The total number of year 2003 stock options under the symbol 2003E is 600,000. Each stock option entitles its holder to subscribe for one (1) new Kesko Corporation B share during 1 April 2006 to 30 April 2009 at a subscription price that corresponds to the trade volume weighted average price of a Kesko Corporation B share on the Helsinki Stock Exchange during the period 1 to 30 April 2004 (EUR 15.19), with a deduction of the amount of dividends decided after the period for the determination of the subscription price has begun but before share subscription, on the record date of each dividend distribution.
Currently the subscription price of a share subscribed for with a 2003E stock option is EUR 13.19. However, the share subscription price is always at least the book counter-value of the share. The book counter-value of a Kesko Corporation B share is EUR 2.00.
The dividend right and other shareholder rights carried by shares subscribed for with stock options take effect after the share capital increase has been entered in the Trade Register.
On 23 February 2005, Financial Supervision granted the company a permission to be exempted from the obligation to publish a prospectus in connection with applying for listing stock options on the main list of the Helsinki Stock Exchange and offering new Kesko Corporation B shares subscribed for with stock options and applying for their listing on the main list of the Helsinki Stock Exchange.
Further information is available from Corporate Counsel Jarkko Karjalainen, telephone +358 1053 22602.
Kesko Corporation
Harri Utoslahti
Communications Manager
Communications Manager
DISTRIBUTION
Helsinki Stock Exchange
Main news media
Helsinki Stock Exchange
Main news media
Enclosure
KESKO CORPORATION 2003 STOCK OPTION TERMS AND CONDITIONS
I STOCK OPTIONS
1. Number of Stock Options
The number of stock options issued will be 1,800,000, which entitle to subscribe for a total of 1,800,000 B shares in Kesko with a book counter-value of EUR 2.00 (B share).
1. Number of Stock Options
The number of stock options issued will be 1,800,000, which entitle to subscribe for a total of 1,800,000 B shares in Kesko with a book counter-value of EUR 2.00 (B share).
2. Stock Options
Of the stock options 600,000 will be marked with the symbol 2003D, 600,000 will be marked with the symbol 2003E and 600,000 will be marked with the symbol 2003F. The persons to whom stock options will be issued will be notified in writing by the Company about the offer of stock options. The stock options will be distributed to the recipient when he or she has accepted the offer of the Company. Stock options will be issued in the book-entry securities system.
Of the stock options 600,000 will be marked with the symbol 2003D, 600,000 will be marked with the symbol 2003E and 600,000 will be marked with the symbol 2003F. The persons to whom stock options will be issued will be notified in writing by the Company about the offer of stock options. The stock options will be distributed to the recipient when he or she has accepted the offer of the Company. Stock options will be issued in 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 gratuitously granted to the management of the Kesko Group and to Sincera Oy (Sincera), a wholly owned subsidiary of Kesko. 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 Kesko Group's incentive and commitment program for the management.
The stock options shall, with deviation from the shareholders' pre-emptive right to subscription, be gratuitously granted to the management of the Kesko Group and to Sincera Oy (Sincera), a wholly owned subsidiary of Kesko. 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 Kesko Group's incentive and commitment program for the management.
4. Distribution of Stock Options
The Board of Directors decides upon the distribution of the stock options. Sincera shall be distributed stock options to such extent that the stock options are not distributed to management of the Kesko Group. The Board of Directors of Kesko shall later on decide upon the further distribution of the stock options issued to the subsidiary, to the management employed by or to be recruited by the Kesko Group. A proportion of the persons eligible for subscription belongs to the inner circle of the Company.
The Board of Directors decides upon the distribution of the stock options. Sincera shall be distributed stock options to such extent that the stock options are not distributed to management of the Kesko Group. The Board of Directors of Kesko shall later on decide upon the further distribution of the stock options issued to the subsidiary, to the management employed by or to be recruited by the Kesko Group. A proportion of the persons eligible for subscription belongs to the inner circle of the Company.
Upon issue all stock options 2003E and 2003F and those stock options 2003D, which shall not be distributed to the management, shall be distributed to Sincera. Sincera shall distribute stock options 2003D, 2003E and 2003F to the management employed by or to be recruited by the Kesko Group by the resolution of the Board of Directors of Kesko.
5. Transfer of Stock Options and Obligation to Offer Stock Options
The stock options, for which the share subscription period in accordance with Section II.2 has not begun, cannot be transferred to a third party or pledged. The stock options are freely transferable, when the relevant share subscription period has begun. Should the stock option owner transfer his/her stock options, such person is obliged to inform the Company about the transfer in writing without delay. The Board of Directors may, as an exception to the above, permit the transfer of a stock option also before such date.
The stock options, for which the share subscription period in accordance with Section II.2 has not begun, cannot be transferred to a third party or pledged. The stock options are freely transferable, when the relevant share subscription period has begun. Should the stock option owner transfer his/her stock options, such person is obliged to inform the Company about the transfer in writing 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 Kesko Group, for any other reason than the death of the employee before 1 April 2007, such person shall without delay offer to the Company or its order, 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 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 stock options on the basis of the above-mentioned reasons. 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 restrictions concerning the stock options to the stock option owner's book-entry account without the consent of the stock option owner.
II TERMS AND CONDITIONS OF THE SHARE SUBSCRIPTION
1. Right to Subscribe New Shares
Each stock option entitles its owner to subscribe for one (1) B share in Kesko. The book counter-value of each B share is EUR 2.00. As a result of the subscriptions the share capital of Kesko may be increased by a maximum of EUR 3,600,000 and the number of B shares by a maximum of 1,800,000 new B shares.
1. Right to Subscribe New Shares
Each stock option entitles its owner to subscribe for one (1) B share in Kesko. The book counter-value of each B share is EUR 2.00. As a result of the subscriptions the share capital of Kesko may be increased by a maximum of EUR 3,600,000 and the number of B shares by a maximum of 1,800,000 new B shares.
Sincera, as a subsidiary of Kesko, shall not be entitled to subscribe shares in Kesko on the basis of the stock options.
2. Share Subscription and Payment
The share subscription period shall be:
- for stock option 2003D 1 April 2005 - 30 April 2008,
- for stock option 2003E 1 April 2006 - 30 April 2009 and
- for stock option 2003F 1 April 2007 - 30 April 2010.
The share subscription period shall be:
- for stock option 2003D 1 April 2005 - 30 April 2008,
- for stock option 2003E 1 April 2006 - 30 April 2009 and
- for stock option 2003F 1 April 2007 - 30 April 2010.
The share subscription shall take place at the head office of Kesko or possibly at another location to be determined later. The stock options with which shares have been subscribed shall be deleted from the subscriber's book-entry account and shares fully paid shall be transferred to the subscriber's book-entry account. Payment for 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 2003D the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2003,
- for stock option 2003E the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2004 and
- for stock option 2003F the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2005.
The share subscription price shall be:
- for stock option 2003D the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2003,
- for stock option 2003E the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2004 and
- for stock option 2003F the trade volume weighted average quotation of the Kesko B share on the Helsinki Exchanges between 1 April and 30 April 2005.
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 beginning of the period for determination of the subscription price but before share subscription. The share subscription price shall nevertheless always amount to at least the book counter-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.
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.
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 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 subscription for shares, 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 by virtue of stock options remains unchanged and the share subscription price shall be amended accordingly. 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 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 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 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 combination 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 stock options within a 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 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 a situation, 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 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.
If the Company, before the share subscription decides on combining its share series, a stock option owner shall have an equal right to that of a B shareholder.
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 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 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 Kesko.
The Company is entitled to withdraw the stock options, which have not been transferred, or with which shares have not been subscribed, 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.
These terms and conditions have been made in Finnish, Swedish and English. In case of any discrepancy between the Finnish, Swedish and English terms and conditions, the Finnish terms and conditions are decisive.