Nokia 2008 Annual Report Download - page 111

businesses or employees in the United States and Canada under which participants can receive Nokia
ADSs or ordinary shares. These equity plans do not result in an increase in the share capital of Nokia.
In connection with our July 10, 2008 acquisition of NAVTEQ, we assumed NAVTEQ’s 2001 Stock
Incentive Plan (“NAVTEQ Plan”). All unvested NAVTEQ restricted stock units under the NAVTEQ Plan
were converted to an equivalent number of restricted stock units entitling their holders to Nokia
shares. The maximum number of Nokia shares to be delivered to NAVTEQ employees during the years
2008—2012 in connection with the NAVTEQ restricted stock units that were converted into Nokia
restricted stock units upon closing of the acquisition is approximately 3 million. We do not intend to
make further awards under the NAVTEQ Plan.
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 at December 31, 2008, a total of 11 700 044 ADSs had been
purchased under this plan since its inception, and there were a total of approximately 1 000
participants.
For more information on these plans, see Note 22 to our consolidated financial statements included
in Item 18 of this annual report.
EquityBased Compensation Program 2009
The Board of Directors announced the proposed scope and design for the Equity Program 2009 on
January 22, 2009. The main equity instrument continues to be performance shares. In addition, stock
options will be used on a limited basis for senior managers, and restricted shares will be used for a
small number of high potential and critical employees. These equitybased incentive awards are
generally forfeited if the employee leaves Nokia prior to vesting.
Performance Shares
The Performance Share Plan 2009 approved by the Board of Directors will cover a performance period
of three years (20092011) 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 : 5% (threshold) and 10% (maximum) during the performance
period 20092011, and
(2)
EPS (diluted, nonIFRS) : EUR 1.01 (threshold) and EUR 1.53 (maximum) at the end of the
performance period in 2011.
Average Annual Net Sales Growth is calculated as an average of the net sales growth rates for the
years 2009 through 2011. EPS is the diluted, nonIFRS earnings per share in 2011. Both the EPS and
Average Annual Net Sales Growth criteria are equally weighted and performance under each of the
two performance criteria is calculated independent of each other.
Achievement of the maximum performance for both criteria would result in the vesting of a
maximum of 18 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 4.5 million shares. If only one of the threshold
levels of performance is achieved, only approximately 2.25 million of the performance shares will
vest. If none of the threshold levels is achieved, then none of the performance shares will vest. For
performance between the threshold and maximum performance levels, the vesting follows a linear
scale. If the required performance levels are achieved, the vesting will occur December 31, 2011. Until
the Nokia shares are delivered, the participants will not have any shareholder rights, such as voting
or dividend rights associated with these performance shares.
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