Nokia 2006 Annual Report Download - page 182

Notes to the Consolidated Financial Statements (Continued)
23. Sharebased payment (Continued)
(3) Includes a minor number of performance shares granted under other employee equity plans than
the global plans.
(4) Based on the performance of the Group during the Interim Measurement Period 20042005, under
the 2004 Performance Share Plan, both performance criteria were met. Hence, 3 595 339 Nokia
shares equalling the threshold number were delivered in 2006 with an intrinsic value of
EUR 66 million. The performance shares related to the interim settlement of the 2004
Performance Share Plan are included in the number of performance shares outstanding at
December 31, 2006 as these performance shares will remain outstanding until the final settlement
in 2008. The final payout, in 2008, if any, will be adjusted by the shares delivered based on the
Interim Measurement Period.
Based on the performance of the Group during the Interim Measurement Period 20052006, under
the 2005 Performance Share Plan, both performance criteria were met. Hence 4.1 million Nokia
shares equalling the threshold number are expected to vest in 2007. The shares will vest as of the
date of the Annual General Meeting on May 3, 2007.
Restricted shares
Since 2003, the Group has granted restricted shares to recruit, retain, reward and motivate selected
high potential employees, who are critical to the future success of the Group. The restricted share
plans 2003, 2004, 2005 and 2006 have been approved by the Board of Directors. A valid
authorization from the Annual General Meeting is required, when the plans are settled using the
Company’s newly issued shares or transfer of existing own shares. The Group may also settle the
plans by using Nokia shares purchased on the open market or by using cash settlement. All of our
restricted share grants have a restriction period of three years after grant, after which period the
granted shares will vest.
As soon as practicable after vesting, the Nokia shares are delivered to the recipients. Until the Nokia
shares are delivered, the recipients will not have any shareholder rights, such as voting or dividend
rights associated with the restricted shares.
The table below gives certain information relating to the restricted shares outstanding as at
December 31, 2006.
Weighted
Weighted average
average remaining Aggregate
Number of grant date contractual intrinsic
Restricted fair value term value
Shares EUR (1) (years) EURm
Restricted Shares at December 31, 2004********** 2 319 430 11.55 2.06 27
Granted ***************************************** 3 016 746 12.14 2.76
Forfeited **************************************** 150 500 14.31 0.74
Restricted Shares at December 31, 2005********** 5 185 676 11.59 2.06 80
Granted(2) *************************************** 1 669 050 14.71 2.65
Forfeited **************************************** 455 100 12.20 0.87
Vested ****************************************** 334 750 12.33 0.00 5
Restricted Shares at December 31, 2006********** 6 064 876 12.27 1.69 94
(1) The fair value of restricted shares is estimated based on the grant date market price of the
Company’s share less the present value of dividends expected to be paid during the vesting
period.
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