DNA's new long-term share-based incentive system for senior executives and other key employees

DNA PLC STOCK EXCHANGE RELEASE JANUARY 31, 2017, 8.00 AM

DNA's Board of Directors has complemented a decision, mentioned in the prospectus dated 14 November 2016, concerning a new, long-term, share-based incentive system for senior executives and other key employees. The purpose of the long-term incentive system is to harmonise shareholders' and senior executives' goals to increase DNA's value, and to commit executives and other key employees to DNA by offering them a competitive long-term reward plan in the company.

The new system mainly consists of a Performance Share Plan (PSP), which the Board of Directors decided to complement with a separate share-based Bridge Plan to facilitate the transition period from the long-term share-based incentive system introduced in 2014 to the new, long-term incentive system that will begin in 2017. In addition, DNA has a Restricted Share Plan (RSP).

Performance Share Plan (PSP)

The PSP consists of separate, share-based reward programmes that begin annually. Each programme has a three-year vesting period. The start of each new programme requires a separate decision by the Board of Directors. The first programme (PSP 2017) starts at the beginning of 2017. Any share-based rewards earned through it will be paid in the spring of 2020, if the performance targets set by the Board of Directors are reached.

The first programme will be built on the following performance targets: DNA's total shareholder return (TSR) compared to a peer group over the period 2017-2019, and DNA's cumulative cash flow in 2017-2019. The first programme has about 50 participants, and the maximum number of shares to be handed out will be 429,000 (gross amount from which applicable withholding tax will be deduced, and the remaining net amount will be paid as shares).

Bridge Plan

The Bridge Plan for the transition period consists of two, three-year-long share-based reward programmes. These programmes have a year-long vesting period and a two-year restriction period. The programmes will begin in 2017 and 2018. Any share-based rewards based on the 2017 programme will be handed out in the spring of 2018, if the performance targets set by the Board of Directors are reached. Shares received as a reward cannot be transferred during a two-year restriction period after the vesting period.

The performance targets applicable to the share-based reward system during the transition period are based on DNA's key strategic objectives for the vesting periods in question. The first programme has about 50 participants, and the maximum number of shares to be handed out will be 143,000 (gross amount from which applicable withholding tax will be deduced, and the remaining net amount will be paid as shares).

DNA's Board of Directors will later decide, separately, on the persons who will be selected for the Bridge Plan starting in 2018, its performance targets and the maximum number of shares that may be handed out.

Restricted Share Plan (RSP)

The restricted share-based reward system can be used as a complementary tool for committing employees in specific situations, such as during acquisitions and recruitment. The Restricted Share Plan consists of share-based incentive programmes that begin every year. Each program consists of a three-year restriction period, after which the shares allocated in the beginning of each respective programme are paid to the participants, provided that their employment DNA continues until the payment of the rewards. The start of each new programme requires a separate decision by the Board of Directors.

The first program (RSP 2017) will begin in early 2017, and the rewards earned will be handed out in the spring of 2020. The RSP typically applies to only a few individuals per year. The maximum number of shares to be handed out under the first programme (RSP 2017) will be 42,900 (gross amount from which applicable withholding tax will be deduced, and the remaining net amount will be paid as shares).

Other terms and conditions

DNA adheres to the recommendation on the shareholdings of the Group Executive Team. According to the recommendation, each Executive Team member should own a share in the company, which corresponds to his or her annual fixed gross salary. In order to achieve the recommended ownership, the Executive Team members must retain ownership of at least 50 per cent of the shares they have received through the above-mentioned, share-based incentive systems (calculated based on the net amount of shares left after deduction of the applicable withholding tax), until the person's share in DNA is in line with the recommendation.

The maximum amount of rewards payable under the share-based incentive systems is limited in such a way that a participant's annual share reward may exceed their annual gross salary three times at a maximum.

The share-based incentive systems described above will not have a dilutive effect, because no new shares will be issued in connection with them.

More information:
DNA Corporate Communications, tel. +358 44 044 8000, [email protected]

Distribution:
Nasdaq Helsinki
Key media
www.dna.fi

DNA Plc is a Finnish telecommunications group providing high-quality voice, data and TV services for communication, entertainment and working. DNA is Finland's largest cable operator and the leading pay TV provider in both cable and terrestrial networks. For DNA, the key area for growth in corporate business is the new way of working, independent of time and place, facilitated by smart terminal devices, diverse communications services and rapid connections. In 2016, DNA recorded net sales of EUR 859 million and an operating profit of EUR 91 million. DNA has more than 3.8 million subscriptions in its fixed and mobile communications networks. The Group also includes DNA Store, Finland's largest retail chain selling mobile phones. DNA shares are listed on Nasdaq Helsinki Ltd. For further information, visit www.dna.fi or follow us on Twitter @DNA_fi, @DNA_Business and @DNA_Palvelu and Facebook.