PROPOSAL ON BOARD COMPOSITION
Konecranes Plc’s Nomination and Compensation Committee proposes to the Annual General Meeting of Shareholders on March 23, 2016 that the number of Board members be six (6).
The respective Boards of Directors of Konecranes Plc and Terex Corporation have in August 2015 approved a definitive agreement to combine their businesses in a merger of equals (the "Merger"). The Merger is subject to approval by both Terex and Konecranes shareholders, regulatory approvals and other closing conditions as further described in Konecranes' release of 11 August 2015. Konecranes expects to convene an Extraordinary General Meeting of shareholders to approve the Merger and elect a Board of Directors for the combined company in the first half of 2016. Konecranes Plc, which will be the parent company in Konecranes Terex group, will upon closing of the Merger change its company name to Konecranes Terex Plc. Upon closing of the Merger, the combined company is planned to have a Board comprising nine members, of which five directors will be nominated by Terex and four directors by Konecranes.
The Nomination and Compensation Committee of the Board of Directors proposes that the current Board members Mr. Svante Adde, Mr. Stig Gustavson, Mr. Ole Johansson, Mr. Bertel Langenskiöld, Ms. Malin Persson and Mr. Christoph Vitzthum be re-elected for a term of office ending at the earlier of (i) the closing of the Merger or (ii) the closing of the Annual General Meeting in 2017. All candidates and the evaluation regarding their independence will be presented on the Company’s website www.konecranes.com. All candidates have given their consent to the election.
Of the proposed Board members Stig Gustavson is deemed to be dependent of the company based on the Board’s overall evaluation relating to his former and current positions in Konecranes combined with his substantial voting rights in the company. He is independent of any significant shareholders. Of the proposed Board members Ole Johansson is deemed to be dependent of significant shareholders of the company based on his current position as Chairman of the Board of Directors of Hartwall Capital Oy Ab. Bertel Langenskiöld is deemed to be dependent of significant shareholders of the company based on his previous position as the Managing Director of Hartwall Capital Oy Ab. While both Svante Adde and Malin Persson have served as directors of the company for more than ten consecutive years, they are deemed to be independent of the company since their independence is not compromised by this or any other factor according to the Board's overall evaluation. Christoph Vitzthum, who has served as a director of the company for one year, is independent of both the company and significant shareholders.
While the fact that only half of the proposed Board members, namely Svante Adde, Malin Persson and Christoph Vitzthum, are deemed to be independent of both the company and significant shareholders may be a potential concern, the Nomination and Compensation Committee considers that it would neither be practical nor in the interest of the company and its shareholders to elect new board members for the period until the closing of the Merger. Given that the combined company is planned to have a Board comprising nine members, of which five directors will be nominated by Terex and four Directors by Konecranes, a majority of the Board members is expected to be independent after the closing of the Merger.
CVs of the proposed Board members are attached.
COMPENSATION OF THE BOARD OF DIRECTORS
The Nomination and Compensation Committee of the Board of Directors proposes to the Annual General Meeting that the annual remuneration payable to the members of the Board to be elected at the Annual General Meeting for the term until the closing of the Annual General Meeting in 2017 be unchanged from 2015 as follows: Chairman of the Board EUR 105,000, Vice Chairman of the Board EUR 67,000, and other Board members EUR 42,000. In case the term of office of a Board member ends before the closing of the Annual General Meeting in 2017, he or she is entitled to the prorated amount of the annual remuneration calculated on the basis of his or her actual term in office.
The Committee furthermore proposes that 50 per cent of the annual remuneration be paid in Konecranes shares. The remuneration shares may be purchased on the market on behalf of the Board members at a price determined in public trading at the time of acquiring the shares or transferred in a corresponding number of treasury shares. The purchase of shares or transfer of treasury shares shall be carried out in four equal instalments, each instalment being purchased or transferred within the two week period following each of the Company's interim report announcements and the Company's financial statements bulletin for 2016.
In case the shares due in any such instalment cannot be purchased or transferred within the time period indicated above due to legal or other regulatory restrictions or due to reasons related to a Board member, the amount of annual remuneration due for payment in such instalment shall be paid fully in cash.
In addition, the Chairman of the Board, the Vice Chairman of the Board, and other Board members are entitled to a compensation of EUR 1,500 per attended Board committee meeting. The Chairman of the Audit Committee of the Board of Directors is, however, entitled to a compensation of EUR 3,000 per attended Audit Committee meeting. Such compensation will be paid in connection with each instalment of the annual remuneration to the extent accrued. Any compensation accruing after the payment of the last instalment of the annual remuneration will be paid, without undue delay, after the end of the term of office of the Board member. No remuneration will be paid to Board members employed by the Company. Travel expenses will be compensated against receipt.
KONECRANES PLC
Miikka Kinnunen
Director, Investor Relations
FURTHER INFORMATION
Miikka Kinnunen, Director, Investor Relations tel. +358 (0)20 427 2050
Konecranes is a world-leading group of Lifting Businesses™, serving a broad range of customers, including manufacturing and process industries, shipyards, ports and terminals. Konecranes provides productivity-enhancing lifting solutions as well as services for lifting equipment and machine tools of all makes. In 2014, Group sales totaled EUR 2,011 million. The Group has 12,000 employees at 600 locations in 48 countries. Konecranes is listed on Nasdaq Helsinki (symbol: KCR1V).
DISTRIBUTION
NASDAQ Helsinki
Media
www.konecranes.com
ATTACHMENT
ADDITIONAL INFORMATION RELATING TO THE PROPOSAL BY THE NOMINATION AND COMPENSATION COMMITTEE FOR COMPOSITION OF THE BOARD OF DIRECTORS
Stig Gustavson
b. 1945
Chairman of the Board since 2005
Board Member since 1994 and Member of the Nomination and Compensation Committee since 2006
M.Sc. (Eng.), Dr.Tech. (hon.)
Principal occupation: Board professional
Primary working experience: KCI Konecranes Plc 1994 – 2005: President and CEO; KONE Cranes division 1988 – 1994: President; KONE Corporation 1982 – 1988: holder of various executive positions. Prior to 1982: holder of various executive positions in major Finnish corporations
Current key positions of trust: Ahlström Capital Oy: Vice Chairman of the Board; Oy Mercantile Ab: Board Member; IK Investment Partners: Board Member in the following Funds: IK 2004, IK 2007 and IK VII Limited; Outokumpu Plc: Board Member; Suomi Gas Distribution Oy: Chairman of the Board; Mutual Pension Insurance Company Varma: Member of the Supervisory Board
Shares: 8,235
* Konecranes Plc has on December 28, 2011 received information according to which the Chairman of the company’s Board of Directors, Mr Stig Gustavson has donated all of the shares he at that time owned in Konecranes Plc to his near relatives retaining himself for life the voting rights and right to dividend attached to the donated shares. The donation encompassed in total 2,069,778 shares which corresponds to approximately 3.27 percent of all of the company’s shares and voting rights.
Svante Adde
b. 1956
Board Member since 2004
Member of the Audit Committee since 2004 and Chairman of the Audit Committee since 2008
B.Sc. (Econ. and Business Administration)
Principal occupation: Senior Adviser, Lincoln International, board professional
Primary working experience: Pöyry Capital Limited, London 2007 – 2013: Managing Director; Compass Advisers, London 2005 – 2007: Managing Director; Ahlstrom Corporation 2003 – 2005: Chief Financial Officer; Lazard London and Stockholm 2000 – 2003: Managing Director; Lazard London 1989 – 2000: Director; Citibank 1979 – 1989: Director
Current key positions of trust: Cambium Global Timberlands Ltd: Board Member; Lantmännen Agroenergi AB: Chairman of the Board;
Meetoo AB: Chairman of the Board; Rörvik Timber AB: Chairman of the Board;
Shares: 7,682
Ole Johansson
b. 1951
Vice Chairman of the Board and Member of the Audit Committee since March 26, 2015
B.Sc. (Econ.)
Principal occupation: board professional
Primary working experience: Wärtsilä Corporation 2000 - 2011: President & CEO; Wärtsilä NSD Oy 1998 – 2000: President & CEO; Wärtsilä Corporation 1975 - 1998: Vice President, Wartsilä Diesel Inc. and Wärtsilä Diesel Group; various positions in Finland, USA, France and Switzerland
Current key positions of trust: Aker Arctic Technology Inc., Chairman of the Board; Hartwall Capital Oy Ab: Chairman of the Board; Svenska Handelsbanken AB: Board Member
Shares: 11,151
Bertel Langenskiöld
b. 1950
Board Member since 2012 and Chairman of the Nomination and Compensation Committee since 2012
M.Sc. (Eng.)
Principal occupation: Board professional
Primary working experience: Hartwall Capital Oy Ab 2011 – 2015: Managing Director; Metso Paper and Fiber Technology 2009 - 2011: President; Metso Paper 2007 - 2008: President; Metso Paper, Fiber Business Line 2006 - 2007: President; Metso Minerals 2003 - 2006: President; Fiskars Corporation 2001 - 2003: President and CEO; Tampella Power/Kvaerner Pulping, Power Division 1994 - 2000: President
Current key positions of trust: Kährs Holding AB: Board Member
Shares: 3,293
Malin Persson
b. 1968
Board Member since 2005 and Member of the Audit Committee since 2012
Member of the Nomination and Compensation Committee 2005 - 2011
M.Sc. (Eng.)
Principal occupation: CEO and owner, Accuracy AB
Primary working experience: Chalmers University of Technology Foundation: President and CEO; Volvo Group: Holder of various executive positions including: Volvo Technology Corporation: President and CEO; AB Volvo: Vice President, Corporate Strategy and Business Development; Volvo Transport Corporation: Vice President, Business & Logistics Development
Current key positions of trust: Ahlström Capital Oy: Board Member; Becker Industrial Coatings AB: Board Member; Getinge AB: Board Member; Hexatronic Scandinavia AB: Board Member; Hexpol AB: Board Member; Kongsberg Automotive Holding AB: Board Member; Magnora AB: Board Member; Mekonomen Group AB: Board Member; Mobile Climate Control Group Holding AB: Board Member; Presscise AB: Board Member; Ricardo Plc: Board Member; RO-Gruppen AB: Chairman of the Board
Shares: 7,552
Christoph Vitzthum
b. 1969
Member of the Board and Member of the Nomination and Compensation Committee since March 26, 2015
M.Sc. (Econ.)
Principal occupation: President and CEO, Fazer Group
Primary working experience: Wärtsilä Corporation 2009 – 2013: President Services, Executive Vice President; Wärtsilä Corporation 2006-2009: President Power Plants, Executive Vice President; Wärtsilä Propulsion 2002-2006: President; Wärtsilä Corporation 1999-2002: Vice President, Finance & Control, Marine Division; Wärtsilä Corporation 1997-1999: Business Controller, Power Plants Division; Metra Finance Oy 1995-1997: Dealer
Current key positions of trust: NCC AB: Board Member; Oras Invest Oy: Board Member; East Office of Finnish Industries: Board Member; EVA (Elinkeinoelämän valtuuskunta): Delegation Member; Finnish Food and Drink Industries’ Federation: Board Member; Finnish-Swedish Chamber of Commerce: Board Member; Varma Mutual Pension Insurance Company: Member of the Supervisory Board
Shares: 722
Forward Looking Statements
This document contains forward-looking statements regarding future events, including statements regarding Terex or Konecranes, the transaction described in this document and the expected benefits of such transaction and future financial performance of the combined businesses of Terex and Konecranes based on each of their current expectations. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. When included in this document, the words “may”, “expects”, “intends”, “anticipates”, “plans”, “projects”, “estimates” and the negatives thereof and analogous or similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statement is not forward-looking. Terex and Konecranes have based these forward-looking statements on current expectations and projections about future events. These statements are not guarantees of future performance.
Because forward-looking statements involve risks and uncertainties, actual results could differ materially. Such risks and uncertainties, many of which are beyond the control of Konecranes, include, among others: the ability of Terex and Konecranes to obtain shareholder approval for the transaction, the ability of Terex and Konecranes to obtain regulatory approval for the transaction, the possibility that the length of time required to complete the transaction will be longer than anticipated, the achievement of the expected benefits of the transaction, risks associated with the integration of the businesses of Terex and Konecranes, the possibility that the businesses of Terex and Konecranes may suffer as a result of uncertainty surrounding the proposed transaction, and other factors, risks and uncertainties that are more specifically set forth in Terex’ public filings with the SEC and Konecranes’ annual and interim reports. Konecranes disclaims any obligation to update the forward-looking statements contained herein.
IMPORTANT ADDITIONAL INFORMATION
This document relates to the proposed merger of Terex and Konecranes through which all of Terex’ common stock will be exchanged for Konecranes ordinary shares (or American depositary shares, if required). This document is for informational purposes only and does not constitute an offer to purchase or exchange, or a solicitation of an offer to sell or exchange, all of common stock of Terex, nor is it a substitute for the Preliminary Prospectus included in the Registration Statement on Form F-4 (the “Registration Statement”) to be filed by Konecranes with the SEC, the Prospectus/Proxy to be filed by Terex with the SEC, the listing prospectus of Konecranes to be filed by Konecranes with the Finnish Financial Supervisory Authority (and as amended and supplemented from time to time, the “Merger Documents”). No offering of securities shall be made in the United States except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE MERGER DOCUMENTS AND ALL OTHER RELEVANT DOCUMENTS THAT KONECRANES OR TEREX HAS FILED OR MAY FILE WITH THE SEC, NASDAQ HELSINKI, OR FINNISH FINANCIAL SUPERVISORY AUTHORITY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING THE PROPOSED MERGER.
The information contained in this document must not be published, released or distributed, directly or indirectly, in any jurisdiction where the publication, release or distribution of such information is restricted by laws or regulations. Therefore, persons in such jurisdictions into which these materials are published, released or distributed must inform themselves about and comply with such laws or regulations. Konecranes and Terex do not accept any responsibility for any violation by any person of any such restrictions. The Merger Documents and other documents referred to above, if filed or furnished by Konecranes or Terex with the SEC, as applicable, will be available free of charge at the SEC’s website (www.sec.gov) or by writing to Anna-Mari Kautto, Investor Relations Assistant, Konecranes Plc, P.O. Box 661, FI-05801 Hyvinkää, Finland or Elizabeth Gaal, Investor Relations Associate, Terex, 200 Nyala Farm Road, Westport, CT 06880, USA.
Konecranes and Terex and their respective directors, executive officers and employees and other persons may be deemed to be participants in the solicitation of proxies in respect of the transaction. Information regarding Konecranes' directors and executive officers is available in Konecranes’ annual report for fiscal year 2014 at www.konecranes.com. Information about Terex' directors and executive officers and their ownership of Terex ordinary shares is available in its Schedule 14A filed with the SEC on April 1, 2015. Other information regarding the interests of such individuals as well as information regarding Konecranes’ and Terex' directors and officers will be available in the proxy statement/prospectus when it becomes available. These documents can be obtained free of charge from the sources indicated above.
