The shareholders of UPM-Kymmene Corporation are hereby summoned to the company's Annual General Meeting to be held on Thursday, 22 March 2001 beginning at 1.30 pm in Finlandia Hall, address: Mannerheimintie 13e, 00100 Helsinki. The names of participants will be checked and voting slips issued beginning at 12.30 pm.
The following matters will be dealt with at the meeting:
1. Matters pertaining to the Annual General Meeting as stated in § 11 of the company's Articles of Association.
2. The Board of Directors' proposal to increase the share capital through a transfer from reserves.
The Board of Directors proposes that the company's share capital be increased by EUR 4,710,909.64 to EUR 441,954,302.30 by transferring the amount in question from the share premium reserve to the share capital. No new shares will be issued, and the number of the company's shares in issue will not change. The book value (equivalent value) of the company's share before the transfer is EUR 1.68, which is not an exact figure. Following the transfer, each share will have an equivalent value in the bookkeeping of exactly EUR 1.70.
3. The Board of Directors' proposal to reduce the share capital
The contents of the proposal are as follows:
The purpose of reducing the share capital is to invalidate own shares held by the company.
The company's share capital will be reduced by no more than EUR 21,930,000.
The share capital will be reduced by invalidating, without payment, no more than 12,900,000 own shares held by the company.
The invalidation concerns only own shares held by the company.
The purchase price of the shares will be deducted from distributable shareholders' equity. Restricted shareholders' equity will not be reduced as the book value (equivalent value) of the shares invalidated will be transferred from the share capital to the share premium reserve.
The reduction in share capital will not affect the distribution of share ownership and voting rights within the company as the shares to be invalidated are in the possession of the company.
4. The Board of Directors' proposal that the Annual General Meeting decide on the buying back of the company's own shares using distributable funds on the following terms:
Own shares will be bought back for use as payment when the company acquires assets relating to its business operations, as payment in any company acquisitions in the manner and to the extent decided by the Board of Directors, or otherwise for relinquishment or invalidation.
The number of shares bought back will be no fewer than 100 and no more than 12,300,000.
The shares will be purchased through public trading on the Helsinki Stock Exchange.
The shares will be purchased at the market price quoted in public trading at the time of purchase. The purchase price will be paid to the sellers within the payment time specified in the rules of the Helsinki Stock Exchange and Finnish Central Securities Depository Ltd.
Purchase of the shares will reduce the company's distributable shareholders' equity.
As the maximum number of shares to be bought back represents less than 5% of the total number of the company's shares and less than 5% of the number of votes carried by the shares, the purchase will have no major impact on the distribution of share ownership and voting rights within the company.
Under the terms of the Companies Act, at 16 February 2001, insiders owned a total of 31,631,356 of the company's 248,811,555 shares, which represents 12.71% of the company's share capital. Insiders control 12.71% of the voting rights carried by the shares before the proposed buy-back of own shares. As the company intends to buy back its own shares through public trading on the Helsinki Stock Exchange without knowing the sellers of the shares, the proportion of the company's share capital and voting rights controlled by insiders after the share buy-back cannot be determined.
5. The Board of Directors' proposal that the Annual General Meeting authorize the Board to decide on the disposal of own shares bought back in accordance with the above decision on the following conditions:
The authorization concerns a maximum of 12,300,000 own shares bought back by the company.
The Board of Directors will be authorized to decide to whom and in what order it will dispose of the said shares. The Board of Directors may decide to dispose of the shares otherwise than in proportion to the existing pre-emptive rights of shareholders to purchase the company's shares.
The shares will be used as payment when the company acquires assets relating to its business operations, as payment in any company acquisitions in the manner and to the extent decided by the Board of Directors.
The shares will be sold for at least the market price quoted for them in public trading on the Helsinki Stock Exchange at the moment of sale.
This authorization will remain valid for one year from the date of the decision of the Annual General Meeting.
Documents relating to the company's accounts and the proposals made by the Board of Directors are available for inspection by shareholders as of 15 March 2001 at UPM-Kymmene Corporation's head office (address given below). Copies of these documents will be sent to shareholders on request.
Right to attend the meeting
Shareholders wishing to attend the meeting must be registered in the list of the company's shareholders maintained by Finnish Central Securities Depository Ltd on 12 March 2001.
Shareholders whose shares have not been transferred to the book-entry securities system may also attend the meeting provided that they were registered in Kymmene Corporation's list of shareholders before 21 August 1992 or in Repola Ltd's list of shareholders before 28 February 1994, or that they have notified the company of their share ownership and established their valid title and right to attend the meeting. In such cases the shareholders must present to the meeting their share certificates or proof of their whereabouts, or other evidence that the title to the shares has not been transferred to a book-entry account.
Shareholders wishing to attend the meeting must inform the company by 4.00 pm on Monday, 19 March 2001 at the latest either by writing to UPM-Kymmene Corporation, Share Register, Eteläesplanadi 2, P.O. Box 380, 00101 Helsinki, Finland, by telephoning +358 2041 50108 or 2041 50109, by telefax to +358 2041 50333, or via the Internet at www.upm-kymmene.com/ir. Written notifications must arrive before the deadline stated above. Any letters of authorization must be submitted at the time the shareholders concerned inform the company of their intention to attend.
Shareholders registered under nominees
Asset managers will accept notifications by shareholders taken from the register of nominees and information about the parties representing such shareholders at meetings. The asset managers will pass on the nominee-registered shareholders to a list of company shareholders drawn up for the meeting by Finnish Central Securities Depository Ltd.
Payment of dividend
The Board of Directors has decided to propose to the Annual General Meeting that a dividend of EUR 1.50 per share be paid in respect of the 2000 financial year. Dividend will be paid to shareholders who own shares at the date of the meeting, as shown by the fact that such shareholders are registered in the list of shareholders maintained by Finnish Central Securities Depository Ltd at the record date for dividend payment. The Board of Directors has decided that the record date for dividend payment will be 27 March 2001. The Board of Directors proposes to the Annual General Meeting that dividend be paid on 3 April 2001.
In the case of shareholders permanently resident outside Finland, tax will be deducted from the dividend at source.
Helsinki, 21 February 2001
BOARD OF DIRECTORS