OREANDA-NEWS. On April 23, 2008 the Board of Directors of MMC Norilsk Nickel (Norilsk Nickel or the Company) approved the terms of a long-term incentive program (the Program) for senior management of MMC Norilsk Nickel and other companies of the Group. The Program is an integral part of the corporate remuneration system, reported the press-centre of Norilsk Nickel.

The participants in the Program will include more than 60 senior managers of Norilsk Nickel and its major production units in the Norilsk Industrial Region and Kola Peninsula. The number of participants in the Program may be increased over time.

Awards will be made under the Program in April 2008, vesting in three annual installments based on performance over the 2008–2011 period. The Program may be extended beyond 2011 at the Board’s discretion based on its assessment of the effectiveness of the 2008 awards in terms of employee motivation and retention, and its efficacy in driving the Company’s returns to shareholders.

An award under the Program is based on a grant of ‘nominal’ Company shares providing a participant the opportunity to receive a cash-based bonus linked to the value of the shares at the time of vesting. An award provides no automatic entitlement to dividends, voting rights or any other rights afforded to shareholders of the Company. However, additional cash-based bonuses will be paid on vested awards to reflect dividends paid on the Company’s shares over the vesting period, to ensure alignment with shareholders’ interests. The aggregate (i.e. covering all participants) opportunity under the Program will be based on a total grant of up to 1,200,000 nominal shares (equivalent to c.0.6% of the company’s share capital) for awards being made in April 2008. The Company has also reserved up to 450,000 nominal shares for future participants of the Program (equivalent to about c.0.24% of the company’s share capital).

Awards will vest partly on continued employment and partly on the Company’s total shareholder return (‘TSR’) relative to the TSR of international mining industry peers.

The Program is aimed at motivating over the long-term senior executives of Norilsk Nickel and other companies of the Group, supporting retention and maximizing participants’ performance. Thus, the interests of the Program participants will be aligned with the interests of the Company’s shareholders in increasing the market capitalization of the company.

According to Denis Morozov, General Director of Norilsk Nickel, the design of the Program is broadly in line with incentive plans used by other leading metals and mining companies.

"The Program will orient senior managers of our main production divisions on the common goal of further strengthening MMC Norilsk Nickel’s leading position in the industry", - Denis Morozov noted.

Assessment of the proposed Program was carried out by independent financial and legal experts before approval by the Board of Directors of Norilsk Nickel.