Nokia 2005 Annual Report Download - page 179

Notes to the Consolidated Financial Statements (Continued)
23. The shares of the Parent Company (Continued)
The Board of Directors will propose to the Annual General Meeting convening on March 30, 2006
that the Board of Directors be authorized to repurchase a maximum of 405 million Nokia shares
by using unrestricted shareholders’ equity. Further, the Board of Directors will propose that the
Annual General Meeting authorize the Board of Directors to resolve to dispose a maximum of
405 million Nokia shares. These authorizations are proposed to be effective until March 30, 2007,
or in the event that the new Companies Act has been approved by the time of the Annual General
Meeting, and enters into force latest on March 30, 2007, these authorizations are proposed to be
effective until June 30, 2007.
24. Share-based payment
The Group has several equity based incentive programs for employees, in which management also
participates. The programs include performance share plans, stock option plans and restricted
share plans.
The equity-based incentive grants are generally forfeited, if the employment relationship with the
Group terminates, and they are conditional upon the fulfillment of the performance and such
other conditions, as determined in the relevant plan rules.
Stock options
The Group’s outstanding stock option plans currently include the so called ‘‘Global plans’’ launched
in 2001, 2003 and 2005. These plans have been approved by the Annual General Meeting in the
year of the launch of the plan.
Under these plans, each stock option entitles the holder to subscribe for one new Nokia share with
a par value of EUR 0.06 each. In the 2001 stock option plan the stock options are transferable and
the stock options under the 2003 and 2005 plans are non-transferable by the participants. All of
the stock options have a quarterly staggered vesting schedule, as specified in the table below. The
exercise prices are determined at the time of the grant, on a quarterly basis equalling the trade
volume weighted average price of the Nokia share on the Helsinki Stock Exchange during the
trading days of the first whole week of the second month (i.e. February, May, August or
November) of the respective calendar quarter, when the sub-category of the stock option is
denominated.
The exercises based on the stock options issued under the 2001, 2003 and 2005 stock option plans
are settled with newly issued shares which will entitle the holder to a dividend for the financial
year in which the subscription occurs. Other shareholder rights commence on the date on which
the shares subscribed for are registered with the Finnish Trade Register.
Pursuant to the stock options issued, an aggregate maximum number of 144,495,187 new shares
were authorized for subscription representing EUR 8,669,711 of the share capital and
approximately 3% of the total number of votes on December 31, 2005. During 2005 the exercise of
125,240 options resulted in the issuance of 125,240 new shares and an increase of the share
capital of the Group by EUR 7,514.40.
There were no other stock options or convertible bonds outstanding as of December 31, 2005,
which upon exercise would result in an increase of the share capital of the parent company.
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