Nokia 2008 Annual Report Download - page 110

voting or dividend rights, associated with the performance shares. The performance share grants are
generally forfeited if the employment relationship terminates with Nokia prior to vesting.
Performance share grants are approved by the CEO at the end of the respective calendar quarter on
the basis of an authorization given by the Board of Directors. Approvals for performance share grants
to the CEO are confirmed by the independent members of the Board subject to the requirements of
Finnish law. Approvals for performance share grants to the other Group Executive Board members and
other direct reports of the CEO are made by the Personnel Committee.
Stock Options
Nokia’s global stock option plans in effect for 2008, including their terms and conditions, were
approved by the Annual General Meetings in the year when each plan was launched, i.e., in 2003,
2005 and 2007.
Each stock option entitles the holder to subscribe for one new Nokia share. The stock options are
nontransferable. All of the stock options have a vesting schedule with a 25% vesting one year after
grant, and quarterly vesting thereafter. The stock options granted under the plans generally have a
term of five years.
The exercise price of the stock options are determined at the time of their grant on a quarterly basis.
The exercise prices are determined in accordance with a preagreed schedule after the release of
Nokia’s periodic financial results and are based on the trade volume weighted average price of a
Nokia share on NASDAQ OMX Helsinki during the trading days of the first whole week of the second
month of the respective calendar quarter (i.e., February, May, August or November). Exercise prices are
determined on a oneweek weighted average to mitigate any shortterm fluctuations in Nokia’s share
price. The determination of exercise price is defined in the terms and conditions of the stock option
plan, which are approved by the shareholders at the respective Annual General Meeting. The Board of
Directors does not have the right to amend the abovedescribed determination of the exercise price.
Stock option grants are approved by the CEO at the time of stock option pricing on the basis of an
authorization given by the Board of Directors. Approvals for stock option grants to the CEO are
confirmed by the independent members of the Board subject to the requirements of Finnish law.
Approvals for stock option grants to the other Group Executive Board members and for other direct
reports of the CEO are made by the Personnel Committee.
Restricted Shares
Since 2003, we have granted restricted shares to recruit, retain, reward and motivate selected high
potential employees, who are critical to the future success of Nokia. It is Nokia’s philosophy that
restricted shares will be used only for key management positions and other critical resources. The
outstanding global restricted share plans, including their terms and conditions, have been approved
by the Board of Directors.
All of our restricted share plans have a restriction period of three years after grant. Once the shares
vest, they are transferred and delivered to the participants. The restricted share grants are generally
forfeited if the employment relationship terminates with Nokia prior to vesting. Until the Nokia
shares are delivered, the participants do not have any shareholder rights, such as voting or dividend
rights, associated with the restricted shares. Restricted share grants are approved by the CEO at the
end of the respective calendar quarter on the basis of an authorization given by the Board of
Directors. Approvals of restricted share grants to the CEO are confirmed by the independent directors
of the Board subject to the requirements of Finnish law. Approvals for restricted share grants to the
other Group Executive Board members and other direct reports of the CEO are made by the Personnel
Committee.
Other Equity Plans for Employees
In addition to our global equity plans described above, we have equity plans for Nokiaacquired
109