Nokia Board of Directors approve Nokia equity program for 2021-2023

ESPOO, FINLAND: Nokia Board of Directors has approved the Company’s equity program for 2021-2023, a press statement noted.

The Program includes a new share-based long-term incentive plan (LTI Plan) and an employee share purchase plan (ESPP) under which awards may be granted until December 31, 2023.

Long-term Incentive Plan 2021-2023:

Nokia seeks to recognise, reward and retain its most talented employees. The long-term incentive plan intends to effectively contribute to the long-term value creation and sustainability of the Company and align the interests of the executives and employees with those of Nokia’s shareholders.

Nokia’s long-term incentive plan for 2021-2023 is a key tool which supports these objectives. Under the LTI Plan the company may grant eligible executives and other employees awards in the form of both performance shares and restricted shares.

Awards under the LTI Plan may be granted between the date the plan is approved and December 31, 2023 subject to applicable performance metrics as well as performance and/or restriction periods of up to 36 months depending on the award.

Consequently, the restriction periods for the last awards granted under the LTI Plan would end in 2026. Performance metrics as well as weightings and targets for the selected metrics for performance shares are set by the Board of Directors annually to ensure they continue to support Nokia’s long-term business strategy and financial success. Further disclosure on annual implementation of the LTI Plan is provided in the Company’s annual report and website.

The potential maximum aggregate number of Nokia shares that may be issued based on awards granted under the LTI plan in 2021, 2022 and 2023 is 350 million. Until the Nokia shares are delivered, the participants will not have any shareholder rights, such as voting or dividend rights associated with the performance or restricted shares. If the participant’s employment with Nokia terminates before the vesting date of the award or a part of an award, the individual is not, as a main rule, entitled to settlement based on the plan.

Employee Share Purchase Plan 2021-2023:

The purpose of the ESPP is to encourage share ownership within the Nokia employee population, increasing engagement and sense of ownership in the company. Under the ESPP 2021-2023, subject to the Board commencing annual plan cycles, the eligible employees may elect to make contributions from their monthly net salary to purchase Nokia shares at market value on pre-determined dates on a quarterly basis during the applicable plan period.

Nokia would deliver one matching share for every two purchased shares that the participant still holds at the end of applicable plan cycle. In addition, the participants may be offered free shares subject to meeting certain conditions related to participation as determined by the Board.

The maximum number of shares that can be issued under all plan cycles commencing under the ESPP in 2021, 2022 and 2023 is 35 million. Participants have immediate shareholder rights over all shares purchased from the market. Until the matching or free Nokia shares are delivered, the participants will not have any shareholder rights, such as voting or dividend rights associated with the matching or free shares.

Dilution effect:

As at December 31, 2020, the estimated aggregate maximum number of shares that would be issued under Nokia’s outstanding equity programs, assuming the unvested performance shares would be delivered at maximum level, represented approximately 1.87 per cent of Nokia’s total number of shares (excluding the treasury shares owned by Nokia Group).

This represents the net number of shares that would be issued, once applicable estimated taxes are deducted from the gross value of the awards.

The dilution impact of Nokia’s outstanding equity programs, if maximum performance was achieved, in addition to the net number of shares that could be issued under the new LTI Plan and the ESPP as a result of awards made in 2021, 2022 and 2023, would not exceed 5 per cent of Nokia’s current total number of shares (excluding the treasury shares owned by Nokia Group).

www.nokia.com

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