The shareholders of SanomaWSOY Corporation are invited to the Extraordinary General Meeting of Shareholders to be held in hall A on the 4th floor of the congress wing of Finlandia Hall (entrances M1 or K1), at Mannerheimintie 13 e, Helsinki, on Wednesday, 18 September 2002 at 3:00 p.m. The reception of the shareholders registered for the meeting starts at 2:15 p.m. The issue of the Extraordinary General Meeting of Shareholders is: The Board of Directors' Proposal for Approving the Merger Plan
The Board of Directors of SanomaWSOY Corporation proposes that the Extraordinary General Meeting approves the merger plan approved and signed by the Boards of Directors of SanomaWSOY Corporation and Rautakirja Oyj on 19 June 2002, according to which Rautakirja Oyj will merge into SanomaWSOY Corporation. The principal contents of the merger plan are the following: Merger
Rautakirja Oyj will be merged into SanomaWSOY Corporation by absorption merger as provided for in Chapter 14, Section 1 of the Finnish Companies Act and under the terms and conditions set out in the merger plan.
The Articles of Association of SanomaWSOY Corporation are proposed to be amended as a result of the merger so that the field of business of the company is to engage in publication, marketing and distribution of books, newspapers, magazines and other publications, other communications, kiosk business activity, entertainment business activity, and affiliated industrial and commercial business operations, either by itself or by its subsidiaries or associated companies, in addition to which, the company can engage in rental and investment activity. Furthermore, the Articles of Association are proposed to be amended so that the maximum share capital would be EUR 300,000,000; the number of A-shares of the company can be at most 120,000,000, and the number of B-shares of the company is at least 100,202,620 with a maximum of 720,000,000.
The merger will come into force on the day when the implementation of the merger is registered in the trade register. The intended time for the registration of the implementation of the merger is
1 March 2003. Merger consideration
The shareholders of Rautakirja Oyj will receive new B-shares issued by SanomaWSOY Corporation as a merger consideration so that 5.3 B-shares of SanomaWSOY Corporation with a book-keeping value of EUR 0.43 per share are given against each A- or B-share of Rautakirja Oyj with a book-keeping value of EUR 3.40 per share.
To the extent that the number of shares to be given as a merger consideration should not be a whole number compared with the number of shares owned by a shareholder of Rautakirja Oyj, and thus the shareholder would not receive full merger consideration in shares of SanomaWSOY, the remaining fraction will be compensated as a cash consideration. The cash consideration shall be calculated on the basis of the volume weighted average price quoted for the A- and B-shares of Rautakirja Oyj at the HEX Helsinki Exchanges during the last three months' trading period, which expires one week prior to the effective date of the merger. In the event of it being a question of a fraction of shares of Rautakirja Oyj, the merger consideration shall be a corresponding fraction of the average price determining the basis of the consideration.
No merger consideration is given to Rautakirja Oyj shares held by SanomaWSOY Corporation.
The distribution of the merger consideration will start on the date of the merger, or if this is not a banking day, on the next banking day following the date of the merger. The merger consideration will be distributed in the book-entry system so that on the date of the registration of the implementation of the merger in the trade register, the shares entered in the shareholders' book-entry accounts, according to the shareholders' register of Rautakirja Oyj, are converted into shares of SanomaWSOY Corporation at an exchange rate and manner agreed upon in the merger plan.
The cash consideration will be paid to the bank account connected to the book-entry account of the shareholder or to another bank account nominated by the shareholder. Proposal to increase the share capital in order to pay the merger consideration
In order to pay the merger consideration, SanomaWSOY Corporation will increase its share capital by a minimum of EUR 0.43 and a maximum of EUR 14,426,981.60 by issuing at least one and a maximum of 33,551,120 new B-shares, with an equivalent book-keeping value of EUR 0.43 per share. The shares given as merger consideration will entitle their holders to a full dividend for the financial year, ending on 31 December 2002, and entitle their holders to all other rights of a shareholder starting from the date the increase of share capital has been registered. Reasons and causes of the merger, according to which the merger consideration is to be determined
The operations of Rautakirja Oyj and SanomaWSOY Corporation are merged as part of the structural change in the Group, in order to increase the efficiency of the operations and to save total costs. The merger will also enable full usage of the SanomaWSOY Group's resources, for example, in international expansion projects.
The merger consideration is based on the relative values of SanomaWSOY Corporation and Rautakirja Oyj for the purpose of which the valuation of the companies and their shares has been made on the basis of the market value of the companies, the cash flow value of the operations, and on other commonly used evaluation methods. Description of the special benefits and rights to be granted in connection with the merger
The members of the Boards of Directors, the Managing Directors, or the auditors of the merging companies are not granted any special benefits or rights. Neither are such benefits or rights granted to the auditors acting as independent experts. Clearance of subordinated loans
Rautakirja Oyj does not have subordinated loans as governed in Chapter 14, Section 4, Subsection 2, Paragraph 4 of the Finnish Companies Act. SanomaWSOY Corporation issued on 31 August 2001 a convertible subordinated loan for the amount of EUR 200,000,000. Shareholdings of Rautakirja Oyj and its subsidiaries in SanomaWSOY Corporation
Rautakirja Oyj or its subsidiaries do not own any shares in SanomaWSOY Corporation. Other terms and conditions
Paid dividends of the companies have been taken into account in the merger plan. The new shares of SanomaWSOY Corporation to be received by the shareholders as merger consideration entitle their holders to a full dividend for the financial year of 2002. The amount of dividend is decided in the Annual General Meeting of SanomaWSOY Corporation following the registration of the implementation of the merger and registration of the increase of the share capital relating to the payment of the merger consideration. For the financial year of 2002, the Board of Directors of SanomaWSOY Corporation will propose to the Annual General Meeting a dividend of at least EUR 0.26 per share.
Both companies agree to operate according to the aim and purpose of this merger plan and to take it into account in all decisions unless otherwise agreed in the merger plan. Neither company shall take any unusual or far-reaching measures and shall not before the enforcement of the merger change its share capital, acquire company's own shares, issue convertible bonds or options, or resolve to distribute any other dividend than mentioned in the merger plan. The above restrictions can only be deviated from in a manner approved in advance by the Boards of Directors of both companies and, not be prevented by any restrictions, the Board of Directors of Rautakirja Oyj may decide to incorporate its business or parts of its business or carry out other kind of reorganisation of its corporate structure.
The merger is subject to the fact that, prior to the Extraordinary General Meeting deciding on the approval of the merger plans, no permanent material adverse change occurs in the financial preconditions of either company, other than due to changes in economic trends. Merger memorandum
A merger memorandum required by the Finnish Securities Markets Act is intended to be displayed for the inspection of the shareholders on 10 September 2002. Displayed documents
The merger plan and its appendices will be held available for the inspection of shareholders at company's Legal Affairs department, Ludviginkatu 6-8, 3rd floor, Helsinki, as of Friday, 16 August 2002. Copies of the documents will be sent upon request to the shareholders. Participation right
Shareholders entered as shareholders in the shareholders' list of the company held by the Finnish Central Securities Depository Ltd by 6 September 2002 are entitled to attend the Extraordinary General Meeting. In addition, shareholders whose shares are not transferred into a book-entry system are entitled to participate in the Extraordinary General Meeting, provided that the shareholder was registered in the shareholders' list of Sanoma Corporation, Helsinki Media Company Oy, or Oy Devarda Ab before 1 May 1999, or in the shareholders' list of Werner Söderström Oyj - WSOY before 23 December 1992. In this case, the shareholder must present his/her share certificate or other proof of the fact that the ownership of the shares has not been transferred to a book-entry account, at the Extraordinary General Meeting. Shareholders in the nominee register
Nominee registered shareholders can be temporarily entered in the shareholders' list of the company for participation in the Extraordinary General Meeting on 6 September 2002. The administrators of property shall enter the nominee registered shareholders in the shareholders' list to be created for the Extraordinary General Meeting upon request. Registration
Shareholder who wants to participate in the Extraordinary General Meeting, must give notice of his/her participation at the latest by 10 September 2002 at 4:15 p.m. either via telephone +358 10 519 5021, fax +358 10 519 5058 or email to email@example.com. At the same time, please supply the name of the possible advocate, authorised agent, or statutory representative. When registering via fax or email, the fax or email message must be received prior to the end of the registration period. Please, deliver the possible proxies during the advance registration period to the address: SanomaWSOY, Legal Affairs, P.O. Box 1229, FIN-00101 Helsinki, Finland. For any questions concerning the registration, please contact Ms. Kirsi Vainio, Paralegal, tel. +358 10 519 5055.
Helsinki, 19 June 2002
Board of Directors
Investor Relations and Group Communications