Nokia 2012 Annual Report Download - page 158

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 plans, which were approved by the shareholders at the Annual
General Meetings 2007 and 2011. 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.
Restricted Shares
During 2012, we administered four global restricted share plans, the Restricted Share Plans 2009,
2010, 2011 and 2012, each of which, including its terms and conditions, has been approved by the
Board of Directors.
Restricted shares are used on a selective basis to ensure retention and recruitment of individuals with
functional mastery and other employees deemed critical to Nokia’s future success.
All of our restricted share plans have a restriction period of three years after grant. Until the 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.
Nokia Equity-Based Incentive Program 2013
On January 24, 2013, the Board of Directors approved the scope and design of the Nokia Equity
Program 2013. The Equity Program 2013 mirrors the 2012 Program in terms of performance shares,
stock options and restricted shares. In addition to these instruments, the Board of Directors approved
also the implementation of a new Employee Share Purchase Plan. Similarly to the earlier broad-based
equity incentive programs, the Equity Program 2013 is designed to support the participants’ focus and
alignment with the company’s strategy and targets. Nokia’s use of the performance-based plan in
conjunction with the restricted share plan as the main long-term incentive vehicles is planned to
effectively contribute to the long-term value creation and sustainability of the company and to align the
interests of the employees with those of the shareholders. It is also designed to ensure that the overall
equity-based compensation is based on performance, while also ensuring the recruitment and
retention of talent vital to the future success of Nokia. In addition, the new Employee Share Purchase
Plan is introduced to encourage employee share ownership, commitment and engagement.
The primary equity instruments for the executive employees are performance shares and stock
options. Restricted shares are also used for executives for retention purposes. For directors below the
executive level, the primary equity instruments are performance shares and restricted shares. Below
the director level, performance shares and restricted shares are used on a selective basis to ensure
retention and recruitment of individuals with functional mastery and other employees deemed critical to
Nokia’s future success. These equity-based incentive awards are generally forfeited if the employee
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