Nokia 2010 Annual Report Download - page 170

We intend to pursue our CRT and LCD claims as appropriate in these matters in order to protect our
interests. However, the final outcome of the claims, including the ability to recover damages for any
overcharges paid, is uncertain due to the nature and inherent risks of such legal proceedings.
Agreement Related Litigation
We are also involved in arbitrations and several lawsuits with Basari Elektronik Sanayi ve Ticaret A.S.
(“Basari Elektronik”) and Basari Teknik Servis Hizmetleri Ticaret A.S. regarding claims associated with
the expiration of a product distribution agreement and the termination of a product service
agreement. Those matters have been before various courts and arbitral tribunals in Turkey and
Finland. Basari Elektronik claims that it is entitled to compensation for goodwill it generated on
behalf of Nokia during the term of the agreement and for Nokia’s alleged actions in connection with
the termination of the agreement. The compensation claim has been dismissed by the Turkish courts
and referred to arbitration. Basari Elektronik has filed for arbitration in Helsinki and Turkey. In October
2009, the arbitration in Helsinki was resolved in our favor while the arbitration in Turkey continues.
We believe that these claims are without merit, and will continue to defend ourselves against these
actions vigorously.
Securities Litigation
On February 5, 2010, a lawsuit was initiated by a municipal retirement fund in the United States
District Court for the Southern District of New York on behalf of itself, and seeking class action status
on behalf of purchasers of the American Depositary Shares, or ADSs, of Nokia between January 24,
2008 and September 5, 2008, inclusive (the “Class Period”), to pursue remedies under the Securities
Exchange Act of 1934 (the “Exchange Act”). An amended complaint was filed in the same lawsuit on
August 23, 2010 by a different municipal retirement fund that was appointed lead plaintiff. The
amended complaint names Nokia Corporation, and its former executives, OlliPekka Kallasvuo and
Richard Simonson as well as its current executive Kai O
¨ista
¨mo ¨, and claims violations of the Exchange
Act. In particular, the complaint alleges that throughout the Class Period, Nokia and the individual
defendants failed to disclose alleged material adverse facts about the Company’s business, including
specifically that: (i) Nokia was experiencing significant softwarerelated problems with the
development of its Symbian operating system, which were delaying scheduled product launch dates;
(ii) Nokia was allegedly losing market share because of intense price cuts by its competitors; and
(iii) the dynamics of the emerging Chinese market for mobile phones were changing. Plaintiff claims
that as a result of the above allegations, the price of Nokia ADSs dropped substantially. Plaintiff seeks
to recover damages on behalf of all purchasers of Nokia ADSs during the Class Period. A motion to
dismiss has been filed and is pending before the Court.
In addition, on April 19, 2010 and April 21, 2010 two individuals filed separate putative class action
lawsuits against Nokia Inc. and the directors and officers of Nokia Inc., and certain other employees
and representatives of the company, claiming to represent all persons who were participants in or
beneficiaries of the Nokia Retirement Savings and Investment Plan (the “Plan”) who participated in
the Plan between January 1, 2008 and the present and whose accounts included investments in Nokia
stock. The plaintiffs allege that the defendants failed to comply with their statutory and fiduciary
duties when they failed to remove Nokia stock as a plan investment option. The cases were
consolidated and an amended consolidated complaint was filed on September 15, 2010. The
amended complaint alleges that the named individuals knew of the matters alleged in the securities
case referenced above, that the matters significantly increased the risk of Nokia stock ownership, and
as a result of that knowledge, the named defendants should have removed Nokia stock as a Plan
investment option. A motion to dismiss has been filed and is pending before the Court.
We believe that the allegations described above are without merit, and we will continue to defend
ourselves against these actions vigorously.
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