Nokia 2009 Annual Report Download - page 234

22. The shares of the Parent Company (Continued)
of shares represents less than 10% of all the shares of the Company. The shares may be repurchased
in order to develop the capital structure of the Company, finance or carry out acquisitions or other
arrangements, settle the Company’s equitybased incentive plans, be transferred for other purposes,
or be cancelled. The authorization would be effective until June 30, 2011 and terminate the current
authorization granted by the Annual General Meeting on April 23, 2009.
The Board of Directors will also propose to the Annual General Meeting to be held on May 6, 2010
that the Annual General Meeting authorize the Board to resolve to issue a maximum of 740 million
shares through issuance of shares or special rights entitling to shares (including stock options) in one
or more issues. The Board proposes that the authorization may be used to develop the Company’s
capital structure, diversify the shareholder base, finance or carry out acquisitions or other
arrangements, settle the Company’s equitybased incentive plans, or for other purposes resolved by
the Board. The proposed authorization includes the right for the Board to resolve on all the terms and
conditions of the issuance of shares and special rights entitling to shares, including issuance in
deviation from the shareholders’ preemptive rights. The authorization would be effective until
June 30, 2013 and terminate the current authorization granted by the Annual General Meeting on
May 3, 2007.
23. Sharebased payment
The Group has several equitybased incentive programs for employees. The programs include
performance share plans, stock option plans and restricted share plans. Both executives and
employees participate in these programs.
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 16 million in 2009 (EUR 74 million in 2008 and EUR 228 million in 2007).
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
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.
F60
Notes to the Consolidated Financial Statements (Continued)