In December 2002, the Board of Norske Skog decided to implement an incentive program for the top management team, in the form of synthetic options. So far, no options have been allocated under this scheme, which is described on page 16 in the 2002 Annual Report.

 

The Board has today given Norske Skog's President and CEO, Mr Jan Reinås, the authorisation to allocate up to 30,000 synthetic options to each of the nine members of the top management group. Potential allocation will be on Nov 20, 2003, with strike price identical to Norske Skog's average share price in the period Nov 6 - Nov 19, 2003.

The options will run until Dec 31, 2006, and can be exercised in the period Jul 1 - Dec 31, 2006. If the options are exercised, an amount corresponding to the difference between market price and strike price will be paid. This amount will be treated as salary, and the net amount less paid tax shall be used to buy Norske Skog shares at market price, and these shares must be held for three years. It will therefore take five-six years before a potential capital gain can be realized. The options are valid as long as the persons entitled are employed by Norske Skog. The program has no dilution effect.

 

The CEO was also authorised to allocate up to 30,000 synthetic options to each member of the top management team on Oct 1 in 2004 and 2005, with strike price identical to Norske Skog's average share price in the two week period prior to the allocation. These options can be exercised in the 2nd half of 2007 and 2008, respectively. Other conditions are as described above.

 

The Chairman of the Board was authorised to allocate synthetic options to the in-coming President and CEO, Mr Jan Oksum. Mr. Oksum's maximum number of options will be limited to 60,000, inclusive of the options he might otherwise get as a current member of Norske Skog's management team. This potential allocation will also be made on Nov 20, 2003, under conditions identical to those described above. This special authorisation runs until Oct 1, 2004.