Nokia 2013 Annual Report Download - page 131

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COMPENSATION OF THE BOARD OF DIRECTORS AND THE NOKIA GROUP LEADERSHIP TEAM
In  employees of Networks were excluded from Nokia’s
equity incentive programs.
For a more detailed description of all of our equity-based
incentive plans, see Note  to our consolidated fi nancial
statements.
Performance shares
During , we administered four global performance share
plans: the Performance Share Plans of , ,  and
, 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 fulfi llment of pre-defi ned
performance criteria. No Nokia shares will be delivered unless
the Group’s performance reaches at least one of the threshold
levels measured by two independent, pre-defi ned perfor-
mance criteria. The below table illustrates the performance
criteria of the Performance Share Plans from  through
.
Performance share plan
Performance criteria 2012 2011 2010 2009
Average annual net sales
growth (Nokia Group) — — yes yes
EPS at the end of
performance period
(Nokia Group) — — — yes
Average annual net sales
(Nokia Group excluding
Networks) yes 1 yes — —
Average annual net sales
(Nokia Group) yes 2 — — —
Average annual EPS
(Nokia Group) yes yes yes —
 Specific to  year, of the two-year performance period ( – ),
only.
 Specific to  year, of the two-year performance period ( – ),
only to reflect the change in ownership structure of Networks.
The  and  plans have a three-year performance pe-
riod. The shares vest after the respective performance period.
The  and  plans have a two-year performance period
and a subsequent one-year restriction period, after which the
shares vest. The shares will be delivered to the participants as
soon as practicable after they vest. No shares will be deliv-
ered if Nokia’s performance does not reach the performance
criteria. The below table summarizes the relevant periods and
settlements under the plans.
Performance
Plan period Settlement
2010 1 2010 – 2012 2013
2011 2 2011 – 2013 2014
2012 2 2012 – 2013 3 2015
2013 2013 – 2014 3 2016
 No Nokia shares were delivered under the Nokia Performance Share Plan
 as Nokia’s performance did not reach the requisite threshold level
with respect to the applicable performance criteria under the plan.
 No Nokia shares will be delivered under the Nokia Performance Share
Plans  and  as Nokia’s performance did not reach the requisite
threshold level with respect to the applicable performance criteria for
either plan.
 Nokia Performance Share Plans  and  have a one-year restriction
period after the two-year performance period.
Until the shares are delivered, the participants will not have
any shareholder rights, such as voting or dividend rights, as-
sociated with the performance shares. The performance share
grants are generally forfeited if the employment relationship
terminates with Nokia prior to vesting.
Similar to the previous ,  and  plans, there
was no payout from the Nokia Performance Share Plan .
There will also be no payout from Nokia Performance Share
Plan  as the threshold level under the applicable perfor-
mance criteria was not reached.
Stock options
During  we administered two global stock option plans:
the Stock Option Plans  and , each of which, includ-
ing 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  have a vesting
schedule with % of the options vesting one year after grant
and .% each quarter thereafter. The stock options granted
under the  plan have a term of approximately fi ve years.
The stock options granted under the Stock Option Plan 
have a vesting schedule with % of stock options vesting
three years after grant and the remaining % vesting four
years from grant. The stock options granted under the 
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
fi nancial 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 fi rst whole week
of the second month of the respective calendar quarter (i.e.,
February, May, August or November). With respect to the 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 deter-
mined on a one-week weighted average to mitigate any day-
specifi c fl uctuations in Nokia’s share price. The determination
of exercise price is defi ned in the terms and conditions of the
stock option plans, which were approved by the shareholders
at the Annual General Meetings  and . 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 fi nancial 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 , we administered four global restricted share
plans: the Nokia Restricted Share Plans , ,  and
, each of which, including its terms and conditions, has
been approved by the Board of Directors.