The Board of Directors of KCI Konecranes Plc has today approved a long-term incentive scheme directed to Pekka Lundmark, the Managing Director of the Company. The incentive scheme will be implemented by disposing of the Company’s own shares held by the Company on the basis of the authorization granted to the Board of Directors by the General Meeting of Shareholders on 8 March 2006.
Pursuant to the incentive scheme a total of 50,000 shares in the Company will be sold to the Managing Director in December 2006 and 50,000 shares in January-February 2007 on terms and conditions defined in the terms of subscription. The shares sold are subject to a five year transfer restriction. As part of the scheme the Company will pay a separate bonus to the Managing Director to cover the taxes levied as a result of the arrangement.
The purpose of the incentive scheme is to motivate the Managing Director to contribute in the best possible manner to long-term success of the Company and increased shareholder value for all shareholders of the Company.
Through the incentive scheme Lundmark will invest a substantial amount of his own funds in the Company’s shares for five years, which shows long-term commitment by the CEO, says Stig Gustavson, the Chairman of the Board. The Company’s share price has increased from 7.50 euros to its current level of some 20 euros during Lundmark’s period as the CEO of the Company. This development has been used as grounds for determining the share price. The agreed price of 12 euros corresponds approximately to the average share price calculated from the beginning of year 2005, Gustavson continues.
The Board of Directors of the Company is also considering to present to the Annual General Meeting of Shareholders to be held in the spring 2007 the approval of another incentive program that would be directed to a wider group of key personnel. The aim of such new incentive program and the scheme that is now being implemented is to ensure the continuity of the Company’s incentive schemes. The previous option program of the Company is from year 2003.
The terms of subscription for the directed issue of shares relating to the Managing Director’s incentive scheme are attached to this release. After the issuance of shares the Company will hold 742 600 own shares in the Company. The Board of Directors will consider possibilities to use also these shares in accordance with the authorization granted by the General Meeting of Shareholders.
KCI KONECRANES PLC
Board of Directors
For further information, please contact
Chairman of the Board, Stig Gustavson
Tel. +358 400 411 119
DISTRIBUTION
OMX Helsinki Stock Exchange
Media
ATTACHMENT: Terms of subscription
ISSUE OF SHARES IN KCI KONECRANES PLC
15 DECEMBER 2006
TERMS OF SUBSCRIPTION
The Board of Directors of KCI Konecranes Plc (the Company) has today based on the authorization granted to it by the General Meeting of Shareholders of the Company on 8 March 2006 to dispose of the Company’s own shares, decided to issue in deviation of the shareholders’ pre-emptive rights a total of 100,000 own shares in the Company to the Managing Director of the Company on the following terms:
1. SHARE SUBSCRIPTION AND SUBSCRIPTION PRICE
A total of 100,000 shares currently held by the Company are offered in deviation of the shareholders’ pre-emptive rights to be subscribed by the Managing Director of the Company, Mr. Pekka Lundmark (the Subscriber), as part of the incentive scheme directed to the Managing Director.
The shares shall be subscribed for to a price of EUR 12 per share. The subscription price is based on the objectives set for the incentive scheme to reward and increase the commitment of the Subscriber and to motivate the Subscriber to contribute to long-term success of the Company.
The subscription price shall be booked in the invested unrestricted equity fund.
2. SUBSCRIPTION OF THE SHARES AND TERMS OF PAYMENT
The shares are subscribed for by the approval and due signing by the Subscriber of the respective Incentive Agreement to be entered into between the Subscriber and the Company. The subscription price for the first 50,000 shares shall be paid to the bank account designated by the Company no later than 31 December 2006 and the subscription price for the remaining 50,000 shares no later than 28 February 2007. The Board of Directors of the Company approves without separate announcement the subscriptions made according to these terms of subscription.
3. REASONS FOR THE DEROGATION FROM THE PRE-EMPTIVE RIGHTS OF THE SHAREHOLDERS
The issue of shares is carried out in order to put into place a new incentive scheme of the Company approved by the Board of Directors on this same day with the aim of motivating the Managing Director of the Company to contribute in the best possible manner to long-term success of the Company and increased shareholder value for all shareholders of the Company. The share issue is carried out on the basis of the authorization granted to the Board of Directors by the General Meeting of Shareholders on 8 March 2006, by which the Board of Directors is authorized to dispose of own shares purchased by the Company for the purpose of granting incentives to key personnel. Therefore, the derogation from the pre-emptive rights of the shareholders has strong economic grounds as defined in Chapter 9 Section 4 of the Companies Act.
