Matters to be handled at Orion's Extraordinary General Meeting of Shareholders on 19 December 2005

The shareholders of Orion Corporation are convened to an Extraordinary Meeting of the Shareholders
on Monday, 19 December 2005 at 16.00 pm. at the Congress Center of the Helsinki Fair Center, address: Messuaukio 1, 00520 Helsinki.

 

 

The following matters will be handled:

 

The Board of Directors proposes that the Shareholder Meeting approves the demerger plan of Orion Corporation ("Demerging Company" or "Company") drawn by the Board and signed on 7 November 2005. According to the plan, Orion Corporation will be demerged into two new companies so that its assets and liabilities are transferred without a winding-up procedure to the new "Orion Corporation" and "Oriola-KD Corporation" ("Recipient Companies"), both of which will be established and listed, and the current Orion Corporation shall be dissolved.

The main content of the demerger plan is as follows:

 

As demerger consideration, the shareholders of the Demerging Company will receive shares in the Recipient Companies in the same proportion as they hold shares in the Demerging Company, i.e., one (1) class A share of the new Orion Corporation and one (1)class  A share of Oriola-KD Corporation for each class A share of the Demerging Company, and one (1) class B share of the new Orion Corporation and one (1) class B share of Oriola-KD Corporation for each class B share of the Demerging Company.

 

The purpose of the demerger is to differentiate the businesses of the current Orion Group so that the development, manufacture and marketing of pharmaceuticals (Orion Pharma) and the development, manufacture and marketing of diagnostic tests (Orion Diagnostica) would form one Group of businesses and the sale of pharmaceuticals and other healthcare products (Oriola and Kronans Droghandel) would form another Group. The Board of Directors believes that the demerger enables increased shareholder value by means of clarifying the business structures and by improving operational transparency.

 

In accordance with the demerger plan, the Annual General Meeting of the shareholders of the Demerging Company in the spring of 2006 will confirm both the number of members as well as the members and the chairmen to be elected to the boards of directors of the new Orion Corporation and Oriola-KD Corporation.

 

Orion's Board of Directors proposes that the board to be elected for the new Orion Corporation be advised to appoint Mr. Jukka Viinanen, current President and CEO of the Demerging Company, to serve as President and CEO of the new Orion Corporation as of the effective date of the demerger, and that the board to be elected for Oriola-KD Corporation be advised to appoint Mr. Eero Hautaniemi, who will start as President and CEO of the Wholesale and Distribution Division as of 2 January 2006, to serve as President of Oriola-KD Corporation as of the effective date of the demerger.

 

Each of the two Recipient Companies will have one (1) auditor and one (1) deputy auditor, which will be elected by the Annual General Meeting of the Demerging Company in the spring of 2006.

 

The demerger consideration shall be distributed to the shareholders of the Demerging Company on the registration day of the implementation of the demerger, on or about 30 June 2006. The demerger consideration shall be distributed in the book-entry securities system on the registration day of the demerger so that the shares held by the shareholders in the Demerging Company are exchanged for the shares of the Recipient Companies in accordance with the exchange ratio defined in the demerger plan.

 

Those shares of the Demerging Company that have not been delivered by their holders for registration in a book-entry securities system are deposited on a joint book-entry account maintained by the Finnish Central Securities Depository Ltd. On 30 September 2005, a total of 67,220 Orion Corporation A-shares and 66,138 Orion Corporation B-shares were deposited on this joint book-entry account. Shareholders having delivered their unregistered share certificates for registration into a relevant book-entry securities system by no later than eight days before the effective date of the demerger will receive their proportions of the demerger consideration to their respective book-entry securities accounts. For share certificates remaining unregistered, the shares shall be exchanged for the demerger consideration in the joint book-entry account.

  

The shareholders of the Demerging Company are not entitled to require redemption of their shares on the basis of the demerger. 

 

The proposed share capital of Oriola-KD Corporation is 147,899,766.14 euros. The share capital is not dependent on the total amount of shares of Oriola-KD Corporation distributed as demerger consideration. 

 

The proposed minimum share capital of the new Orion Corporation is 50,000,000 euros and the maximum share capital is 2,000,000,000 euros. The exact amount of the share capital will be determined on the date of the implementation of the demerger on the basis of the sum of the share capital and the share premium of the Demerging Company, from which the share capital of Oriola-KD Corporation has been deducted. On the basis of the share capital and share premium in the Balance Sheet of the Demerging Company on 30 September 2005, the share capital of the new Orion Corporation would be 88,168,775.46 euros.

 

The new Orion Corporation and Oriola-KD Corporation shall apply for the listing of their shares on the Helsinki Stock Exchange on or about 3 July 2006. The estimated last trading day for the Demerging Company's shares on the Helsinki Stock Exchange will be 30 June 2006, the effective date of the demerger and the dissolution of the Demerging Company.  

 

In accordance with the terms of the Stock Option Plan 2001 of Orion Corporation, if the company resolves to be demerged, the option holders shall be given the right to subscribe for the shares before the demerger within a time period determined by the company's Board of Directors. Accordingly, the holders of options 2001 are not entitled for requiring redemption of their options or any other consideration due to the demerger. As decided by the Board of Directors, the share subscription period for options 2001D shall begin on 2 January 2006 and the subscription period for all options 2001 shall end on 31 May 2006, after which the options shall not entitle for share subscriptions.  

 

 

The Board of Directors proposes that the share premium in the equity be decreased by 53,043,797.66 euros. The terms of the decrease are as follows:

 

The share premium fund shall be decreased without consideration and the decrease shall not have an effect on the number of shares in the Company, on the rights attached to the shares nor on the proportional ownership of the shareholders in the Company.

 

The share premium fund shall be decreased by 53,043,797.66 euros by transferring the decreased amount to an expendable fund in the non-restricted equity.

 

 

Following the decrease, the Company's aggregate restricted equity shall amount to a total of 236,068,541.60 euros and the aggregate non-restricted equity to a total of 165,749,399.90 euros. The Company's share capital, other restricted equity and other non-distributable equity shall have full coverage after the decrease of the share premium. The amount of the equity presented above and the coverage left for non-distributable equity have been calculated based on the interim financial statements of the Company as of 30 September 2005.

 

The decrease of the share premium shall not have an effect on the terms of the stock options issued by the Company.

 

The decrease of the share premium is proposed to come into effect in 2006 before the date of the implementation of the Company's demerger.

 

The implementation of the decrease of the share premium presumes that the Extraordinary Shareholders' Meeting has approved the demerger of the Company according to the Demerger Plan proposed to it. In case the Board of Directors of the Company decides not to implement the demerger for a reason in accordance with the Demerger Plan, the Board of Directors shall have a right not to implement the decrease of the share premium.

 

The proposed decrease of the share premium forms a part of the proposed demerger of the Company into two new companies and its purpose is to restructure the Company's balance sheet so as to make it as appropriate as possible from the perspective of the demerger, especially taking into account the intended public status of the companies to be established in the demerger and taking into account the ability to distribute dividend expected from public companies. Additionally, the purpose of the decrease is to prepare for the proposed reform of the Companies Act pursuant to which the current concept of share premium will no longer exist.

 

Taking into account the business activities of the Company and its development and the current needs and possibilities of expansion, the share premium is not necessary for the Company's operation as there are no investment or other needs falling outside the scope of ordinary business, except for the demerger itself, in the foreseeable future.

 

The expendable fund formed by the decrease of the share premium shall be divided among the companies to be established in the demerger in the manner defined more exactly in the Demerger Plan prepared by the Board of Directors of the Company.

The documents provided for in the Companies Act shall be held available as of 18 November 2005 for the shareholders at the head office of the company in Espoo, address: Orionintie 1 A, 02200 Espoo, and they will be sent to a shareholder upon request. The notice to convene the Extraordinary General Meeting has been sent to all shareholders whose address is known to the company.

 

The Notice to Convene the Extraordinary General Meeting will be available on Orion's homepage www.orion.fi as of 15 November 2005.

 

 

 

 

Orion Corporation

 

 

 

Jukka Viinanen                                        Olli Huotari

President and CEO                                  General Counsel

 

 

 

Jukka Viinanen, President and CEO, Orion Corporation, phone +358 10 429 3710                   

Olli Huotari, General Counsel, phone +358 10 429 3054

 

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Orion Corporation

Corporate Administration

Orionintie 1A, 02200 Espoo

Homepage: www.orion.fi