Nokia 2006 Annual Report Download - page 96

the respective calendar quarter on the basis of an authorization given by the Board of Directors.
Approvals for restricted share grants to the CEO are made by the Board of Directors, and for the
Group Executive Board members and other direct reports of the CEO by the Personnel Committee of
the Board.
Other Equity Plans for Employees
In addition to our global equity plans described above, we have equity plans for Nokia acquired
businesses or employees in the United States and Canada under which participants can receive Nokia
ADSs. These equity plans do not result in an increase in the share capital of Nokia. The Nokia
Auxiliary Equity Plan which was launched in 2006, is a plan under which performance shares, stock
options and restricted shares can be granted. Under the Nokia Auxiliary Equity Plan 2006, Nokia may
award equity instruments based in Nokia ordinary shares or Nokia ADSs to eligible employees of
Nokia Group or eligible employees in acquired businesses up to the aggregate maximum of 4 million
shares. Under the Nokia Auxiliary Equity Plan 2006 grants can be made under more than one sub
plan and the plan is currently comprised of the Nokia Auxiliary Performance Share Plan 2006, the
Nokia Auxiliary Stock Option Plan 2006 and the Nokia Auxiliary Restricted Share Plan 2006.
We have also an Employee Share Purchase Plan in the United States, which permits all fulltime
Nokia employees located in the United States to acquire Nokia ADSs at a 15% discount. The purchase
of the ADSs is funded through monthly payroll deductions from the salary of the participants, and
the ADSs are purchased on a monthly basis. As of December 31, 2006, a total of 2 276 233 ADSs had
been purchased under this plan since its inception, and there were a total of approximately 1 000
participants. For more information of these plans, see Note 23 to our consolidated financial
statements included in Item 18 of this annual report on Form 20F.
EquityBased Compensation Program 2007
The Board of Directors announced the proposed scope and design for the 2007 Equity Program on
January 25, 2007. The main equity instrument will be performance shares. In addition, stock options
will be granted to a more limited population, and restricted shares will be used for a small number
of high potential and critical employees.
Performance Share Plan 2007
The Performance Share Plan in 2007 approved by the Board of Directors will cover a performance
period of three years (20072009) with no interim measurement period. No performance shares will
vest unless Nokia’s performance reaches at least one of the threshold levels measured by two
independent, predefined performance criteria:
(1) Average Annual Net Sales Growth : performance period 20072009, and
(2) Reported, basic EPS: 2009.
The actual threshold and maximum levels will be determined and disclosed during the first quarter
2007.
Average Annual Net Sales Growth is calculated as an average of the net sales growth rates for the
years 2006 through 2009. Both the EPS and Average Annual Net Sales Growth criteria are equally
weighted and performance under each of the two performance criteria are calculated independent of
each other.
Achievement of the maximum performance for both criteria will result in the vesting of maximum of
12 million Nokia shares. Performance exceeding the maximum criteria does not increase the number
of performance shares that will vest. Achievement of the threshold performance for both criteria will
result in the vesting of approximately 3 million shares. If only one of the threshold levels of
performance is achieved, only approximately 1.5 million of the performance shares will vest. If none
of the threshold levels are achieved, then none of the performance shares will vest. For performance
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