Teleste - Total number of voting rights and capital

THE BOARD OF DIRECTORS OF TELESTE DECIDED ON INCENTIVE PLANS DIRECTED TO MEMBERS OF THE MANAGEMENT GROUP AND TO KEY EMPLOYEES

Turku, Finland, 2011-12-05 09:00 CET (GLOBE NEWSWIRE) -- TELESTE CORPORATION  
STOCK EXCHANGE RELEASE    5.12.2011 AT 10:00 



THE BOARD OF DIRECTORS OF TELESTE CORPORATION DECIDED ON INCENTIVE PLANS
DIRECTED TO MEMBERS OF THE MANAGEMENT GROUP AND TO KEY EMPLOYEES 

The Board of Directors of Teleste Corporation has today decided on two new
share-based incentive plans directed to the members of the Teleste Management
Group and to key employees. The purpose of the new plans is to combine the
objectives of the owners and members of the Management Group and key employees
in order to increase the value of the Company, to commit the members of the
Management Group and key employees to Teleste Corporation (“Teleste”) by
encouraging them to acquire and hold Teleste's shares, as well as to offer them
competitive reward plans based on long-term holding the Company's shares. 

Incentive Plan for Members of the Management Group

Through the incentive plan directed to members of the Management Group, the
directors personally invest a considerable amount of their own funds in
Teleste's shares. The directors finance their investments partly themselves and
partly by a loan provided by Teleste. The actual owner risk will be carried out
personally by the directors for the part of their personal investment in the
plan. 

For the purpose of the share ownership, some of the members of the Management
Group have established a limited liability company named Teleste Management II
Oy (“Teleste Management II”), whose entire capital stock they or corporations
over which they exercise control own. Upon establishment of the Plan, the
intention of Teleste Management II is to acquire Teleste shares for a maximum
of EUR 1,600,000, in total. The share acquisition will be financed by capital
investments in Teleste Management II by members of the Management Group, in the
maximum total amount of EUR 320,000, as well as by a loan provided by Teleste.
Some of the members of the Management Group will finance their capital
investments in Teleste Management II by selling the Teleste shares they
currently hold. 

It is possible to expand the plan by present or new members of the Management
Group to be recruited. The maximum number of Teleste's shares to be acquired
for Teleste Management II, on the basis of the whole Plan, is, however, 700,000
in total. After the plan has been implemented in full, members of the
Management Group will hold 3.7% of the Teleste's shares through Teleste
Management II. The members of the Management Group earlier hold 2.1% of the
Teleste's shares through Teleste Management Oy established in 2010. 

On the basis of authorization granted by the Annual General Meeting of
Shareholders of Teleste on 8 April 2011, the Board of Directors of Teleste
decided on a share issue against payment directed to Teleste Management II. In
the share issue, a maximum total of 542,000 new shares in Teleste will be
offered for subscription by Teleste Management II, in derogation from the
shareholders' pre-emptive subscription rights. There are weighty financial
reasons for the derogation from the shareholders' pre-emptive subscription
rights as the shares to be issued in the share issue will be used for the
implementation of the incentive and commitment plan of the members of the
Teleste Management Group. 

The subscription price of the new share is the trade volume weighted average
quotation of Teleste´s share on NASDAQ OMX Helsinki Ltd. during 18 November — 1
December 2011, i.e. EUR 2.95. The subscription price is based on the prevailing
market price of Teleste's share. Teleste Management II has subscribed for
542,000 shares. The subscribed shares must be paid by 31 December 2011, at the
latest. The subscription price will be credited to the reserve for invested
unrestricted equity of Teleste. Right to dividend and other shareholder rights
will commence after the new shares have been entered into the Trade Register.
The shares will be registered on the book-entry account of the subscriber and
will be applied for public trading on NASDAQ OMX Helsinki Ltd after their Trade
Register entry. 

As part of the plan, the Board of Directors of Teleste has today decided to
grant to Teleste Management II an interest-bearing loan in the maximum amount
of EUR 1,600,000 to finance the acquisition of Teleste's shares. The loan will
be repaid in full by 1 July 2015, at the latest. Should the plan be continued
by one year at a time in 2015, in 2016 and in 2017, the loan period may be
extended correspondingly. Teleste Management II has the right to repay the loan
prematurely at any time, and the obligation to repay the loan prematurely by
selling the Teleste's shares it holds, in case the Teleste's share price
exceeds a certain level determined in the plan, otherwise than occasionally. 

The plan will be valid until summer 2015, at which time the plan is intended to
be dissolved in a manner to be determined later. The plan may be dissolved,
e.g., by merging Teleste Management II with Teleste, or by otherwise selling
the Teleste's shares held by Teleste Management II. The plan will be continued
by one year at a time, in case the Teleste's share price in April—May 2015, in
April—May 2016 or in April—May 2017 is lower than the average share price which
Teleste Management II paid for its Teleste's shares. 

During the validity of the plan, the transfer of the Teleste's shares held by
Teleste Management II has been restricted. The share ownership in Teleste
Management II by the members of the Management Group will be valid until the
plan is dissolved. 

Upon establishment of the plan, four members of the Management Group will be
included in the incentive plan directed to members of the Management Group. 

Key Employees Performance Share Plan

The new key employees' performance share plan includes three performance
periods, calendar years 2012, 2013 and 2014. The Board of Directors or the
Company will decide on the performance criteria of the Plan and their targets
at the beginning of each performance period. The prerequisite for participation
in the plan and receipt of reward provides that a key employee purchases
Teleste's shares in accordance with the terms and conditions of the performance
share plan and decision by the Board of Directors. The potential reward from
the performance period 2012 is based on the Operating Profit of the Teleste
Group and / or of the business areas, as well as on fulfillment of the above
participation prerequisite. Furthermore, a key employee will have a possibility
to earn restricted reward, the amount of which depends on the number of
purchased shares. Restricted reward is tied to the validity of employment or
service relationship. Rewards will be paid partly in the Company's shares and
partly in cash in 2015. The cash proportion is intended to cover taxes and
tax-related costs arising from the reward to a key employee. No reward will be
paid if a key employee's employment or service contract terminates before the
reward payment. 

The target group of the performance share plan consists of approximately 30 key
employees. The total amount of rewards to be paid on the basis of the share
performance plan is a maximum of 250,000 Teleste's shares and cash payments
corresponding to the value of shares. 



Turku 2.12.2011



TELESTE CORPORATION
The Board of Directors



ADDITIONAL INFORMATION:
Mr Jukka Rinnevaara, CEO, Tel. +358 2 2605 866 or +358 400 747 488



DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Media
www.teleste.com