Shares and Shareholders

Share capital

The share capital of Parent Company Tamro Corporation on 31 December 2003 amounted to EUR 114,837,083 and it was divided into a total of 114,837,083 shares with a nominal value of EUR 1.

On 31 December 2003 the company held 341,000 own shares, repurchased according to the decision of the 1999 Annual General Meeting. This holding corresponds to 0,3 % of the year-end share capital. At the year-end the Board of Directors had no authorisation from the Annual General Meeting to repurchase or sell own shares.

Shareholders

On 31 December 2003, PHOENIX Group held 113,714,106 shares or 99,3% of the shares of Tamro Corporation, excluding the 341,000 own shares held by Tamro.

With the agreement concluded on 13th of August 2003, PHOENIX acquired 22,114,333 shares representing 19.3% of the total shares from Apoteket AB. This triggered a redemption offer under the Articles of Association of Tamro Corporation, and, as the shareholding exceeded 70%, it also triggered the Mandatory Redemption offer under Chapter 6, Section 6 of the Securities Market Act. On 16th December 2003, PHOENIX’s ownership had increased to above 9/10 of all outstanding shares, and on that date PHOENIX exercised the Redemption Claim under Chapter 14, Section 20 of the Companies Act..

Details of the PHOENIX redemption offers and claims are stated at the end of this sectio.

At year-end, the Board Members, Group management and permanent insiders did not own Tamro Corporation shares, warrants or option rights.

Incentive system

The Group has earlier adopted option schemes and policies as incentives for its key employees and personnel. At year-end 213,000 or 3.1% of the total 6,882,000 option rights and warrants, were not held by Tamro Group or PHOENIX. Tamro Group owned 1,278,000 or 18.6% and PHOENIX held 5,391,000 or 78.3% of all warrants and option rights.

Following the cancellation decided by the Board of Directors, there remain 2,276,000 class A and 2,276,000 class B warrants from the 1997 warrant bond issued to the personnel. The class A warrants entitle their holders to subscribe for one Tamro Corporation share at the subscription price of EUR 6.56, less the regular dividend paid out after issuance, between 1 December 2000 and 31 January 2004. The class B warrants entitle their holders to subscribe for one Tamro Corporation share at the subscription price of EUR 6.56, less the regular dividend paid out after issuance, between 1 December 2001 and 31 January 2004. At the present the share subscription price for the 1997 warrants is EUR 5.78.

The share option scheme for the key personnel in 2000 consisted of 1,165,000 class A share option rights and 1,165,000 class B share option rights following the cancellation decided by the Board of Directors. Shares may be subscribed for with class A share option rights from 1 April 2002 to 30 April 2006, and with class B share option rights from 1 April 2004 to 30 April 2006. The subscription price will be EUR 4.00 for shares whose subscription period commences on 1 April 2002, and EUR 4.80 for shares whose subscription period commences on 1 April 2004, less any dividends exceeding 50% of the earnings per share for the relevant accounting period, declared after 12 April 2000 and paid out before the time of subscription. If dividends are distributed for loss-making accounting periods, the whole amount paid out is to be deducted from the subscription price. However, the subscription price must at least equal the nominal value of the share. At the present the share subscription price for the year 2000 A warrants is EUR 3.95 and for the B warrants EUR 4.75.

The subscriptions may increase the share capital of the company by a maximum of 6,882,000 shares, or EUR 6,882,000.

Dividend policy and distribution to owners

Provided that Tamro's financial development continues along healthy lines, the Board targets a dividend pay-out ratio of around 50% of the earnings per share (EPS).

The Board of Directors proposes to the Annual General Meeting that the 2003 dividend be set at 0.3 EUR per share.

Share listing, performance and trading volume

Tamro Corporation shares are listed on the Helsinki Exchanges.

The closing price for 2003 stood at EUR 4.51 (3.80), up 18.7% from the end of 2002. The year's trading high was EUR 4.60 and trading low EUR 3.77. During 2003, a total of 50.8 (17.5) million shares changed hands, equivalent to 44.3% of the average number of all Tamro shares; this share turnover represented a market value of EUR 227.9 (66.7) million. Turnover amounts are not comparable with last year’s figures, as they include the purchases made by PHOENIX in connection with the redemption offers and claims.

Tamro's market capitalisation at year-end was EUR 516.4 million compared with EUR 435.1 million at the close of 2002. The market capitalisation figure does not include own shares. Information on share price trends and share-specific data for the past five years are presented separately.

Redemption offers and claims

Redemption obligation according to Tamro’s Articles of Association

On 14 August 2003, Tamro received notifications of a share purchase agreement concluded on 13 August 2003. With the fulfilment of this agreement the entire holdings of Apoteket AB in Tamro will be transferred to PHOENIX International Beteiligungs GmbH. Due to the transaction, the holdings of Apoteket AB in Tamro will decrease from 19.3 per cent to zero (0 per cent) and the holdings of PHOENIX will increase to 19.3 per cent.

With the fulfilment of the share purchase agreement, the proportion of voting rights and share capital held by PHOENIX and Meco Holding A/S, a fully owned subsidiary of PHOENIX, in Tamro Corporation will increase to 58.9 per cent.

PHOENIX informed that the fulfilment of the share purchase agreement triggers the redemption obligation under the Articles of Association of Tamro Corporation.

On 14 August 2003, Tamro's Board of Directors received from PHOENIX a notification regarding the redemption obligation referred to in Section 12 of the Articles of Association of Tamro Corporation.

On 3 September 2003, Tamro’s Board of Directors issued a notification regarding the redemption obligation. The Board of Directors stated that PHOENIX's holdings of voting rights and shares in Tamro trigger the redemption obligation as determined in Section 12 of the Articles of Association of Tamro. Thus, at the request by other shareholders and holders of warrants issued by Tamro in 1997 and 2000, PHOENIX is obligated to purchase their shares and warrants.

In the notification the Board of Directors informed that the redemption price shall be EUR 4.51 per share. The redemption price had been determined in accordance with the provision in the Articles of Association of Tamro. The highest of the alternative prices referred to in the Articles of Association of Tamro was the weighted average trading price of Tamro’s shares on the Helsinki Exchanges during the (10) trading days preceding the date, of 14 August 2003 on which PHOENIX gave its notice.

Tamro also announced that PHOENIX had informed that the redemption price for the 1997 A warrants is EUR 0.08 per warrant, for the 1997 B warrants EUR 0.08 per warrant, for the 2000 A warrants EUR 0.80 per warrant and for the 2000 B warrants EUR 0.52 per warrant. Tamro informed that it had no information that would indicate that the calculation of the redemption prices for the warrants is anything but fair.

Detailed instructions for the shareholders were announced in a stock exchange release published on 3 September 2003 and in an advertisement published in two newspapers on 4 September 2003.

On 4 September 2003, PHOENIX informed Tamro that it offers to acquire, in accordance with Section 12 of the Articles of Association of Tamro, all the shares in Tamro as well as the warrants issued by Tamro in 1997 and 2000. Tamro was also informed that the Financial Supervision Authority had on 3 September 2003 decided to approve the tender offer document, as prepared by PHOENIX, including the terms and conditions of the offer. The decision of the Financial Supervision Authority had been published by PHOENIX.

At the request of PHOENIX, the Board of Directors of Tamro issued a statement on the offered redemption price, according to which the Board is not aware of any undisclosed material circumstances that objectively could have an impact on the market price of the Tamro share.

On 26 September 2003, PHOENIX announced that it shall extend the offer period for the tender offer, which was initially scheduled to expire on 25 September 2003. The new expiration date will be the third (3rd) Finnish banking day following the receipt of the competition clearances set as conditions for the completion of the tender offer under the terms and conditions of the offer.

On 1 October 2003, after the reporting period of January-September, PHOENIX informed that it had received the required competition clearances for its acquisition of Tamro Corporation. PHOENIX also informed that with the receipt of these competition clearances its tender offer for all of Tamro’s shares and warrants has been set to expire at 4 pm (Finnish time) on 6 October 2003. PHOENIX informed that it will announce the results of the tender offer on or around 8 October 2003.

On 6 October 2003, Tamro received notifications of a change in ownership according to Chapter 2, Section 9 of the Securities Markets Act. According to the notifications, the holdings of Apoteket AB (publ) in Tamro had decreased from 19.3 per cent to zero (0 per cent) and PHOENIX and Meco Holding A/S hold shares in Tamro as follows:

The holdings of PHOENIX and Meco Holding A/S, a fully owned subsidiary of PHOENIX, had exceeded one half (1/2) of the voting rights and share capital in Tamro. PHOENIX had thus become the parent company of Tamro.

On 8 October, PHOENIX informed that, as the conditions for the completion of the tender offer have been satisfied, PHOENIX would complete the tender offer in accordance with the terms and conditions of the offer. The sale and purchase of the Tamro shares and warrants tendered in the tender offer will be executed on 10 October 2003. Holders that have tendered their Tamro shares and options will receive payment of the offer price on or about 15 October 2003.

PHOENIX also informed that a total of 40,642,904 shares, representing approximately 35.39 per cent of the total shares and voting rights pertaining to such shares in Tamro, have been tendered in the tender offer. In addition, a total of 5,311,000 warrants representing approximately 70.33 per cent of the total warrants in Tamro have been tendered in the tender offer.

Further, PHOENIX informed that it will launch a mandatory redemption offer in accordance with the Finnish Securities Markets Act as soon as possible and will notify this separately. PHOENIX also informed that it has not yet made any decisions on its intentions regarding a possible redemption procedure under the Finnish Companies Act.

On 8 October 2003, Tamro Corporation announced that it had received notification on change in ownership according to
Chapter 2, Section 9 of the Securities Markets Act. As a result of the tender offer by PHOENIX of all issued shares and warrants in Tamro, the holding of PHOENIX exceeded two-thirds (2/3) of the voting rights and share capital of Tamro. Thus, PHOENIX and Meco Holding A/S hold shares in Tamro as follows:

Once the title to the warrants tendered in the tender offer has passed to PHOENIX, it will hold 5,311,000 warrants in Tamro entitling to subscribe for 5,311,000 shares in Tamro.

On 15 October 2003, Tamro Corporation received an announcement from PHOENIX according to which PHOENIX’s holding of shares and votes in Tamro has exceeded nine-tenths (9/10). As a result, PHOENIX's has the right to redeem the shares held by other shareholders in Tamro in accordance with Chapter 14, Section 19 of the Companies Act. PHOENIX’s current holding in Tamro is 108,240,770 shares corresponding to 94.26 per cent of all the shares and 94.54 per cent of the votes in Tamro. In the calculation of the portion of votes, own shares held by Tamro have not been taken into account.

A redemption claim under Chapter 14, Section 20 of the Companies Act was exercised by PHOENIX on 16 December 2003, as the ownership was 99 per cent.

On the application of Tamro Corporation, the District Court of Vantaa has appointed Mr Henrik Hästö, Attorney at Law at Gahmberg, Hästö & Co Ltd. Attorneys-at-Law, as trustee to look after the interest of absent shareholders during the redemption of the minority shares in Tamro Corporation and PHOENIX applied to the Finnish Central Chamber of Commerce for the appointment of arbitrator(s) for the redemption proceeding. The Central Chamber of Commerce appointed in its meeting on 28 January 2004 Mr. Antero Molander, attorney at law, as the only arbitrator/member of the Arbitral Tribunal. The Arbitral Tribunal will handle possible disputes regarding the existence of PHOENIX’ redemption right, the nature and value of the security to be given by PHOENIX for the payment of the redemption price, and the redemption price.