Nokia 2004 Annual Report Download - page 94

The Corporate Governance and Nomination Committee’s purpose is (1) to prepare the proposals for
the general meetings in respect of the composition of the Board along with the director
remuneration to be approved by the shareholders, and (2) to monitor issues and practices related
to corporate governance and to propose necessary actions in respect thereof.
The Committee fulfills its responsibilities by (i) actively identifying individuals qualified to become
members of the Board, (ii) recommending to the shareholders the director nominees for election at
the Annual General Meetings, (iii) monitoring significant developments in the law and practice of
corporate governance and of the duties and responsibilities of directors of public companies,
(iv) assisting the Board and each committee of the Board in its annual performance
self-evaluation, including establishing criteria to be used in connection with such evaluation, and
(v) developing and recommending to the Board and administering the Corporate Governance
Guidelines of the company. The Corporate Governance and Nomination Committee convened five
meetings in 2004.
The charters of each of the committees are available on our website, www.nokia.com.
Service Contracts of the Chairman and CEO and of the President
We have a service contract with each of Mr. Jorma Ollila and Mr. Pekka Ala-Pietil¨ a, each of an
indefinite duration. The Board has also agreed with Mr. Jorma Ollila on the continuation of his
services as CEO of Nokia through 2006.
Mr. Jorma Ollila’s contract has provisions for severance payments for up to 24 months of
compensation (both base compensation and bonus) in the event of his termination of employment
for reasons other than cause, including a change of control. As previously mentioned, Mr. Jorma
Ollila is further entitled to a full statutory pension from the date he turns 60 years of age, instead
of the statutory age of 65.
Mr. Pekka Ala-Pietil¨ a’s contract has provisions for severance payments for up to 18 months of
compensation (both base compensation and bonus) in the event of his termination of employment
for reasons other than cause, including a change of control. As previously mentioned, Mr. Pekka
Ala-Pietil¨ a is entitled to a full statutory pension from the date he turns 60 years of age, instead of
the statutory age of 65.
Home Country Practices
Under the New York Stock Exchange’s corporate governance listing standards, listed foreign private
issuers, like Nokia, must disclose any significant ways in which their corporate governance
practices differ from those followed by US domestic companies under the NYSE listing standards.
There are no significant differences in the corporate governance practices followed by Nokia as
compared to those followed by US domestic companies under the NYSE listing standards, except
that Nokia follows the requirements of Finnish law with respect to the approval of equity
compensation plans. In addition to that, Finnish laws and regulations do not mandatorily require
companies to have an internal audit function which in Nokia is covered by comprehensive risk
management and internal control processes. Under Finnish law, stock option plans require
shareholder approval at the time of their launch. All other plans that include the delivery of
company stock in the form of newly issued shares or treasury shares require shareholder
approval at the time of the delivery of the shares or, if shareholder approval is granted through
an authorization to the Board of Directors, not earlier than one year in advance of the delivery of
the shares. The NYSE listing standards require that equity compensation plans be approved by a
company’s shareholders. Nokia’s corporate governance practices also comply with the Corporate
Governance Recommendation for Listed Companies approved by the Helsinki Exchanges in
December 2003 effective as of July 1, 2004.
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