders of the Company in the preparation of the proposal and use outside advisors to find and evaluate candidates. The Company shall bear the costs of outside advisors provided that these costs have been approved by the Company in advance.

When preparing the proposal for the composition of the new board or directors, the Nomination Board is entitled to receive the results of the annual assessment of the board of director’s activities, material information relating to the independence of candidates for the board of directors as well as other information reasonably needed by the Nomination Board for the preparation of its proposal.

6.2 Qualifications of the Members of the Board of Directors

The Company’s board of directors must have sufficient expertise and collectively sufficient knowledge and experience in the matters within the Company’s field of operation and business. Each member of the board of directors must be able to dedicate sufficient time to their duties.

In order to ensure sufficient expertise, the Nomination Board must take into account the applicable legislation and other applicable regulation and, as applicable, the principles of the Finnish Corporate Governance Code.

In particular, the board of directors must collectively have sufficient knowledge and experience of:
- matters relating to the Company’s field of operations and business,
- the management of public companies of corresponding size,
- group and financial administration,
- strategy and mergers and acquisitions,
- internal control and risk management and
- good governance.

7 Proposals to the General Meeting

The Nomination Board must submit its proposals to be made to the general meeting to the Company’s board of directors no later than on the last day of the January preceding the annual general meeting.

If a matter to be prepared by the Nomination Board is to be resolved on in an extraordinary general meeting, the Nomination Board must seek to submit its proposal to the Company’s board of directors in good enough time to be included in the notice convening the general meeting.

The proposals of the Nomination Board will be published in a stock exchange release and included in the notice convening the general meeting. The Nomination Board will present its proposals and their justifications to the general meeting.

If the Nomination Board has not submitted proposals for the matters (or one of them) that the Nomination Board is responsible for preparing to the Company’s board of directors by the aforementioned dates, such lacking proposals shall be prepared and presented to the general meeting by the Company’s board of directors.

8 Confidentiality

The members of the Nomination Board and the shareholders who have appointed the members must keep the information concerning the proposals to be presented to the general meeting confidential until the Nomination Board has made its final decision and the Company has published the proposals. This confidentiality obligation also extends to other confidential information received in connection with the work of the Nomination Board and shall remain in force until the Company has published such information.

The chairperson of the Nomination Board or the chairperson of board of directors may at their discretion propose to the Company’s board of directors that the Company should make separate confidentiality agreements with a shareholder or the member of the Nomination Board appointed by it.

9 Amendment of the Charter

The Nomination Board will review the contents of this charter annually and propose that the general meeting make amendments to it as necessary. The Nomination Board is authorised to make updates and amendment of a technical nature to this charter itself. However, material amendments, such as changes to the number and method of appointment of members of the Nomination Board, must be decided by the general meeting.

10 Language versions

This charter has been drafted in Finnish and English.


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