Share capital and shares

Nokian Tyres’ share was quoted on the main list of the Helsinki Exchanges for the first time on 1 June 1995. The company has one class of shares, each share entitling the holder to one vote at the Annual General Meeting and carrying equal rights to dividend. The nominal value of each share is EUR 0.20. The minimum share capital stated in the Articles of Association is EUR 16,000,000 and the maximum share capital is EUR 64,000,000. Within these limits, the share capital may be increased or decreased without amending the Articles of Association.
 

Share price development and trading volume in 2007

At the end of 2007, the price of Nokian Tyres’ share was EUR 24.05, showing an increase of 55% on the previous year’s closing price of EUR 15.52. At its highest, Nokian Tyres’ share was quoted at EUR 29.92 in 2007 (EUR 16.68 in 2006) and EUR 13.99 (EUR 9.90) at its lowest. During the year, a total of 236,332,864 (257,824,937) Nokian Tyres’ shares were traded on the Helsinki Exchanges. At the end of the year, the market capitalisation of the share capital was EUR 2,974,895,534 (1,893,940,830).
 

Dividend policy

The dividend policy adopted by the company’s Board of Directors is to propose to the Annual General Meeting a dividend that reflects the company’s profit development. In the past nine years, dividends paid to shareholders have represented approximately 35% of the year’s net profit. The company plans to continue distributing approximately 35% of net profits in dividends.
 

Board’s authorisations

The Annual General Meeting held on 3 April 2007 authorised the Board of Directors to make a decision to offer no more than 24,000,000 shares through a share issue or by granting special rights under Chapter 10, section 1 of the Finnish Companies Act that entitle to shares (including convertible bonds) on one or more occasions. The Board may decide to issue new shares or shares held by the company. The maximum number of shares included in the authorisation accounts for approximately 20% of the company’s entire share capital. The company has one class of share with a nominal value of EUR 0.20.
 
The authorisation includes the right to issue shares or special rights through private offering, in other words to deviate from the shareholders’ pre-emptive right, subject to provisions of the law.
 
Under the authorisation, the Board of Directors will be entitled to decide on the terms and conditions of a share issue, or the granting of special rights under Chapter 10, section 1 of the Finnish Companies Act, including the recipients of shares or special rights entitling to shares, and the compensation to be paid. It was decided that the authorisation should be exercised for purposes determined by the Board. The authorisation will be effective for five years from the date of the decision made at the Annual General Meeting. This authorisation invalidates all other Board authorisations regarding share issues and convertible bonds.
 

Company share ownership and authorisation for acquisition

Nokian Tyres does not hold any of its own shares, nor is the Board of Directors authorised to acquire them.
 

Bond with warrants directed at personnel and option scheme 2001

The Annual General Meeting of Nokian Tyres, in 2001, decided to offer bonds with warrants to the personnel of the Nokian Tyres Group and the wholly-owned subsidiary of Nokian Tyres plc. The bonds with warrants amounted to EUR 0.4 million. A total of 10,800 type I bond certificates, 9,600 type II bond certificates II and 9,600 type III bond certificates were issued. 600,000 warrants were attached to the bonds, 216,000 of which were attached to the type I bond certificates and marked with the symbol 2001A; 192,000 were attached to type II bond certificates and marked with the symbol 2001B; and 192,000 were attached to type III bond certificates and marked with symbol 2001C. The Board of Directors of Nokian Tyres plc approved the subscriptions for the bonds with warrants directed at the personnel of the Nokian Tyres Group on 1 June 2001. The bonds were subscribed for by 42% of the entire personnel. A minimum subscription of FIM 53.82 for each subscriber was approved. In addition, a subscription for bonds with warrants in the amount of FIM 65,634 was approved to the Nokian Tyres subsidiary Direnic Oy for later offer to employees of the Nokian Tyres Group or persons recruited to the Nokian Tyres Group.
 
The share subscription price for warrants 2001A was originally EUR 19.00, for warrants 2001B the trade volume weighted average quotation of the Nokian Tyres plc share in the Helsinki Exchanges between 1 October and 31 October 2001, i.e. EUR 25.94, and for warrants 2001C the trade volume weighted average quotation of the Nokian Tyres plc share on the Helsinki Exchanges between 1 April and 30 April 2002, i.e. EUR 30.43. The price of shares subscribed for with warrants shall be reduced by the amount of dividends paid after the commencement of the period for which the subscription price was determined, and dividends paid before the subscription on the record date of each dividend payment. After 11 April 2006, the subscription price for warrants 2001A is EUR 1.038, warrants 2001B EUR 1.797 and warrants 2001C EUR 2.246.
 

The share subscription period began

• for warrants 2001A on 1 March 2003
• for warrants 2001B on 1 March 2004
• for warrants 2001C on 1 March 2005
 
The subscription period for all warrants ended on 31 March 2007. As a result of the subscriptions, and according to the original subscription terms, the share capital of Nokian Tyres plc may increase by a maximum of EUR 1.2 million and the number of shares by a maximum of 600,000 new shares.
 

Bonds with warrants 2004 directed at personnel

The Annual General Meeting held on 5 April 2004 decided to issue bonds with warrants to the personnel of the Nokian Tyres Group and to Direnic Oy, a wholly owned subsidiary of Nokian Tyres plc. A deviation was made from the shareholders’ pre-emptive subscription right because the warrants are designed to be part of the Group’s incentive scheme. The number of warrants is 735,000. A total of 245,000 warrants will be marked with the symbol 2004A, 245,000 with the symbol 2004B and 245,000 with the symbol 2004C. According to the original subscription terms, the warrants entitle the subscription of a maximum of 735,000 Nokian Tyres plc shares. The Board’s intention was to issue the shares in spring 2004 (2004A warrants), 2005 (2004B warrants) and 2006 (2004C warrants).
 
The original share subscription price for warrants 2004A was the average price of a Nokian Tyres plc share weighted by the share trading volume on the Helsinki Exchanges between 1 January and 31 March 2004, i.e. EUR 62.96. For warrants 2004B, the price was the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January and 31 March 2005, i.e. EUR 120.96 and for warrants 2004C, the average price of a share weighted by the share trading volume on the Helsinki Exchanges between 1 January and 31 March 2006, i.e. EUR 12.82.
 
The price of shares subscribed for with warrants shall be reduced by the amount of dividends paid after the commencement of the period for which the subscription price was determined, and dividends paid before the subscription on the record date of each dividend payment. After 10 April 2007, the subscription price for warrants 2004A is EUR 5.539, warrants 2004B EUR 11.34 and warrants 2004C EUR 12.28.
 

The share subscription period is

• for warrants 2004A 1 March 2006–31 March 2008
• for warrants 2004B 1 March 2007–31 March 2009
• for warrants 2004C 1 March 2008–31 March 2010
 
As a result of the subscriptions with the 2004 bonds with warrants, and according to the original subscription terms, the share capital of Nokian Tyres plc may be increased by a maximum of EUR 1,470,000 and the number of shares by a maximum of 735,000 new shares.
 

Bonds with warrants 2007 directed at personnel

The Annual General Meeting held on 3 April 2007 decided to issue bonds with warrants to the personnel of the Nokian Tyres Group and the wholly-owned subsidiary of Nokian Tyres plc. A deviation was made from the shareholders’ pre-emptive subscription right because the warrants are designed to be part of the Group’s incentive scheme. The purpose of the issue is to encourage the personnel to work on a long-term basis to increase shareholder value.
 
The number of warrants is 6,750,000. A total of 2,250,000 warrants will be marked with the symbol 2007A, 2,250,000 with the symbol 2007B and 2,250,000 with the symbol 2007C. According to the original subscription terms, the warrants entitle the subscription of a maximum of 6,750,000 Nokian Tyres plc shares. The Board’s intention is to issue the shares in spring 2007 (2007A warrants), 2008 (2007B warrants) and 2009 (2007C warrants).
 
The share subscription price shall be based on the prevailing market price of the Nokian Tyres plc share on the Helsinki Stock Exchange in January–March 2007, January– March 2008 and January–March 2009.
 
The original share subscription price for warrants 2007A was the average price of a Nokian Tyres plc share weighted by the share trading volume on the Helsinki Exchanges between 1 January and 31 March 2007, i.e. EUR 17.29.
 
The price of shares subscribed for with warrants shall be reduced by the amount of dividends paid after the commencement of the period for which the subscription price was determined, and dividends paid before the subscription on the record date of each dividend payment. After 10 April 2007, the subscription price for warrants 2007A is EUR 16.98.
 

The share subscription period is

• for warrants 2007A 1 March 2009–31 March 2011
• for warrants 2007B 1 March 2010–31 March 2012
• for warrants 2007C 1 March 2011–31 March 2013
 
As a result of the subscriptions with the 2007 bonds with warrants, and according to the original subscription terms, the share capital of Nokian Tyres plc may be increased by a maximum of EUR 1,350,000 and the number of shares by a maximum of 6,750,000 new shares.
 
A share ownership plan shall be incorporated to the 2007 warrants, according to which the Group’s senior management shall be obliged to acquire the Company’s shares with a proportion of the income gained from the stock options.
 

Warrants listed on the Main List of the Helsinki Exchanges

Nokian Tyres’ 2001A warrants for the option scheme 2001 were listed on the Helsinki Exchanges main list as of 3 March 2003, 2001B warrants as of 1 March 2004, and 2001C warrants as of 1 March 2005. In 2007, at their highest, Nokian Tyres’ 2001A warrants were quoted at EUR 182.20 (EUR 155.00 in 2006) and EUR 131.24 (EUR 91.50) at their lowest. The highest rate for 2001B warrants was EUR 175.00 (EUR 146.00) and the lowest EUR 120.50 (EUR 80.70). The highest rate for 2001C warrants was EUR 175.00 (EUR 142.00) and the lowest EUR 115.00 (EUR 75.00). During the year, a total of 28,129 (82,143) Nokian Tyres’ warrants were traded on the Helsinki Exchanges.
 
Nokian Tyres’ 2004A warrants for the option scheme 2004 were listed on the Helsinki Exchanges main list as of 3 March 2006 and 2004B warrants as of 1 March 2007. At their highest, the 2004A warrants were quoted at EUR 243.00 and at their lowest EUR 82.00. During the year, a total of 84,686 2004A warrants were traded on the Helsinki Exchanges. The highest quote for the 2004B warrants was EUR 184.49 and the lowest EUR 54.00, and a total of 150,222 warrants were traded during the year.
 

Management shareholding

On 31 December 2007, Nokian Tyres’ Board members and the President and CEO held a total of 9,000 Nokian Tyres’ publicly traded bonds with warrants, and a total of 179,000 bonds with warrants that were not publicly traded in 2007. In addition, Nokian Tyres’ Board members and the President and CEO held a total of 19,140 Nokian Tyres’ shares. The shares and publicly traded bonds with warrants represent 0.1% of the total number of votes.
 

Convertible bond loan for Finnish and international institutional investors

On 20 June 2007, the Board of Directors of Nokian Tyres announced the issue of a convertible bond totalling EUR 130.4 million, in deviation from the pre-emptive rights of the company’s shareholders, for subscription by Finnish and international institutional investors in a book building period process. Bids received in the offering constituted an oversubscription of several times the maximum number of bonds offered. The books opened and closed within 3 hours. With reference to the earlier announcement, on 20 June 2007, Nokian Tyres announced the issue of convertible bonds totalling EUR 130.4 million, maturing in 2014.
 
The Board of Directors of Nokian Tyres accepted the final terms of the bonds and, on the basis of the authorisation granted by the Annual General Meeting on 3 April 2007, issued bonds to institutional investors, deviating from the pre-emptive rights of the company’s shareholders. The bonds were issued to finance investments in accordance with the company’s investment strategy, to refinance existing financing facilities, and for general corporate purposes.
 
The bonds were issued in principal amounts of EUR 100,000 and at 100% in their principal amount, and will not bear interest during the loan period. The loan will be redeemed when it finally expires for an amount producing an annual yield of 3.0%, or for 123% of the loan principal, unless it has previously been converted, redeemed, purchased or cancelled. Each EUR 100,000 bond will be convertible to 2,672 company shares. The conversion price represents a premium of 40% above the reference price of EUR 26.73 of the company’s ordinary shares on 20 June 2007. The right to convert the bonds into company shares commences on 7 August 2007 and ends on 20 June 2014 at 16:00 p.m. Finnish time. In the event that all bonds will be converted into ordinary shares of the company, the aggregate number of the new ordinary shares to be issued by the company will be 4,008,551, which represents 3.3% of the aggregate number of the company’s shares on 20 June 2007 (assuming that the over-allotment option is fully exercised).
 
The maturity date of the bonds is 27 June 2014, unless previously redeemed, converted, purchased or cancelled. The company may redeem the bonds at their accreted principal amount as at the date fixed for redemption at any time on or after 27 June 2011, provided that the price of the company’s shares multiplied by the conversion ratio is equal to or exceeds 130% of the then applicable accreted principal amount for a period of 20 trading days during a period of 30 consecutive days. In addition, the company has the right to redeem the bonds if, at any time, the aggregate principal amount of the bonds outstanding is equal to or less than 15% of the aggregate principal amount of the bonds initially issued. The payment of the issue took place on 27 June 2007, and the bonds were registered in the Finnish Trade Register on 28 June 2007.
 
The offering was managed by Nomura International Plc as Sole Bookrunner and Joint Lead Manager and Carnegie Investment Bank AB as Joint Lead Manager. Nokian Tyres granted Nomura International plc an over-allotment option to subscribe for up to EUR 19.6 million of additional bonds solely to cover over-allotments, if any, which may be exercised at any time, up to and including 20 July 2007.
 
The trading of the bonds on the Euro MTF market of Luxembourg commenced on 17 July 2007. The company issued a Listing Document concerning the listing of the bond (and its terms) on 17 July 2007. The new shares in the company issued in conjunction with bond conversion will be listed on the Helsinki Exchanges.
 
On 17 July 2007, Nokian Tyres announced that Nomura International Plc, the Joint Lead Manager of the Nokian Tyres plc’s convertible bonds due 2014 offering, has fully exercised the EUR 19.6 million over-allotment option granted to it by Nokian Tyres plc. The EUR 19.6 million of additional bonds will solely be used to cover over-allotments. Subsequent to the exercise of the overallotment option, the total amount of the convertible bond is EUR 150 million.
 

Share information

ISIN code:FI0009005318
Nominal value: EUR 0.20
Trading code: NRE1V
Currency:Euro