Nokia 2010 Annual Report Download - page 151

Averaged Annual EPS criteria are equally weighted and performance under each of the two
performance criteria is calculated independent of each other.
We believe the performance criteria set above are challenging. The awards at the threshold are
significantly reduced from grant level and achievement of maximum award would serve as an
indication that Nokia’s performance significantly exceeded current market expectations of our
longterm execution.
Achievement of the maximum performance for both criteria would result in the vesting of a
maximum of 28 million Nokia shares. Performance exceeding the maximum criteria does not increase
the number of performance shares that will vest. Achievement of the threshold performance for both
criteria will result in the vesting of approximately 7 million shares. If only one of the threshold levels
of performance is achieved, only approximately 3.5 million of the performance shares will vest. If
none of the threshold levels is achieved, then none of the performance shares will vest. The vesting
of shares follows a linear scale for actual financial performance achieved. If the required performance
level is achieved, the vesting will occur December 31, 2013. Until the Nokia shares are delivered, the
participants will not have any shareholder rights, such as voting or dividend rights associated with
these performance shares.
Stock Options
The Board of Directors will make a proposal for Stock Option Plan 2011 to the Annual General Meeting
convening on May 3, 2011. The Board will propose to the Annual General Meeting that selected
personnel of Nokia Group be granted a maximum of 35 million stock options until the end of 2013.
The proposed Stock Option Plan 2011 will succeed the previous Stock Option Plan 2007, approved by
the Annual General Meeting 2007, which has not been available for further grants of stock options
since the end of 2010.
The grants of stock options in 2011 will be made out of this new plan subject to its approval by the
Annual General Meeting. The planned maximum annual grant for the year 2011 under the Stock
Option Plan 2011 is approximately 12 million stock options, with the remaining stock options
available through the end of 2013.
The stock options under the Stock Option Plan 2011 entitle to subscribe for a maximum of 35 million
Nokia shares. The subcategories of stock options to be granted under the plan will have a term of
approximately six years. The vesting periods of the stock options are as follows: 50% of stock options
granted under each subcategory vesting three years after grant date and the remaining 50% vesting
four years from grant. The exercise period for the first subcategory will commence on July 1, 2014
and the exercise period for the last subcategories will expire on December 27, 2019.
The exercise price for each subcategory of stock options will be determined on a quarterly basis. The
exercise price for each subcategory of stock options will be equal to the trade volume weighted
average price of the Nokia share on NASDAQ OMX Helsinki during the trading days of the first whole
week of the second month (i.e. February, May, August or November) of the respective calendar
quarter, on which the subcategory has been denominated. Should an exdividend date take place
during that week, the exercise price shall be determined based on the following week’s trade volume
weighted average price of the Nokia share on NASDAQ OMX Helsinki. The determination of exercise
price is defined in the terms and conditions of the stock option plan, which are subject to the
approval of the shareholders at the respective Annual General Meeting. The Board of Directors does
not have the right to change how the exercise price is determined.
Restricted Shares
Restricted shares under the Restricted Share Plan 2011 approved by the Board of Directors are used,
on a very selective basis, to attract and retain high potential and critical talent, vital to the future
success of Nokia. The restricted shares under the Restricted Share Plan 2011 will have a threeyear
restriction period. The restricted shares will vest and the resulting Nokia shares be delivered in 2014
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