INCAP'S NEW STOCK OPTION SCHEME COMMITS TO SHARE OWNERSHIP

Incap Corporation is introducing a new stock option scheme, which commits key personnel to ownership of the Incap shares on a long-term-basis. A total of 630,000 stock options will be granted and they will entitle their holders to subscribe for 630,000 Incap Corporation shares. The shares that can be subscribed for through the exercise of the stock options represent a maximum of 4.9% of the company's shares and the votes conferred by the shares after any possible increase in share capital. In the first stage, to thirteen Incap Group key personnel will be distributed a maximum of 252,000 stock options, representing around 2% of the company's shares and the votes conferred by the shares.

 

Stock options will be divided into stock options 2004A, 2004B and 2004C. At the issuing stage, a condition of the distribution of stock options 2004A and 2004B is that the option holder has acquired a certain number of Incap shares, decided in advance by the Board of Directors, before stock options 2004A and 2004B are distributed. A condition of the distribution of stock options 2004C is that certain criteria based on financial targets, to be determined in advance by the Board of Directors, shall be fulfilled before option instalment 2004C is distributed. At the issuing stage, stock options 2004C as well as those stock options 2004A and stock options 2004B that are not distributed to key personnel shall be issued to Euro-Ketju Oy, a wholly-owned subsidiary of Incap Corporation.

 

The subscription price of shares with 2004A and 2004B option warrants shall be the trade volume weighted average quotation of the Incap share traded on the Helsinki Exchanges from 1 May to 31 May 2004 and with 2004C option warrants the trade volume weighted average quotation of the Incap share traded on the Helsinki Exchanges between 1 March to 31 March 2006. The subscription price of shares through the exercise of option warrants will be lowered, on each record date for the distribution of dividends, by the amount of dividends, to be decided after the commencement of the period for determining the subscription price of the share and prior to the share subscription.

 

The subscription period for shares with 2004A option warrants is from 1 April 2007 to 30 April 2009, with 2004B option warrants from 1 April 2008 to 30 April 2010 and with 2004C option warrants from 1 April 2009 to 30 April 2011. The subscription period for shares through the exercise of option warrants shall only begin, however, when the average price of the Incap share exceeds a certain threshold level, specified in more detail in the terms and conditions.

 

The purpose of the stock options is to commit key personnel to the company on a long-term basis. Should a person cease to be employed by or in the service of the company before each share subscription begins, such a person must offer his or her option warrants back to the company without compensation for any value that the options may have gained. This does not, however, apply in cases of retirement or death. Also linked to the option scheme is a share ownership programme by which key personnel shall acquire the company's shares with 20% of the gross yield received from the stock options.

 

The Board of Directors of Incap Corporation decided on the distribution of stock options on the basis of an authorisation granted by the Annual General Meeting on 20 April 2004.

 

Incap Group currently has two option schemes. Of stock options 1998A and 1998B, distributed in connection with a share issue directed at employees in 1998, there are still a total of 51,200 valid option warrants, representing around 0.4% of the company's shares and the votes conferred by the shares. The subscription price of shares with 1998A option warrants is 19.43 euros and with 1998B option warrants 22.27 euros. The subscription period began on 1 July 2000 and will end on 30 November 2004. No shares have been subscribed for with 1998 option warrants.

 

Stock options 2000A, 2000B, 2000C and 2000D, issued in 2000 and directed at key personnel, grant entitlement to subscribe for 550,600 of the company's shares, representing around 4.3% of the company's shares and the votes conferred by the shares. The subscription price of shares with 2000A option warrants is 8 euros, with 2000B option warrants 10 euros and with 2000C and 2000D option warrants 12 euros. The subscription period began in stages from 1 December 2000 to 1 December 2003 and will end for all option warrants on 31 December 2005. No shares have been subscribed for with 2000 option warrants.

 

 

INCAP CORPORATION

 

 

Juhani Hanninen

President and CEO

 

ANNEX