The board of Norske Skog has adopted a long-term incentive scheme for Norske Skog's corporate management in the form of synthetic options, replacing an earlier programme which ran from 2003-05.

 

Under the new scheme, the chief executive can award up to 30 000 options to each member of the corporate management in the years 2006, 2007 and 2008. The chair can award up to 60 000 options to the chief executive in the same years. These options run to the end of the year in which they are awarded plus three years, and can be exercised fully or in part during the final six months of their term. Options awarded remain valid for as long as the holder continues to be employed by Norske Skog and has not resigned or been dismissed. For options awarded in 2006, the strike price will equal the average price of Norske Skog's share for 12-30 June. In subsequent years, the strike price will equal the average price for the last 14 days of September.

 

As mentioned above, these options are synthetic. In other words, if they are exercised, an amount corresponding to the difference between the market and strike prices will be paid. This amount will be treated as pay and the net amount after tax used to buy Norske Skog shares at market price, which must be held for three years. It will therefore be six years before a possible gain can be realised.

 

In accordance with his contract of employment, chief executive Christian Rynning-Tønnesen has been awarded 60 000 synthetic options. The strike price has been set at NOK 87.50, which equals the average price of Norske Skog's share for 12-30 June. These options run until 30 June 2009 and can be exercised in the 1 January-30 June 2009 period. Following this award, Rynning-Tønnesen holds 150 000 options and 2,853 shares in Norske Skog.

 

Under the new programme mentioned above, the following synthetic options have been awarded to other members of Norske Skog's corporate management team (total options and shares held in brackets):

 

Andreas Enger 30,000 options  (30,000 options and 1,000 shares)

Peter Chrisp 30,000 options (30,000 options and 656 shares)

Eric d'Olce 30,000 options (30,000 options and 2,093 shares)

Antonio Dias 30,000 options (120,000 options and 4,470 shares)

Vidar Lerstad 30,000 options (120,000 options and 8,030 shares)

Ketil Lyng 30,000 options (120,000 options and 6,015 shares)

 

These options have been awarded on the same terms as those issued to the chief executive.

 

 

Oxenøen, 5 July 2006

 

Norske Skog

Investor relations

 

 

Thomas Tronsgaard, director investor relations, tel: +47 67 59 90 62 or +47 900 29 918