Option programme (2007)
The Board of Directors decided to continue the option programme introduced in 1999. Awards were made to some 730 staff. The strike price is EUR 14.00, based on an average price for the Series R shares on the OMX Nordic Exchange Helsinki in the period 8–14 February 2007 plus a premium of 10%. The programme will include a total of 1.4 million options/synthetic options (2.2 million in 2006), which will be financially hedged and will not dilute existing shares. The seven-year options/synthetic options may be exercised between 1 March 2010 and 28 February 2014. Depending on local circumstances, option holders can either receive a payment in cash, representing the difference between the strike price and the share price at the time of exercise, or an option to purchase existing R shares. Options are not transferable and expire if the employee chooses to leave the company.
Two share-award programmes (2007)
The two share-based plans that were introduced in 2004 have been continued in 2007. In 2007 the Board of Directors approved a Senior Executive section of the performance share plan for Group Executives.
The general performance share plan will deliver awards over a three-year period starting 1 March 2008, based on the Group performance during each of the preceding financial years. 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 2008 the target is ROCE 9.5%. A maximum vesting will be reached at a ROCE at 12.0%, and no shares will vest if ROCE is below 7.0%. These measures are decided by the Compensation Committee after consideration of the forecasts of financial results In 2006 ROCE (excl. non-recurring items) was 8.7%.
The second programme – the restricted share plan - is not performance related. Shares are delivered over a three-year period starting 1 March 2008, based on continued employment.
The target number of shares in the performance related plan totals 419 000 shares, but the vesting in the period 2008 – 2010 can then vary according to the company’s results between 0–628 000 shares. A total of 475 000 shares may be awarded under the restricted share plan during the period 2008 to 2010.
In the Senior Executive section of the performance share plan, the performance targets have been set based on the Group’s Return on Capital Employed as well as Total Shareholder Return compared to a peer group of listed industry competitors as well as a basic materials index. For the CEO, EBITDA is also used. The targets have been set to provide the full award only if performance is well above current expectations, i.e. rewarding a successful restructuring.Grants have been made to cover the period 2007 and 2008, and these will deliver shares over a four-year period from 2009 to 2012, based on Group performance during each of the preceding financial years. A maximum of 630 000 shares can be delivered through this programme. If minimum financial and TSR targets are not met, no shares will be delivered.
Under all share programmes, the rights to shares are lost if the employee resigns his position or employment is terminated by the company.
Key talents (2007)
There is also a share programme directed towards key talents. The shares are allocated to a maximum of 50 key talents nominated during 2007 with a condition that they remain in employment for at least 5 years. The maximum number of shares that may be issued is 187 500.
