Nokia 2006 Annual Report Download - page 176

Notes to the Consolidated Financial Statements (Continued)
22. The shares of the Parent Company (Continued)
At the end of 2006, the Board of Directors had no other authorizations to issue shares, convertible
bonds, warrants or stock options.
Other authorizations
At the Annual General Meeting held on April 7, 2005, Nokia shareholders authorized the Board of
Directors to repurchase a maximum of 443 200 000 Nokia shares. In 2006 Nokia repurchased
84 880 000 Nokia shares on the basis of this authorization. The authorization expired on March 30,
2006 following the new authorization granted by the Annual General Meeting 2006.
At the Annual General Meeting held on March 30, 2006, Nokia shareholders authorized the Board of
Directors to repurchase a maximum of 405 million Nokia shares, representing less than 10% of the
share capital and the total voting rights, and to resolve on the transfer of a maximum of 405 million
Nokia shares. In 2006, Nokia repurchased a total of 126 960 000 shares under this buyback
authorization, as a result of which the unused authorization amounted to 278 040 000 shares on
December 31, 2006. In 2006, a total of 2 236 479 shares were transferred under the authorization to
transfer shares. The shares may be repurchased under the buyback authorization in order to carry
out the company’s stock repurchase plan. In addition, shares may be repurchased in order to
develop the capital structure of the company, to finance or carry out acquisitions or other
arrangements, to settle the company’s equitybased incentive plans, to be transferred for other
purposes, or to be cancelled. The authorization to transfer the shares may be carried out pursuant to
terms determined by the Board in connection with acquisitions or in other arrangements or for
incentive purposes to selected members of the personnel. The Board may resolve to transfer the
shares in another proportion than that of the shareholders’ preemptive rights to the company’s
shares, provided that from the company’s perspective important financial grounds exist for such
transfer. These authorizations are effective until March 30, 2007.
Authorizations proposed to the Annual General Meeting 2007
Pursuant to the announcement on January 25, 2007, the Board of Directors will propose to the
Annual General Meeting convening on May 3, 2007 that the Annual General Meeting authorize the
Board of Directors to issue a maximum of 800 million shares through issuance of shares or special
rights entitling to shares (including stock options) in one or more issues. The Board may issue either
new shares or shares held by the company. It is proposed that the authorization be effective until
June 30, 2010.
Further, the Board of Directors will propose to the Annual General Meeting that the Annual General
Meeting authorize the Board of Directors to repurchase a maximum of 380 million Nokia shares by
using funds in the unrestricted shareholders’ equity. The proposed amount of shares corresponds to
less than 10% of all shares of the company. It is proposed that the authorization be effective until
June 30, 2008.
23. Sharebased payment
The Group has several equitybased incentive programs for employees. The programs include
performance share plans, stock option plans and restricted share plans. Both executives and
employees participate in these programs.
The equitybased incentive grants are generally forfeited, if the employment relationship with the
Group terminates, and they are conditional upon the fulfillment of such performance, service and
other conditions, as determined in the relevant plan rules.
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