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The Board of Directors of UPM-Kymmene Corporation proposes share options for corporate management

Archive 17.2.1997 0:00 EET

The Board of Directors of UPM-Kymmene Corporation has decided to propose to the Annual General Meeting to be held on the 25th March 1998 that share options be offered to members of corporate management. There would be a total of 6,000,000 options, conferring entitlement to subscribe 6,000,000 company shares.
According to the Board's proposal, the share options would been divided into three series: A, B and C, with 2,000,000 options in each series. The share subscription price would be calculated as the share's trading-weighted average price quoted on Helsinki Stock Exchange during the period 18th - 24th March 1998, incremented by FIM 30 in the case of the A series, by FIM 60 in the case of the B series, and by a factor of two in the case of the C series. Subscription prices calculated in the manner described above would be rounded up to the nearest Finnish mark. The share subscription prices would be reduced by the amount of dividends distributed after 1st May 1998 and before the date of share subscription.
The share subscription period would begin with series A on 1st April 2001 and on series B and C on 1st April 2003. The share subscription period for all options would close on the 30th April 2005. The company's share capital may rise as a consequence for these subscriptions by FIM 60,000,000.
The proposed share options are intended, in the long-term, to provide corporate management with an incentive to increase shareholder value and to commit the management to the company. According to the proposal, the Board would decide on the practical implementation of the options' distribution. The intention is that the share options would be offered to approximately one hundred management members.
Procurement of own shares
The Board of Directors further proposes to the Annual General Meeting that it should decide on the procurement of the company's own shares using distributable funds for use as payment when the company procures property belonging to its business operations, and for use as payment in any possible corporate acquisitions. The Board of Directors would also be able to decide to cancel the shares thus acquired. According to the proposal, a minimum of 1,000,000 own shares and a maximum of 13,519,438 own shares i.e. a maximun of 5 per cent of the total number of the shares, would be purchased.
It is also proposed that Annual General Meeting authorise the Board of Directors to decide on the transfer of own shares thus acquired. The authorisation would remain in force for one year from the date of the AGM's decision.
Election of board members
The Board of Directors proposes an amendment to 4§ of the Articles of Association, which would mean all board members being elected for a term of office beginning at the end of the meeting at which they are elected and ending at the conclusion of the next Annual General Meeting, instead of the longer terms of office currently in effect. In addition, the Board of Directors would no longer have an executive committee.