Oriola Corporation’s incentive plans and share savings plan for key personnel

Oriola Corporation Stock Exchange Release 17 December 2018 at 4:00 p.m.

Oriola Corporation’s incentive plans and share savings plan for key personnel

The Board of Directors of Oriola Corporation has resolved to establish a new share-based Long-term Incentive Plan 2019–2023 and a share-based one-off Long-Term Incentive Plan 2019–2020 directed to the Group key personnel. The Long-Term Incentive Plans will form a part of Oriola Corporation’s remuneration program for its key employees, and the aim of the plans is to combine the objectives of the shareholders and the key personnel in order to increase the value of the Company in the long-term, to retain the key personnel in the Company, and to offer them a competitive reward plan based on performance and accumulation of share ownership in the Company. The Company’s long-term incentive plans are harmonized by combining the Company’s Key Personnel Share Savings Plan, Long-Term Incentive Plan 2019–2023 and one-off Long-Term Incentive Plan 2019–2020.

Long-Term Incentive Plan 2019–2023

The Long-Term Incentive Plan Arrangement has three three-year performance periods 2019–2021, 2020–2022 and 2021–2023. The Board of Directors of the Company will resolve on the Plan's performance criteria and on the required performance level for each criterion at the beginning of a performance period. Approximately 30 key persons, including the members of the Group Management Team, belong to the target group of the Plan.

The prerequisite for participation in the Plan and for receipt of reward on the basis of the Plan is that a key person has enrolled in the Key Personnel Share Savings Plan and makes the monthly saving from his or her fixed gross monthly salary, in accordance with the Rules of the Key Personnel Share Savings Plan in force during the first year of the three-year performance period.

The potential reward from the performance period 2019–2021 will be based on the Group's Earnings per Share (EPS) and Group’s Total Shareholder Return (TSR). The rewards to be paid on the basis of the performance period 2019-2021 correspond to the value of an approximate maximum total of 1,700,000 Oriola Corporation Class B shares (including also the proportion to be paid in cash). The potential reward will be paid partly in Oriola Corporation Class B shares and partly in cash in spring 2022 after the end of the performance period. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key person.

A member of the Group Management Team must hold 50 per cent of the net shares given on the basis of the Long-Term Incentive Plans, until his or her shareholding in the Company in total equals the value of his or her gross annual salary. Such number of shares must be held as long as the key person holds a position as a Group Management Team member.

One-off Long-Term Incentive Plan 2019-2020

The Board of Oriola has resolved on a two-year one-off incentive plan to enable the prolonging of the Long-Term Incentive plan performance period to three years and with that change better answer to the requirements of the investors and Corporate Governance and to be more aligned with the market practice.

The one-off long-term incentive plan has a two-year performance period 2019–2020. The Board of Directors of the Company will resolve on the Plan's performance criteria and on the required performance level for each criterion at the beginning of a performance period. Approximately 30 key persons, including the members of the Group Management Team, belong to the target group of the Plan.

The prerequisite for participation in the Plan and for receipt of reward on the basis of the Plan is that a key person has enrolled in the Key Personnel Share Savings Plan for Long-Term Incentive Plan 2019–2021 and makes the monthly saving for this plan from his or her fixed gross monthly salary, in accordance with the Rules of the Key Personnel Share Savings Plan in force.

The potential reward from the performance period 2019-2020 will be based on the Group's Earnings per Share (EPS) and separately defined two-year strategic projects. The rewards to be paid on the basis of the performance period 2019–2020 correspond to the value of an approximate maximum total of 1,700,000 Oriola Corporation Class B shares (including also the proportion to be paid in cash). The potential reward will be paid partly in Oriola Corporation Class B shares and partly in cash in spring 2021 after the end of the performance period. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a key person.

The member of the Group Management Team must hold 50 per cent of the net shares given on the basis of the Long-Term Incentive Plans, until his or her shareholding in the Company in total equals the value of his or her gross annual salary. Such number of shares must be held as long as the key person holds a position as a Group Management Team member.

Key Employee Share Savings Plan

The Board of Directors has decided to launch a new Savings Period 2019 that will be offered to approximately 90 Group key employees. This Savings Period will last for 12 months, and it will begin on 1 January 2019 and end on 31 December 2019. The maximum monthly saving is 8.3 percent and the minimum is 2 percent of each participant's fixed monthly gross salary. The accumulated savings are used for purchasing Oriola class B shares for the participants at the market price quarterly.

In return, each participant will receive two free class B matching shares for every three acquired savings shares if the participant holds the acquired shares from the Savings Period until the end of the designated holding period and if his or her employment with a company has not been terminated on bad leaver terms. Matching shares will be paid partly in the Company's class B shares and partly in cash. The cash proportion is intended for covering taxes and tax-related payments arising from the reward to a key person.

A key person will participate in the Plan for one savings period at a time. Shares will be acquired with the accrued savings at the market price quarterly, after the publication date of the relevant interim report. Any dividends paid on purchased shares during the commencing Savings Period will automatically be reinvested into additional class B shares on the following purchase date. These shares will have an equal right to matching shares. Assuming all eligible employees will participate and will save the maximum of 8.3 percent of their fixed monthly gross salary the aggregated estimated number of new shares to be issued or treasury shares held by the Company to be transferred as matching shares based on the 12-month Savings Period 2019 is approximately 200,000 class B shares.

Oriola Corporation
Board of Directors

Further information:

Robert Andersson
President and CEO
Tel. +358 10 429 2109
Email: robert.andersson@oriola.com

Petter Sandström
General Counsel
Tel. +35810 429 5761
Email: petter.sandstrom@oriola.com

Distribution:
Nasdaq Helsinki Ltd.
Key media

Released by:
Oriola Corporation
Corporate Communications
Orionintie 5
02200 Espoo
www.oriola.com