Nokia 2003 Annual Report Download - page 87

Stock Ownership Guidelines for Executive Management
The goal of our long-term, equity-based incentive awards is to recognize progress towards the
achievement of our strategic objectives, and to focus executives on building value for shareholders.
In addition to stock option grants, we encourage stock ownership by our top executives. In
January 2001, we introduced a stock ownership commitment guideline with minimum
recommendations tied to annual fixed salaries. For the members of the Group Executive Board, the
recommended minimum investment in our shares corresponds to two times the member’s annual
base salary, to be fulfilled by January 2006. This timeline is adjusted for persons, including also
the new Group Executive Board members whose service began on January 1, 2004, to whom we
have started to apply the guidelines after their initial introduction.
Nokia Stock Option Plans
For a summary of the existing Nokia stock option plans, in some of which the Group Executive
Board members participate, please see Note 21 to our consolidated financial statements included
in Item 18 of this Form 20-F. The plans under Note 21 have been approved by the Annual General
Meetings in the year of the launch of the plan.
Restricted Shares
In 2003, we granted a total of 452 250 Restricted Shares to 28 of our key management personnel
who are critical to the future success of Nokia. These Restricted Shares will vest in October 2006,
at which time the shares will be transferred and delivered to the recipients. Until the shares are
transferred and delivered, the recipients will not have any voting or dividend rights associated
with these shares. Mr. Pertti Korhonen, a member of the 2003 Group Executive Board, was granted
35 000 Restricted Shares in 2003.
Other Employee Stock Option Plans
Unlike our other stock option plans, the plans described below do not result in an increase of our
share capital.
In 1999 we introduced a stock option plan available to our employees in the United States and
Canada: The Nokia Holding Inc. 1999 Stock Option Plan. For more information on this plan, see
Note 21 to our consolidated financial statements included in Item 18 of this Form 20-F.
In 2000, we introduced an Employee Share Purchase Plan, which permits all full-time Nokia
employees located in the United States to acquire Nokia ADSs at a 15% discount. The ADSs to be
purchased are funded through monthly payroll deductions from the salary of the participants, and
the ADSs are purchased on a monthly basis. As of December 31, 2003, a total of 1 446 457 ADSs
had been purchased under the plan since its inception, and there were a total of approximately
1 100 participants.
In connection with the acquisition of Ipsilon, we assumed Ipsilon’s 1995 stock option plan. The
former employees, officers and directors of Ipsilon are eligible to participate in this plan. We
intend to issue no more options pursuant to this plan. As of December 31, 2003, options to
purchase 529 025 ADSs were outstanding at an average exercise price of USD 27.64186 per ADS.
In connection with the acquisition of certain US corporations, we have replaced stock options held
by the employees, officers or consultants of the acquired corporations immediately prior to the
respective acquisition with stock options that entitle those persons to purchase Nokia ADSs. The
maximum aggregate number of ADSs that may be issued under these arrangements is 7 050 000.
As of December 31, 2003 options to purchase 3 591 935 ADSs were outstanding at an average
exercise price of USD 18.62968 per ADS.
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