Decisions of Wärtsilä’s Annual General Meeting 19.3.2008

Wartsila Corporation
  • Stock exchange release
19 March 2008 at 2:01 AM E. Europe Standard Time

Wärtsilä Corporation Minutes of annual general meeting 19 March 2008 at 18.15 local time

Link to President & CEO Ole Johanssons review (in Finnish): Ole Johanssonin puhe yhtiökokouksessa 2008  35Mb »   

Wärtsilä’s Annual General Meeting approved the financial statements and discharged the company’s President & CEO and the members of the Board of Directors from liability for the financial year 2007. The Meeting approved the Board of Directors’ proposal to pay a dividend of EUR 2.25 per share and an extra dividend of EUR 2.00 per share for a total dividend of EUR 4.25 per share. The dividend will be paid to shareholders who are recorded in the company’s shareholder register maintained by the Finnish Central Securities Depository Ltd. The record date is March 26, 2008. The dividend will be paid on April 2, 2008.

The Meeting approved the following fees to the members of the Board of Directors:
- To the ordinary members EUR 55,000/year
- To the deputy chairman EUR 82,500/year
- To the chairman EUR 110,000/year
- In addition, each member will be paid EUR 400/meeting attended, the chairman’s meeting fee being double this amount. Roughly 40% of the annual fee is paid in Wärtsilä shares.

Board of Directors and Auditor

The Annual General Meeting decided that the Board of Directors shall have six members. The following were elected to the Board: Ms Maarit Aarni-Sirviö, Mr Kaj-Gustaf Bergh, Mr Kari Kauniskangas, Mr Antti Lagerroos, Mr Bertel Langenskiöld and Mr Matti Vuoria.

It was decided to pay the auditors’ fees as invoiced. The firm of public auditors KPMG Oy Ab were appointed as the company’s auditors.

Amendments to the Articles of Association

The Annual General Meeting approved the proposal of the Board of Directors to amend the Articles of Association. The new Articles of Association are attached.

Combination of share series and the related directed share issue and amendments to the Articles of Association

The Annual General Meeting approved the proposal of the Board of Directors to combine the Series A and Series B shares involving a directed free share issue and changes to the Articles of Association. The proposal of the Board of Directors is attached.


The AGM voted about the fees of the members of the Board of Directors.

ENCLOSURES

 

BOARD OF DIRECTORS’ PROPOSAL FOR DIVIDEND DISTRIBUTION APPROVED BY THE AGM ON MARCH 19, 2008

PROPOSAL OF THE BOARD FOR THE DIVIDEND

The parent company’s distributable funds total 577,382,733.65 euros, which includes 159,240,111.16 euros in net profit for the year. There are 95,969,561 shares with dividend rights.

The Board of Directors proposes to the Annual General Meeting that the company’s distributable earnings be disposed of in the following way:

- a dividend of EUR 2.25 per share be paid, making a total of EUR 215,931,512.25
- that the following sum be retained in shareholders’ equity EUR 361,451,221.40
Totalling EUR 577,382,733.65

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 dividend will not put the company’s solvency at risk.

Helsinki, February 4, 2008
Board of Directors


PROPOSAL OF THE BOARD FOR 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 total of 191,939,122.00
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, February 27, 2008

Board of Directors


DECISION BY THE AGM ON 19 MARCH 2008 TO AMEND THE 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.


DECISION BY THE AGM ON MARCH 19, 2008 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.”

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