Nokia Board of Directors approves the Nokia Equity Program 2010.
Espoo, Finland - Nokia announced that Nokia's Board of Directors has approved the Nokia Equity Program 2010, which, following previous years' practice, has the below structure:
- Performance Shares - offered as the main equity-based incentive to approximately 4 500 employees;
- Stock options - used in conjunction with performance shares on a limited basis for senior managers; and
- Restricted Shares - granted on a highly selective basis to high potential and critical employees.
The Equity Program 2010, like Nokia equity programs of previous years, will focus on attracting, retaining and motivating critical talent. Similarly, it intends to align the potential value received by the participants directly with the long-term performance of the Company, thus aligning the participants' interests also with Nokia shareholders' interests. Nokia's balanced approach and use of the performance-based plan as the main long-term incentive vehicle effectively contribute to the long-term value sustainability of the Company and ensure that compensation is based on performance.
Under the Nokia Performance Share Plan 2010, Nokia shares will be delivered provided that the Company's performance reaches at least one of the required threshold levels measured by two independent performance criteria. The performance criteria are as follows:
Performance Criteria
Threshold
Maximum
Average annual net sales growth
during the performance period
0%
13.5%
Earnings per share (EPS)
(diluted, non-IFRS) in 2012
EUR 0.82
EUR 1.44
The Performance Share Plan 2010 has a three-year performance period (2010-2012).
The grant of Performance Shares in 2010 may result in an aggregate maximum payout of 17 million Nokia shares, should the maximum level for both performance criteria be met.
As part of the Nokia Equity Program 2010, stock options will be granted under Nokia Stock Option Plan 2007 approved by the Annual General Meeting 2007. The total size of Nokia Stock Option Plan 2007 is 20 million stock options, which can be granted until December 31, 2010. The planned maximum number of stock options to be granted during 2010 is 8 million.
The Resticted Share Plan 2010 has a three-year restriction period (2010 - 2012). The grant of Restricted Shares in 2010 may result in an aggregate maximum payout of 6 million Nokia shares.
As of December 31, 2009, the total maximum dilution effect of Nokia's equity incentives currently outstanding, assuming that the performance shares are delivered at maximum level, is approximately 1.6%. The potential maximum effect of the Nokia Equity Program 2010 will be approximately another 0.8%.
Policy on the recoupment of equity gains
The Board of Directors has approved a policy allowing for the recoupment of equity gains realized by Group Executive Board members under Nokia equity plans in case of a financial restatement caused by an act of fraud or intentional misconduct. This policy will apply to equity grants made to Group Executive Board members after January 1, 2010.
Settlements under various Nokia equity plans
There will be no settlement under the Performance Share Plan 2007 as neither of the threshold performance criteria of EPS and Average Annual Net Sales Growth of this plan were met.
To fulfill the Company's obligations under two other, more limited equity-based incentive plans, Nokia's Board of Directors has resolved to issue a total amount of 930 000 Nokia shares (NOK1V) held by the Company to settle its obligations to approximately 400 participants, employees of the Nokia Group.
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