SanomaWSOY to issue another Stock Option Scheme
SanomaWSOY Corporation is to issue another Stock Option Scheme to the senior management. The Stock Option Scheme 2004 will comprise a maximum of 4,500,000 stock options, each entitling the holder to one SanomaWSOY Series B share. The total number of shares to be subscribed for with the stock options represents a maximum of 2.9% of the Company's shares and 0.8% of votes after new shares subscribed with stock options have been registered.
The stock options will be distributed in three stages, at the turn of 2004/2005 (identified as 2004A stock options) 2005/2006 (2004B stock options), and 2006/2007 (2004C stock options). In each category, a maximum of 1,500,000 stock options will be issued. The share subscription price in all three stages will be the average price of SanomaWSOY's Series B share as quoted in November-December 2004, 2005, or 2006 with an addition of 20%. The annual dividend will be deducted from the share subscription price.
The subscription period will begin three years from the distribution of stock options and will continue for three years from that point. The share subscription period for 2004A stock options is from 1 November 2007 to 30 November 2010, for 2004B stock options from 1 November 2008 to 30 November 2011 and for 2004C stock options from 1 November 2009 to 30 November 2012.
- The new Stock Option Scheme is a consistent extension of the Group's total compensation for senior management. Stock options are a good international way to secure senior management's personal commitment to the Group in the long-term, SanomaWSOY's Senior Vice President, Finance and Administration, Matti Salmi says.
In case that stock option holder's contract of employment or service ends before the beginning of a share subscription period, the person in question will be required to offer his/her stock options back to the company; no payment will be made to cover any additional value that may have accrued. This does not affect people retiring or cases where a person dies.
The stock options will be distributed according to the decision of the SanomaWSOY Board of Directors. A large proportion of the stock options will not be distributed at this stage, but granted to SanomaWSOY's fully owned subsidiary, Lastannet Oy. The Board of Directors of SanomaWSOY will be responsible for distributing the remainder at a later date at its discretion. The Board of Directors is entitled to broaden the range of recipients or to decide to distribute stock options in new acquisitions or recruitment, for example.
Company personnel who belong to the inner circle of the Company and who are entitled to subscribe for shares under this stock option scheme are estimated to currently hold under 1% of the Company?s shares and associated votes.
SanomaWSOY's Board of Directors decided to issue stock options on the basis of an authorisation received at the Annual General Meeting of Shareholders held on 30 March 2004. Scheme 2004 is SanomaWSOY's second Stock Option Scheme. SanomaWSOY announced the issue and the terms and conditions of Warrant Scheme 2001 on 31 January 2002.
The terms and conditions of the Stock Option Scheme 2004 are included in their entirety as an attachment.
Terms and Conditions of the Stock Option Scheme 2004
SANOMAWSOY CORPORATION STOCK OPTION SCHEME 2004
The Board of Directors of SanomaWSOY Corporation ("SanomaWSOY" or "Company") (Board of Directors) has on 8 November 2004 resolved, by authorization of the Annual General Meeting of Shareholders on 30 March 2004, that stock options be issued to the senior management of SanomaWSOY and its subsidiaries ("SanomaWSOY Group") and to Lastannet Oy ("Lastannet"), a wholly owned subsidiary of SanomaWSOY on the following terms and conditions:
I STOCK OPTION TERMS AND CONDITIONS
1. Number of Stock Options
The number of stock options issued shall be 4,500,000, which entitle to subscribe for a total of 4,500,000 B-shares in SanomaWSOY.
2. Stock Options
Of the stock options 1,500,000 shall be marked with the symbol 2004A, 1,500,000 shall be marked with the symbol 2004B and 1,500,000 shall be marked with the symbol 2004C. The persons to whom stock options shall be issued shall be notified in writing by the Company about the offer of stock options. The stock options shall be delivered to the recipient when he or she has accepted the offer of the Company. Stock option certificates shall, upon request, be delivered to the stock option owner at the start of the relevant share subscription period unless the stock options have been transferred to the book-entry securities system.
3. Right to Stock Options
The stock options shall, with deviation from the shareholders' pre-emptive right to subscription, be issued to the senior management of the SanomaWSOY Group and to Lastannet, a wholly owned subsidiary of SanomaWSOY Corporation. It is proposed that the shareholders' pre-emptive right to subscription be deviated from since the stock options are intended to form part of the Group's incentive and commitment program for the senior management.
Upon issue all stock options 2004B and 2004C shall be granted to Lastannet. Lastannet can distribute stock options 2004B and 2004C to the senior management employed by or to be recruited by the SanomaWSOY Group by the resolution of the Board of Directors of SanomaWSOY.
4. Distribution of Stock Options
The Board of Directors shall decide upon the distribution of the stock options. Lastannet shall be granted stock options to such extent that the stock options are not distributed to the senior management of the SanomaWSOY Group. The Board of Directors of SanomaWSOY shall later on decide upon the further distribution of the stock options granted to the subsidiary, to the senior management employed by or to be recruited by the SanomaWSOY Group.
5. Transfer of Stock Options and Obligation to Offer Stock Options
The stock options are freely transferable, when the relevant share subscription period has begun. The Company shall hold the stock options on behalf of the stock option owner until the beginning of the share subscription period. The stock option owner has the right to acquire the possession of the stock options when the relevant share subscription period begins. Should the stock option owner transfer his/her stock options, such person is obliged to inform the Company about the transfer without delay. The Board of Directors may, as an exception to the above, permit the transfer of a stock option also before such date.
Should a stock option owner cease to be employed by or in the service of the SanomaWSOY Group, for any other reason than the death of an employee, or the statutory retirement of an employee in compliance with the employment contract, or the retirement of an employee otherwise determined by the Company, such person shall without delay offer to the Company, free of charge, the stock options for which the share subscription period in accordance with Section II.2 had not begun at the last day of such person's employment or service. The Board of Directors can, however, in the above-mentioned cases, decide that the stock option owner is entitled to keep such stock options or a part of them, which are under offering obligation.
Regardless of whether the stock option owner has offered his/her stock options to the Company or not, the Company is entitled to inform the stock option owner in writing that the stock option owner has lost his/her stock options on the basis of the above-mentioned reasons. Should the stock options be transferred to the book-entry securities system, the Company has the right, whether or not the stock options have been offered to the Company, to request and get transferred all the stock options, for which the share subscription period had not begun, from the stock option owner's book-entry account to the book-entry account appointed by the Company without the consent of the stock option owner. In addition, the Company is entitled to register transfer restrictions and other respective restrictions concerning the stock options to the stock option owner's book-entry account without the consent of the stock option owner.
II SHARE SUBSCRIPTION TERMS AND CONDITIONS
1. Right to Subscribe for New Shares
Each stock option entitles its owner to subscribe for one (1) B-share in SanomaWSOY. The book equivalent value of each share is 0.43 euro upon issue of stock options. As a result of the subscriptions the share capital of SanomaWSOY may be increased by a maximum of 1,935,000 euro and the number of shares by a maximum of 4,500,000 new B-shares.
Lastannet, as a subsidiary of SanomaWSOY, shall not be entitled to subscribe for shares in SanomaWSOY on the basis of the stock options.
2. Share Subscription and Payment
The share subscription period shall be
- for stock option 2004A 1 November 2007 - 30 November 2010,
- for stock option 2004B 1 November 2008 - 30 November 2011 and
- for stock option 2004C 1 November 2009 - 30 November 2012.
The share subscription shall take place at the head office of SanomaWSOY or possibly at another location to be determined later. The subscriber shall transfer the respective stock option certificates with which he/she subscribes for shares, or in case the stock options have been transferred to the book-entry securities system, the stock options with which shares have been subscribed for shall be deleted from the subscriber's book-entry account. Payment of shares subscribed shall be effected upon subscription to the bank account appointed by the Company. The Company shall decide on all measures concerning the share subscription.
3. Share Subscription Price
The share subscription price shall be:
- for stock option 2004A the trade volume weighted average quotation of the SanomaWSOY B-share in the Helsinki Exchanges between 1 November and 31 December 2004 with an addition of 20%,
- for stock option 2004B the trade volume weighted average quotation of the SanomaWSOY B-share in the Helsinki Exchanges between 1 November and 31 December 2005 with an addition of 20% and
- for stock option 2004C the trade volume weighted average quotation of the SanomaWSOY B-share in the Helsinki Exchanges between 1 November and 31 December 2006 with an addition of 20%.
From the share subscription price of stock options shall, as per the dividend record date, be deducted the amount of the dividend decided after the end of the period for determination of the share subscription price but before share subscription. The share subscription price shall nevertheless always amount to at least the book equivalent value of the share.
4. Registration of Shares
Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber.
5. Shareholder Rights
Dividend rights of the shares and other shareholder rights shall commence when the increase of the share capital has been entered into the Trade Register.
6. Share Issues, Convertible Bonds and Stock Options before Share Subscription
Should the Company, before the share subscription, increase its share capital through an issue of new shares, or issue of new convertible bonds or stock options, a stock option owner shall have the same right as or an equal right to that of a shareholder. Equality is reached in the manner determined by the Board of Directors by adjusting the number of shares available for subscription, the share subscription price or both of these.
Should the Company, before the share subscription, increase its share capital by way of a bonus issue, the subscription ratio shall be amended so that the ratio to the share capital of shares to be subscribed for by virtue of stock options remains unchanged. If the number of shares that can be subscribed for by virtue of one stock option should be a fraction, the fractional part shall be taken into account by reducing the share subscription price.
7. Rights in Certain Cases
If the Company reduces its share capital before the share subscription, the subscription right accorded by the terms and conditions of the stock options shall be adjusted accordingly as specified in the resolution to reduce the share capital.
If the Company is placed in liquidation before the share subscription, the stock option owner shall be given an opportunity to exercise his/her subscription right before the liquidation begins within a period of time determined by the Board of Directors.
If the Company resolves to merge in another company as the company being acquired or in a company to be formed in a merger, or if the Company resolves to be divided, the stock option owner shall, before the merger or division, be given the right to subscribe for the shares with his/her stock options within the period of time determined by the Board of Directors. After such date no subscription right shall exist. In the above situations the stock option owner has no right to require that the Company redeems the stock options from him/her for market value.
If the Company, after the beginning of the share subscription period, resolves to acquire its own shares by an offer made to all shareholders, the stock option owners shall be made an equivalent offer. In other cases acquisition of the Company?s own shares does not require the Company to take any action in relation to the stock options.
In case, before the end of the share subscription period, a situation as referred to in Chapter 14 Section 19 of the Finnish Companies Act, in which a shareholder possesses over 90% of the shares of the Company and therefore has the right and obligation to redeem the shares of the remaining shareholders, or as referred to in Chapter 6 Section 6 of the Finnish Securities Market Act, arise, the stock option owners shall be entitled to use their right of subscription by virtue of the stock option within a period of time determined by the Board of Directors.
If the number of the Company's shares is changed, while the share capital remains unchanged, the share subscription terms and conditions of the stock options shall be amended so that the relative proportion of shares available for subscription with the stock options to the total number of the Company's shares, as well as the share subscription price total, remain the same.
Converting the Company from a public company into a private company shall not affect the terms and conditions of the stock options.
III OTHER MATTERS
The laws of Finland shall be applied to these terms and conditions. Disputes arising in relation to the stock options shall be settled by arbitration in accordance with the Arbitration Rules of the Central Chamber of Commerce.
The Board of Directors may decide on the transfer of the stock options to the book-entry securities system at a later date and on the resulting technical amendments to these terms and conditions, including those amendments and specifications to the terms and conditions, which are not considered essential. Other matters related to the stock options are decided on by the Board of Directors. The stock option documentation is kept available for inspection at the head office of SanomaWSOY.
The Company is entitled to withdraw the stock options which have not been transferred, or with which shares have not been subscribed for, free of charge, if the stock option owner acts against these terms and conditions, or against regulations given by the Company on the basis of these terms and conditions, or against applicable law, or against regulations by authorities.
The stock option owner is liable for his/her tax consequences arising from participating in the stock option scheme.
These terms and conditions have been made in Finnish and in English. In case of any discrepancy between the Finnish and English terms and conditions, the Finnish terms and conditions are decisive.