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

During December 13–31, 2004, a total of 60,010 UPM stock options 1998A were used for the subscription of 120,020 shares. Furthermore, a total of 5,000 stock options 1998B were used for the subscription of 10,000 shares. The shares have been registered in the Finnish Trade Register on January 19, 2005.

As a result of the subscriptions, UPM's share capital was increased by 130,020 new shares, i.e., by EUR 221,034. After the registration, the total number of UPM shares is 524,450,272 and the share capital of the company is now EUR 891,565,462.40. The book equivalent value of one share is EUR 1.70.

After giving effect to the bonus issue 2003, each stock option A and B 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 for the stock option A is currently EUR 21.71 for two shares, and for the stock option B EUR 26.75 for two shares. The share subscription period for stock options 1998A began on April 1, 2001 and for stock options 1998B on April 1, 2003. The option scheme is based on the resolution by the Annual General Meeting of Shareholders on March 25, 1998. The stock options A have been listed on the Helsinki Stock Exchange as of April 2, 2001 and the stock options B as of April 1, 2003.

The new 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 has been submitted for listing the new shares together with the old shares at the Helsinki Stock Exchange’s Main List as of January 20, 2005.

UPM
Corporate Communications
January 19, 2005