NOKIA STOCK EXCHANGE RELEASE January 25, 2007
Nokia Board of Directors convenes Annual General Meeting 2007
New stock repurchase plan projected
Nokia Equity Program 2007 in line with previous years practice
Espoo, Finland - Nokia announced today that Nokia Board of Directors will
submit the below proposals to the Annual General Meeting on May 3, 2007. The
Board also projects to continue with stock repurchases, and it has resolved to
establish Nokia Equity Program 2007, in line with previous years practice.
- Proposal to pay a dividend of EUR 0.43 per share
- Projection for a stock repurchase plan for 2007
- Proposal for a new stock option plan as part of Nokias Equity Program 2007
- Proposal to amend the Articles of Association
- Proposals to reduce the share issue premium and to record the subscription
prices for shares issued based on stock options in the fund for invested non-
restricted equity
- Proposals to authorize the Board for stock repurchases and stock issuances
Proposal to pay a dividend
Nokias Board of Directors proposes to the Annual General Meeting on May 3,
2007 that a dividend of EUR 0.43 per share be paid from the fiscal year 2006.
The dividend ex-date would be May 4, 2007, the record date May 8, 2007 and the
pay date May 24, 2007. The actual dividend pay date outside Finland will be
determined by the practices of the intermediary banks transferring the dividend
payments.
Projection for a stock repurchase plan for 2007
As in 2006, Nokias Board of Directors projects to repurchase Nokia shares
under a stock repurchase plan for 2007. Therefore, the Board proposes to the
Annual General Meeting a renewal of the authorization of the Board to
repurchase a maximum of 380 million Nokia shares. The Board plans to repurchase
shares with up to EUR 4 billion until March 31, 2008 subject to the
authorization, and to commence repurchases based on the new authorization after
the Annual General Meeting of May 3, 2007. The Board also intends to cancel
majority of the shares held by the Company prior to the Annual General Meeting
2007.
Nokia Equity program 2007 and proposal for a new stock option plan
Nokia Equity Program 2007, following previous years practice, has the below
structure as approved by the Nokia Board of Directors:
- Performance shares - offered as the main equity-based incentive;
- Stock options - to be used at a lesser degree compared to previous years;
- Restricted shares - only a small number granted to high potential and
critical employees.
Nokia Equity Program 2007 will focus on rewarding achievement and retaining
critical talent, like Nokia equity programs of previous years. Similarly, it
intends to align the potential value received by the participants directly with
the performance of the Company, thus aligning the participants' interests also
with the shareholders' interests.
Performance shares under the Nokia Equity Program 2007 will be settled provided
that the Company's performance reaches the required threshold level measured by
two performance criteria: average annual net sales growth during the three-year
performance period (2007-2009), and earnings per share ('EPS') (basic) at the
end of the performance period (2009). The actual threshold levels will be
determined and disclosed during the first quarter of 2007. The grant of
performance shares in 2007 may result in an aggregate maximum payout of 12
million Nokia shares, should the maximum level for both performance criteria be
met. Nokia intends to continue to grant performance shares also in 2008-2010 up
to a total payout of 36 million Nokia shares.
Restricted shares under the Nokia Equity Program 2007 will have a three-year
restriction period and therefore be settled mainly in 2010. The grant of
restricted shares in 2007 may result in a maximum payout of 4 million Nokia
shares. Nokia intends to continue to grant restricted shares also in 2008-2010
up to total payout of 12 million Nokia shares.
As part of Nokia Equity Program 2007, the Board proposes to the Annual General
Meeting that selected personnel of Nokia Group be granted a maximum of 20
million stock options during a four year period 2007-2010. The average annual
grant is planned to be 5 million. The stock options entitle to subscribe for a
maximum of 20 million Nokia shares. The subcategories of stock options to be
granted under the plan will have a term of approximately 5 years from grant,
the last of the subcategories expiring as of December 31, 2015. The exercise
prices (i.e. subscription prices) shall be determined on a quarterly basis at
grant and be based on the market price of the Nokia share quoted in public
trading at the time of the pricing, as determined in the terms and conditions
of the stock options. The latest stock option plan was approved by the Annual
General Meeting in 2005. Nokia Stock Option Plan 2005 covered a maximum of 25
million stock options to be granted 2005-2006, the average annual grant being
maximum 12.5 million.
As of December 31, 2006, the total maximum dilution effect of Nokia's equity
incentives currently outstanding, assuming that the performance shares are
settled at maximum, is approximately 3.4%. The potential maximum effect of the
Nokia Equity Program 2007 would be approximately another 0.8%.
Proposal to amend the Articles of Association
The Board proposes that the Annual General Meeting resolve to amend the
Articles of Association as follows:
- Remove the provisions on minimum and maximum share capital as well as on the
nominal value of a share.
- Remove the provisions on record date.
- Amend the maximum number of members of the Board of Directors from ten to
twelve.
- Add a reference that the Boards Corporate Governance and Nomination
Committee shall also make the proposal on the Board remuneration.
- Amend provisions on the right to represent the Company to correspond to the
terminology of the Companies Act effective as from September 1, 2006.
- Remove provisions on the timing for submitting the annual accounts to the
auditors.
- Amend the latest possible date for the Annual General Meeting to be June 30.
- Amend the provisions on the notice of a General Meeting to the effect that it
must be published no earlier than three months prior to the latest date of
registration and also be published on the Companys website.
- Remove the provisions that when the Companys shares are in the book-entry
system the provisions of the law regarding participation in the Annual General
Meeting shall apply.
- Amend "the opinion of the chairman" to "the vote of the chairman".
- Amend the list of agenda items of the Annual General Meeting to correspond to
the Companies Act effective as from September 1, 2006.
Proposals to reduce the share issue premium and to record the subscription
prices for shares issued based on stock options to the fund for invested non-
restricted equity
The Board of Directors proposes that the Annual General Meeting resolve to
reduce the share issue premium of the Company by a minimum of EUR 2 312 146
296.94 by transferring all the funds in the share issue premium on the date of
the Annual General Meeting to the fund for invested non-restricted equity. In
line therewith, the Board also proposes that the Annual General Meeting resolve
that the total amount of the subscription prices paid for new shares issued
after the date of the Annual General Meeting based on stock options under the
Nokia Stock Option Plans 2001, 2003 and 2005 be recorded in the fund for
invested non-restricted equity.
Proposals to authorize the Board for stock repurchases and for stock issuances
The Board of Directors proposes that the Annual General Meeting authorize the
Board to resolve to repurchase a maximum of 380 million Nokia shares. The
proposed amount of shares corresponds to less than 10 per cent of all shares of
the Company. The shares may be repurchased in order to develop the capital
structure of the Company, which includes carrying out the announced projection
for a stock repurchase plan. In addition, the shares may be repurchased in
order to finance or carry out acquisitions or other arrangements, to settle the
Companys equity-based incentive plans, to be transferred for other purposes,
or to be cancelled. The shares may be repurchased either through a tender offer
made to all shareholders on equal terms, or through public trading from the
market.
The Board proposes that the Annual General Meeting authorize the Board to
resolve to issue a maximum of 800 million shares through issuance of shares or
special rights entitling to shares in one or more issues. The Board proposes
that the authorization be used to finance or carry out acquisitions or other
arrangements, to settle the Companys equity-based incentive plans, or other
purposes resolved by the Board. It is proposed that the authorization includes
the right for the Board to resolve 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 complete proposals by the Board of Directors to the Annual General Meeting
are available on Nokia's website at www.nokia.com/agm. The proposals will be
included in the notice to the Annual General Meeting which will be published
later.
Media enquiries:
Nokia
Communications
Tel. +358 7180 34900
Email: press.office@nokia.com
www.nokia.com