Trading begins in Wärtsilä 2001 Warrants

Wärtsilä Corporation, Stock exchange release 3 March 2005 at 16:30 UTC+2

Wärtsilä Corporation’s 2001 warrants will be admitted for trading on the Main List of the Helsinki Exchanges on 7 March 2005.

The Annual General Meeting on 20 March 2001 approved the issue of warrants as part of the key personnel incentive scheme. On 3 February 2005 the Board of Directors decided to include the 2001 warrants in the book-entry securities system.

Deviating from the original terms and conditions of the warrants in consequence of the bonus issue on 7 December 2004, each warrant entitles the holder to subscribe for three (3) Wärtsilä B share with two (2) warrants. A total of 1,500,000 warrants have been issued and they may be exercised to subscribe for altogether 2,250,000 Wärtsilä B shares during the subscription period that started on 1 April 2003 and ends on 31 March 2007. The annual subscription period is 2 January to 30 November. No certificates have been issued for the warrants. The warrants may be surrendered without restriction. The share subscription price, which has been reduced by the amount of the extra dividends by the decisions of the Annual General Meetings, is 17.15 euros. Subscriptions based on these warrants may increase the share capital by at most 7,875,000 euros.

The Financial Supervision of Finland has granted Wärtsilä exemption from the obligation to publish a listing prospectus concerning these warrants when listing them for public trading. The conditions of the Wärtsilä Corporation 2001 warrants are attached herewith.

ENCL. Terms and Conditions of the Warrants

WARRANTS IN WÄRTSILÄ CORPORATION 2001

I TERMS AND CONDITIONS OF WARRANTS

1. Number of warrants

The number of warrants issued will be 1,500,000, which entitle to subscribe for a total of 1,500,000 B-shares in Wärtsilä Corporation.

2. Issuing of Warrants

The persons to which warrants will be issued will be notified in writing by the Company about the issue of warrants free of charge. The warrants will be issued to the recipient when he or she has accepted the offer within the time specified by the Company. Warrant certificates shall upon request be delivered to the warrant holder at the beginning of the subscription period unless the warrants have been transferred to the book-entry system.

3. Right to warrants

The warrants shall, with deviation from the shareholders’ pre-emptive right to subscription, be issued to the key personnel of the Wärtsilä Group. A small part of the warrants will be reserved for new key persons which will be nominated later and shall for this purpose be issued to a wholly-owned subsidiary of Wärtsilä Corporation. It is proposed that the shareholders’ pre-emptive right to subscription be deviated from, since the warrants are intended to form part of the Group’s incentive program for the key personnel.

4. Distribution of warrants

The Board of Directors decides upon the distribution of the warrants to the different categories of the key personnel. The warrants which are reserved for new key persons which will be nominated later shall be issued to a subsidiary
specified by the Board of Directors. The Board of Directors shall later on decide upon the distribution of these warrants to the key personnel.

5. Transfer of warrants and obligation to offer warrants

The warrants are freely transferable when the share subscription period has begun. The Board of Directors may, as an exception to the above, permit the transfer of warrants also at an earlier date.

Should a subscriber cease to be employed by the Wärtsilä Group before 1 April 2003 for any other reason than retirement or death, such person shall without delay offer the warrants to the Company free of charge.

II TERMS AND CONDITIONS OF THE SHARE SUBSCRIPTION

1. Right to subscribe new shares

Each warrant entitles its holder to subscribe for one (1) B-share in Wärtsilä Corporation. The nominal value of each share is 3.50 EUR. As a result of the subscriptions the share capital of Wärtsilä Corporation may be increased by a maximum of 1,500,000 new B-shares i.e. by a maximum of 5,250,000 EUR.

Shares subscription and payment

The subscription period is from 1 April 2003 to 30 November 2003 and thereafter annually from 2 January to 30 November until 31 March 2007 which is the last day for subscription.

The share subscription shall take place at the head office of Wärtsilä Corporation and possibly at an other location to be determined later. Payment of shares subscribed shall be effected on subscription.

3. Share subscription price

The share subscription price shall be the trade volume weighted average price of the B-share at the Helsinki Exchanges during the period 2 May – 25 May 2001 with an addition of thirty (30) per cent.

From the share subscription price shall be deducted the amount of any extra dividends which may be distributed after 25 May 2001 but before the subscription for shares. The Board of Directors shall in its proposal for dividend to the General Meeting of Shareholders determine, which part of the distribution, if any, is extra dividend. The share subscription price shall nevertheless always amount to at least the nominal value of the share. The deduction from the share subscription price shall be effected as per the respective dividend record date.

4. Registration of shares

Shares subscribed for and fully paid shall be registered in the book-entry account of the subscriber.

5. Shareholder rights

The shares shall entitle to dividend for the financial year during which the subscription takes place. Other shareholder rights shall commence when the increase of the share capital has been entered into the Trade Register.

6. Share issues, convertible bonds and warrants before sharesubscription

Should the Company, before the subscription for shares, increase its share capital through an issue of new shares, or issue convertible bonds or warrants, a warrant holder shall have the same or equal right as the shareholder to participate in
such issue. Equality is reached in the manner determined by the Board of Directors by adjusting the amount of shares available for subscription, the subscription price or both of these.

Should the Company, before the subscription for shares, increase its share capital by way of a bonus issue, the subscription ratio shall be amended so that the ratio to the share capital of shares to be subscribed for by virtue of warrants remains unchanged. If the number of shares that can be subscribed for by virtue of one warrant should be a fraction, the fractional part shall be taken into account by reducing the subscription price.

7. Rights in certain cases

If the Company reduces its share capital before the subscription of shares, the subscription right accorded by the terms of the warrant shall be adjusted accordingly as specified in the resolution to reduce the share capital.

If the Company is placed in liquidation before the subscription of shares, the warrant holder shall be given an opportunity to exercise his subscription right before the liquidation begins within a period of time determined by the Board of Directors.

If the Company resolves to merge in an other company as the company being acquired or in a company to be formed in a combination merger or if the Company resolves to be divided, the warrant holder shall before the merger or division be given the right to subscribe for the shares within the period of time determined by the Board of Directors. After such date no subscription right shall exist.

If the Company, after the beginning of the period of subscription, resolves to acquire its own shares by an offer made to all shareholders, the warrant holder shall be made an equivalent offer. In other cases acquisition of the Company’s own shares does not require the Company to take any action in relation to the warrant holder.

In case of a situation as referred to in Chapter 14 Article 19 of the Finnish Companies Act, in which a shareholder possesses over 90% of the shares of the Company and therefore has the right and obligation to redeem the shares of the remaining shareholders, the warrant holders shall be entitled to use their right of subscription by virtue of the warrant within a period of time defined by the Board of Directors.

If the nominal value of the share is changed but the share capital remains unchanged, the subscription terms shall be amended so that the total nominal value of the shares available for subscription and the total subscription price of such shares remain the same.

Converting the Company from a public company into a private company will not affect the terms and conditions of the warrants.

8. Settlement of disputes

Disputes arising in relation to the warrants shall be settled by arbitration in accordance with the Arbitration Rules of the Finnish Central Chamber of Commerce.

9. Other matters

The Board of Directors may decide on the transfer of the warrants to the book-entry system at a later date and on the resulting technical amendments to the terms and conditions. The Board of Directors may also decide on other matters relating to the warrants. The warrant documentation is available for inspection at the head office of Wärtsilä Corporation in Helsinki.