Incentive programmes (2005) 

Option programme (2005)

The Board of Directors decided to continue the option programme introduced in 1999. The 2005 option programme will cover approximately 1 000 participants. The strike price is EUR 12.20, based on an average price for the Series R shares on the Helsinki Stock Exchange in the period 4–11 February 2005 plus a premium of 10%. The programme will include a total of 3.3 million options/synthetic options (4.7 million in 2004), which will be financially hedged and will not dilute existing shares. The seven-year options/synthetic options, which may be exercised between 1 March 2008 and 28 February 2012, entitle participants either to cash compensation in the form of the difference between the strike price and the prevailing share price or shares (not new), depending on the legal restrictions in each country. The option/synthetic options are not transferable and expire if the employee leaves the company.

Two share-based programmes (2005)

The two share-based programmes that were introduced in 2004 have been continued in 2005.

The performance related programme grants shares with a vesting during a 3 year period starting 1 March 2006, depending on the successful fulfillment of an annual financial target. If the target is not reached no shares will be granted, but if the target is exceeded, up to 150% of the granted shares can be vested. The target is decided upon on an annual basis and for the first vesting in 2006 the target is ROCE 8.7%, which corresponds to the weighted average cost of capital. A maximum vesting will be reached at a ROCE at 11.7%. In 2004 ROCE (excl. non-recurring items) was 3.0%.

The second programme is not performance related. Shares are granted with a 3 year vesting period starting 1 March 2005.

The target number of shares granted in the performance related programme totals 400 000 shares, but the vesting can then vary according to the companies results between 0–600 000 shares.

A total of 700 000 shares may be awarded under the restricted share programme during the period 2006 to 2008.

Key employee programme (2005)

There is also a share programme directed towards employees with special skills in Stora Enso. The shares in this program are vested after a 5 year period and the number of participants and shares are maximised to 50 and 187 500 respectively.

All of the above mentioned programmes require that the employee is employed by the Company at the time of vesting, exercise or payment. If the employee leaves the Company for another employment the benefit is lost.