Nokia Board of Directors approves the Nokia Equity Program for 2019 and the issuance of shares held by the company

Nokia Corporation

Stock Exchange Release

January 31, 2019 at 9:00 (CET +1)

Nokia Board of Directors approves the Nokia Equity Program for 2019 and the issuance of shares held by the company

Espoo, Finland - Nokia announced today that its Board of Directors has approved the companys equity program for 2019 designed to support and align the participants focus with Nokias strategy and long-term success. In line with previous years, the Nokia Equity Program for 2019 consists of a performance share plan, a restricted share plan and an employee share purchase plan. There are no more outstanding stock options granted under the Nokia stock option plans.

Performance Share Plan 2019

Nokia uses Performance Shares as the main long-term incentive instrument for executives and other eligible employees with the intention to effectively contribute to the long-term value creation and sustainability of the company and to align interests of the executives and employees with those of Nokias shareholders. Performance Shares are also designed to ensure that the overall equity-based compensation is based on performance.

The 2019 Performance Share Plan has a three-year performance period (2019-2021). The pay-out in Nokia shares will depend on whether performance criteria have been met during the performance period. The performance criteria are earnings per share, free cash flow and revenue relative to market. For non-executive participants, 25 per cent of the Performance Shares granted in 2019 will settle after the performance period, regardless of the satisfaction of the applicable performance criteria. In case the applicable performance criteria are not satisfied, employees who are executives at the date of Performance Share grant in 2019 will not receive any settlement.

The awards under the 2019 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 Share Plan 2019

Restricted Shares are granted to Nokias executives and other eligible employees on a more limited basis than Performance Shares for purposes related to retention and recruitment to ensure Nokia is able to retain and recruit vital talent for the future success of the company.

Under the 2019 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 awards under the 2019 Restricted Share Plan could result in an aggregate maximum settlement of 2.5 million Nokia shares.

Employee Share Purchase Plan 2019

Under the Employee Share Purchase Plan, the eligible Nokia Group employees may elect to make contributions from their monthly net salary to purchase Nokia shares. The 2019 Employee Share Purchase Plan is planned to be offered to Nokia employees in up to 72 countries, provided that there are no significant local regulatory or administrative restraints in relation to the Plan. Participation in the Plan is voluntary.

The share purchases are intended to be made at market value on pre-determined dates on a quarterly 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, 2020.

The aggregate maximum amount of contributions that employees can make during the Plan cycle commencing in 2019 is approximately EUR 60 million, which equals approximately 10.6 million Nokia shares using the closing share price of EUR 5.68 on Nasdaq Helsinki on January 30, 2019. Accordingly, based on the matching ratio of one matching share for every two purchased shares, the number of matching shares would be approximately 5.3 million.

Dilution effect

As of December 31, 2018, the aggregate maximum number of shares that could be issued under Nokias outstanding equity programs and stock option rights, assuming the performance shares would be delivered at maximum level, represented approximately 2.68 per cent of Nokias 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 2019 represents approximately an additional 1.47 percentage points, 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.

Share issuance resolution for the settlement of shares under previous Nokia equity plans

To fulfill Nokias obligations under the 2015, 2016, 2017 and 2018 Restricted Share plans and the 2016 Performance Share plan in respect of shares to be settled in 2019, Nokias Board of Directors has resolved to issue, without consideration, a maximum of 7.5 million Nokia shares held by the company to settle its commitments to plan participants.

About Nokia

We create the technology to connect the world. We develop and deliver the industrys only end-to-end portfolio of network equipment, software, services and licensing that is available globally. Our customers include communications service providers whose combined networks support 5.7 billion subscriptions, as well as enterprises in the private and public sector that use our network portfolio to increase productivity and enrich lives.

Through our research teams, including the world-renowned Nokia Bell Labs, we are leading the world to adopt end-to-end 5G networks that are faster, more secure and capable of revolutionizing lives, economies and societies. Nokia adheres to the highest ethical business standards as we create technology with social purpose, quality and integrity. www.nokia.com

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