Nokia CorporationStock Exchange ReleaseFebruary 2, 2017 at 08:05
(CET
+1)
Nokia Board of Directors approves the Nokia Equity Program
for 2017 and the issuance of shares held by the company
Espoo, Finland - Nokia announced today that its Board of
Directors has approved the company's equity program for 2017 (the
"Nokia Equity Program 2017"). In line with previous years, the
Nokia Equity Program 2017 includes the following equity
instruments:
- An employee share purchase plan for Nokia employees in selected
jurisdictions (the "Employee Share Purchase Plan"), entitling the
eligible employees to contribute a part of their salary to purchase
Nokia shares. After a 12-month holding period, Nokia will offer the
employees one matching share for every two purchased shares held by
an employee at the end of the holding period;
- Performance shares, which are dependent on the achievement of
independent performance criteria ("Performance Shares"); and
- Restricted shares, which are used on a limited basis or in
exceptional retention and recruitment circumstances ("Restricted
Shares").
Nokia Equity Program 2017The Nokia Equity Program 2017 is
designed to support and align the participants' focus with Nokia's
strategy and long-term success.
Nokia uses Performance Shares as the main long-term incentive
instrument with the intention to effectively contribute to the
long-term value creation and sustainability of the company and to
align interests of the employees with those of Nokia's
shareholders. Performance Shares are also designed to ensure that
the overall equity-based compensation is based on performance,
while also supporting the recruitment and ensuring retention of
vital talent for the future success of Nokia.
Restricted Shares are granted on a limited basis for exceptional
purposes related to retention and recruitment, primarily in the
United States, to ensure Nokia is able to retain and recruit vital
talent for the future success of the company.
Since 2014, stock options have no longer been part of the Nokia
equity programs.
Employee Share Purchase Plan Under the Employee Share
Purchase Plan, the eligible Nokia employees may elect to make
monthly contributions from their net salary to purchase Nokia
shares. Participation in the plan is voluntary.
The monthly minimum and maximum contribution limit to the
Employee Share Purchase Plan is EUR 15 and EUR 150, respectively.
Consequently, the maximum participant contribution limit during the
plan cycle is EUR 1 800. Generally, the share purchases will be
made at market value on pre-determined dates on a monthly basis
during a 12-month period. Nokia intends to deliver one matching
share for every two purchased shares that the participant still
holds on July 31, 2018, which marks the end of the Employee Share
Purchase Plan cycle for 2017. The aggregate maximum amount of
contributions that employees can make during the enrolment window
for the plan cycle commencing in 2017 will be approximately EUR 60
million, which equals approximately 14.2 million Nokia shares using
the share price of EUR 4.25. Accordingly, based on the matching
ratio of one matching share for every two purchased shares, the
number of matching shares would be approximately 7.1 million.
The Employee Share Purchase Plan is planned to be offered to
Nokia employees in up to 57 countries for the plan cycle commencing
in 2017. The savings period is intended to start in July 2017 and
the first monthly purchases are planned to be made in August
2017.
Performance Shares Under the 2017 Performance Share plan,
the pay-out will depend on whether independent performance criteria
have been met by the end of the performance period. The performance
criteria are Nokia's continuing operations average annual non-IFRS
net sales and average annual non-IFRS earnings-per share
(diluted).
The 2017 Performance Share plan has a two-year performance
period (2017-2018) and a subsequent one-year restriction period.
The number of Performance Shares to be settled would be determined
by reference to the performance targets during the performance
period. For non-executive participants, 25 per cent of the
Performance Shares granted in 2017 will settle after the
restriction period, regardless of the satisfaction of the
applicable performance criteria. In case the applicable performance
criteria is not satisfied, employees who are executives at the date
of Performance Share grant in 2017 will not receive any
settlement.
The grant under the 2017 Performance Share plan could result in
an aggregate maximum settlement of 74 million Nokia shares, in the
event that maximum performance against all the performance criteria
is achieved.
Restricted Shares Under the 2017 Restricted Share plan,
the Restricted Shares are divided into three tranches, each tranche
consisting of one third of the Restricted Shares granted. The first
tranche has a one-year restriction period, the second tranche a
two-year restriction period, and the third tranche a three-year
restriction period. The grant under the 2017 Restricted Share plan
could result in an aggregate maximum settlement of 4.5 million
Nokia shares.
Employees covered by the Nokia Equity Program 2017In
accordance with the previous years' practice, the primary equity
instruments granted to executive employees and other eligible
employees are Performance Shares.
Nokia limits the use of Restricted Shares as means of
compensation. Shares under the Restricted Share plan can be granted
for exceptional retention or recruitment purposes, primarily in US
markets to support the specific needs, practices and competitive
market environment, to ensure Nokia is able to retain and recruit
vital talent for the future success of Nokia.
Nokia employees in up to 57 countries are planned to be offered
the possibility to participate in the Employee Share Purchase Plan
for the cycle commencing in 2017, provided that there are no local
regulatory or administrative restraints in relation to such
plan.
Dilution effectAs of December 31, 2016, the aggregate
maximum number of shares that could be issued under Nokia's
outstanding equity programs and stock option rights, assuming the
Performance Shares would be delivered at maximum level, represented
approximately 1.67 per cent of Nokia's total number of shares
(excluding the shares owned by Nokia Corporation). The potential
maximum number of shares that could be issued under the Equity
Program 2017 represents approximately an additional 1.49 per cent,
assuming delivery at maximum level for Performance Shares and the
delivery of matching shares against the maximum amount of
contributions of approximately EUR 60 million under the Employee
Share Purchase Plan.
Settlement of shares under various Nokia equity plansTo
fulfill Nokia's obligations under the 2013, 2014, 2015 and 2016
Restricted Share plans and the 2014 Performance Share plan in
respect of shares to be settled in 2017, Nokia's Board of Directors
has resolved to issue, without consideration, a maximum of 9.75
million Nokia shares held by the company to settle its commitments
to plan participants, who are all employees of the Nokia Group.
The performance period for the 2015 Performance Share plan ended
on December 31, 2016, and Nokia's performance over 2015 and 2016,
assessed against the independent performance criteria set out in
the plan rules, was above the threshold performance level for the
plan. The settlement to the participants under the plan is planned
to take place in the beginning of 2018 after the restriction period
ends.
FORWARD-LOOKING STATEMENTSIt
should be noted that Nokia and its businesses are exposed to
various risks and uncertainties and certain statements herein that
are not historical facts are forward-looking statements, including,
without limitation, those regarding: A) our ability to
integrate Alcatel-Lucent into our operations and achieve the
targeted business plans and benefits, including targeted synergies
in relation to the acquisition of Alcatel-Lucent; B) expectations,
plans or benefits related to our strategies and growth management;
C) expectations, plans or benefits related to future performance of
our businesses; D) expectations, plans or benefits related to
changes in organizational and operational structure; E)
expectations regarding market developments, general economic
conditions and structural changes; F) expectations and targets
regarding financial performance, results, operating expenses,
taxes, currency exchange rates, hedging, cost savings and
competitiveness, as well as results of operations including
targeted synergies and those related to market share, prices, net
sales, income and margins; G) timing of the deliveries of our
products and services; H) expectations and targets regarding
collaboration and partnering arrangements, joint ventures or the
creation of joint ventures, as well as our expected customer reach;
I) outcome of pending and threatened litigation, arbitration,
disputes, regulatory proceedings or investigations by authorities;
J) expectations regarding restructurings, investments, uses of
proceeds from transactions, acquisitions and divestments and our
ability to achieve the financial and operational targets set in
connection with any such restructurings, investments, divestments
and acquisitions; and K) statements preceded by or including
"believe," "expect," "anticipate," "foresee," "sees," "target,"
"estimate," "designed," "aim," "plans," "intends," "focus,"
"continue," "project," "should," "will" or similar expressions.
These statements are based on management's best assumptions and
beliefs in light of the information currently available to it.
Because they involve risks and uncertainties, actual results may
differ materially from the results that we currently expect.
Factors, including risks and uncertainties that could cause these
differences include, but are not limited to: 1) our ability
to execute our strategy, sustain or improve the operational and
financial performance of our business and correctly identify and
successfully pursue business opportunities or growth; 2) our
ability to achieve the anticipated benefits, synergies, cost
savings and efficiencies of the Alcatel-Lucent acquisition, and our
ability to implement our organizational and operational structure
efficiently; 3) general economic and market conditions and other
developments in the economies where we operate; 4) competition and
our ability to effectively and profitably compete and invest in new
competitive high-quality products, services, upgrades and
technologies and bring them to market in a timely manner; 5) our
dependence on the development of the industries in which we
operate, including the cyclicality and variability of the
information technology and telecommunications industries; 6) our
global business and exposure to regulatory, political or other
developments in various countries or regions, including emerging
markets and the associated risks in relation to tax matters and
exchange controls, among others; 7) our ability to manage and
improve our financial and operating performance, cost savings,
competitiveness and synergies after the acquisition of
Alcatel-Lucent; 8) our dependence on a limited number of customers
and large multi-year agreements; 9) exchange rate fluctuations, as
well as hedging activities; 10) Nokia Technologies' ability protect
its IPR and to maintain and establish new sources of patent
licensing income and IPR-related revenues, particularly in the
smartphone market; 11) our dependence on IPR technologies,
including those that we have developed and those that are licensed
to us, and the risk of associated IPR-related legal claims,
licensing costs and restrictions on use; 12) our exposure to direct
and indirect regulation, including economic or trade policies, and
the reliability of our governance, internal controls and compliance
processes to prevent regulatory penalties in our business or in our
joint ventures; 13) our reliance on third-party solutions for data
storage and service distribution, which expose us to risks relating
to security, regulation and cybersecurity breaches; 14)
inefficiencies, breaches, malfunctions or disruptions of
information technology systems; 15) Nokia Technologies' ability to
generate net sales and profitability through licensing of the Nokia
brand, particularly in digital media and digital health and digital
media, and the development and sales of products and services, as
well as other business ventures which may not materialize as
planned; 16) our exposure to various legislative frameworks and
jurisdictions that regulate fraud and enforce economic trade
sanctions and policies, and the possibility of proceedings or
investigation that result in fines, penalties or sanctions; 17)
adverse developments with respect to customer financing or extended
payment terms we provide to customers; 18) the potential complex
tax issues, tax disputes and tax obligations we may face in various
jurisdictions, including the risk of obligations to pay additional
taxes; 19) our actual or anticipated performance, among other
factors, which could reduce our ability to utilize deferred tax
assets; 20) our ability to retain, motivate, develop and recruit
appropriately skilled employees; 21) disruptions to our
manufacturing, service creation, delivery, logistics and supply
chain processes, and the risks related to our
geographically-concentrated production sites; 22) the impact of
litigation, arbitration, agreement-related disputes or product
liability allegations associated with our business; 23) our ability
to optimize our capital structure as planned and re-establish our
investment grade credit rating or otherwise improve our credit
ratings; 24) our ability to achieve targeted benefits from or
successfully implement planned transactions, as well as the
liabilities related thereto; 25) our involvement in joint ventures
and jointly-managed companies; 26) the carrying amount of our
goodwill may not be recoverable; 27) uncertainty related to the
amount of dividends and equity return we are able to distribute to
shareholders for each financial period; 28) pension costs, employee
fund-related costs, and healthcare costs; and 29) risks related to
undersea infrastructure, as well as the risk factors specified on
pages 69 to 87 of our annual report on Form 20-F filed on April 1,
2016 under "Operating and financial review and prospects-Risk
factors", and in Nokia's other filings with the U.S. Securities and
Exchange Commission. Other unknown or unpredictable factors or
underlying assumptions subsequently proven to be incorrect could
cause actual results to differ materially from those in the
forward-looking statements. We do not undertake any obligation to
publicly update or revise forward-looking statements, whether as a
result of new information, future events or otherwise, except to
the extent legally required.
About Nokia Nokia is a global leader in creating the
technologies at the heart of our connected world. Powered by the
research and innovation of Nokia Bell Labs, we serve communications
service providers, governments, large enterprises and consumers,
with the industry's most complete, end-to-end portfolio of
products, services and licensing.
From the enabling infrastructure for 5G and the Internet of
Things, to emerging applications in virtual reality and digital
health, we are shaping the future of technology to transform the
human experience. www.nokia.com
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