Nokia 2010 Annual Report Download - page 245

through public trading from the stock market. The authorization would be effective until June 30,
2012 and terminate the current authorization for repurchasing of the Company’s shares resolved at
the Annual General Meeting on May 6, 2010.
24. 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 47 million in 2010 (EUR 16 million in 2009 and EUR 74 million in 2008).
Stock options
During 2010 we administered two global stock option plans, the Stock Option Plan 2005 and 2007,
each of which, including its terms and conditions, has been approved by the Annual General Meetings
in the year when the plan was launched.
Each stock option entitles the holder to subscribe for one new Nokia share. The stock options are
nontransferable and may be exercised for shares only. 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, in
accordance with a preagreed schedule after the release of Nokia’s periodic financial results. The
exercise prices 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 dayspecific 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 the right to change how the exercise price is determined.
Shares will be eligible for dividend for the financial year in which the subscription takes place. Other
shareholder rights commence on the date on which the subscribed shares are entered in the Trade
Register. The stock option grants are generally forfeited if the employment relationship terminates
with Nokia.
Pursuant to the stock options issued under the global stock option plans, an aggregate maximum
number of 21 743 599 new Nokia shares may be subscribed for, representing 0.6% of the total
number of votes at December 31, 2010. The exercises of stock options resulted in an increase of
Nokia’s share capital prior to May 3, 2007. After that date the exercises of stock options have no
longer resulted in an increase of the share capital as thereafter all share subscription prices are
recorded in the fund for invested nonrestricted equity as per a resolution by the Annual General
Meeting.
There were no stock options outstanding as of December 31, 2010, which upon exercise would result
in an increase of the share capital of the parent company.
F57
Notes to the Consolidated Financial Statements (Continued)