Nokia 2014 Annual Report Download - page 169

167
Financial statements
NOKIA IN 2014
Legacy equity compensation programs
Stock options
In 2014, the Group administered two global stock option plans, the Stock Option Plans 2007 and 2011, approved by the shareholders at the
Annual General Meeting in the year when the plan was launched. In 2014, the Board of Directors decided not to propose adoption of a stock
option plan to the Annual General Meeting and no new grants were oered.
Each stock option entitles the holder to subscribe for one new Nokia share. The stock options are not transferable and may be exercised for
shares only. Shares will be eligible for dividends for the 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 with the Group is terminated. Unvested stock options for employees who have transferred to Microsoft following the
Sale of the D&S Business have been forfeited.
The reconciliation of stock options outstanding and exercisable is as follows:
Shares under option(1)
Number
of shares
Weighted
average exercise
price
EUR
Weighted
average share
price
EUR
Weighted
average grant
date fair
value
EUR(2)
Number of
options
exercisable
Weighted
average exercise
price
EUR
At January 1, 2012 23 390 030 9.07 6 904 331 14.01
Granted 10 258 400 2.32 0.76
Exercised (627) 0.97 2.08
Forfeited (4 246 222) 6.60
Expired (3 555 213) 15.26
At December 31, 2012 25 846 368 5.95 5 616 112 11.96
Granted 8 334 200 2.77 1.23
Forfeited (3 705 512) 4.06
Expired (2 474 864) 14.78
At December 31, 2013 28 000 192 4.47 4 339 341 9.66
Exercised (56 623) 5.75 6.69
Forfeited (16 839 593) 3.39
Expired (3 759 953) 9.94
At December 31, 2014 7 344 023 4.81 1 913 537 10.43
(1) Includes stock options granted under other than global equity plans, excluding the Nokia Networks equity incentive plan.
(2) Fair value of stock options is calculated using the Black-Scholes model.
Nokia Networks Equity Incentive Plan
Nokia Networks established the Nokia Networks Equity Incentive Plan (“the Plan”), a share-based incentive program in 2012 under which options
for Nokia Solutions and Networks B.V. shares were granted to selected key employees and Nokia Networks’ senior management, some of whom
became members of the Nokia Group Leadership Team in 2014. Following the Group’s acquisition of Siemens’ stake in Nokia Networks and the
Sale of the D&S Business, the Board of Directors approved a modication to the Plan on February 14, 2014 to allow 30% of the options to vest
on the third anniversary of the grant date, with the remainder of the options continuing to become exercisable on the fourth anniversary of the
grant date, or earlier, in the event of a corporate transaction as dened in the Plan. The exercise price of the options is based on a per share
value on grant as determined for the purposes of the Plan. The options are accounted for as a cash-settled share-based payment liability based
on the circumstances at December 31, 2014. The fair value of the liability is determined based on the estimated fair value of shares less the
exercise price of the options on the reporting date. The total carrying amount of the Plan is EUR 80 million (EUR 41 million in 2013) and is
included in accrued expenses and other liabilities in the consolidated statement of nancial position.