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TERMS AND CONDITIONS OF THE NOKIA
PERFORMANCE SHARE PLAN 2004
1. Definitions
Annual EPS: The Annual Earnings Per Share number (basic,
reported) in the approved consolidated financial accounts
for Nokia Group (IAS) for fiscal years 2003, 2005, and 2007,
as applicable, will be used for the measurement of the EPS
growth, as one financial performance objective and vesting
condition under paragraph 4.2.
Average Annual Net Sales: The Annual Net Sales in the
approved consolidated financial accounts for Nokia Group
(IAS) for fiscal years 2003, 2005, and 2007, as applicable,
will be used for the calculation of the Average Annual Net
Sales Growth as one financial performance objective and
vesting condition under paragraph 4.2 below.
Combined Threshold Number: The number of Units to vest,
provided that the Threshold Performance is achieved with
respect to both of the Performance Criteria, as determined
in the Vesting conditions of the Plan under paragraph 4.2.
The Combined Threshold Number equals the Grant Amount.
Grant Amount: The number of Units that will be allocated to
a Participant in a grant. One half of the Grant Amount
represents the Threshold Number for EPS Growth, and one half
represents the Threshold Number for Net Sales Growth. The
Grant Amount equals the Combined Threshold Number.
Interim Measurement Period: The period comprising the fiscal
years 2004 and 2005. The measurement of the first payout
during the Performance Period under paragraph 4.2 and 4.3
will be based on the performance during the Interim
Measurement Period.
Maximum Number: The number of granted Units to vest,
provided that the Maximum Performance is achieved with
respect to either performance criteria, as determined in the
Vesting conditions under paragraph 4. For each Performance
Criteria, the Maximum Number of Units is equal to four times
the Threshold Number. The combined Maximum Number of Units
for Maximum Performance on both Performance Criteria, shall
not, however, exceed four times the Grant Amount.
Maximum Performance: The performance level, which is defined
for each Performance Criteria under paragraph 4.2. The
Maximum Performance results in the Vesting of four times the
Threshold Number.
Participant: Eligible persons who, based on the grant
guidelines approved by the Personnel Committee, receive a
grant of Performance Share Units under the Plan.
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Performance Criteria: The pre-determined financial
objectives for the Plan, the measurement of which determines
whether granted Units shall vest as defined under paragraph
4.2. The two, equally weighted Performance Criteria are
annual EPS Growth and average annual Net Sales Growth.
Performance Period: The period comprising the fiscal years
2004 through 2007. The fulfillment of the pre-determined
Performance Criteria as described under paragraph 4.2, is
measured based on Nokia's financial performance during this
period.
Performance Share Unit or Unit: Each Participant is offered
at grant a number of Performance Share Units, equalling the
Grant Amount. The Units will vest as Shares for the
Participant to the extent of and subject to the Vesting
conditions under paragraph 4.2, and other restrictions under
these Plan Rules.
Plan Rules: This document as adopted by the Board of
Directors.
Settlement Date: The day of the settlement of the payouts
under the Plan. Subject to the Vesting conditions under
paragraph 4 below, there will be two Settlement Dates, one
after the Interim Measurement Period and a second after the
Performance Period as defined under paragraph 6. The
Settlement Date will be as soon as practicable after the
Vesting Date.
Shares: Nokia ordinary shares to be transferred to
Participants based on vested Units. Nokia may, however, in
its sole discretion, use for the settlement of vested Units
one or more of the ways of funding described under paragraph
6, including cash settlement.
Threshold Number: The number of Units to vest, provided that
the Threshold Performance is achieved with respect to either
of the performance criteria, as determined in the Vesting
conditions of the Plan under paragraph 4.2. For each
Performance Criteria, the Threshold Number is equal to
one-half of the Grant Amount.
Threshold Performance: The minimum performance level as
defined under paragraph 4.2, which results in the Vesting of
the Threshold Number of Units of a grant. For each
Performance Criteria, a Threshold Performance level is
established.
Vesting: The granted Units shall vest as Shares and the
Participant shall acquire the right to receive full
ownership of such number of Shares. The number of Units that
Vest will be dependent on the fulfilment of the Vesting
conditions under paragraph 4. The Vesting conditions will be
measured after the close of the Interim Measurement Period,
and the close of the Performance Period, as defined under
paragraph 4.3.
Vesting Date: The Vesting Date is the date of the Annual
General Meeting of Nokia in 2006 and 2008, respectively, as
determined by Nokia. The Vesting Date represents the day in
which a participant earns the shares, subject to the Vesting
conditions defined in paragraph 4.2. There will be two
Vesting Dates, one after the Interim Measurement Period and
a second after the Performance Period as defined under
paragraph 6.
2. Purpose and
Scope of the Plan
Nokia Corporation ("Nokia") may grant under the Performance
Share Plan 2004 (the "Plan") a maximum of 17 000 000 Nokia
shares (the "Shares") to eligible participants, subject to
the terms and conditions and
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other restrictions set out herein ("Plan Rules"). The
purpose of the Plan is to recruit, retain and motivate
selected personnel of Nokia Group, and to promote their
share ownership.
To comply with the purposes of the Plan, the Personnel
Committee of the Board of Directors of Nokia ("Personnel
Committee") shall determine the grant principles of the
Plan, as well as approve the eligible persons of Nokia Group
to receive grants under the Plan (the "Participants") from
time to time.
3. Grant of
Performance Share Units
At grant, each Participant will be offered a certain number
of Performance Share Units ("Grant Amount"). The granted
Units will vest as Shares to the Participants, subject to
the Vesting conditions described below under paragraph 4,
and other terms and conditions under these Plan Rules.
In connection with the grant, the Participant may be
required to give Nokia such authorizations and consents, as
Nokia deems necessary in order to administer the Plan from
time to time. The fulfillment of such requirements,
including the instructions given by Nokia regarding the
acceptance of a grant, forms a precondition of a valid
grant.
4. Vesting
Conditions of the Performance Share Units
4.1. Vesting and Settlement
The granted Units shall vest as Shares and the Participant
shall acquire the right to receive full ownership of such
number of Shares, as determined in the Vesting conditions
described below in this paragraph 4 ("Vesting") and be
subject to Settlement pursuant to paragraph 6 below,
"Settlement of Grant".
4.2. Performance Period and
Financial Performance Criteria
The Vesting of Units under the Plan is determined by the
financial performance of Nokia during the Performance Period
comprising the fiscal years 2004 through 2007 ("Performance
Period").
The measurement of Nokia's performance during the
Performance Period will be based on the approved
consolidated financial accounts of Nokia Group (IAS) as of
the end of fiscal year 2003, compared with those of 2005 and
2007.
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Threshold Performance
The Threshold Number, equalling one half of the Grant
Amount, shall vest, if Nokia's financial performance equals
either of the two pre-determined financial performance
criteria ("Performance Criteria") described below as
Threshold Performance.
The Threshold Performance level for each Performance
Criteria is as fo
