FORTUM'S ANNUAL GENERAL MEETING APPROVED THE AUTHORISATION TO REPURCHASE FORTUM SHARES Fortum Corporation's Annual General Meeting, which was held in Helsinki on 16 March 2006, adopted the income statement and balance sheet of the parent company and the Group for 2005, discharged Fortum's Supervisory Board, Board of Directors and the President and CEO from liability for 2005, and decided to pay a dividend of EUR 1.12 per share for 2005, in total EUR 987 million. The rest of the distributable equity will be carried over to retained earnings. The record date for dividend payment is 21 March 2006. The dividend payment date is 28 March 2006. The number of members of Fortum's Supervisory Board was confirmed to be 11. The following persons were re-elected to the Supervisory Board: Members of Parliament Lasse Hautala, Rakel Hiltunen, Mikko Immonen, Timo Kalli, Kimmo Kiljunen, Jari Koskinen, Ben Zyskowicz, second vice chairman of the City Counsil Martti Alakoski, Industrial Counsellor Kimmo Kalela. Member of Parliament Sirpa Paatero was elected as a new member. Timo Kalli was elected as Chairman and Rakel Hiltunen as Deputy Chairman of the Supervisory Board. The Supervisory Board was elected until the end of the following Annual General Meeting. The Annual General Meeting confirmed the following remunerations for Supervisory Board service: Chairman EUR 1,000/month Deputy Chairman EUR 1,000/month Members EUR 500/month Meeting fee EUR 200/meeting In addition the members are entitled to travel expense compensation in accordance with the company's travel rules. The number of members in the Board of Directors was confirmed to be seven. The following persons were re-elected to the Board of Directors: Peter Fagernäs (Chairman), Birgitta Kantola (Deputy Chairman), Birgitta Johansson-Hedberg, Matti Lehti and Marianne Lie. Esko Aho and Christian Ramm-Schmidt were elected as new members. The Board of Directors was elected until the end of the following Annual General Meeting. The Annual General Meeting confirmed the following remuneration for Board Service: Chairman EUR 55,000 /year Deputy Chairman EUR 42,000/year Members EUR 30,000/year Meeting fee EUR 500/meeting In addition a meeting fee of EUR 500 is paid for the Board Committee meetings. The members are entitled to travel expense compensation in accordance with the company's travel rules. Authorised Public Accountant Deloitte & Touche Oy was elected as auditor, with CGR Mikael Paul having the principal responsibility. The Annual General Meeting authorised the Board of Directors to decide on repurchasing the company's own shares by using funds available for distribution of profit. The authorisation is valid for one year from the date of the decision of the Annual General Meeting. The maximum amount of shares to be repurchased is 35 million. In addition, the amount of funds used for the repurchases may not exceed EUR 500 million. The maximum amount of shares to be repurchased corresponds to approximately four per cent of the share capital of the company and the total voting rights. The shares will be repurchased through public trading of the securities on the Helsinki Stock Exchange at the market price of the shares at the time of the repurchase. The repurchases shall be carried out and settled according to the Rules of the Helsinki Stock Exchange and the Rules of the Finnish Central Securities Depository. Shares repurchased by the company shall be cancelled either by decreasing the share capital through a decision made by a General Meeting of Shareholders or without decreasing the share capital through a decision of the Board of Directors, provided that under the new Companies Act proposed to enter into force in September 2006, the Board of Directors is entitled to cancellation. The repurchase of the shares will reduce the company's distributable retained earnings but will not have a material impact on the division of the ownership of the shares and the voting rights. The shares will be repurchased in order to develop the capital structure of the company. This is the first step in a planned share repurchase programme targeting at repurchasing Fortum shares by using funds in the maximum amount of EUR 1000 million during the next three years. The Annual General Meeting resolved to appoint a Nomination Committee to prepare proposals concerning Board members and their emoluments for the following Annual General Meeting. The Nomination Committee will consist of the Chairman of the Board of Directors, acting as an expert member, and the representatives of the three main shareholders. The three shareholders whose share of the total votes of all the shares of the company is largest on the 1st day of November preceding the Annual General Meeting will have the right to appoint the members representing the shareholders. Should a shareholder not wish to use its right to nominate, this right will be passed on to the next biggest shareholder. The largest shareholders will be determined on the basis of the ownership information registered in the book-entry system. In the case of an owner required by the Securities Markets Act to report certain changes in ownership (flagging by shareholder required), ownership distributed among various funds, for example, will be counted as one holding, should the owner inform the Board in writing of this request no later than on 31 October 2006. The Nomination Committee will be convened by the Chairman of the Board of Directors, and the Committee will choose a chairman from among its own members. The Committee shall give its proposal to the Board of Directors of the company at the latest by the 1st of February preceding the Annual General Meeting. The proposal by the shareholder George Jauhiainen to dissolve the Supervisory Board was not accepted. Fortum Corporation Carola Teir-Lehtinen Senior Vice President, Corporate Communications Distribution: Helsinki Stock Exchange Key media APPENDIX Members of the Board of Directors Esko Aho, born 1954, Master of Political Sciences. Esko Aho's career within Finnish society is long and impressive. Aho was elected Member of Parliament in 1993, and he was the leader of the Centre Party of Finland during 1990-2002. His career as an MP included being part of several important committees as well as in the Finnish delegations to the Nordic and European Councils. Aho was Finland's Prime Minister during 1991-1995. After running for president in 2000, Aho lectured at Harvard University for a year. When his parliamentary duties were concluded, he became a private consulting entrepreneur. He was elected President of The Finnish National Fund for Research and Development (Sitra) on July 1st, 2004. New Board Member. Fagernäs, Peter, born 1952, L.L.M., Chairman of the Board of Oy Hermitage Ab and Managing Partner of Hermitage & Co. Ltd. Former Chairman of Pohjola Group plc (2001-2003). He is a member of the Board of Finnlines Plc. Chairman of the Board of Directors since 2004. Johansson-Hedberg, Birgitta, born 1947. Bachelor of Arts, Master of Psychology. President and CEO of Lantmännen. Former President and CEO of Foreningssparbanken and Resident Director for Scandinavia in the Dutch listed company Wolters Kluwer. She is a member of the Boards of Skandia, Sveaskog and Oriflame and the Chairman of University of Umeå. She is also a member of Aktiemarknadsnämnden. Board Member since 2004. Kantola, Birgitta, born 1948, Master of Laws. Former Executive Vice President (Finance) of the Nordic Investment Bank (1991-1995) and Vice President and CFO of the International Finance Corporation, Washington D.C. (1995-2000). Currently she is a Director of Vasakronan AB, Akademiska Hus AB, Nordea Bank AB and Varma Mutual Pension Insurance Company. Board Member since 2001. Lehti, Matti, born 1947, Ph.D. (Econ.), President and CEO, Member of Board of Directors, TietoEnator Corporation, former President and CEO and Member of Board of Directors of Tietotehdas Oy and Tieto Group and Deputy Managing Director of Rautakirja Oy. Chancellor of Helsinki School of Economics, Chairman of Board of Directors, Foundation for Economic Education, Vice Chairman of Board of Directors, Helsinki School of Economics Foundation, as well as member of Board of Directors in Jaakko Pöyry Group and in Confederation of Finnish Industries EK. Board Member since 2005. Lie, Marianne, born 1962, Director General, Norwegian Shipowners' Association. She has previously worked as Managing Director of Vattenfall Norge AS, Managing Director of Helsevekten Telemed AS and Director of Department of Information and Industrial Policy of Norwegian Shipowners' Association. Member of Board of Directors in several Norwegian companies. Board Member since 2005. Christian Ramm-Schmidt, born 1946, B.Sc. (Econ.) Since the beginning of the 70's, Christian Ramm-Schmidt has held marketing and executive positions both within international and Finnish corporations. He gained his versatile experience at Rank-Xerox Oy, Reader's Digest Oy and Servi Systems Oy, among others. In 1994, he became the President of Fazer Keksit Oy, Fazer Suklaa Oy, and finally his areas of responsibility were extended to include Fazer's international candy sector. In 1997 he became the President of Baltic Beverages Holding AB (BBH), which has become the leading brewery business in Russia, the Ukraine, the Baltic countries and Kazakhstan, as well as one of the world's leading brewery corporations. Mr. Ramm-Schmidt has held many board positions, including seats in three listed companies. New Board Member.
Stock exchange release
FORTUM'S ANNUAL GENERAL MEETING APPROVED THE AUTHORISATION TO REPURCHASE FORTUM
16 March 2006, 18:16 EET
Fortum Corporation Stock Exchange Release 16 March 2006 1(4)