Nokia 2011 Annual Report Download - page 167

Performance Shares
During 2011, we administered four global performance share plans, the Performance Share Plans of
2008, 2009, 2010 and 2011, 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, in the Performance Share Plans of 2008,
2009 and 2010 earnings per share (“EPS”) at the end of the performance period and in the
Performance Share Plan 2011 average annual EPS.
The 2008, 2009, 2010 and 2011 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
2008(1) ................................... 2008-2010 2011
2009(1) ................................... 2009-2011 2012
2010 .................................... 2010-2012 2013
2011 .................................... 2011-2013 2014
(1) No Nokia shares were delivered under Nokia Performance Share Plans 2008 and 2009 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
the CEO are approved by the Personnel Committee. Performance share grants to eligible employees
are approved by the CEO on a quarterly basis, based on an authorization given by the Board of
Directors.
Stock Options
During 2011 we administered three global stock option plans, the Stock Option Plan 2005, 2007 and
2011, each of which, including its terms and conditions, has been approved by the Annual General
Meeting 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 granted under the
Stock Option Plans 2005 and 2007 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 2005 and 2007
plans have a term of approximately five years. The stock options granted under the Stock Option Plan
2011 have a vesting schedule with 50% of stock options vesting three years after grant date and the
remaining 50% vesting four years from grant. The stock options granted under the 2011 plan have a
term of approximately six years.
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