Nokia 2012 Annual Report Download - page 159

leaves Nokia prior to vesting. The Employee Share Purchase Plan will be offered to all employees in
selected jurisdictions (excluding Nokia Siemens Networks’ employees), to the extent there are no local
regulatory or administrative obstacles for the offer. The participation in the plan will be voluntary to
eligible employees.
Performance Shares
The Performance Share Plan 2013 approved by the Board of Directors has a performance period of
two years (2013-2014) and a subsequent one-year restriction period. Therefore, the amount of shares
based on the financial performance during 2013-2014 will vest after 2015. No Nokia shares will be
delivered unless Nokia’s performance reaches at least one of the threshold levels measured by two
independent, pre-defined performance criteria:
(1) Average Annual Net Sales (non-IFRS): EUR 12 483 million (threshold) and EUR 18 725 million
(maximum) during the performance period 2013-2014, and
(2) Average Annual EPS (diluted, non-IFRS): EUR 0.00 (threshold) and 0.30 (maximum) during the
performance period 2013-2014.
Average Annual Net Sales is calculated as an average of the non-IFRS net sales for Nokia Group,
excluding Nokia Siemens Networks B.V. and its subsidiaries, for the years 2013 and 2014. Average
Annual EPS is calculated as an average of the diluted, non-IFRS earnings per share for the years 2013
and 2014 for Nokia Group. Both the Average Annual Net Sales and the Average Annual EPS criteria
are equally weighted and performance under each of the two performance criteria is calculated
independent of each other.
We believe the performance criteria set above are challenging, yet realistic and within reach. The
awards at the threshold are significantly reduced from grant level and achievement of maximum award
would serve as an indication that Nokia’s performance significantly exceeded current market
expectations of our long-term execution.
Achievement of the maximum performance for both criteria would result in the vesting of a maximum of
32 million Nokia shares. Performance exceeding the maximum criteria does not increase the number
of performance shares that will vest. Achievement of the threshold performance for both criteria will
result in the vesting of approximately 8 million shares. If only one of the threshold levels of
performance is achieved, only approximately 4 million of the performance shares will vest. If none of
the threshold levels is achieved, then no Nokia shares will be delivered. If the required performance
level is achieved, the vesting will occur after 2015. Until the Nokia shares are delivered, the
participants will not have any shareholder rights, such as voting or dividend rights associated with
these performance shares.
Stock Options
The stock options to be granted in 2013 are out of the Stock Option Plan 2011 approved by the Annual
General Meeting in 2011. For more information about the Stock Option Plan 2011 see “Equity-Based
Incentive Programs – Stock Options” above.
Restricted Shares
Restricted shares under the Restricted Share Plan 2013 approved by the Board of Directors are used
as described above on a selective basis to ensure retention and recruitment of individuals with
functional mastery and other employees deemed critical to Nokia’s future success. The restricted
shares under the Restricted Share Plan 2013 have a three-year restriction period. The restricted
shares will vest and the resulting Nokia shares will be delivered in 2016 and early 2017, dependent on
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