Nokia 2009 Annual Report Download - page 135

The employees of Nokia Siemens Networks including the Chief Executive Officer of Nokia Siemens
Networks have not participated in any new Nokia equitybased incentive plans since the formation of
Nokia Siemens Networks on April 1, 2007.
For a more detailed description of all of our equitybased incentive plans, see Note 23 to our
consolidated financial statements included in Item 18 of this annual report.
Performance Shares
We have granted performance shares under the global 2005, 2006, 2007, 2008 and 2009 plans, each
of which, including its terms and conditions, has been approved by the Board of Directors.
The performance shares represent a commitment by the Group to deliver Nokia shares to employees
at a future point in time, subject to Nokia’s fulfillment of predefined performance criteria. No
performance shares will vest unless the Group’s performance reaches at least one of the threshold
levels measured by two independent, predefined performance criteria: the Group’s average annual
net sales growth for the performance period of the plan and earnings per share (“EPS”) at the end of
the performance period.
The 2005 plan has a fouryear performance period with a twoyear interim measurement period. The
2006, 2007, 2008 and 2009 plans have a threeyear performance period with no interim payout. The
shares vest after the respective interim measurement period and/or the performance period. The
shares will be delivered to the participants as soon as practicable after they vest. The below table
summarizes the relevant periods and settlements under the plans.
Plan
Performance
period
Interim
measurement
period
1st (interim)
settlement
2nd (final)
settlement
2005 .................................. 20052008 20052006 2007 2009
2006 .................................. 20062008 N/A N/A 2009
2007 .................................. 20072009 N/A N/A 2010
2008 .................................. 20082010 N/A N/A 2011
2009 .................................. 20092011 N/A N/A 2012
Until the Nokia shares are delivered, the participants will not have any shareholder rights, such as
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. Performance share grants to the CEO are
made upon recommendation by the Personnel Committee and approved by the Board of Directors and
confirmed by the independent members of the Board. Performance share grants to the other Group
Executive Board members and other direct reports of the CEO are approved by the Personnel
Committee.
Stock Options
Nokia’s global stock option plans in effect for 2009, 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 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
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