OPTIONS

KONE Corporation's Board of Directors decided at its 18 December 2014 meeting to grant stock option rights to approximately 560 employees of its global organization based on the authorization received from the shareholders' meeting on March 1, 2010.

The stock options are granted in order to encourage key personnel for long-term efforts to grow shareholder value, and to increase their commitment to the company by offering them an internationally competitive incentive program. The company's Board Members, President and CEO, Executive Board Members and other key personnel covered by KONE's share-based incentive programs other than option programs are not included in the option plan.

The stock options are to be marked with the symbol 2015 and a maximum total of 1,500,000 options will be granted. Each stock option entitles its holder to subscribe for one (1) new class B KONE share.

The share subscription period for the stock options 2015 will be April 1, 2017 - April 30, 2019. The share subscription period begins as the financial performance of the KONE Group for the financial years 2015-2016 based on the total consideration of the Board of Directors was equal to or better than the average performance of the key competitors of KONE. The original share subscription price for the stock option was 36.20 euros per share and is further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. The effective subscription price as per February 27, 2019 is 28.75 EUR.

Terms and conditions of the 2015 option rights

In December 2015, KONE’s Board of Directors decided that KONE’s share-based remuneration will be based on two separate plans starting from the financial year 2016.

One share-based incentive plan will be targeted for the senior management of KONE, including the President and CEO, members of the Executive Board and other top management, consisting of approximately 60 individuals. The potential reward is based on the annual growth in both sales and earnings before interest and taxes (EBIT). The reward is to be paid as a combination of class B shares and cash equivalent of the taxes and similar charges that are incurred. The plan prevents participants from transferring the shares during a period of two years following the ending of each earning period. As part of the share-based incentive plan, a long-term target for the management´s ownership has been set. In April 2015, a total of 354,838 class B shares were granted to the management as a reward due to the achievement of the targets for the year 2014.

A second plan will be targeted for other key personnel of KONE, totaling approximately 425 individuals. The incentive plans will be part of these individuals’ remuneration starting from the financial year 2016. According to the decision, the potential reward is based on the annual growth in sales and earnings before interest and taxes (EBIT) in both plans. However, KONE’s Board of Directors has the possibility to change the basis of the target setting annually. Plans include conditions preventing participants from transferring and participants are obliged to return the shares and the cash payments if employment or service contract is terminated during a period of two years following the ending of each earning period. Following the decision, KONE does not grant new stock option plans. The current existing stock option plans 2013, 2014 and 2015 shall be carried out based on the original terms of these programs.

Option rights 2007 were granted according to the decision of the Board of Directors on December 5, 2007 to approximately 350 employees of its global organization based on the authorization received from the shareholders meeting at February 26, 2007. The stock options were marked with the symbol 2007 and a maximum total of 2,000,000 options were offered. The original share subscription price on April 1, 2010 was EUR 22.845. The share subscription price was reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. Each stock option entitled its holder to subscribe for two (2) class B KONE share. The share subscription period for stock options 2007 was April 1, 2010 - April 30, 2012. The Board of Directors confirmed on January, 26 2010 that the criteria of the stock option program 2007 had been attained and therefore resolved that the share subscription period would begin on April 1, 2010 as stated in the terms. The share subscription period was to begin only if the average turnover growth of the KONE Group for financial years 2008 and 2009 exceeded market growth and if the earnings before interest and taxes (EBIT) of the KONE Group for the financial year 2008 exceeded the EBIT for the financial year 2007, and the EBIT for the financial year 2009 exceeded the EBIT for the financial year 2008. KONE 2007 option rights were listed on the NASDAQ OMX Helsinki Ltd list on April 1, 2010 respectively. The subscription period for the 2007 option rights ended on April 30, 2012.

Option rights 2010 were granted according to the decision of the Board of Directors on July 20, 2010 to approximately 430 key employees. The decision was based on the authorization received from the Shareholders Meeting on March 1, 2010. A maximum total of 3,000,000 options could be granted. The original share subscription price for the option was EUR 17.50 per share and it was further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. Each option entitled its holder to subscribe for two (2) new class B share. The share subscription period for the stock option 2010 was April 1, 2013 - April 30, 2015. The share subscription period began on April 1, 2013, as the financial performance of the KONE Group for the financial years 2010–2012, based on the total consideration of the Board of Directors, was equal to or better than the average performance of key competitors of KONE. The 2010 stock options were listed on the NASDAQ OMX Helsinki Ltd as of April 2, 2013. The subscription period for the KONE 2010 option rights expired on April 30, 2015. The 896,000 KONE 2010 option rights held by KONE Capital Oy, a subsidiary of KONE Corporation, and otherwise unused 105 KONE 2010 option rights have expired upon the expiry of the subscription period.

Option rights 2013 were granted according to the decision of the Board of Directors on January 24, 2013 to approximately 480 employees. The decision was based on the authorization received from the shareholders' meeting on March 1, 2010. A maximum total of 750,000 options were granted. The original share subscription price for the stock option was 29.125 euros per share and it was further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. Each stock option entitled its holder to subscribe for two (2) new class B KONE shares. The share subscription period for the stock options 2013 was April 1, 2015 - April 30, 2017. The share subscription period began because the financial performance of the KONE Group for the financial years 2013-2014, based on the total consideration of the Board of Directors, was equal to or better than the average performance of the key competitors of KONE. The subscription period for the KONE 2013 option rights expired on April 30, 2017. The 55,000 KONE 2013 option rights held by KONE Capital Oy, a subsidiary of KONE Corporation, expired upon the expiry of the subscription period.

Stock options 2014 were granted according to the decision of the Board of Directors on December 20, 2013 to approximately 550 employees. The decision was based on the authorization received from the shareholders' meeting on March 1, 2010. The stock options were to be marked with the symbol 2014 and a maximum total of 1,500,000 options were granted. Each stock option entitled its holder to subscribe for one (1) new class B KONE share. The share subscription period for the stock options 2014 will be April 1, 2016 - April 30, 2018. The share subscription period began as the financial performance of the KONE Group for the financial years 2014-2015 based on the total consideration of the Board of Directors was equal to or better than the average performance of the key competitors of KONE. The original share subscription price for the stock option was 31.80 euros per share and was further reduced in situations mentioned in the terms, for example with dividends distributed before the subscription of the shares. The subscription period for the KONE 2014 option rights expired on April 30, 2018.

Option rights 2007: terms and conditions
Option rights 2010: terms and conditions
Option rights 2013: terms and conditions