Nokia 2008 Annual Report Download - page 198

22. Sharebased payment (Continued)
The equitybased incentive grants are generally conditional upon continued employment as well as
fulfillment of such performance, service and other conditions, as determined in the relevant plan
rules.
The sharebased compensation expense for all equitybased incentive awards amounted to
EUR 74 million in 2008 (EUR 228 million in 2007 and EUR 196 million in 2006).
Stock options
Nokia’s global stock option plans in effect for 2008, including their terms and conditions, were
approved by the Annual General Meeting 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 25% of the options vesting
one year after grant and 6.25% each quarter thereafter. The stock options granted under the plans
generally have a term of five years.
The exercise price of the stock options is determined at the time of grant on a quarterly basis. The
exercise prices are determined in accordance with a preagreed schedule quarterly 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 right to amend the abovedescribed determination of the exercise price.
The stock option exercises are settled with newly issued Nokia shares which entitle the holder to a
dividend for the financial year in which the subscription occurs. Other shareholder rights commence
on the date on which the shares subscribed for are registered with the Finnish Trade Register.
Pursuant to the stock options issued, an aggregate maximum number of 23 113 218 new Nokia
shares may be subscribed for, representing 0.6% of the total number of votes at December 31, 2008.
During 2008 exercise of 3 546 508 options resulted in issuance of 3 546 508 new shares. The exercises
of stock options have resulted in an increase of the share capital of the parent company until May 3,
2007. After that date the exercises of stock options have no longer resulted in an increase of the
share capital as thereafter all share subsctiption prices are recorded in the fund for invested non
restricted equity as per a resolution by the Annual General Meeting.
There were no stock options outstanding as of December 31, 2008, which upon exercise would result
in an increase of the share capital of the parent company.
F54
Notes to the Consolidated Financial Statements (Continued)