Nokia 2014 Annual Report Download - page 204

202 NOKIA IN 2014
On October 26, 2012 the Group issued a EUR 750 million convertible bond based on an authorization to issue shares and special rights entitling
to shares, granted by the Annual General Meeting on May 6, 2010 and terminated by a resolution in the Annual General Meeting on May 7, 2013.
The bonds had a ve-year maturity and a 5.0% per annum coupon payable semi-annually. The initial conversion price was EUR 2.6116, which
was adjusted to EUR 2.44 per share on June 18, 2014 due to the distribution of ordinary and special dividends as resolved by the Annual
General Meeting on June 17, 2014. Bond terms and conditions require conversion price adjustments following dividend distributions.
Consequently, the Board of Directors decided to issue 20 192 323 new shares on the conversion of the bonds into Nokia shares based on
the authorization by the Annual General Meeting and in deviation from the pre-emptive subscription right of the shareholders. Based on the
adjusted conversion price of EUR 2.44, the maximum number of new shares which may be issued by the Group on the conversion of the bonds
is 307.3 million shares, representing 8.4% of the Group’s total number of shares at December 31, 2014, excluding the shares owned by the
Group. The right to convert the bonds into shares commenced on December 6, 2012 and ends on October 18, 2017. On March 15, 2013 EUR
0.1 million of the bond was converted into shares resulting in the issuance of 38 290 shares.
On September 23, 2013 the Group issued three EUR 500 million tranches of convertible bonds to Microsoft based on an authorization to issue
shares and special rights entitling to shares granted by the Annual General Meeting on May 7, 2013 and terminated by a resolution in the Annual
General Meeting on June 17, 2014. The maximum number of shares which might have been issued by the Group on conversion of these bonds,
based on the initial conversion price of each tranche, was approximately 367.5 million. At the closing of the Sale of the D&S Business, these
bonds were redeemed and the principal amount and accrued interest netted against the proceeds from the transaction.
At December 31, 2014 the Board of Directors had no other authorizations to issue shares, convertible bonds, warrants or stock options.
Other authorizations
At the Annual General Meeting held on May 7, 2013, the shareholders authorized the Board of Directors to repurchase a maximum of
370 million Nokia shares using funds in the unrestricted equity. The Group did not repurchase any shares on the basis of this authorization.
The authorization that would have been eective until June 30, 2014 was terminated by the resolution of the Annual General Meeting on
June 17, 2014.
At the Annual General Meeting held on June 17, 2014 the shareholders authorized the Board of Directors to repurchase a maximum of
370 million Nokia shares. The amount corresponds to less than 10% of the total number of Nokia shares. The shares may be repurchased in
order to develop 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 authorization is eective until December 17, 2015. The Board of Directors decided on June 18, 2014 under
the authorization granted by the Annual General Meeting to commence share repurchases. The Board of Directors decided to repurchase a
maximum of 370 million shares, up to an equivalent of EUR 1.25 billion. At December 31, 2014 the Group had repurchased 66 903 682 shares.
On January 29, 2015 the Group announced that the Board of Directors had decided to cancel these treasury shares. The cancellation of the
shares does not have an impact on the Parent Company’s share capital.
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.
Notes to Parent Company Financial statements continued