Kesko's share-based compensation plan in 2016 and compensation in 2015

KESKO CORPORATION STOCK EXCHANGE RELEASE 03.02.2016 AT 09.04 1(2)

Kesko's share-based compensation plan in 2016 and compensation in 2015

Kesko Corporation's Board has decided for the target group of the 2016 vesting period of Kesko's three-year (2014-2016) share-based compensation plan to consist of approximately 150 Kesko management employees and other named key persons, the vesting criteria of the vesting period and the maximum share award amount of each member of the target group. At the same time, the Board decided to grant a total of 140,365 own B shares held by the company as treasury shares, based on the fulfilment of the vesting criteria of the 2015 vesting period of the share-based compensation plan.

The purpose of the share-based compensation plan is to promote Kesko's business and to increase the company's value by combining the objectives of the shareholders and the management employees. The plan commits the persons to Kesko Group and gives them the opportunity to receive company shares upon fulfilment of the objectives set in the share-based compensation plan.

In the share-based compensation plan, the award for each vesting period of a calendar year is based on the fulfilment of the vesting criteria determined by the Board separately for each vesting period. The criteria for the 2016 vesting period are, like the vesting criteria for the year 2015, Kesko Group's sales growth percentage exclusive of tax, Kesko's basic earnings per share (EPS) excluding non-recurring items and the percentage by which the total earnings of a Kesko B share exceeds the OMX Helsinki Benchmark Cap index. The award for the 2016 vesting period will be paid by the end of April 2017.

Following a vesting period, the shares granted as a share award carry a commitment period of three calendar years, during which the shares are not allowed to be assigned. If a person's employment or service relationship ends prior to the expiry of a commitment period, he/she must, as a rule, return the shares under the assignment restriction to Kesko without consideration. In individual cases, the Board may also decide that the grantee can keep some or all of the shares that are subject to the return obligation.

Based on the fulfilment of the vesting criteria of the 2015 vesting period of the share-based compensation plan, a total of 140,365 own B shares held by the company as treasury shares are granted to 142 Kesko management employees and other named key persons included in the target group of the 2015 vesting period. The shares will be assigned to the grantees by the end of April 2016 in accordance with the terms and conditions of the plan. The grantees cannot assign or pledge these shares prior to the expiry of the related commitment period on 31 December 2018.

Under the plan, a total maximum of 600,000 own B shares held by the company as treasury shares can be granted in three years. In addition to shares granted based on the fulfilment of the vesting criteria of each vesting period, a cash component is paid to cover the taxes and tax-like charges incurred by the award.

The shares are granted on the basis of the authorisation given to the Board at the Annual General Meeting of 8 April 2013.

Further information is available from Matti Mettälä, Vice President, Human Resources, tel. +358 105 322 200.

Kesko Corporation

Merja Haverinen
Vice President, Group Communications

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www.kesko.fi