Nokia 2010 Annual Report Download - page 141

fully after the close of a predetermined restriction period. Any shares granted are subject to the
share ownership guidelines as explained below. All of these equitybased incentive awards are
generally forfeited if the executive leaves Nokia prior to their vesting.
Recoupment of certain equity gains
The Board of Directors has approved a policy allowing for the recoupment of equity gains realized by
Nokia Leadership Team members under Nokia equity plans in case of a financial restatement caused
by an act of fraud or intentional misconduct. This policy applies to equity grants made to Nokia
Leadership Team members after January 1, 2010.
Information on the actual equitybased incentives granted to the members of our Group Executive
Board in 2010 is included in Item 6E. “Share Ownership.”
Actual Executive Compensation for 2010
Service Contracts
Stephen Elop’s service contract covers his position as President and CEO as from September 21, 2010.
As at December 31, 2010, Mr. Elop’s annual total gross base salary, which is subject to an annual
review by the Board of Directors and confirmation by the independent members of the Board, is
EUR 1 050 000. His incentive targets under the Nokia shortterm cash incentive plan are 150% of
annual gross base salary as at December 31, 2010. Mr. Elop is entitled to the customary benefits in
line with our policies applicable to the top management, however, some of them are being provided
on a tax assisted basis. Mr. Elop is also eligible to participate in Nokia’s longterm equitybased
compensation programs according to Nokia policies and guidelines and as determined by the Board
of Directors. Upon joining Nokia, Mr. Elop received 500 000 stock options, 75 000 performance shares
at threshold performance level and 100 000 restricted shares out of Nokia Equity Program 2010.
As compensation for lost income from his prior employer, which resulted due to his move to Nokia,
Mr. Elop received a onetime payment of EUR 2 292 702 in October 2010 and is entitled to a second
payment of USD 3 000 000 in October 2011. In addition, relating to his move to Nokia, Mr. Elop
received a onetime payment of EUR 509 744 to reimburse him for fees he was obligated to repay his
former employer. He also received income of EUR 312 203, including tax assistance, resulting from
legal expenses paid by Nokia associated with his move to Nokia. In case of early termination of
employment, Mr. Elop is obliged to return to Nokia all or part of these payments related to his move
to Nokia.
In case of termination by Nokia for reasons other than cause, Mr. Elop is entitled to a severance
payment of up to 18 months of compensation (both annual total gross base salary and target
incentive) and his equity will be forfeited as determined in the applicable equity plan rules, with the
exception of the equity out of the Nokia Equity Program 2010 which will vest in an accelerated
manner. In case of termination by Mr. Elop, the notice period is six months and he is entitled to a
payment for such notice period (both annual total gross base salary and target incentive for six
months) but all his equity will be forfeited. In the event of a change of control of Nokia, Mr. Elop may
terminate his employment upon a material reduction of his duties and responsibilities, upon which
he will be entitled to a compensation of 18 months (both annual total gross base salary and target
incentive), and his unvested equity will vest in an accelerated manner. In case of termination by
Nokia for cause, Mr. Elop is entitled to no additional compensation and all his equity will be forfeited.
In case of termination by Mr. Elop for cause, he is entitled to a severance payment equivalent to
18 months of notice (both annual total gross base salary and target incentive), and his unvested
equity will vest in an accelerated manner. Mr. Elop is subject to a 12month noncompetition
obligation after termination of the contract. Unless the contract is terminated for cause, Mr. Elop may
be entitled to compensation during the noncompetition period or a part of it. Such compensation
amounts to the annual total gross base salary and target incentive for the respective period during
which no severance payment is paid.
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