Nokia Board of Directors Convenes Annual General Meeting 2005 and Projects a New Stock Repurchase Plan

Nokia Board of Directors Convenes Annual General Meeting 2005 and Projects a New Stock Repurchase Plan

ESPOO, Finland, January 27/PRNewswire-FirstCall/ -- Nokia Board of Directors submits proposals to the Annual General Meeting
on April 7, 2005 and projects to continue with stock repurchases



- Proposal to pay a dividend of EUR 0.33 per share

- Projection for a stock repurchase plan for 2005

- Proposal to reduce the share capital through cancellation of a minimum
of 176 million and a maximum of 230 million shares held by the Company

- Proposal to grant stock options as part of Nokia's Equity program 2005
to selected personnel of the Company

- Proposal to renew authorizations of the Board to resolve to increase
the share capital, repurchase Nokia shares and dispose them




Proposal to pay a dividend



Nokia's Board of Directors will propose to the Annual General Meeting on
April 7, 2005 that a dividend of EUR 0.33 per share be paid. The dividend
record date is proposed to be April 12, 2005 and pay date April 22, 2005.



Projection for a stock repurchase plan for 2005



As in 2004, Nokia Board of Directors projects to repurchase Nokia shares
under a stock repurchase plan during 2005. Therefore, the Board proposes to
the Annual General Meeting a renewal of the authorization of the Board to
repurchase Nokia shares, as discussed below. Subject to the authorization,
the Board plans to repurchase shares with up to EUR 5 billion within the
limits of the authorization. The repurchases based on this new authorization
are intended to commence after the Annual General Meeting of April 7, 2005.
The current authorization from the Annual General Meeting of 2004 is in force
until March 25, 2005.



Proposal to reduce the share capital through cancellation of Nokia shares



Nokia Board of Directors will propose that the share capital be reduced
through cancellation of Nokia shares held by the Company as well as the
shares possibly repurchased until the Annual General Meeting. The Board will
propose that the reduction will be effected through cancellation of the above
mentioned shares, i.e. a minimum of EUR 10 560 000 and a maximum of EUR 13
800 000, corresponding to a minimum of 176 000 000 and a maximum of 230 000
000 shares, and that the amount to be cancelled be transferred from the share
capital to the share issue premium. As a result of the reduction, the
shareholders' equity of the Company will not be reduced. The reduction of the
share capital will have no material effect on the relative holdings of the
other shareholders of the Company or on the voting powers among them. As of
December 31, 2004, the Company held a total of 176 000 000 Nokia shares as a
result of the repurchases made in 2004.



Proposal to grant stock options



The Stock Option Plan 2005 is a part of Nokia's Equity compensation
program 2005. As part of the program, approved by the Board of Directors on
January 27, 2005, the Board proposes to the Annual General Meeting that
selected personnel of the Nokia Group and a fully owned subsidiary of Nokia
Corporation, be granted a maximum of 25 million stock options, which entitle
to subscribe for a maximum of 25 million new Nokia shares with the par value
of EUR 0.06 each.



Nokia intends to grant stock options under the Nokia Stock Option Plan
2005 during the next two years. The subcategories of stock options to be
issued under the plan will have a life of approximately 5 years as from the
moment of grant, the last of the subcategories expiring as of 31 December
2011. The subscription prices, i.e. exercise prices, shall be determined at
grant. Our intention is to determine the exercise prices at fair market
value. The share capital of Nokia may increase based on subscriptions made
with the stock options by a maximum of 0.56 per cent, assuming share
subscription for all of these stock options as well as the cancellation of
the maximum number of shares proposed by the Board.



The complete terms and conditions of the Stock Option Plan are attached
as Enclosure 1.



Proposals to renew authorizations of the Board



Nokia Board of Directors will propose that the Annual General Meeting
authorize the Board to resolve to repurchase a maximum of 443 200 000 Nokia
shares. The proposed amount of shares corresponds to nearly 10 per cent of
the share capital of the Company and the total voting rights. The proposal is
based on the assumption that the amendment of the Finnish Companies Act will
be passed by the Parliament prior to or during the validity of the proposed
authorization. Therefore, the authorization shall amount to a maximum of 221
600 000 shares only, in the event that the proposed amendment mentioned above
does not enter into force during the one-year validity of the proposed
authorization.



The shares may be repurchased in order to carry out the stock repurchase
plan. In addition, the shares may be repurchased in order to develop the
capital structure of the Company, to finance or carry out acquisitions or
other arrangements, to settle the Company's 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, including also the use of
certain derivative, share lending or other arrangements.



The Board will also propose that it be authorized to resolve to dispose a
maximum of 443 200 000 Nokia shares at a price determined by the Board.
However, the authorization is not proposed to exceed the authorization to be
approved for repurchases of the Company's own shares. The authorization is
proposed to allow disposal of shares in proportion other than that of the
shareholders' pre-emptive rights to the Company's shares. The shares may also
be disposed through public trading.



Furthermore, the Board will propose that it be authorized to increase the
share capital of the Company by issuing new shares, stock options or
convertible bonds in one or more issues. The Board proposes to be authorized
to disapply the shareholders' pre-emptive rights to the Company's shares. The
increase of the Company's share capital may amount to an aggregate maximum of
EUR 53 160 000 corresponding to 886 million shares. The total proposed amount
corresponds to approximately 19.9 per cent of the currently registered share
capital and the total voting rights assuming the cancellation of the maximum
number of shares according to the other proposal by the Board.



It is proposed that all authorizations be effective until April 7, 2006.



The complete proposals by the Board of Directors to the Annual General
Meeting will be available on Nokia's Internet pages at www.nokia.com/agm as
of February 9, 2005.



www.nokia.com



ENCLOSURE 1:



NOKIA STOCK OPTION PLAN 2005



I TERMS AND CONDITIONS OF STOCK OPTIONS



1. Stock Options to be Issued



1.1. Nokia Corporation ("Company") will issue the maximum of 25 000 000
stock options entitling to the subscription for the maximum of 25 000 000 of
the Company's newly issued shares (the "Shares" or "Share" as the case may
be) with a par value of EUR 0.06 each.



1.2. The stock options will be offered to selected [personnel] of Nokia
Group and to a wholly owned subsidiary of the Company (the "Subsidiary") to
be offered to selected personnel of Nokia Group. It is proposed that
shareholders' pre-emptive rights to the share subscription be disapplied
since the stock options are intended to form a part of the equity based
incentive program of Nokia Group.



1.3. The subscription period for the stock options to be issued as
defined above will expire as of July 31, 2006 or any earlier date as
determined by the Board of Directors of the Company (the "Board of
Directors").



2. Stock Option Sub-categories and Lots



2.1. The stock options to be granted will be divided into sub-categories
so that the stock options that have equal share subscription price and expiry
date of the share subscription period (as defined in Section II.3 below) form
one sub-category. The Board of Directors will determine how the stock options
to be granted will be divided into the sub-categories. The sub-categories
will be denoted with a title that indicates the basis for the pricing and the
time of the pricing, for example: "2005 2Q" or "2006 1Q" regarding quarterly
priced stock options, or "2005 9M" or "2005 12M" regarding monthly priced
stock options.



3. Distribution of Stock Options



3.1. The Board of Directors will resolve on the distribution of the stock
options to selected personnel of Nokia Group (the "Participants") and the
Subsidiary. The stock options held by the Subsidiary may subsequently be
allocated to the Participants in accordance with the resolution of the Board
of Directors.



3.2. The Company will notify each Participant of the allocation of stock
options to the Participant.



4. Price of the Stock Options



4.1. The stock options will be issued free of charge.



5. Non-Transferability



5.1. The stock options are non-transferable to a third party by the
Participant and may be exercised for share subscription only.



5.2. Should the stock options be redeemed pursuant to Section I.6 below,
the Company may reallocate the redeemed and priced stock options to other
Participants in accordance with the resolution of the Board of Directors.



6. Other Restrictions pertaining to the Stock Options



6.1. Should a Participant cease to be employed by Nokia Group for any
reason other than retirement or permanent disability, as defined by the
Company, or death, the Company is entitled to redeem free of charge those
stock options of such Participant for which the share subscription period
referred to in Section II.2 has not yet commenced as at the last day of such
Participant's employment. In addition, the Company is entitled to redeem free
of charge from such Participant those stock options, for which as at the last
day of the Participant's employment, the share subscription period has
already commenced, but which remain unexercised at such date.



6.2. The Company may resolve that in cases of voluntary and/or statutory
leave of absence of the Participant and in other corresponding circumstances
the Company has the right to defer the commencement of the share subscription
period of the stock options and/or redeem the stock options free of charge
from the Participant.



II TERMS AND CONDITIONS OF SHARE SUBSCRIPTION



1. Right to Subscribe for Shares



1.1. Each stock option will entitle the Participant to subscribe for one
Share with a par value of EUR 0.06. Pursuant to the share subscriptions the
number of shares of the Company may increase by a maximum of 25 000 000
Shares and the share capital of the Company may increase by a maximum of EUR1
500 000.



1.2. The share subscription with the stock options may take place only
after the share subscription period of each respective stock option has
commenced.



1.3. The Subsidiary may not exercise the stock options for share
subscription.



2. Share Subscription Period and Payment of Shares



2.1. The share subscription period for the stock options to be granted
will be determined by the Board of Directors and will begin not earlier than
July 1, 2006 and end no later than December 31, 2011.



The stock option sub-categories and lots shall have a staggered schedule
of share subscription periods as depicted in the table below. The table
illustrates as an example the beginning of the subscription periods for the
sub-category "2005 2Q", but the subscription periods for the other
sub-categories to be denoted shall commence similarly no later than one year
after the end of the quarter, under which the sub-category has been denoted
and the price determined. Should the stock option sub-category be denoted on
a monthly basis, the subscription period commences in a similar way staggered
no later than one year after the end of the month under which the
sub-category has been denoted.



-------------------------------------------------------------------------
Title of Lot % of the whole
Sub-category Sub-category Vesting date for the Lot(1)
-------------------------------------------------------------------------
2005 2Q 25% July 1, 2006
-------------------------------------------------------------------------
2005 2Q 6.25% October 1, 2006
-------------------------------------------------------------------------
2005 2Q 6.25% January 3, 2007
-------------------------------------------------------------------------
2005 2Q 6.25% April 1, 2007
-------------------------------------------------------------------------
2005 2Q 6.25% July 1, 2007
-------------------------------------------------------------------------
2005 2Q 6.25% October 3, 2007
-------------------------------------------------------------------------
2005 2Q 6.25% January 2, 2008
-------------------------------------------------------------------------
2005 2Q 6.25% April 3, 2008
-------------------------------------------------------------------------
2005 2Q 6.25% July 3, 2008
-------------------------------------------------------------------------
2005 2Q 6.25% October 2, 2008
-------------------------------------------------------------------------
2005 2Q 6.25% January 2, 2009
-------------------------------------------------------------------------
2005 2Q 6.25% April 2, 2009
-------------------------------------------------------------------------
2005 2Q 6.25% July 2, 2009
-------------------------------------------------------------------------

(1) Vesting date is the day when the share subscription period, i.e. the
right to subscribe for the share in connection with the stock option
exercise, commences




2.2. The share subscriptions shall be made to Nordea Bank Finland Plc or
another subscription agent, as determined by the Company from time to time.
Payment of the Shares subscribed for shall be made to the Company pursuant to
the instructions given by the Company, however, always prior to the release
of the Shares by the Company. The Company will resolve on all procedural
matters applicable to the share subscription and on the payment of the
Shares.



3. Subscription Price



3.1. The share subscription prices for the different sub-categories of
stock options to be allocated to Participants under the Nokia Stock Option
Plan 2005 will regularly be determined and the sub-categories denoted on a
quarterly basis. The share subscription price for such sub-categories of
stock options will equal to the trade volume weighted average price of the
Nokia share on the Helsinki Exchanges during the trading days of the first
whole week of the second month (i.e. February, May, August or November) of
the respective calendar quarter, based on which the sub-category has been
denoted.



3.2. The Board of Directors may resolve that sub-categories be denoted
and priced also on a monthly basis. The share subscription price for such
stock option sub-categories will equal to the trade volume weighted average
price of the Nokia share on the Helsinki Exchanges during the trading days of
the first whole week of the respective month, based on which the sub-category
has been denoted.



3.3. Should the General Meeting in accordance with the proposal of the
Board of Directors decide to distribute a special dividend constituting a
deviation to the dividend policy of the Company, the amount of this special
dividend will be deducted from the share subscription price, which has
previously been determined. The Board of Directors will specify in its
proposal for the dividend whether the dividend, or a part of it, is such a
special dividend, and will determine the new share subscription price.



4. Shareholder Rights



4.1. Shares will be eligible for dividend with respect to the financial
year in which the share subscription takes place. Other shareholder rights
will commence on the date on which the share subscription is entered in the
Trade Register.



5. Issue of Shares, Convertible Bonds and Stock Options before Share
Subscription



5.1. Should the Company, prior to the share subscription, increase its
share capital through an issue of new shares, or issue new convertible bonds
or stock options, the Participants will have the same or equal right as the
shareholders to participate in such an issue. Equality will be implemented in
the manner resolved by the Board of Directors so that the number of Shares,
which may be subscribed for with each sub-category, the share subscription
prices or both will be amended.



5.2. Should the Company, prior to the share subscription, increase the
share capital through a bonus issue, the share subscription ratio will be
amended so that the ratio of the share capital to Shares to be subscribed for
by virtue of the stock options remains unchanged. Should the new number of
Shares, which may be subscribed for by virtue of one stock option, be a share
fraction, the fraction will be taken into account by lowering the share
subscription price.



6. Rights of Participants in certain Cases



6.1. Should the Company, before the share subscription, reduce its share
capital through redemption of shares, the right to the share subscription of
the Participants will be adjusted in the manner specified in the resolution
to reduce the share capital.



6.2. Should the Company, before the commencement of the share
subscription period, be placed into liquidation, the Participants will be
given the right to subscribe for Shares with the stock options, the share
subscription period of which has commenced, within a period prior to the
commencement of the liquidation as prescribed by the Board of Directors.



6.3. Should the Company resolve to merge with another existing company or
with a company to be formed or should the Company resolve to be divided, the
Participants will be given the right to subscribe for all the Shares
pertaining to their stock options or to convert their stock options into
stock options issued by another company or, where a new company will be
formed, by the formed company, on such terms and within such a time period
prior to the merger or division, as prescribed by the Board of Directors.
Following the closing of the merger or division, any rights to subscribe for
Shares or to convert the stock options will lapse. The provision stated in
this paragraph 6.3. also applies to a merger, in which the Company takes
part, and whereby the Company registers itself as a European Company
(Societas Europae) in another member state in the European Economic Area. The
same also applies, if the Company resolves to restructure itself into a
European Company and registers a transfer of its domicile into another member
state. This provision constitutes an agreement referred to in Chapter 14,
Section 3 of the Companies Act.



6.4. Should the Company, before the end of the share subscription period,
make a resolution to acquire its own shares with an offer to all the
shareholders, the Company will be obliged to make an equal offer to the
Participants in respect of stock options, the share subscription period of
which has commenced. If the Company acquires its own shares in any other
manner, no measures will need to be taken in relation to the stock options.



6.5. Should a tender offer regarding all shares and stock options issued
by the Company be made or should a shareholder under the articles of
association of the Company or the Securities Markets Act have the obligation
to redeem the shares from the Company's other shareholders, or to redeem the
stock options, or should a shareholder have under the Companies Act the right
and obligation to redeem the shares from the Company's other shareholders the
Participants may, notwithstanding the transfer restriction prescribed under
section I.5 above, transfer all of the stock options in their possession to
the offeror, or the party under the obligation or right of redemption, as
applicable.



6.6. Should a shareholder have under the Companies Act the right to
redeem the shares from the other shareholders of the Company, the
Participants will have a corresponding obligation to that of the shareholders
to transfer all of their stock options for redemption to the redeeming
shareholder.



6.7. The Board of Directors may, however, in any of the situations
prescribed above in paragraph 6.5 and 6.6, also give the Participants an
opportunity to exercise all of the stock options in their possession for
share subscription or to convert them into stock options issued by another
company on such terms and within such time period prior to the completion of
the tender offer or redemption, as prescribed by the Board of Directors. At
the close of this period set by the Board of Directors, all rights to a share
subscription or to a conversion of stock options shall lapse.



6.8. Should the par value of the Company's share be changed so that the
share capital remains unchanged, the number of issued stock options will be
amended accordingly so that each stock option will still entitle to subscribe
for one Share, and the terms and conditions of the stock options concerning
the share subscription will be amended so that the aggregate par value of the
Shares to be subscribed for and the aggregate share subscription price remain
unchanged.



6.9. Should the Company be changed from a public limited company into a
private limited company, the terms and conditions of the stock options will
not be amended.



III OTHER TERMS AND CONDITIONS



1. These terms and conditions are governed by the laws of Finland.
Disputes arising out of the stock options will be settled by arbitration in
accordance with the Arbitration Rules of the Finnish Central Chamber of
Commerce.



2. In the event of conflict, the Finnish language version of these terms
and conditions shall prevail.



3. The Board of Directors is authorized to make other than material
amendments to these terms and conditions. The Board of Directors shall
resolve on other matters relating to the stock options as well as the Shares.
It may also give binding instructions regarding the Participants. The Company
has the sole power to interpret these terms and conditions.



4. Any notices to the Participants relating to this stock option plan
shall be made in writing, electronically or any other manner as determined by
the Company.



5. The Board of Directors may resolve on the transfer of the stock
options or part thereof to the book-entry system and on any possible
technical amendments resulted thereby to these terms and conditions of the
stock options.



6. The documentation for the stock options referred to in the Finnish
Companies Act may be viewed at the Company's head office in Espoo, Finland.



Source: Nokia

Media enquiries: Nokia, Communications, Tel. +358-7180-34900, Fax +358-7180-38226, Email: press.office@nokia.com


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