UPM's share capital increase based on subscriptions for stock options

By September 30, 2004, a total of 1,611 stock options 1998A, issued to the key personnel of UPM, have been used for subscription of 3,222 UPM shares. The shares have been registered in the Finnish Trade Register on October 29, 2004. As a result of the subscriptions UPM's share capital was increased by 3,222 new shares, i.e., by EUR 5,477.40. After the registration, the total number of UPM shares is 523,582,152 and the share capital of the company is now EUR 890,089,658.40. The book equivalent value of one share is EUR 1.70

After giving effect to the bonus issue 2003, each stock option A entitles its holder to subscribe two UPM shares. In accordance with the Stock Option Terms and Conditions, the share subscription price shall be reduced by the amount of dividends distributed before the date of share subscription. The share subscription price is currently EUR 10.86. The share subscription period for stock options 1998A began on April 1, 2001. The option scheme is based on the resolution by the Annual General Meeting of Shareholders on March 25, 1998. The stock options have been listed on the Helsinki Stock Exchange as of April 2, 2001.

The shares are entitled to dividend for the financial period during which they are subscribed. Other shareholder rights shall begin from the date on which the increase in share capital is recorded on the Trade Register of Finland. An application for listing the new shares together with the old shares has been submitted at the Helsinki Stock Exchange’s Main List as of November 1, 2004.

For further questions, please contact:
Mr Olavi Kauppila, Senior Vice President, Investor Relations, tel. +358 204 15 0658

UPM
Corporate Communications
October 29, 2004