Nokia 2014 Annual Report Download - page 167

165
Financial statements
NOKIA IN 2014
Authorizations proposed to the Annual General Meeting 2015
On January 29, 2015 the Group announced that the Board of Directors will propose to the Annual General Meeting convening on May 5, 2015
to authorize the Board of Directors to resolve to repurchase a maximum of 365 million Nokia shares. The proposed maximum number of shares
that may be repurchased corresponds to fewer than 10% of the total number of Nokia shares. The shares may be repurchased in order to
optimize the capital structure of the Parent Company and are expected to be cancelled. In addition, the shares may be repurchased in order to
nance or carry out acquisitions or other arrangements, to settle the Parent Company’s equity-based incentive plans, or to be transferred for
other purposes. The shares may be repurchased either through a tender oer made to all shareholders on equal terms, or in another proportion
than that of the current shareholders. The authorization is eective until November 5, 2016 and terminates the current authorization granted
by the Annual General Meeting on June 17, 2014.
The Group announced on January 29, 2015 that the Board of Directors will propose to the Annual General Meeting on May 5, 2015 that the
shareholders authorize the Board of Directors to issue a maximum of 730 million shares through the issuance of shares or special rights
entitling to shares in one or more issuances. The Board of Directors may issue either new shares or treasury shares held by the Parent Company.
The Board of Directors proposes that the authorization may be used to develop the Parent Company’s capital structure, diversify the
shareholder base, nance or carry out acquisitions or other arrangements, settle the Parent Company’s equity-based incentive plans, or for
other purposes resolved by the Board of Directors. The proposed authorization includes the right for the Board of Directors to decide 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 eective until November 5, 2016 and terminate the current authorization granted by the
Annual General Meeting on June 17, 2014.
25. Share-based payment
The Group has several equity-based incentive programs for employees. The plans include performance share plans, restricted share plans,
employee share purchase plans, and stock option plans. Both executives and employees participate in these programs. In 2011 to 2013 of
the years presented, Nokia global equity-based incentive programs have been oered to the employees of Devices & Services, Group Common
Functions, HERE and Nokia Technologies. In 2014, the employees of Nokia Networks were included in the equity grants following the changes
in the Group. The equity-based incentive grants are generally conditional on continued employment as well as fulllment of the performance,
service and other conditions determined in the relevant plan rules. The share-based payment expense for all equity-based incentive grants for
Continuing operations amounts to EUR 65 million (EUR 42 million in 2013 and EUR 11 million in 2012). The share-based payment expense for all
equity-based incentive grants related to Discontinued operations was EUR 8 million for 2014 (EUR 15 million in 2013 and EUR 1 million in 2012).
Performance shares
In 2014, the Group administered four global performance share plans, the Performance Share Plans of 2011, 2012, 2013 and 2014. The
performance shares represent a commitment by the Group to deliver Nokia shares to employees at a future point in time, subject to the
fulllment of predetermined performance criteria.
In the Performance Share Plan 2014 Plan, performance shares were granted under two sets of performance criteria dened specically for
the separate business units and a minimum payout amount guarantee was introduced. The number of performance shares at threshold is
the amount of performance shares granted to an individual that will be settled if the threshold performance with respect to the performance
criteria is achieved. As a result of the minimum payout amount introduced in the 2014 plan, at the end of the performance period the number
of shares to be settled following the restriction period will start at a minimum of 50% of the amount at threshold. Any additional payout beyond
the minimum amount will be determined based on the nancial performance against the established performance criteria during the two-year
performance period. At maximum performance, the settlement amounts to four times the amount at threshold.
Global performance share plans at December 31, 2014 are:
Plan
Performance shares
outstanding at threshold
Confirmed payout
(% of threshold) Performance period Restriction period Settlement year
2011 –0%, no settlement 2011-2013 N/A 2014
2012 –0%, no settlement 2012-2013 2014 2015
2013 1 822 432 173% 2013-2014 2015 2016
2014 6 794 601 2014-2015 2016 2017
The 2013 Plan performance criteria were modied in 2014 to align performance measures to the Continuing operations following the Sale
of the D&S Business. The payout factor based on the modied performance criteria for the 2013 plan is 173% of the amount outstanding
at threshold.