UPM-Kymmene - Company Announcement

UPM introduces two new share incentive plans

UPM-Kymmene Corporation   Stock exchange release  2 February 2011 at 12:45 EET



UPM introduces two new share incentive plans

UPM's Board of Directors has approved two new long-term share incentive plans.

As the previous Share Ownership Plan and Stock Option Plan have come to the
maturity, UPM introduces new long-term share incentive plans that are
compatible with the long-term business cycle of UPM. 

The new share incentive plans cover approximately 550 participants. In case all
the set performance targets are met in full, the total maximum number of the
shares for the plans is 2,100,000 shares. 

In addition, the Board has reconfirmed a share ownership recommendation for the
Group Executive Team. 

Performance Share Plan

The Performance Share Plan is targeted to the Group Executive Team and other
selected members of the management. Under the plan UPM shares are awarded based
on the group level performance for a three-year earning period. The earned
shares are delivered after the closing of the earning period. 

The earning criteria for the first plan earning period of 2011-2013 are the
operating cash flow and earnings per share (EPS). 

Deferred Bonus Plan

The Deferred Bonus Plan is targeted for other key personnel of the company. The
share incentives are based on the participants' short term incentive target.
Each annual plan is based on the one-year earning period and the two-year
restriction period. During the restriction period, prior to the share delivery,
the earned share rewards are adjusted with dividends and other capital
distribution, if any, paid to all shareholders. 

The first plan commences at the beginning of 2011 and the earned shares will be
delivered in the spring of 2014. 

Other aspects relating to the arrangements

The above indicated estimates of the maximum share rewards represent the gross
value of the rewards of which the applicable taxes will be deducted before the
shares are delivered to the participants. 


Share delivery will be executed by using existing shares of the company.
Besides the attainment of the performance criteria the share reward is, in both
arrangements, subject to the continuation of the employment relationship. 

Ownership recommendation to the executive management

The Board encourages the Group Executive Team to a direct share ownership in
the company. The Board has, therefore, reconfirmed the ownership recommendation
of the Group Executive Team. The Board recommends that the President and CEO
maintains a share ownership corresponding to a two-year gross base salary and
the other persons belonging to the Group Executive Team a share ownership
corresponding to a one-year gross base salary. 


For further information please contact:

Riitta Savonlahti, Executive Vice President, Human Resources, UPM, tel. +358
204 15 0048 

UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284
media@upm.com


Helsinki, 2 February 2011

UPM-KYMMENE CORPORATION
BOARD OF DIRECTORS

UPM-Kymmene Corporation
Pirkko Harrela
Executive Vice President, Corporate Communications

UPM, Corporate Communications
Media Desk, tel. +358 40 588 3284
media@upm.com

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NASDAQ OMX Helsinki Ltd
Main media
www.upm.com