Nokia 2005 Annual Report Download - page 97

Pension arrangements for the members of the Group Executive Board
The members the Group Executive Board in 2005 participate in the local retirement programs
applicable to employees in the country where they reside. Executives in Finland participate in the
Finnish TEL pension system, which provides for a retirement benefit based on years of service and
earnings according to the prescribed statutory system. Under the Finnish TEL pension system, base
pay, incentives and other taxable fringe benefits are included in the definition of earnings,
although gains realized from equity are not. The Finnish TEL pension scheme provides for early
retirement benefits at age 62. Standard retirement benefits are available from ages 63 through 68,
according to an increasing scale.
Executives in the United States participate in Nokia’s Retirement Savings and Investment Plan.
Under this 401(k) plan, participants elect to make voluntary pre-tax contributions that are 100%
matched by the company up to 6% of eligible earnings. The company makes an additional annual
discretionary contribution of up to 2% of eligible earnings. In addition for participants earning in
excess of the eligible earning limit, the company offers an additional Restoration and Deferral Plan.
This plan allows employees to defer up to 50% of their salary and 100% of their bonus into a
non-qualified plan. The company also makes an annual discretionary contribution to this
non-qualified plan of up to 2% of the earnings above 401(k) eligibility limits.
Simon Beresford-Wylie participates in the Nokia International Employee Benefit Plan (NIEBP). The
NIEBP is a defined contribution retirement arrangement provided to some Nokia employees on
international assignments. The contributions to NIEBP are funded two-thirds by Nokia and
one-third by the employee. Because Mr. Beresford-Wylie also participates in the Finnish TEL
system, the company contribution to NIEBP is 1.3% of annual earnings.
Jorma Ollila and Olli-Pekka Kallasvuo can as part of their service contract retire at the age of 60
with full retirement benefit, should they be employed by Nokia at the time. The full retirement
benefit is calculated as if the executive had continued his service with Nokia through the statutory
retirement age of 65. Mr. Ollila’s service contract will terminate as of June 1, 2006. Following the
current contract, he will not be eligible to receive any additional retirement benefits from Nokia
after that date. Pekka Ala-Pietil¨ a had an equal retirement arrangement during his employment at
Nokia and he will not receive any additional retirement benefits from Nokia after termination of
employment.
Hallstein Moerk, following his arrangement with a previous employer, has a retirement benefit of
65% of his pensionable salary beginning at the age of 62. Early retirement is possible at the age of
55 with reductions in benefits.
Service Contract of the Chairman and CEO, of the President and COO, and of the former
President
We have a service contract with each of Jorma Ollila and Olli-Pekka Kallasvuo.
Jorma Ollila’s contract covers his current position as Chairman and CEO, and Chairman of the
Group Executive Board. Mr. Ollila’s employment will come to an end on June 1, 2006 based on his
request as a result of which the Board of Directors has released him from his duties as CEO and
Chairman of the Group Executive Board from that date. As of June 1, 2006, his service contract will
terminate without any severance or other payments by Nokia. Thereafter, he will no longer be
eligible for incentives, bonuses, stock options or other equity grants from Nokia. He will be entitled
to retain all vested and unvested stock options and other equity compensation granted to him
prior to June 1, 2006. Further, following his current contract, he will not be eligible to receive any
additional retirement benefits from Nokia after June 1, 2006.
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