Nokia 2005 Annual Report Download - page 101

November) or, for the monthly priced stock options, the first whole week of such calendar month
when the subcategory of the stock option has been denominated. The stock options will have a
quarterly staggered vesting schedule. The subcategories of stock options to be issued under the
plan will have a life of approximately five years, with the last of the subcategories expiring as of
December 31, 2011.
The restricted shares to be granted under the Restricted Share Plan 2006 will have a three-year
restriction period. The restricted shares will be delivered in 2009, subject to fulfilling the
restriction criteria. Shares are not eligible for any shareholder rights or voting rights during the
restriction period, until transferred to plan participants.
The maximum number of planned grants under the 2006 Equity Program (i.e. performance shares,
stock options and restricted shares) are depicted in the table below. The planned amounts for
2006 are in line with the total amounts approved and disclosed in 2005.
Number of planned grants in 2006
(number, millions)
Recruitment
Annual grants and special
Plan type 2006 retention needs Total
Stock Options ..................................... 8.90 7.90 16.80
Restricted Shares .................................. 2.30 7.20 9.50
Performance Shares at Threshold(1) .................... 4.50 3.65 8.15
(1) The maximum number of shares to be delivered at maximum performance is four times the
number originally granted (at threshold).
As of December 31, 2005, the total dilution effect of Nokia’s stock options, performance shares and
restricted shares currently outstanding, assuming full dilution, is approximately 4.2% in the
aggregate. The potential maximum effect of the proposed new program, including the impact of
the equity grants in connection with the acquisition of Intellisync Inc., would be approximately
another 1.4%.
Cash Incentive Plans
In addition to equity-based compensation programs we also provide our executives and employees
with cash incentive payments through our comprehensive cash incentive plans. These
performance-based cash incentives include individual, team and project/program incentive
payments as well as the Nokia Connecting People bonus.
6.C Board Practices
The Board of Directors
The operations of the company are managed under the direction of the Board of Directors, within
the framework set by the Finnish Companies Act and our articles of association and the
complementary Corporate Governance Guidelines and related charters as adopted by the Board.
The Board represents and is accountable to the shareholders of the company. The Board’s
responsibilities are active and not passive and include the responsibility to regularly evaluate the
strategic direction of the company, management policies and the effectiveness with which
management implements its policies. The Board’s responsibilities further include overseeing the
structure and composition of the company’s top management and monitoring legal compliance
and the management of risks related to the company’s operations. In doing so the Board may set
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