Nokia 2011 Annual Report Download - page 168

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). With respect to the 2011 Stock Option
Plan, 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. 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 share subscription takes place.
Other shareholder rights will 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.
Stock option grants to the CEO are made upon recommendation by the Personnel Committee and are
approved by the Board of Directors and confirmed by the independent directors of the Board. Stock
option grants to the other Nokia Leadership Team members and other direct reports of the CEO are
approved by the Personnel Committee. Stock option grants to eligible employees are approved by the
CEO on a quarterly basis, based on an authorization given by the Board of Directors.
Restricted Shares
During 2011, we administered four global restricted share plans, the Restricted Share Plan 2008, 2009,
2010 and 2011, each of which, including its terms and conditions, has been approved by the Board of
Directors.
Restricted shares are used to recruit, retain, and motivate selected high potential and critical talent who
are vital to the future success of Nokia. Restricted shares are used only for key management positions
and other critical talent.
All of our restricted share plans have a restriction period of three years after grant. Until the Nokia
shares are delivered, the participants will not have any shareholder rights, such as voting or dividend
rights, associated with the restricted shares. The restricted share grants are generally forfeited if the
employment relationship terminates with Nokia prior to vesting.
Restricted 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.
Restricted share grants to the other Nokia Leadership Team members and other direct reports of the
CEO are approved by the Personnel Committee. Restricted share grants to eligible employees are
approved by the CEO on a quarterly basis, based on an authorization given by the Board of Directors.
Nokia Equity-Based Incentive Program 2012
On January 26, 2012, the Board of Directors approved the scope and design of the Nokia Equity
Program 2012. Similarly to the earlier broad-based equity incentive programs, it intends to align the
potential value received by the participants directly with the long-term financial performance of the
company and increases in the company’s share price, thus aligning the participants’ interests with
Nokia shareholders’ interests. Nokia’s balanced approach toward the use of equity effectively
contributes to long-term value creation and sustainability of the company and ensures compensation is
based on performance.
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