KONE Oyj - Company Announcement

KONE's Board of Directors Decides on New Stock Option Plan

KONE Corporation, stock exchange release, July 20, 2010 at 1.30 p.m. EET



KONE Corporation's Board of Directors decided at its 20 July 2010 meeting to
grant stock option rights to approximately 430 employees of its global
organization based on the authorization received from the shareholders meeting
at March 1, 2010.

The stock options are granted for encouraging 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, CEO and Executive Committee Members are not included in
the option plan.



The stock options are to be marked with the symbol 2010 and a maximum total of
3,000,000 options will be offered. Each stock option entitles its holder to
subscribe for one (1) new or an existing company's own class B KONE share. The
class B shares for which these stock options can be exchanged constitute no more
than 1.2 % of the company's total number of shares.



The share subscription period for stock option 2010 will be April 1, 2013 -
April 30, 2015. The share subscription period begins only if the financial
performance of the KONE Group for financial years 2010-2012 based on the total
consideration of the Board of Directors is equal to or better than the average
performance of key competitors of KONE. If the above-mentioned prerequisite does
not fulfill, stock options expire based on the consideration and in the extent
and manner decided by the Board of Directors and the terms of the stock options.
The share subscription price for the stock option is 35.00 euros per share and
further reduced in situations mentioned in the terms, for example with dividends
distributed before the subscription of the shares.



The terms of the Stock Option Plan 2010 are included in their entirety as an
attachment and they are also available in the KONE website. Additional
information on KONE's compensation systems is available in the Corporate
Governance Statement section of the KONE website at www.kone.com.


About KONE

KONE is one of the global leaders in the elevator and escalator industry. The
company has been committed to understanding the needs of its customers for the
past century, providing industry-leading elevators, escalators and automatic
building doors as well as innovative solutions for modernization and
maintenance. The company's objective is to offer the best people flow experience
by developing and delivering solutions that enable people to move smoothly,
safely, comfortably and without waiting in buildings in an increasingly
urbanizing environment. In 2009, KONE had annual net sales of EUR 4.7 billion
and approximately 34,000 employees. KONE class B shares are listed on the NASDAQ
OMX Helsinki Ltd in Finland. Founded in 1910, KONE celebrates its centennial
anniversary in 2010.

www.kone.com

For further information, please contact:
Jukka Ala-Mello, Secretary to the Board, tel. +358 (0)204 75 4226

Sender:

KONE Corporation

Jukka Ala-Mello
Secretary to the Board

Anne Korkiakoski
Executive Vice President
Marketing & Communications


KONE CORPORATION STOCK OPTION 2010 TERMS

The Board of Directors of KONE Corporation (Board of Directors) has on July
20, 2010 resolved by authorization of the General Meeting of Shareholders on
March 1, 2010 to issue stock options to the key personnel of KONE Corporation
(Company) and its subsidiaries (KONE Group) and to a wholly owned subsidiary
KONE Capital Corporation (Subsidiary) on the following terms and conditions.


I STOCK OPTION TERMS AND CONDITIONS

1. Number of Stock Options

The maximum total number of stock options issued shall be 3,000,000, and they
entitle their holders to subscribe for a maximum total of 3,000,000 new class B
shares in the Company or existing class B shares held by the Company.

2. Stock Options

1. The stock options shall be marked with the symbol "2010".

2. The key personnel to whom stock options are issued shall be notified of their
entitlement to subscribe stock options in writing by the Board of Directors. The
Board of Directors shall decide on the approval of the subscriptions of stock
options.

3. Right to Stock Options

The stock options shall, in deviation from the shareholders' pre-emptive
subscription rights, be gratuitously issued to the key personnel of the KONE
Group (stock option recipients) and to the Subsidiary wholly owned by the
Company. The shareholders' pre-emptive subscription rights are deviated from
since the stock options are intended to form part of the Group's incentive and
commitment program for the key personnel. There is a weighty financial reason
for the Company for granting the stock options.

4. Granting of Stock Options

1. The Board of Directors shall decide upon the granting of the stock options.
The Subsidiary shall be granted stock options to the extent that the stock
options are not granted to the key personnel of the KONE Group.

2. The Board of Directors shall later decide upon the further granting of the
stock options subscribed by the Subsidiary, to the key personnel employed by or
to be recruited by the KONE Group.

5. Transfer of Stock Options and Obligation to Offer Stock Options

1. The stock options are freely transferable, when the relevant share
subscription period has begun. The Board of Directors may, however, permit the
transfer of a stock option also before such date. The Company or the Subsidiary
shall hold the stock options on behalf of the stock option recipient until the
beginning of the share subscription period. The stock option recipient has the
right to acquire possession of the stock options when the relevant share
subscription period begins. Should the stock option recipient transfer his/her
stock options, such person is obliged to inform the Company about the transfer
in writing, without delay.

2. Should a stock option recipient cease to be employed by or in the service of
the KONE Group, for any reason other than the death of a stock option recipient,
or the statutory retirement, retirement in compliance with the employment or
service contract or retirement otherwise determined by the Company, such person
or his/her legal successor shall, without delay, offer to the Company or its
order, free of charge, the stock options for which the share subscription period
specified in Section II.2 has not begun on the last day of such person's
employment or service. The Board of Directors can, however, in the
above-mentioned cases, decide that the stock option recipient is entitled to
keep such stock options, or a part of them, which are under the offering
obligation.

3. Regardless of whether the stock option recipient or his/her legal successor
has offered the stock options to the Company or not, the Company is entitled to
inform the stock option recipient in writing that the stock option recipient has
lost his/her stock options on the basis of reasons mentioned in Sections
I.5.1-2. Should the stock options be transferred to the book-entry account
system, the Company has the right, whether or not the stock options have been
offered to the Company, to request and get transferred all the stock options
under the offering obligation from the stock option recipient's book-entry
account to the book-entry account appointed by the Company, without the consent
of the stock option recipient. In addition, the Company is entitled to register
transfer restrictions and other respective restrictions concerning the stock
options to the stock option recipient's book-entry account, without the consent
of the stock option recipient.

II SHARE SUBSCRIPTION TERMS AND CONDITIONS

1. Right to Subscribe for Shares

1. Each stock option entitles its holder to subscribe for one (1) new or an
existing class B share in the Company. The Company shall, prior to the beginning
of the share subscription period, announce whether the subscription right is
directed at a new class B share or an existing class B share. The book
equivalent value of each share is EUR 0.25. As a result of the share
subscriptions, the share capital of the Company may be increased by a maximum
total of EUR 750,000 and the number of class B shares by a maximum total of
3,000,000 new class B shares.

2. The Subsidiary shall not be entitled to subscribe for shares in the Company
on the basis of the stock options.

2. Share Subscription and Payment

1. The share subscription period for stock option shall be April 1, 2013 - April
30, 2015.

2. However, the share subscription period begins only if the financial
performance of the KONE Group for financial years 2010-2012 based on the total
consideration of the Board of Directors is equal to or better than the average
performance of key competitors of KONE. If the above-mentioned prerequisite does
not fulfill, stock options expire based on the consideration and in the extent
and manner decided by the Board of Directors and the terms of the stock options.
3. Share subscriptions shall take place at the head office of the Company or
possibly at another location to be determined later. The subscriber shall
transfer the respective stock option certificates with which he/she subscribes
for shares, or, in the case of the stock options have been transferred to the
book-entry account, the stock options with which shares have been subscribed
for, shall be deleted from the subscriber's book-entry account. Upon
subscription, payment for the shares subscribed for shall be made to the bank
account designated by the Company. From the subscription price 0.25 euros
representing the accounting par value will be entered to the share capital and
rest to the paid-up unrestricted equity fund if new class B shares are directed
at the subscription. The Company shall decide on all measures concerning the
share subscription.

3. Share Subscription Price

1. The share subscription price for the stock option is 35.00 euros per share.

2. The subscription price of the stock option shall be reduced in special
situations and at times specified hereinafter at Sections II.7.1 - II.7.2. The
share subscription price shall, nevertheless, always amount to at least the book
equivalent value of the share.

4. Registration of Shares

Shares subscribed for and fully paid shall be registered in the book-entry
account of the subscriber.

5. Shareholder Rights

The dividend rights of the new class B shares and other shareholder rights shall
commence when the increase of the share capital has been entered into the Trade
Register.

Should existing class B shares, held by the Company, be given to the subscriber
of shares, the subscriber shall be given the right to dividend and other
shareholder rights after the shares have been registered on his/her book-entry
account.

6. Share Issues, Stock Options and Other Special Rights for Shares before Share
Subscription

If the Company, prior to share subscription, decides to issue shares or new
stock options or other special rights entitling to shares, a stock option holder
shall have the same right as, or an equal right to, that of a shareholder.
Equality is reached in the manner determined by the Board of Directors by
adjusting the number of shares available for subscription, the share
subscription price or both of these.

7. Rights in Certain Cases

1. If the Company distributes dividends or funds from the reserve of invested
non-restricted equity, the amount of the dividend or distributable invested
non-restricted equity decided before the subscription is deducted from the
subscription price of the stock option as at the record date for each dividend
distribution or other distribution of funds.

2. If the Company before the subscription reduces its share capital by
distributing share capital to shareholders, the amount of distributable share
capital decided before the subscription is deducted from the subscription price
of the stock option as at the record date of repayment of share capital.

3. If the Company is placed in liquidation before the share subscription, the
stock option holder shall be given an opportunity to exercise his/her
subscription right within a period of time determined by the Board of Directors.
If the Company is removed from the register prior to the share subscription, the
option holder has the same or equal rights with a shareholder.

4. Should the Company resolve to merge with another company as a merging company
or merge with a company to be formed in a combination merger, or should the
Company resolve to be demerged entirely, the stock option owners shall, prior to
the registration of the execution of a merger or a demerger, be given the right
to subscribe for shares with their stock options, within a period of time
determined by the Board of Directors. Alternatively, the Board of Directors may
give a stock option owner the right to convert the stock options into stock
options issued by the other company, in the manner determined in the draft terms
of merger or demerger, or in the manner otherwise determined by the Board of
Directors, or the right to sell stock options prior to the registration of the
execution of a merger or a demerger. After such period, no share subscription
right or conversion right shall exist. The same proceeding shall apply to
cross-border mergers or demergers, or should the Company, after having
registered itself as an European Company (Societas Europae), or otherwise,
register a transfer of its domicile from Finland into another member state of
the European Economic Area. The Board of Directors shall decide on the impact of
potential partial demerger on the stock options. In the above situations, the
stock option owners shall have no right to require that the Company redeem the
stock options from them at their market value.
5. If the Company, after the beginning of the share subscription period,
resolves to acquire or to redeem its own shares by an offer made to all
shareholders, the stock option owners shall be made an equivalent offer. In
other cases, acquisition or the redemption of the Company's own shares or stock
options or other special rights entitling to shares by the Company, shall not
affect the position of stock option owners.

6. If, before the end of the subscription period, a situation, as referred to in
Chapter 18 Section 1 of the Finnish Companies Act, in which a shareholder
possesses over 90% of the shares and the votes of the shares of the Company, and
therefore has the right and obligation to redeem the shares of the remaining
shareholders, the stock option owners shall be entitled to use their right of
subscription by virtue of the stock option within a period of time determined by
the Board of Directors. A shareholder who possesses over 90% of the shares and
the votes of the shares of the Company has the right to buy the stock option
owner's stock options and when a shareholder exercises this right the stock
option owner is under obligation to sell them to the shareholder for market
value.

7. If the Company, prior to the share subscription, decides to combine its share
series, stock option owners have equal rights with the owners of the Company's
class B shares.

III OTHER MATTERS

1. The laws of Finland shall be applied to these terms and conditions. Disputes
arising in relation to the stock options shall be settled by arbitration, in
accordance with the Arbitration Rules of the Central Chamber of Commerce by
using one arbitrator.

2. The Board of Directors may decide on the transfer of the stock options to the
book-entry account at a later date than earlier mentioned and make also other
such technical amendments and specifications, which are not considered
essential, to these terms and conditions. Other matters related to the stock
options shall be decided by the Board of Directors and they may impose binding
rules on stock option recipients. The stock option documentation shall be kept
available for inspection at the head office of the Company.

3. If the stock option owner acts against these terms and conditions, or against
any decisions, orders, or instructions given by the Company or against
applicable laws and regulations of the authorities, the Company shall be
entitled to withdraw, free of charge, the stock options which have not been
transferred, or with which shares have not been subscribed for.

4. The Company may maintain a register of the stock option owners to which the
stock option owners' personal data is recorded. The Company may send all
announcements regarding the stock options to the stock option owners by email.

5. These terms and conditions have been made in Finnish and in English. In the
case of any discrepancy between the Finnish and English terms and conditions,
the Finnish terms and conditions shall prevail.



[HUG#1432785]