The extraordinary shareholders’ meetings of Imatran Voima Oy (IVO) and Neste Oyj, wholly owned subsidiaries of Fortum Oyj, held on 8 September 1998 have resolved, in accordance with the proposals of the meetings of the Board of Directors of even date, on the distribution of an additional dividend of FIM 500 million from the distributable funds of both companies, in total FIM 1,000 million. FIM 50 million of the dividend per company may be withdrawn as of 15 October 1998 and the remaining FIM 450 million per company as of 15 March 1999.
The extraordinary shareholders’ meeting of Gullspång Kraft AB held on 4 September 1998 has resolved on the distribution of a dividend of SEK 1,488 million to IVO Energi AB. The dividend shall be paid prior to the transfer of ownership of Gullspång Kraft to Stadshusettan AB, the company name of which is to be amended to the current working name Birka Energi AB. Gullspång Kraft is a wholly owned subsidiary of IVO Energi AB, and IVO respectively owns IVO Energi in its entirety.
In the meeting of the Board of Directors of Fortum held on 8 September 1998, it was established that the unstable political and economic situation in Russia may have a limited impact on the business operations and result of Fortum in the near future. In the meeting of the Board of Directors, it was resolved to request the general meeting of shareholders for authorization to increase the share capital of the company in connection with the employee offer as well as on issue of bonds with warrants and granting of warrants relating to the personnel incentive scheme.
The extraordinary shareholders’ meeting of Fortum held on 8 September 1998 has decided, in accordance with the proposal of the meeting of the Board of Directors, with certain adjustments, to authorize the Board of Directors of the company, within one year, to decide on the increase of the company’s share capital in connection with the employee offer and the issuing of bonds with warrants as well as the granting of warrants relating to the employee incentive scheme, in deviation from the pre-emptive subscription rights of the shareholders.
The reason underlying the deviation from the pre-emptive subscription rights of the shareholders is motivating group employees and interest groups which may be considered material in respect of the group’s business operations, as well as realization of the incentive scheme directed at group
employees. Based on the authorization, the share capital of the company may be increased by a maximum of FIM 490 million.
In respect of the employee offer, the share capital of the company may be increased by issuing a maximum of 2,000,000 shares with a nominal value of FIM 20 each. This corresponds to a share capital increase of FIM 40,000,000, which equals 0.3 percent of the share capital of the company and voting rights at the time of the authorization by the shareholders’ meeting.
The subscription price for shares offered in the employee offer may not be more than 10 percent lower than the final purchase price in the contemplated retail offering of Fortum. The terms of the employee offer may also include a provision according to which the subscriber consents, simultaneous with the subscription, that the shares may not be transferred to a third party before the end of six months following the conclusion of the Finnish retail offering, other than by transfer through inheritance, testament or based on marital rights, and that public trading with said shares shall not commence before the end of said six month period.
The terms of the employee offer may also include a provision according to which an additional requirement for subscription regarding former shareholders or holders of warrant rights of Neste, who have consented to the exchange offer of IVO-Neste Yhtymä Oyj (Fortum) carried out between 30 April - 30 June 1998, is that such person has not withdrawn the subscription of the Fortum shares subscribed in connection with the exchange offer.
In case the employee offer is not subscribed in full, the Board of Directors has the right to decide on secondary subscription rights with corresponding subscription terms.
In connection with the employee incentive scheme, the shareholders’ meeting authorized the Board of Directors, within one year, to decide on the issuing of one or more bonds to persons employed by the company or its subsidiaries. The capital amount in respect of the bonds with warrants issued to the personnel is FIM 25 million in the maximum. The bonds entail a right to subscribe a total of 7,500,000 Fortum shares. The share capital of Fortum may, due to subscriptions based on the bonds with warrants, increase by a maximum of FIM 150 million, which corresponds to 1.1 percent of the share capital of the company and voting rights at the time of the authorization by the shareholders’ meeting.
In connection with the employee incentive scheme, the shareholders’ meeting also authorized the Board of Directors, by the annual general meeting of shareholders of 1999, but in any case within one year from the extraordinary meeting of shareholders of 8 September 1998, to grant warrants to the management of the Fortum. The authorization includes the right
to determine the persons entitled to the warrants in deviation from the pre-emptive subscription rights of the shareholders with the qualification, that the warrants are intended to
function as a part of the incentive scheme of the group. A maximum of 15,000 warrants may be granted to a maximum of 150 specified persons. Warrants shall also be granted to members of the Board of Directors employed by the company, but such members shall not participate in decision making regarding the warrants on the Board of Directors of the company.
The subscription period is three years as of 1 June 2002. Each warrant entitles the holder thereof to subscribe 1,000 Fortum shares with a nominal value of FIM 20 each between 1 June 2002 and 1 June 2005 for a subscription price defined in the enclosed terms. A requirement for subscription is that the earnings per share growth of Fortum and the increase in the share price at determined times equals or exceeds the average of the selected international peer companies. The share capital of the company may, due to subscriptions, be increased by a maximum of 15,000,000 shares, i.e. a maximum of FIM 300 million, which corresponds to 2.2 percent of the share capital of the company and voting rights at the time of the authorization by the shareholders’ meeting.
Executive Vice President, Communications
The information contained herein is not for publication or distribution to persons in the United States of America. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended. The materials do not constitute an offer of securities for sale in the United States; the securities may not be offered or sold in the United States absent registration or an exemption from registration; and any public offering of securities to be made in the United States will be by means of a prospectus that may be obtained from the issuer or the selling security holder and that will contain detailed information about the company and the management, as well as financial statements.