The share warrants relating to Fortum Corporation’s bond loan with warrants offered to the employees in 1999 to the Main List of the Helsinki Exchanges

The share warrants relating to Fortum Corporation’s bond loan with warrants offered to the employees in 1999 will be traded on the Main List of the Helsinki Exchanges on 17 May 2002.

 

In 1999, Fortum Corporation offered a bond loan with warrants to the amount of FIM 25,000,000 to be subscribed for by the employees. A total of 1,859 people subscribed for the bond loan. The bond loan included a total of 7,500,000 share warrants, which entitle to the subscription of a maximum of 7,500,000 shares during 17 May 2002 – 17 May 2005. According to the terms and conditions of the bond loan, Fortum Corporation has redeemed part of the loan, because of termination of employment.

 

The total number of the share warrants which will be listed is 6,159,300. Each share warrant entitles to the subscription of one (1) Fortum Corporation’s share, the nominal value of which is EUR 3.40. The maximum total number of 6,159,300 shares may be subscribed for using the share warrants, and the subsequent increase in the share capital may be a maximum of EUR 20,941,620.

 

The subscription price of the shares with these share warrants is EUR 4.36 at the beginning of the listing. The dividend paid by Fortum Corporation each year will be deducted from the subscription price. The place of subscription for shares will be Nordea Bank Finland Plc’s asset management branches.

 

 

 

Fortum Corporation

 

 

Carola Teir-Lehtinen

Senior Vice President, Corporate Communications

 

Distribution:

Helsinki Exchanges

Key media

 

 

 

For further information, please contact:

Mr Seppo Viitanen, Group Treasurer, tel. +358 10 452 4477

 

Appendix: The conditions of the 1999 bond loan with warrants

 

THE TERMS AND CONDITIONS OF SUBSCRIPTION FOR FORTUM CORPORATION’S BOND LOAN WITH WARRANTS AND SHARES

The terms and conditions have been prepared in Finnish. A translation of the terms and conditions has been prepared in English. If there are any discrepancies between the Finnish and the English versions, the Finnish version shall prevail.

 

On the basis of an authorisation given by an Extraordinary General Meeting of 8 September 1998, Fortum Corporation’s Board of Directors decided on 15 April 1999, with deviation from the shareholders’ pre-emptive right to subscription, to issue a bond loan by offering a bond loan with warrants to Fortum Group’s employees in Finland. The decisive financial reason to deviate from Chapter 4 Section 2 Subparagraph 2 of the Companies Act is that the bond loan with warrants is intended to be a part of Fortum Group’s personnel incentive system.

 

The Board of Directors has decided that the terms and conditions of the bond loan with warrants will be:

 

I Terms and conditions of the bond loan

 

Bond loan amount and bond loan stakes

 

The amount of the bond loan is a maximum of twenty five million (25,000,000) Finnish markkas, which corresponds to four million two hundred and four thousand six hundred and ninety eight (4,204,698) euro.

 

The bond loan will be issued in the book-entry system.

 

A maximum of twenty five thousand (25,000) bond loan stakes of a nominal value of one thousand (1,000) Finnish markkas per stake are offered, with each stake carrying three hundred (300) share warrants. Each warrant may be exercised to subscribe for one (1) Fortum Corporation share in the way stipulated in the terms and conditions of share subscription. Upon the maturity of the bond loan, on 17 May 2002, the share warrants will be separated from the bond loan into separate book-entry securities.

 

Subscription right

 

The bond loan with warrants is offered with deviation from the shareholders' pre-emptive right to subscription to the employees of Fortum Corporation (hereafter "Company", together with its subsidiary organisations "Fortum Group") and its subsidiary organisations, with deviations defined by the Company's Board of Directors.

 

Subject to deviations defined by the Board of Directors the right to subscribe is held by persons (hereafter "Member of Personnel") who on 1 April 1999 were and at the expiry of the subscription period of the bond loan with warrants still are permanent employees of a Fortum Group organisation registered in Finland, with the exception of the following organisations including their subsidiary organisations: Enermet Oy, Gasum Oy, Infrarödteknik Finland Oy and Neste Chemicals Oy. Persons who are entitled to participate in the stock option scheme for the management of the Fortum Group do not hold a right to subscribe for bond loan.

 

Persons entitled to subscription will be sent a letter confirming the right to subscribe, and this letter shall be surrendered at the place of subscription when registering the subscription.

 

Loan period

 

The bond loan is dated 17 May 1999. The loan period is three (3) years. The bond loan is paid back in one instalment after the loan period has expired on 17 May 2002.

 

Issue price

 

The issue price of the bond loan is one hundred (100) per cent.

 

Interest

 

An annual interest of 4% shall be payable on the bond loan. The interest is paid in one instalment together with the principal amount on 17 May 2002 into a bank account declared by the bond loan holder to the book-entry register.

 

Bond loan subscription period and place

 

The bond loan can be subscribed for during 19-30 April 1999. The place of subscription will be Merita Pankki Plc's asset management branches. The subscription cannot be withdrawn.

 

Minimum and maximum amount of subscription

 

The minimum amount of bond loan subscriptions is two thousand (2,000) Finnish markkas and the maximum amount is thirty thousand (30,000) Finnish markkas per each Member of Personnel.

 

Approval of subscriptions and under- and over-subscription

 

The Company's Board of Directors will decide on the approval of subscriptions and the procedure in possible situations of under- or over-subscription. The company will send a written confirmation on the approved subscriptions to the subscribers.

 

Payment of subscriptions 

 

The approved subscriptions will be charged to the subscriber's bank account on 14 May 1999. Overdue payments are subject to an annual penal interest rate of 11%, starting from the due date until the date of payment.

 

Entries into a book-entry account

 

Bond loan stakes which have been subscribed for and approved will be entered into the book-entry account notified by the subscriber in connection with the subscription not later than on 17 May 1999.

 

Prohibition of transfer of bond loan stakes and the effect of termination of employment

 

The bond loan stakes are in the book-entry accounts as their own security class and cannot be given as collateral nor transferred to a third party without a written consent of the Company's Board of Directors. The transfer of a share warrant carried by the bond loan stake is stipulated hereafter in the terms and conditions of share subscription.

 

If the bond loan holder's employment with the Fortum Group is terminated, for example, on account of the sale of a subsidiary organisation or for some other reason before the maturity of the bond loan on 17 May 2002 and before the subscription period for shares has commenced, the bond loan holder shall immediately offer his bond loan stake to the Company or an organisation of the Fortum Group appointed by the Company at nominal value, added by an annual interest of 4% from the beginning of the loan period to the date of termination of employment. The bond loan holder does not have this obligation if his employment has terminated due to disability or old-age pension or death.

 

The share warrants will be entered into the bond loan holder's book-entry account after the loan period has expired on 17 May 2002 after being separated from the bond loan to be a separate book-entry security.

 

Bond loan holders' rights in case of liquidation

 

If the Company is placed in liquidation during the loan period, the bond loan will expire ninety (90) days after the date the liquidation is entered in the Trade Register.

 

II Terms and conditions of share subscription

 

Right to subscribe for new shares 

 

Each warrant may be exercised to subscribe for one Fortum Corporation share with a nominal value of EUR 3.40. As a result of the subscriptions the Company's share capital may increase by a maximum of 7,500,000 new shares, or by EUR 25,500,000. (Amended on 17 April 2000)

 

Share subscription and payment

 

The shares can be subscribed for during 17 May 2002 – 17 May 2005.

        

The subscription for shares will take place at the asset management branches of Merita Pankki Plc. The shares shall be paid for upon subscription.

 

Subscription price

 

The subscription price is the trade-volume weighted average price of the Company's share in euros on the Helsinki Exchanges during 1 March 1999 – 31 March 1999, increased by 10 per cent and rounded off to the nearest cent. The trade-volume weighted average price is calculated by dividing the euro-denominated value of shares traded during the review period with the number of shares traded.

 

Any dividends per share paid as of 1 January 2000 up to the date of subscription for the shares shall be deducted from the subscription price. An amendment to the subscription price shall be made on the record date of each payment of dividends.

 

Entries into a book-entry account

 

The exercised share warrants will be removed from the subscriber's book-entry account at the same time as the shares subscribed and fully paid for are entered into the subscriber's book-entry account.

 

Prohibition of transfer

 

Share warrants shall not be transferred nor given as collateral to a third party without the written consent of the Company's Board of Directors before the beginning of the share subscription period by virtue of the share warrants.

 

Shareholder rights

 

The shares subscribed for will entitle to distribution of dividend for the accounting period during which the shares were subscribed for. Other rights will commence upon the entry into the Trade Register of the increase of the share capital.

 

Issues of shares, convertible loans and bond loans with warrants, and other instruments entitling to shares

 

Should the Company raise its share capital before the end of the subscription period with a new issue or issues new convertible loans or bond loans with warrants or share warrants or other instruments entitling to shares in accordance with the Companies Act so that the shareholder has a pre-emptive subscription right, the holders of share warrants shall have the same or equal rights as the shareholders. The equality is implemented in a way decided by the Company's Board of Directors so that the numbers of the shares to be subscribed for, subscription prices or both shall be changed.

 

Should the Company raise its share capital with a bonus issue before the end of the subscription period, the numbers of shares to be subscribed for, the subscription price or both shall be changed in a way decided by the Company's Board of Directors so that the relative position of the holders of the share warrants shall remain unchanged.

 

The rights of share warrant holders in certain cases

 

Should the Company lower its share capital before the end of the subscription period, the subscription right of the holder of share warrants shall be adjusted accordingly as specified in the decision to lower the share capital.

 

Should the Company decide to merge with another company as the merging company or with a company to be formed in a combination merger, or to be divided, or to be changed into a private limited company before the end of the subscription period, the holders of the share warrants shall given the right to subscribe for the shares within the prescribed time set by the Company's Board of Directors before the merger, division or the change into a private limited company. After such date no subscription right shall exist.

 

Should the Company decide to acquire its own shares by an offer made to all shareholders, the holders of share warrants shall be made an equal offer. In other cases, the acquisition of the Company's own shares does not require measures taken by the Company towards the holders of the share warrants.

 

Should the Company before the end of the share subscription period go into liquidation or be dissolved or should a shareholder obtain a right or obligation to redeem, as referred to in the Articles of Association, Chapter 14 Section 19 of the Companies Act, or Section 6 Chapter 6 of the Securities Market Act, the holders of the share warrants shall be entitled to use their right of subscription within a prescribed time determined by the Company's Board of Directors before the liquidation, dissolution or redemption. After such date no subscription right shall exist.

 

Should the nominal value of the share be changed before the end of the share subscription time while the share capital remains unchanged, the terms and conditions of share subscription shall be amended so that the total nominal value of the shares to be subscribed for and the total subscription price shall remain unchanged.

 

Applicable law

 

The laws of Finland shall be applied to this bond loan.

 

Settlement of disputes

 

Disputes arising in relation to this bond loan shall be ultimately settled by arbitration in accordance with the Arbitration Rules of the Central Chamber of Commerce of Finland.

 

Other matters

 

The Company's Board of Directors will decide on the approval of subscriptions and on other matters in connection with the bond loan and subscription of shares. The bond loan documentation is kept available for inspection at the head office of the Company in Helsinki.