Nokia 2012 Annual Report Download - page 255

of 370 million Nokia shares. The proposed maximum number of shares that may be repurchased
corresponds to less than 10% of all the shares of the Company. The shares may be repurchased in
order to develop the capital structure of the Company, finance or carry out acquisitions or other
arrangements, settle the company’s equity-based incentive plans, be transferred for other purposes, or
be cancelled. The shares may be repurchased either through a tender offer made to all shareholders
on equal terms, or in such marketplaces the rules of which allow companies to trade with their own
shares. The authorization would be effective until June 30, 2014 and terminate the current
authorization for repurchasing of the Company’s shares resolved at the Annual General Meeting on
May 3, 2012.
Nokia also announced on January 24, 2013 that the Board of Directors will propose to the Annual
General Meeting to be held on May 7, 2013 that the Annual General Meeting authorize the Board to
resolve to issue a maximum of 740 million shares through issuance of shares or special rights entitling
to shares (including stock options) in one or more issues. The Board may issue either new shares or
shares held by the Company. The Board proposes that the authorization may be used to develop the
Company’s capital structure, diversify the shareholder base, finance or carry out acquisitions or other
arrangements, settle the Company’s equity-based incentive plans, or for other purposes resolved by
the Board. The proposed authorization includes the right for the Board to resolve on all the terms and
conditions of the issuance of shares and special rights entitling to shares, including issuance in
deviation from the shareholders’ pre-emptive rights. The authorization would be effective until June 30,
2016 and terminate the current authorization granted by the Annual General Meeting on May 6, 2010.
24. Share-based payment
The Group has several equity-based incentive plans for employees. The plans 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 and other conditions, as determined in the relevant plan rules.
The share-based compensation expense for all equity-based incentive awards amounted to
EUR 13 million in 2012 (EUR 18 million in 2011 and EUR 47 million in 2010).
Stock options
During 2012 Nokia administered two global stock option plans, the Stock Option Plans 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 Plan 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 2007 plan 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 and the remaining 50% vesting four
years from grant. The stock options granted under the 2011 plan have a term of approximately six
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
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