Pihlajalinna Oyj — Proxy Solicitation & Information Statement 2017

Mar 10, 2017

Pihlajalinna Plc: Notice to General Meeting

Pihlajalinna Plc: Notice to General Meeting

PIHLAJALINNA PLC                         STOCK EXCHANGE RELEASE
                          10 March 2017 at 8.00

Pihlajalinna Plc: Notice to the General Meeting

Notice is given to the shareholders of Pihlajalinna Plc to the Annual General
Meeting of Shareholders to be held on Tuesday, 4 April 2017 at 3:00 p.m. at
Yliopistonkatu 55, 33100 Tampere, Finland (Tampere Hall, conference room
Sonaatti). The reception of participants who have registered for the meeting and
the distribution of voting tickets will commence at 2:00 p.m. Coffee will be
served before the meeting.

A. Matters on the Agenda of the Annual General Meeting

The following matters will be considered at the Annual General Meeting:

1. Opening of the Meeting
2. Calling the Meeting to Order
3. Election of Persons to Scrutinize the Minutes and to Supervise the Counting
   of Votes
4. Recording the Legality of the Meeting
5. Recording the Attendance at the Meeting and Adoption of the List of Votes
6. Presentation of the Annual Accounts including the Consolidated Annual
   Accounts, the Report of the Board of Directors and the Auditor's Report for
   the year 2016

7. Review by the CEO

8. Adoption of the Annual Accounts including the Consolidated Annual Accounts

9. Resolution on the Use of the Profit Shown on the Balance Sheet and the
   Payment of Dividend
   The Board of Directors proposes that a dividend of EUR 0.15 per share would be
   paid based on the balance sheet adopted for the financial period ended on 31
   December 2016. The dividend would be paid to a shareholder who on the dividend
   record date 6 April 2017 is registered as a shareholder in the Company's
   shareholders' register held by Euroclear Finland Ltd. The Board of Directors
   proposes that the dividend would be paid on 13 April 2017.

10. Resolution on the Discharge of the Members of the Board of Directors and
    the CEO from Liability

11. Resolution on the Remuneration of the Members of the Board of Directors
    The largest shareholders of the Company, representing approximately 41 percent
    of the shares and votes in the Company, propose that a full-time Chairman of the
    Board of Directors would be elected for the Company on the agenda point 12 and
    the remuneration of the Chairman of the Board of Directors would be increased
    accordingly. The Chairman's full-time participation to the development of the
    Company would be in the Company's best interest inter alia because of the strong
    expansion of the Company's operations and the ongoing changes on the Company's
    field of operation. On these grounds the above-mentioned shareholders propose
    that the annual remuneration to the members of the Board of Directors would be
    paid as follows: to the Chairman EUR 250,000 to the Vice-Chairman EUR 48,000 and
    to other members EUR 24,000.

In addition, the above-mentioned largest shareholders propose that the meeting
fees would be paid as follows: each member of the Board would be paid EUR 500
per meeting of the Board and of a Committee. In addition reasonable travelling
expenses would be paid according to the Company travel rules.

1. Resolution on the Number of Members of the Board of Directors
   The largest shareholders of the Company, representing approximately 41 percent
   of the shares and votes in the Company, propose that the number of members of
   the Board of Directors would be six (6).

2. Election of Members of the Board of Directors
   The largest shareholders of the Company, representing approximately 41 percent
   of the shares and votes in the Company, propose that Jari Eklund, Timo Everi,
   Leena Niemistö, Jari Sundström, Seija Turunen and Mikko Wirén would be re-
   elected as members of the Board of Directors for a term ending at the end of the
   next Annual General Meeting. All of the board candidates have notified the
   Company that if they are elected as members of the Board of Directors, they will
   elect Mikko Wirén as the Chairman of the Board of Directors.

Further information on the proposed nominees to the Board of Directors and the
evaluation regarding their independence is presented on the Company's website
http://investors.pihlajalinna.fi.

1. Proposal by the Board of Directors to appoint a shareholders' Nomination
   Board
   The Board of Directors proposes that the Annual General Meeting would resolve to
   establish a Shareholders' Nomination Board to prepare future proposals
   concerning the election and remuneration of the members of the Board of
   Directors to the General Meetings. The Nomination Board is established for an
   indefinite period. In addition, the Board of Directors proposes that the General
   Meeting adopts the Charter of the Shareholders' Nomination Board in the form set
   out as appendix of the Board's proposal available on the company's website at
   http://investors.pihlajalinna.fi.

The Nomination Board shall consist of four members nominated by the shareholders
of the company. In addition, the Chairman of the Board of Directors of the
company participates in the work of the Nomination Board as an expert. The right
to nominate members shall be vested with the four shareholders of the company
having the largest share of the votes represented by all the shares in the
company annually on September 1 based on the company's shareholders' register
held by Euroclear Finland Ltd. However, if a shareholder who has distributed
his/her holdings e.g. into several funds and has an obligation under the Finnish
Securities Markets Act to take these holdings into account when disclosing
changes in his/her share of ownership makes a written request to such effect to
the Chairman of the Board of Directors no later than on August 31, such
shareholder's holdings in several funds or registers will be combined when
calculating the share of votes which determines the nomination right. Should a
shareholder not wish to exercise his/her nomination right, the right shall be
transferred to the next largest shareholder who otherwise would not be entitled
to nominate a member.

The Chairman of the Board of Directors shall request the four largest
shareholders of the company, based on their shareholding on September 1 each
year, to nominate one member each to the Nomination Board. The Nomination Board
shall elect a Chairman from among its members. The term of office of the members
of the Nomination Board expires annually when the new Nomination Board has been
appointed.

1. Resolution on the Remuneration of the Auditor
   The Board of Directors proposes, based on recommendation of the Board's Audit
   Committee, to the Annual General Meeting that the Auditor's remuneration would
   be paid against an invoice approved by the Audit Committee of the Board of
   Directors.

2. Election of the Auditor
   The Board of Directors proposes, based on recommendation of the Board's Audit
   Committee, to the Annual General Meeting that KPMG Oy Ab, a firm of authorized
   public accountants, would be re-elected as Auditor for the financial year 1
   January - 31 December 2017. KPMG Oy Ab has announced that Ms. Lotta Nurminen,
   APA, would be the Auditor with principal responsibility.

3. Amending the Articles of Association
   The Board of Directors proposes to the Annual General Meeting that sections 4
   and 8 of the Articles of Association be amended to read as follows:

"4 §. The Company has a Board of Directors, which consists of no less than four
(4) and not more than ten (10) members. The General Meeting shall elect the
Chairman and Vice-Chairman of the Board of Directors. The term of office of a
member of the Board of Directors shall expire at the close of the first Annual
General Meeting following the election. In case the Chairman and Vice-Chairman
of the Board of Directors resign or become otherwise unable to act as the
Chairman during their term of office, the Board of Directors may elect from
among its members new Chairman of the Board of Directors for the remaining term
of office."

"8 §. The Company shall have one (1) auditor that shall be a firm of authorized
public accountants with an APA certified auditor acting as the auditor with
principal responsibility."

1. Authorizing the Board of Directors to Resolve on the Repurchase of the
   Company's Own Shares
   The Board of Directors proposes that the Annual General Meeting would authorize
   the Board of Directors to resolve on the repurchase of an aggregate maximum of
   2,061,314 of the Company's own shares, which corresponds to approximately 10
   percent of all the existing shares in the Company at the date of this notice.
   Own shares may be repurchased on the basis of the authorization only by using
   non-restricted equity.

Own shares may be repurchased at a price formed in public trading on the date of
the repurchase or otherwise at a price formed on the market. Own shares may be
repurchased using, inter alia, derivatives. The Board of Directors resolves on
how shares are repurchased. Own shares may be repurchased otherwise than in
proportion to the shares held by the shareholders (directed repurchase) if there
are weighty reasons for the company.

The authorization cancels the authorization given by the Annual General Meeting
on 4 April 2016 to decide on the repurchase of the company's own shares. The
authorization remains in force until the end of the next Annual General Meeting,
however, no longer than until 30 June 2018.

1. Resolution on the Authorization of the Board of Directors to Decide on
   Issuance of Shares and Other Special Rights Entitling to Shares
   The Board of Directors proposes to the Annual General Meeting that the Board of
   Directors would be authorized to decide on the issuance of shares and other
   special rights entitling to shares referred to in Chapter 10, Section 1 of the
   Finnish Companies Act by virtue of one or several decisions as follows.

The number of shares issued pursuant to the authorization shall not exceed
4,122,629 shares, which corresponds to approximately 20 percent of all the
existing shares in the Company. The authorization concerns both the issuance of
new shares as well as the transfer of the Company's own shares.

The Board of Directors decides on all other terms and conditions of the issuance
of shares and other special rights entitling to shares. The authorization
includes a right to deviate from the shareholders pre-emptive right to
subscription (directed issue) if there are weighty reasons for the company. The
authorization may be used, for example, to finance acquisitions or other
business arrangements and investments or the implementation of the Company's
share-based incentive plans as well as other purposes determined by the
Company's Board of Directors.

The authorization cancels the authorization given by the Annual General Meeting
on 4 April 2016 to decide on issuance of shares and other special rights
entitling to shares. The authorization remains in force until the end of the
next Annual General Meeting, however, no longer than until 30 June 2018.

1. Closing of the Meeting
   B. Documents of the Annual General Meeting

The proposals for the decisions on the matters on the agenda of the Annual
General Meeting as well as this notice are available on Pihlajalinna Plc's
website at http://investors.pihlajalinna.fi as of 14 March 2017 at the latest.
The Annual Accounts, the Report of the Board of Directors and the Auditor's
Report of Pihlajalinna Plc are also available on the above-mentioned website.
The proposals for the decisions on the matters and other above-mentioned
documents are also available at the meeting, and copies of these documents and
of this notice will be sent to shareholders upon request. The minutes of the
Annual General Meeting will be available on the above-mentioned website as of
18 April 2017 at the latest.

C. Instructions for the Participants in the Annual General Meeting

1. Shareholders registered in the shareholders' register
   Each shareholder, who is registered on 23 March 2017 in the shareholders'
   register of the Company held by Euroclear Finland Ltd., has the right to
   participate in the Annual General Meeting. A shareholder, whose shares are
   registered on his/her personal Finnish book-entry account, is registered in the
   shareholders' register of the Company.

A shareholder, who is registered in the shareholders' register of the Company
and who wants to participate in the Annual General Meeting, shall register for
the meeting no later than 30 March 2017 at 4:00 p.m. by giving a prior notice of
participation. The notice has to be received by the Company before the end of
the registration period. Such notice can be given by using a registration link
on the Company's website at http://investors.pihlajalinna.fi; by e-mail to
agm@pihlajalinna.fi; by regular mail to Pihlajalinna Plc, yhtiökokous2017,
Kehräsaari B, 33200, Tampere, Finland; or by telephone +358 20 770 6896 (Monday-
Friday between 9 a.m. and 4 p.m.).

In connection with the registration, a shareholder shall notify his/her name,
personal identification number, address, telephone number and the name of a
possible assistant or proxy representative and the personal identification
number of a proxy representative. The personal data is used only in connection
with the general meeting and with the processing of related registrations.

Shareholder, his/her assistant, or proxy representative shall, where necessary,
be able to prove his/her identity and/or right of representation at the venue of
the meeting.

1. Holders of Nominee Registered Shares
   A holder of nominee registered shares has the right to participate in the Annual
   General Meeting by virtue of such shares, based on which he/she on the record
   date of the Annual General Meeting, i.e. on 23 March 2017, would be entitled to
   be registered in the shareholders' register of the Company held by Euroclear
   Finland Ltd. The right to participate in the Annual General Meeting requires, in
   addition, that the shareholder on the basis of such shares has been registered
   into the temporary shareholders' register held by Euroclear Finland Ltd. at the
   latest on 30 March 2017 at 10:00 a.m. As regards nominee registered shares this
   constitutes due registration for the Annual General Meeting.

A holder of nominee registered shares is advised to request without delay
necessary instructions regarding the registration in the temporary shareholder's
register of the Company, the issuing of proxy documents and registration for the
Annual General Meeting from his/her custodian bank. The account management
organization of the custodian bank has to register a holder of nominee
registered shares, who wants to participate in the Annual General Meeting, into
the temporary shareholders' register of the Company at the latest by the time
stated above.

1. Proxy Representative and Proxy Documents

A shareholder may participate in the Annual General Meeting and exercise his/her
rights at the meeting by way of proxy representation. A proxy representative
shall produce a dated proxy document or otherwise in a reliable manner
demonstrate his/her right to represent the shareholder at the Annual General
Meeting.

When a shareholder participates in the Annual General Meeting by means of
several proxy representatives representing the shareholder with shares at
different securities accounts, the shares by which each proxy representative
represents the shareholder shall be identified in connection with the
registration for the Annual General Meeting.

Possible proxy documents should be delivered in originals to Pihlajalinna Plc,
yhtiökokous2017, Kehräsaari B, 33200 Tampere, Finland before the end of the
registration period.

1. Other instructions and information

Pursuant to Chapter 5, Section 25 of the Finnish Companies Act, a shareholder
who is present at the Annual General Meeting has the right to request
information with respect to the matters to be considered at the meeting.

On the date of this notice to the Annual General Meeting, 9 March 2017, the
total number of shares in Pihlajalinna Plc and votes represented by such shares
is 20,613,146. The Company or its subsidiaries do not own shares of the Company.

Helsinki, 9 March 2017

Pihlajalinna PLC
The Board of Directors

For further information, please contact:
Siri Markula, Head of Communications and IR, +358 40 743 2177,
siri.markula@pihlajalinna.fi

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