Annual General Meeting

Chairman's letter

Letter from the Chairman of Kingspan Group plc
10 April 2009
Notice of Annual General Meeting (“AGM”)

Dear Shareholder,
I am writing to you to outline the background to the resolutions to be proposed as special business at the forthcoming AGM, all of which the Board of Directors (“the Board” or “the Directors”) are recommending for your approval. These resolutions are numbered 4 to 9 in the notice of meeting, which is set out on pages 5-10 of this circular.

The first four items of special business relate to the share capital of the Company and concern matters which are now standard for most public companies.

Under the first item of special business (resolution no. 4), shareholders are being asked to renew, until the Annual General Meeting in 2010, the authority of the Directors to allot any unissued share capital of the Company. No issue of shares will be made which could effectively alter control of the Company without prior approval of the shareholders in General Meeting. At present the Directors do not intend to issue any shares except pursuant to the exercise of options under the Company’s previously approved share option schemes. In addition, shareholders are being asked under the second item of special business (resolution no. 5) to renew, until the Annual General Meeting in 2010, the power of the Directors to disapply the statutory pre-emption provisions applying to ordinary shares in the event of a rights issue or any other issue for cash up to an aggregate of 5% of the nominal value of the Company’s issued ordinary share capital.

Under the third item of special business (resolution no. 6), shareholders are being asked to provide, until the Annual General Meeting in 2010, an authority for the Company, or any of its subsidiaries, to purchase up to 10% of the Company’s own shares. The Directors would only exercise the power to purchase the Company’s own shares at price levels which they considered to be in the best interests of the shareholders generally, after taking account of the Company’s overall financial position. The minimum price which may be paid for a purchase of the Company’s own shares will be the nominal value of the ordinary shares, and the maximum price which may be paid shall be 105% of the then average market price of the ordinary shares.

Shareholders’ approval is also being sought, under the fourth item of special business (resolution no. 7), where the Company’s shares have been repurchased (such shares being known as Treasury shares), for re-issue of these shares off-market at a maximum price of 120% of the then average market price of the ordinary shares, and a minimum price of 95% of that average.

The fifth item of special business (resolution no. 8) is being proposed in order to reflect one matter deriving from the proposed implementation in August 2009 of the Shareholder Rights Directive. The regulations implementing this Directive will increase the standard notice period for general meetings of the Company to 21 days, the period that is in any event and will continue to be applicable to an annual general meeting or to a meeting to consider any special resolution (a resolution which requires a 75% majority vote, not a simple majority).

The Company is currently able to call any other general meetings on 14 days’ notice. The Directive envisages that on an annual basis a company may pass a resolution such as this, to preserve its ability to utilise, where appropriate, this shorter notice period. The Directors consider that it is in the interests of the Company to retain this flexibility, and resolution no. 8 seeks such approval. The approval will be effective until the Company’s next annual general meeting, when it is intended that a similar resolution will be proposed.

In order to be able to utilise that shorter notice period after August 2009, the Company must also provide appropriate procedures for electronic voting under the Directive. Such procedures would be provided for by the sixth item of special business (resolution no. 9). That resolution would also anticipate certain other changes that will be introduced when the Shareholder Rights Directive is implemented into Irish law. It would amend the Company’s articles of association so as to:

• permit shareholders to appoint more than one proxy or corporate representative and, in doing so, to designate the shares which relate to such appointment;
• adopt the form of article recommended by Euroclear for the issue of an Uncertificated Proxy Instruction through the CREST System; and
• require that all proxy instructions allow for three way voting on substantive resolutions and require any proxy to vote as directed in the proxy instruction.

The Company's memorandum and articles of association are available for inspection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the head office of the Company at Dublin Road, Kingscourt, Co. Cavan, and will also be available at the AGM.

Recommendation

Your Board believes that the resolutions to be proposed as special business at the AGM are in the best interests of the Company and its shareholders. Accordingly the Directors unanimously recommend that shareholders vote in favour of the resolutions, as they intend to do so in respect of their own beneficial holdings of shares in the Company.

Yours sincerely,

Eugene Murtagh
Chairman

Top of page