Nokia / Miscellaneous 26.01.2012 12:30 Dissemination of a UK Regulatory Announcement, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. =-------------------------------------------------------------------------- Nokia Corporation Stock Exchange Release January 26, 2012 at 13.30 (CET +1) Espoo, Finland - Nokia announced today that Nokia's Board of Directors has approved the Nokia Equity Program 2012 consisting of Performance Shares, dependent on the achievement of two independent financial performance criteria; Restricted Shares, used together with Performance Shares; and Stock options, used on a more limited basis. As the transition of Nokia's business continues, the Nokia Equity Program 2012 will support the participants' focus and alignment with the company's strategy and targets. The primary equity instruments for the executive employees are performance shares and stock options. For directors below the executive level, the primary equity instruments are performance shares and restricted shares. Below the director level, performance shares and restricted shares are used on a selective basis to ensure retention and recruitment of functional mastery and other employees deemed critical to Nokia's future success. Nokia's balanced approach and use of the performance-based plan in conjunction with the restricted share plan as the main long-term incentive vehicles effectively contribute to the long-term value creation and sustainability of the company. They also ensure that the overall equity-based compensation is based on performance while ensuring the recruitment and retention of talent vital to the future success of Nokia. Approximately 4 500 employees are expected to participate in the Nokia Equity Program 2012. Under the Performance Share Plan 2012, Nokia shares will be delivered provided that the financial performance reaches at least one of the required threshold levels measured by two independent performance criteria. The performance criteria are average annual net sales and earnings per share for the performance period. The threshold and maximum levels for the Performance Share Plan 2012 are scheduled to be determined and disclosed during the first quarter of 2012. No Performance Shares will be granted under the plan prior to that. The Plan has a two-year performance period (2012-2013) and a subsequent one-year restriction period. Accordingly, the amount of shares based on the financial performance during the two-year period will vest after the third year. The grant of Performance Shares in 2012 may result in an aggregate maximum payout of 36 million Nokia shares, should the maximum level for both performance criteria be met. The Restricted Share Plan 2012 has a three-year restriction period. The grant of Restricted Shares in 2012 may result in an aggregate maximum payout of 14 million Nokia shares. As part of the Nokia Equity Program 2012, stock options will be granted under the Nokia Stock Option Plan 2011 approved by the Annual General Meeting 2011. Stock options can be granted under the Stock Option Plan 2011 until the end of 2013 and they have a vesting period of 50 % of stock options vesting three years after grant and the remaining 50 % vesting four years from grant. The planned maximum number of stock options to be granted during 2012 is approximately 8.5 million. As of December 31, 2011, the total maximum dilution effect of Nokia's equity program currently outstanding, assuming that the performance shares would be delivered at maximum level, is approximately 1.8 %. The potential maximum effect of the Nokia Equity Program 2012, again assuming the delivery at maximum level, would be approximately another 1.6 %. Settlements under various Nokia equity plans The performance period for the Performance Share Plan 2009 ended on December 31, 2011, and there will be no settlement to the participants under the plan as the threshold performance criteria of EPS and Average Annual Net Sales Growth were not met. To fulfill the Company's obligations under other, considerably more limited equity incentive plans, Nokia's Board of Directors has resolved to issue a total amount of 1 010 000 Nokia shares (NOK1V) held by the Company to settle its commitment to approximately 400 participants, employees of the Nokia Group. About Nokia Nokia is a global leader in mobile communications whose products have become an integral part of the lives of people around the world. Every day, more than 1.3 billion people use their Nokia to capture and share experiences, access information, find their way or simply to speak to one another. Nokia's technological and design innovations have made its brand one of the most recognized in the world. For more information, visit http://www.nokia.com/about-nokia FORWARD-LOOKING STATEMENTS It should be noted that certain statements herein which are not historical facts are forward-looking statements, including, without limitation, those regarding: A) the expected plans and benefits of our strategic partnership with Microsoft to combine complementary assets and expertise to form a global mobile ecosystem and to adopt Windows Phone as our primary smartphone platform; B) the timing and expected benefits of our new strategy, including expected operational and financial benefits and targets as well as changes in leadership and operational structure; C) the timing of the deliveries of our products and services; D) our ability to innovate, develop, execute and commercialize new technologies, products and services; E) expectations regarding market developments and structural changes; F) expectations and targets regarding our industry volumes, market share, prices, net sales and margins of products and services; G) expectations and targets regarding our operational priorities and results of operations; H) expectations and targets regarding collaboration and partnering arrangements; I) the outcome of pending and threatened litigation; J) expectations regarding the successful completion of acquisitions or restructurings on a timely basis and our ability to achieve the financial and operational targets set in connection with any such acquisition or restructuring; and K) statements preceded by 'believe,' 'expect,' 'anticipate,' 'foresee,' 'target,' 'estimate,' 'designed,' 'plans,' '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 that could cause these differences include, but are not limited to: 1) our ability to succeed in creating a competitive smartphone platform for high-quality differentiated winning smartphones or in creating new sources of revenue through our partnership with Microsoft; 2) the expected timing of the planned transition to Windows Phone as our primary smartphone platform and the introduction of mobile products based on that platform; 3) our ability to maintain the viability of our current Symbian smartphone platform during the transition to Windows Phone as our primary smartphone platform; 4) our ability to realize a return on our investment in MeeGo and next generation devices, platforms and user experiences; 5) our ability to build a competitive and profitable global ecosystem of sufficient scale, attractiveness and value to all participants and to bring winning smartphones to the market in a timely manner; 6) our ability to produce mobile phones in a timely and cost efficient manner with differentiated hardware, localized services and applications; 7) our ability to increase our speed of innovation, product development and execution to bring new competitive smartphones and mobile phones to the market in a timely manner; 8) our ability to retain, motivate, develop and recruit appropriately skilled employees; 9) our ability to implement our strategies, particularly our new mobile product strategy; 10) the intensity of competition in the various markets where we do business and our ability to maintain or improve our market position or respond successfully to changes in the competitive environment; 11) our ability to maintain and leverage our traditional strengths in the mobile product market if we are unable to retain the loyalty of our mobile operator and distributor customers and consumers as a result of the implementation of our new strategy or other factors; 12) our success in collaboration and partnering arrangements with third parties, including Microsoft; 13) the success, financial condition and performance of our suppliers, collaboration partners and customers; 14) our ability to source sufficient quantities of fully functional quality components, subassemblies and software on a timely basis without interruption and on favorable terms, including the disruption of production and/or deliveries from any of our suppliers as a result of adverse conditions in the geographic areas where they are located; 15) our ability to manage efficiently our manufacturing, service creation, delivery and logistics without interruption; 16) our ability to ensure the timely delivery of sufficient volumes of products that meet our and our customers' and consumers' requirements and manage our inventory and timely adapt our supply to meet changing demands for our products; 17) any actual or even alleged defects or other quality, safety and security issues in our products; 18) any actual or alleged loss, improper disclosure or leakage of any personal or consumer data collected or made available to us or stored in or through our products; 19) our ability to successfully manage costs, including our ability to achieve targeted costs reductions and to effectively and timely execute related restructuring measures, including personnel reductions; 20) our ability to effectively and
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