Nokia 2010 Annual Report Download - page 148

performance as well as on share price appreciation, thus aligning recipients’ interests with those of
shareholders’ and promoting the longterm financial success of the company. The equitybased
compensation programs are intended to align the potential value received by participants directly
with the performance of Nokia. We also have granted restricted shares to a small selected number of
key employees each year who are considered key talent whose retention or recruitment is vital to the
future success of Nokia.
The equitybased incentive grants are generally conditioned upon continued employment with Nokia,
as well as the fulfillment of performance and other conditions, as determined in the relevant plan
rules.
The broadbased equity compensation program for 2010, which was approved by the Board of
Directors, followed the structure of the program in 2009. The participant group for the 2010
equitybased incentive program continued to be broad, with a wide number of employees in many
levels of the organization eligible to participate. As at December 31, 2010, the aggregate number of
participants in all of our active equitybased programs was approximately 11 500 compared with
approximately 13 000 as at December 31, 2009 reflecting changes in our grant guidelines and
reduction in eligible population.
For a more detailed description of all of our equitybased incentive plans, see Note 24 to our
consolidated financial statements included in Item 18 of this annual report.
Performance Shares
During 2010, we administered four global performance share plans, the Performance Share Plans of
2007, 2008, 2009 and 2010, each of which, including its terms and conditions, has been approved by
the Board of Directors.
The performance shares represent a commitment by Nokia Corporation 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 2007, 2008, 2009 and 2010 plans have a threeyear performance period with no interim payout.
The shares vest after the respective 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 Settlement
2007
(1)
........................................................ 20072009 2010
2008
(1)
........................................................ 20082010 2011
2009 .......................................................... 20092011 2012
2010 .......................................................... 20102012 2013
(1)
No Nokia shares were delivered under Nokia Performance Share Plans 2007 and 2008 as Nokia’s
performance did not reach the threshold level of either performance criteria under both plans.
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 to the CEO are made upon recommendation by the Personnel Committee
and approved by the Board of Directors and confirmed by the independent directors of the Board.
Performance share grants to the other Nokia Leadership Team members and other direct reports of
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