Agenda of the meeting:
1. The matters to be addressed at the annual general meeting as set out in Article 20 of the Company's Articles of Association
2. Dividend
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.36 per share be paid for the year 2005. The dividend will be paid to a shareholder who is registered in the Company's Shareholder Register kept by Finnish Central Securities Depository Ltd on the record date, April 18, 2006. The Board of Directors proposes that the dividend be paid out on April 25, 2006.
3. Proposal of the Board of Directors to authorize the Board of Directors to resolve to repurchase the Company's own shares
The Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to resolve to repurchase shares in the company by using funds available for distribution of earnings. The maximum number of shares to be repurchased is 2,146,640. The amount together with the shares already owned by the Company corresponds to 5 per cent of the share capital of the Company and the total voting rights.
The repurchase of shares in the company will reduce the company's distributable earnings.
The shares may be repurchased in order to finance acquisitions of assets belonging to the field of business of the company, to develop the capital structure of the Company, to improve the liquidity of the shares of the company, to grant incentives to members of the personnel (as a part of the Share Ownership Plan 2004 or otherwise) or to be transferred in other ways, or to be cancelled.
The Board of Directors shall decide on the procedure for buying back shares. The shares can be repurchased either through a tender offer made to all the shareholders on equal terms and at an equal price determined by the Board; or through public trading in which case the shares will be repurchased in another proportion than that of holdings of the current shareholders. The Company may enter into derivative, share lending or other arrangements within applicable regulatory limits, whereby the repurchase price is based on the market price of the share in public trading.
On February 6, 2006, the Chief Executive Officer and the Chief Executive's deputy, the members of the Board of Directors and the Supervisory Board as well as the Auditor, all of whom belong to the Company's inner circle, owned less than 0.1 per cent of the Company's share capital and the voting rights conferred by the shares. In addition, on February 3, 2006 the Republic of Finland and other parties who own more than one per cent of the Company's shares, thereby belonging to the Company's inner circle, owned about 54.1 per cent of the Company's share capital and the voting rights conferred by the shares. The proportion of the Company's share capital and voting rights held by those belonging to the Company's inner circle after the purchase of shares cannot be determined because the own shares may be purchased in public trading on Helsinki Exchanges without knowledge of the parties who will sell the shares.
The authorization is proposed to be effective for one year from the Annual General Meeting until April 11, 2007.
4. Proposal of the Board of Directors' to authorize the Board of Directors to resolve to dispose the company's own shares
The Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to decide on the transfer of a maximum of 6,240,080 own shares.
The Company has in its possession 4,093,440 shares that were purchased on the basis of the previously valid authorization granted by the Annual General Meeting. The Board of Directors has proposed that the Annual General Meeting authorize the Board of Directors to resolve upon a further repurchase of a maximum of 2,146,640 own shares.
The Board of Directors shall have the right to decide on the recipients, terms and conditions and number of shares to be transferred. The shares can be transferred at a price decided by the Board of Directors. The consideration can be other than cash consideration.
The Board of Directors shall have the right to decide on transfer of shares in disapplication of the shareholders' pre-emptive rights providing that there is a weighty economic reason for the transfer, such as the financing or implementation of mergers, acquisitions and similar arrangements as well as the provision of incentives for the personnel or management including the transfer according to the Share Ownership Plan 2004. For the purpose of providing an incentive, shares can be transferred, in disapplication of the shareholders' pre-emptive rights, also to the Chief Executive Officer and Chief Executive's deputy, who are Company insiders, and whose proportion of the Company's share capital and the voting rights conferred by all the shares in the Company (including the own shares in the Company's possession and the stock options in accordance with the 2001 stock option programme) was less than 0.1% on February 6, 2006. The corresponding proportion of the mentioned insiders as a result of transfers to be made according to the incentive scheme cannot be calculated at this stage, but their proportion of shares which may be transferred via the incentive scheme must not exceed 0.5% of the Company's share capital or the voting rights conferred by all the shares in the Company. The shares can also be transferred by selling them in public trading.
It is proposed that the authorization be valid for one year from the Annual General Meeting up to April 11, 2007.
5. Proposal of the Board of Directors' to authorize the Board of Directors to resolve to increase the share capital
The Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to decide on increasing the share capital of the Company by issuing new shares, stock options or convertible bonds in one or more issues. The increase of the share capital through issuance of new shares, subscription of shares pursuant to stock options and conversion of convertible bonds into shares may amount to a maximum of EUR 22,133,006.87 in total.
As a result of share issuance, subscription of shares pursuant to stock options and conversion of convertible bonds into shares an aggregate maximum of 12,480,160 new shares with an approximate book equivalent value of EUR 1.77 per share may be issued. The total proposed amount corresponds to 10% of the registered share capital and the total voting rights.
It is also proposed that the Board of Directors be authorized to decide on the subscription price, grounds for determining the subscription price, other terms and conditions and matters relating to issuance of shares, stock options or convertible bonds.
The Board of Directors proposes to be authorized to disapply the shareholders' pre-emptive rights to the Company's shares, provided that from the Company's perspective important financial grounds exist such as financing or carrying out of an acquisition or another arrangement or granting incentives to selected members of the personnel. The Board of Directors is entitled to determine the persons entitled to subscription, but the decision may not be made to the benefit of the persons referred to in the Finnish Companies Act, Chapter 1, Section 4, Paragraph 1, as prescribed by the Act. The Board is not entitled to decide on issuing stock options to the personnel or to the management. It is also proposed that the Board of Directors be authorized to determine that a share subscription may be made in kind or otherwise on certain terms, as prescribed by the Finnish Companies Act.
It is proposed that the authorization be valid for one year from the Annual General Meeting up to April 11, 2007.
6. Composition of the Board of Directors
The Nomination Committee proposes to the Annual General Meeting that seven members be elected to the Board of Directors and that the present members, i.e. Elizabeth Armstrong, Heikki Bergholm, Eija Malmivirta, Ove Mattsson, Kaija Pehu-Lehtonen, Anssi Soila and Markku Tapio be re-elected as members of the Board of Directors. It is proposed that the present Chairman Anssi Soila and Vice Chairman Eija Malmivirta be re-elected.
7. Election of the auditor
The Audit Committee of the Board of Directors proposes to the Annual General Meeting that KPMG Wideri Oy Ab be elected as the Company's auditor KHT Pekka Pajamo acting as the principal auditor.
8. Proposal of shareholder George Jauhiainen to dissolve the Supervisory Board
9. Election of the Nomination Committee at the Annual General Meeting
The Ministry of Trade and Industry, representing the Finnish State as a shareholder, proposes that the Annual General Meeting decide to set up a Nomination Committee tasked with preparing proposals concerning members of the Board of Directors and their remuneration for presentation to the next Annual General Meeting. The Nomination Committee would consist of the Chairman of the Board of Directors, acting as an expert member, and the representatives of the three largest shareholders. The right to appoint the members who represent the shareholders should belong to those three shareholders whose proportion of the votes conferred by all the Company's shares is the biggest on the 1st of November preceding the Annual General Meeting. Should a shareholder refrain from exercising the right to appoint the member, this right would be passed on to the next biggest shareholder. The biggest shareholders would be determined by their shareholding information registered in the book-entry securities system. However, holdings by a shareholder, who shall, under the Securities Markets Act, notify of certain changes in holdings (shareholder's disclosure requirement), such as holdings spread among several funds, would be added together if the shareholder requires it by means of a written notification sent to the Board of Directors of the Company by October 31, 2006.
The Nomination Committee would be convened by the Chairman of the Board of Directors and the Committee would elect a chairman from amongst its members.
The Nomination Committee should present its proposal to the Company's Board of Directors no later than on the 1st of February preceding the Annual General Meeting
Financial statements and the proposals by the Board of Directors
Kemira Oyj's financial statements and the proposals mentioned above in Sections 3, 4, 5, 6, 7, 8 and 9 are available for inspection by shareholders as from Tuesday, April 4, 2006, at the Company's head office at the address Porkkalankatu 3, Helsinki. Copies of the documents will be sent to shareholders upon request, and they will also be available at the Annual General Meeting.
Right to attend the Annual General Meeting
A shareholder who has been registered in the Company's Shareholder Register kept by the Finnish Central Securities Depository Ltd on March 31, 2006 and has given notice to attend the Annual General Meeting no later than on April 6, 2006 at 4.00 p.m. is entitled to attend and participate in the Annual General Meeting.
Registration for the Annual General Meeting
A shareholder can give notice of the intent to participate in the Annual General Meeting as follows:
a) by letter to the address Kemira Oyj, Arja Korhonen, P.O. Box 330, 00101 Helsinki;
b) by fax on +358 10 862 1780, Kemira Oyj, Arja Korhonen;
c) by telephone on +358 10 862 1703, Arja Korhonen, weekdays 9-12 a.m. and 1-4 p.m.
d) via Kemira's website at the address www.kemira.com/Group/English
Notifications must be received by the Company no later than on Thursday, April 6, 2006 at 4.00 p.m. at the latest.
Submission of proxies
A proxy for representing a shareholder at the meeting must be delivered no later than in connection with the notice to attend the meeting.
Helsinki, February 6, 2006
Board of Directors