Table of Contents

As filed with the Securities and Exchange Commission on August 14, 2015

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Nokia Corporation

(Exact name of registrant as specified in its charter)

 

 

 

Republic of Finland		3663		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Karaportti 3, FI-02610 Espoo, Finland, +358 (0) 10-448-8000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

 

Genevieve A. Silveroli, Nokia USA Inc., 6000 Connection Drive, Irving, Texas 75039, +1 (972) 374-3000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Riikka Tieaho Vice President, Corporate Legal Nokia Corporation Karaportti 3 FI-02610 Espoo Finland Tel. No.: +358 (0) 10-448-8000		Scott V. Simpson Michal Berkner Skadden, Arps, Slate, Meagher & Flom (UK) LLP 40 Bank Street London E14 5DS United Kingdom Tel. No.: +44 20-7519-7000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)  ¨

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  x

 

 

CALCULATION OF REGISTRATION FEE

 

Title of each class of securities to be registered		Amount to be registered		Proposed maximum offering price per share		Proposed maximum aggregate offering price		Amount of registration fee
Shares(1)		300 000 000(2)		$6.60(3)		$1 980 000 000(4)		$230 076.00

(1)

A portion of the shares of Nokia Corporation (“Nokia Shares”) registered hereby may be represented by American depositary shares (“Nokia ADSs”), each representing one Nokia Share, which have been registered pursuant to a separate registration statement on Form F-6 (Reg. No. 333-182900). Pursuant to the Exchange Offer to be made in the United States by Nokia Corporation (the “U.S. Offer”), Nokia Shares and Nokia ADSs will be offered and sold pursuant to this Registration Statement to holders of ordinary shares, nominal value EUR 0.05 per share of Alcatel Lucent (“Alcatel Lucent Shares”) and to holders of American depositary shares, each representing one Alcatel Lucent Share. Furthermore, pursuant to the U.S. Offer, Nokia Shares will be offered and sold pursuant to this Registration Statement to holders of Alcatel Lucent convertible bonds.

(2)	Represents the maximum number of Nokia Shares (including Nokia Shares represented by Nokia ADSs) expected to be offered and sold in the U.S. Offer described herein pursuant to this registration statement.

(3)

In accordance with Rule 457(c) and Rule 457(f)(1) under the Securities Act of 1933 (the “Securities Act”), the proposed maximum offering price per share has been calculated based upon the average of the high and low price of the Alcatel Lucent ADSs on the NYSE equal to $3.63 on August 10, 2015 divided by 0.55, representing the ratio of Nokia Shares to Alcatel Lucent Shares being offered to holders of the Alcatel Lucent Shares pursuant to this exchange offer/prospectus. Offering prices are estimated solely for the purpose of calculating the registration fee.

(4)

In accordance with Rule 457(c) and Rule 457(f)(1) under the Securities Act, the proposed maximum aggregate offering price has been calculated as the product of (a) the maximum number of Nokia Shares (including Nokia Shares represented by Nokia ADSs) expected to be offered and sold in the U.S. Offer and (b) the proposed maximum offering price per share.

 

 

The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission (the “SEC”), acting pursuant to said Section 8(a), may determine.

 

 

 

---

Table of Contents

Preliminary Exchange Offer/Prospectus

The U.S. Offer to exchange Alcatel Lucent Shares and OCEANEs set forth in this exchange offer/prospectus is not made to any person located in the European Economic Area and the U.S. Offer to exchange Alcatel Lucent ADSs set forth in this exchange offer/prospectus is only made to persons located in the European Economic Area pursuant to an exemption or exemptions from the Prospectus Directive (Directive 2003/71/EC, as amended). In addition, for the purposes of the proposed French Offer and Admission (both terms as defined below), this exchange offer/prospectus is not offer documentation or a prospectus and no such person should subscribe for or purchase any transferable securities referred to in this document except on the basis of information contained in the prospectus approved by the Finnish Financial Supervisory Authority and “passported” in France in accordance with the Prospectus Directive (the “Listing Prospectus”), and the separate French Offer documentation filed with the French stock market authority (Autorité des marchés financiers, or “AMF”) (the “French Offer Documentation”), which in each case are proposed to be published by Nokia in due course in connection with the proposed French Offer and the Admission of the Nokia Shares to Euronext Paris. A copy of the Listing Prospectus and the French Offer Documentation will, following publication, be available on Nokia’s website at www.nokia.com. None of the Listing Prospectus, the French Offer Documentation or the information on Nokia’s website forms a part of this exchange offer/prospectus, nor are such documents incorporated by reference herein.

---

Table of Contents

The information in this preliminary exchange offer/prospectus is not complete and may be changed. Nokia may not complete the Exchange Offer and issue its securities referred to below until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary exchange offer/prospectus is not an offer to sell these securities and Nokia is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion Dated August 14, 2015

U.S. Offer to Exchange

All

Ordinary Shares held by U.S. Holders

American Depositary Shares

OCEANEs held by U.S. Holders

of

ALCATEL LUCENT

for

0.55 Nokia Share or 0.55 Nokia American Depositary Share per Alcatel Lucent Ordinary Share

0.55 Nokia American Depositary Share per Alcatel Lucent American Depositary Share

Nokia Share per 2018 Alcatel Lucent OCEANE

Nokia Share per 2019 Alcatel Lucent OCEANE

Nokia Share per 2020 Alcatel Lucent OCEANE

by

NOKIA CORPORATION

Nokia Corporation (“Nokia”), a Finnish corporation, is conducting, upon the terms and subject to the conditions set forth in this exchange offer/prospectus and the French Offer Documentation, an exchange offer comprised of two offers (separately, the “U.S. Offer” and the “French Offer” and collectively, the “Exchange Offer”). The U.S. Offer is being made pursuant to this exchange offer/prospectus to:

 

•

all U.S. holders (within the meaning of Rule 14d-1(d) under the U.S. Securities Exchange Act of 1934 (the “Exchange Act”)) of outstanding ordinary shares, nominal value EUR 0.05 per share (the “Alcatel Lucent Shares”) of Alcatel Lucent, a French société anonyme (“Alcatel Lucent”),

 

•

all holders of outstanding Alcatel Lucent American depositary shares, each representing one Alcatel Lucent Share (the “Alcatel Lucent ADSs”), wherever located, and

 

•

all U.S. holders of outstanding (i) EUR 628 946 424.00 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on July 1, 2018 (the “2018 OCEANEs”), (ii) EUR 688 425 000.00 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on January 30, 2019 (the “2019 OCEANEs”) and (iii) EUR 460 289 979.90 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on January 30, 2020 (the “2020 OCEANEs” and, together with the 2018 OCEANEs and the 2019 OCEANEs, the “OCEANEs” and, together with the Alcatel Lucent Shares and the Alcatel Lucent ADSs, the “Alcatel Lucent Securities”).

---

Table of Contents

Holders of Alcatel Lucent ADSs located outside of the United States may participate in the U.S. Offer only to the extent the local laws and regulations applicable to those holders permit them to participate in the U.S. Offer.

For every Alcatel Lucent Share you validly tender into, and do not withdraw from, the U.S. Offer, you will receive, at your election, 0.55 share of Nokia (a “Nokia Share”) or 0.55 Nokia American depositary share (a “Nokia ADS”), each Nokia ADS representing one Nokia Share. For every Alcatel Lucent ADS you validly tender into, and do not withdraw from, the U.S. Offer, you will receive 0.55 Nokia ADS. For every 2018 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive             Nokia Share, for every 2019 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive             Nokia Share, and for every 2020 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive Nokia Share.

The French Offer to exchange 0.55 Nokia Share for every Alcatel Lucent Share,             Nokia Share for every 2018 OCEANE,             Nokia Share for every 2019 OCEANE, and             Nokia Share for every 2020 OCEANE, is being made pursuant to the French Offer Documentation available to holders of Alcatel Lucent Shares and             OCEANEs located in France (holders of Alcatel Lucent Shares and OCEANEs located outside of France may not participate in the French Offer except if, pursuant to the local laws and regulations applicable to those holders, they are permitted to participate in the French Offer).

No fractional Nokia Shares or fractional Nokia ADSs will be issued. Holders of Alcatel Lucent Securities tendering into the U.S. Offer or the French Offer will receive cash in lieu of any fractional Nokia Shares or Nokia ADSs to which such holders may otherwise be entitled, following the implementation of a mechanism to resell such fractional Nokia Shares or Nokia ADSs.

Holders of options to acquire Alcatel Lucent Shares (“Alcatel Lucent Stock Options”) who wish to tender in the Exchange Offer or the subsequent offering period, if any, must exercise their Alcatel Lucent Stock Options, and Alcatel Lucent Shares must be issued to such holders prior to the Expiration Date (as defined below) or the expiration of the subsequent offering period, as applicable. Pursuant to the Memorandum of Understanding dated April 15, 2015 between Nokia and Alcatel Lucent (the “Memorandum of Understanding”), Alcatel Lucent agreed to accelerate or waive certain terms of the Alcatel Lucent Stock Options, subject to certain conditions.

Restricted stock granted by Alcatel Lucent (“Performance Shares”) cannot be tendered in the Exchange Offer or the subsequent offering period, if any, unless such Performance Shares have vested and are transferable prior to the Expiration Date (as defined below) or the expiration of the subsequent offering period, as applicable. Pursuant to the Memorandum of Understanding, Nokia and Alcatel Lucent agreed to implement a mechanism with respect to unvested Performance Shares granted before April 15, 2015 pursuant to which the beneficiaries may waive their rights to receive Performance Shares in exchange for Alcatel Lucent Shares, subject to certain conditions.

THE BOARD OF DIRECTORS OF ALCATEL LUCENT HAS DETERMINED THAT             .

The U.S. Offer is being made on the terms and subject to the conditions set forth in “The Exchange Offer” section of this exchange offer/prospectus beginning on page 60 and the related form of letter of transmittal.

THE U.S. OFFER AND WITHDRAWAL RIGHTS FOR TENDERS OF ALCATEL LUCENT SHARES AND OCEANEs IN THE U.S. OFFER WILL EXPIRE AT 11:00 A.M., NEW YORK CITY TIME (5:00 P.M. PARIS TIME), ON             (AS SUCH TIME AND DATE MAY BE EXTENDED, THE “EXPIRATION DATE”), UNLESS THE EXCHANGE OFFER IS EXTENDED.

 

i

---

Table of Contents

THE DEADLINE FOR VALIDLY TENDERING AND WITHDRAWING ALCATEL LUCENT ADSs IN THE U.S. OFFER IS 5:00 P.M., NEW YORK CITY TIME ON THE U.S. BUSINESS DAY IMMEDIATELY PRECEDING THE EXPIRATION DATE, WHICH WILL BE             (AS SUCH TIME AND DATE MAY BE EXTENDED, THE “ADS TENDER DEADLINE”), UNLESS THE U.S. OFFER IS EXTENDED.

Nokia Shares are traded on NASDAQ OMX Helsinki Ltd. (the “Nasdaq Helsinki”) under the symbol “NOKIA” and Nokia ADSs are traded on the New York Stock Exchange (the “NYSE”) under the symbol “NOK.” On     , the last trading day before the opening of the Exchange Offer, the closing price of Nokia Shares listed on the Nasdaq Helsinki was EUR             (equivalent to USD             based on the USD/EUR exchange rate on such date) and the closing price of Nokia ADSs on the NYSE was USD        .

Nokia has applied for the Nokia Shares (including the Nokia Shares to be issued in connection with the Exchange Offer) to be listed on Euronext Paris (the “Admission”). Nokia expects to request that Admission be approved to take effect following the completion of the Exchange Offer. In addition, Nokia will apply for listing of the Nokia Shares and Nokia ADSs to be issued in connection with the Exchange Offer on the Nasdaq Helsinki and the NYSE, respectively.

Alcatel Lucent Shares are traded on Euronext Paris under the symbol “ALU” and Alcatel Lucent ADSs are traded on the NYSE under the symbol “ALU.” OCEANEs are traded on Euronext Paris, under the symbol “YALU” for the 2018 OCEANEs, “YALU1” for the 2019 OCEANEs and “YALU2” for the 2020 OCEANEs. On             , the last trading day before the opening of the Exchange Offer, the closing price of Alcatel Lucent Shares on Euronext Paris was EUR              (equivalent to USD             based on the USD/EUR exchange rate on such date) and the closing price of Alcatel Lucent ADSs on the NYSE was USD             and the latest reasonably available quotations for the OCEANEs was EUR             (equivalent to USD            ) for the 2018 OCEANEs, EUR             (equivalent to USD             ) for the 2019 OCEANEs and EUR             (equivalent to USD            ) for the 2020 OCEANEs. As promptly as practicable following completion of the Exchange Offer and subject to applicable law and Euronext Paris rules, Nokia intends to request Euronext Paris to delist the Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris. Nokia also intends, subject to applicable law, to cause Alcatel Lucent to terminate the deposit agreement in respect of the Alcatel Lucent ADSs (the “Alcatel Lucent deposit agreement”) and seek to delist the Alcatel Lucent ADSs from the NYSE and, when possible, to deregister the Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act.

SEE THE “RISK FACTORS” SECTION OF THIS EXCHANGE OFFER/PROSPECTUS BEGINNING ON PAGE 21 FOR A DISCUSSION OF IMPORTANT RISK FACTORS THAT YOU SHOULD CONSIDER BEFORE DECIDING WHETHER OR NOT TO TENDER YOUR ALCATEL LUCENT SECURITIES INTO THE U.S. OFFER.

Nokia has not authorized any person to provide any information or to make any representation in connection with the U.S. Offer other than the information contained or incorporated by reference in this exchange offer/prospectus, and if any person provides any of this information or makes any representation of this kind, that information or representation must not be relied upon as having been authorized by Nokia.

Nokia is not asking you for a proxy pursuant to this exchange offer/prospectus and you are requested not to send to Nokia a proxy in response hereto.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the transactions described in this exchange offer/prospectus or passed upon the adequacy or accuracy of this exchange offer/prospectus. Any representation to the contrary is a criminal offense.

 

 

The date of this exchange offer/prospectus is                     , 2015.

 

ii

---

Table of Contents

CERTAIN DEFINED TERMS

Unless otherwise specified or if the context so requires in this exchange offer/prospectus:

 

•

“Admission” refers to Nokia’s application for the Nokia Shares (including the Nokia Shares to be issued in connection with the Exchange Offer) to be listed on Euronext Paris.

 

•

“ADS Tender Deadline” refers to the deadline for validly tendering and withdrawing Alcatel Lucent ADSs in the U.S. Offer, set for 5:00 P.M., New York City time on the U.S. business day immediately preceding the Expiration Date, which will be             (as such time and date may be extended).

 

•

“Alcatel Lucent” refers to Alcatel Lucent, a French société anonyme.

 

•

“Alcatel Lucent ADSs” refer to American depositary shares each representing one Alcatel Lucent Share.

 

•

“Alcatel Lucent 2014 Form 20-F” refers to Alcatel Lucent’s Annual Report on Form 20-F for the year ended December 31, 2014 filed with the SEC on March 24, 2015.

 

•

“Alcatel Lucent Securities” refer to the Alcatel Lucent Shares, the Alcatel Lucent ADSs and the OCEANEs.

 

•

“Alcatel Lucent Shares” refer to ordinary shares, nominal value EUR 0.05 per share of Alcatel Lucent.

 

•

“Alcatel Lucent Stock Options” refer to options to acquire Alcatel Lucent Shares.

 

•

“AMF” refers to the French stock market authority (Autorité des marchés financiers).

 

•

“AMF General Regulation” refers to Article 236-3 of the General Regulation (Règlement général) published by the AMF.

 

•

“ATOP System” refers to the automated tender system of DTC.

 

•

“Completion of the Exchange Offer,” “completion of the U.S. Offer,” “completion of the French Offer” or “completion of the subsequent offering period” refer to settlement and delivery of the Nokia Shares to the holders of Alcatel Lucent Securities in accordance with the terms of the Exchange Offer and Conditions after announcement of the successful results of the French Offer by the AMF (taking into account the results of the U.S. Offer) or the results of the subsequent offering period, as applicable.

 

•

“Conditions” refer collectively to the Minimum Tender Condition and the Nokia Shareholder Approval.

 

•

“Convertible Bond” refers to Nokia’s EUR 750 million convertible bond issued in October 2012 and maturing in 2017.

 

•

“DTC” refers to The Depository Trust Company, the U.S. clearing and settlement system for equity securities.

 

•

“Exchange Offer” refers collectively to the U.S. Offer and the French Offer.

 

•

“Expiration Date” refers to the expiration date of the the U.S. Offer and withdrawal rights for tenders of Alcatel Lucent Shares and OCEANEs in the U.S. Offer, set for 11:00 A.M., New York City time (5:00 P.M. Paris time), on (as such time and date may be extended).

 

•

“French business day” refers to any day, other than a Saturday, Sunday or French public holiday.

 

•

“French Offer” refers to Nokia’s exchange offer in France to exchange 0.55 Nokia Share for every Alcatel Lucent Share,             Nokia Share for every 2018 OCEANE,             Nokia Share

 

iii

---

Table of Contents

for every 2019 OCEANE and      Nokia Share for every 2020 OCEANE, made pursuant to separate French Offer Documentation available to holders of Alcatel Lucent Shares and OCEANEs located in France (holders of Alcatel Lucent Shares and OCEANEs located outside of France may not participate in the French Offer except if, pursuant to the local laws and regulations applicable to those holders, they are permitted to participate in the French Offer).

 

•

“French trading day” refers to any day on which Euronext Paris is generally open for business.

 

•

“French Offer Documentation” refers to the French Offer documentation filed with the AMF.

 

•

“IFRS” refers to the International Financial Reporting Standards as issued by the International Accounting Standards Board.

 

•

“Mandatory Minimum Acceptance Threshold” refers to a number of Alcatel Lucent Shares representing more than 50% of the Alcatel Lucent share capital or voting rights, taking into account, if necessary, the Alcatel Lucent Shares resulting from the conversion of the OCEANEs validly tendered into the Exchange Offer. Refer to “Exchange Offer—Conditions to the Exchange Offer” for a description of how the Mandatory Minimum Acceptance Threshold is calculated.

 

•

“Memorandum of Understanding” refers to the Memorandum of Understanding dated April 15, 2015 between Nokia and Alcatel Lucent.

 

•

“Minimum Tender Condition” refers to the number of Alcatel Lucent Securities validly tendered in accordance with the terms of the Exchange Offer representing, on the date of announcement by the AMF of the results of the French Offer taking into account the results of the U.S. Offer, more than 50% of the Alcatel Lucent Shares on a fully diluted basis.

 

•

“MoU Business Day” refers to any day on which banking institutions are open for regular business in Finland, France and the United States which is not a Saturday, a Sunday or a public holiday.

 

•

“Nasdaq Helsinki” refers to NASDAQ OMX Helsinki Ltd.

 

•

“Nokia,” the “company,” “we,” “us” or “our” refers to Nokia Corporation, a Finnish corporation.

 

•

“Nokia ADSs” refer to American depositary shares each representing one Nokia Share.

 

•

“Nokia depositary” refers to Citibank, N.A., the depositary for the Nokia ADSs pursuant to a deposit agreement.

 

•

“Nokia 2014 Form 20-F” refers to Nokia’s Annual Report on Form 20-F for the year ended December 31, 2014 filed with the SEC on March 19, 2015.

 

•

“Nokia Shareholder Approval” refers to Nokia shareholders having approved the authorization for the Nokia board of directors to issue such number of new Nokia Shares as may be necessary for delivering the Nokia Shares offered in consideration for the Alcatel Lucent Securities tendered into the Exchange Offer and for the completion of the Exchange Offer.

 

•

“Nokia Shares” refer to shares of Nokia Corporation.

 

•

“NYSE” refers to the New York Stock Exchange.

 

•

“2018 OCEANEs” refer to EUR 628 946 424.00 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on July 1, 2018.

 

•

“2019 OCEANEs” refer to EUR 688 425 000.00 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on January 30, 2019.

 

iv

---

Table of Contents

•

“2020 OCEANEs” refer to EUR 460 289 979.90 Alcatel Lucent bonds convertible into new Alcatel Lucent Shares or exchangeable for existing Alcatel Lucent Shares due on January 30, 2020.

 

•

“OCEANEs” refer to the 2018 OCEANEs, the 2019 OCEANEs and the 2020 OCEANEs.

 

•

“Performance Shares” refer to restricted stock granted by Alcatel Lucent.

 

•

“Schedule TO” refers to the tender offer statement on Schedule TO.

 

•

“U.S. business day” refers to any day, other than a Saturday, Sunday or U.S. federal holiday or a day on which banking institutions are required or authorized by law or executive order to be closed in New York, New York.

 

•

“U.S. exchange agent” refers to Citibank, N.A.

 

•

“U.S. Offer” refers to the exchange offer to be made in the United States.

 

v

---

Table of Contents

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER			x
SUMMARY			1
The Companies			1
Summary of the Terms of the Exchange Offer			3
Treatment of Alcatel Lucent Stock Options and Performance Shares			6
Reasons for the Exchange Offer			6
Integration and Reorganization			8
Squeeze-Out			8
Reasons for the Alcatel Lucent Board of Directors’ View on the Exchange Offer			9
Opinion of the Financial Advisor to the Alcatel Lucent Board of Directors			9
Risk Factors			9
Nokia Shareholder Meeting			9
Trading in Alcatel Lucent Securities During and After the Exchange Offer Period			10
Accounting Treatment			10
No Appraisal Rights			10
Tax Considerations			10
Interests of Executive Officers and Directors of Alcatel Lucent in the Exchange Offer			11
Certain Relationships with Alcatel Lucent and Interests of Nokia in the Exchange Offer			11
Comparison of Rights of Holders of Nokia Shares and Alcatel Lucent Shares			11
Securities Prices			11
Regulatory Approvals for the Exchange Offer			12
No Solicitation of Alternate Proposals			12
Change in Alcatel Lucent Board Recommendation			12
Change in Nokia Board Recommendation			12
Termination of the Memorandum of Understanding			12
Termination Fees			13
COMPARATIVE DATA			14
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION			16
Selected Historical Consolidated Financial Information for Nokia			16
Selected Historical Consolidated Financial Information for Alcatel Lucent			17
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION			19
RISK FACTORS			21
Risk Factors Relating to the Exchange Offer and the Squeeze-out			21
Risk Factors Relating to Nokia’s Business and Financing			30
Risk Factors Relating to Alcatel Lucent’s Business			30
Risk Factors Relating to the Proposed Sale of our HERE business			31
INDICATIVE TIMETABLE			32
THE TRANSACTION			33
Background of the Exchange Offer			33
Disclosure of Certain Information Relating to Alcatel Lucent			43
Reasons for the Exchange Offer			43
Reasons for the Alcatel Lucent Board of Directors’ View on the Exchange Offer			46
Opinion of the Financial Advisor to the Alcatel Lucent Board of Directors			46
Nokia Shareholder Meeting			46
Intentions of Nokia over the next twelve months			47
THE MEMORANDUM OF UNDERSTANDING			51
The Exchange Offer			51
Additional Exchange Mechanisms			51
Representations and Warranties			51
French Group Committee Consultation			52

 

vi

---

Table of Contents

Consents and Approvals			52
Conduct of the Business Pending the Exchange Offer			52
Nokia Shareholder Meeting			53
No Solicitation of Alternate Proposals			53
Change in Alcatel Lucent Board Recommendation			55
Nokia Board Recommendation			56
Change in Nokia Board Recommendation			56
Indemnification and D&O Insurance			57
Conditions to the Filing of the French Offer			57
Termination of the Memorandum of Understanding			58
Termination Fees			58
Standstill			59
Exchange Ratio Adjustment Mechanism			59
THE EXCHANGE OFFER			60
Terms of the Exchange Offer			60
Procedure for Tendering			66
Validity of Tenders			73
Announcement of Results			73
Settlement and Delivery of Securities			73
Treatment of Fractional Nokia Shares or Nokia ADSs			75
Share Issuance and Power of Attorney			76
Representations and Covenants of Tendering Holders			76
Certain Consequences of the Exchange Offer			79
Accounting Treatment			83
No Appraisal Rights			83
Fees and Expenses			83
Statutory Exemption from Certain U.S. Tender Offer Requirements			84
Matters Relevant for OCEANEs Holders			84
Legal Matters; Regulatory Approvals			87
Certain Relationships with Alcatel Lucent and Interests of Nokia in the Exchange Offer			89
Interests of Executive Officers and Directors of Alcatel Lucent in the Exchange Offer			91
Treatment of Alcatel Lucent Stock Options and Performance Shares			91
FINANCIAL ANALYSIS OF THE EXCHANGE OFFER			93
TAX CONSIDERATIONS			94
France Income Tax Consequences			94
United States Federal Income Tax Consequences			94
Finland			100
Finnish Income Tax Consequences of Ownership and Disposal of Nokia Securities			101
Finnish Transfer Tax			102
THE COMPANIES			103
Nokia			103
Alcatel Lucent			108
Organizational Structure			111
DESCRIPTION OF THE NOKIA SHARES AND ARTICLES OF ASSOCIATION			112
Shares and Share Capital of Nokia			112
Legislation Under Which Nokia Shares will be Issued			112
Summary of the Articles of Association of Nokia			112
Purchase Obligation			114
Overview of the Finnish Securities Market			116
The Finnish Book-Entry Securities System			117
DESCRIPTION OF THE NOKIA AMERICAN DEPOSITARY SHARES			120
Dividends and Distributions			121

 

vii

---

Table of Contents

Distributions of Cash			121
Distributions of Shares			121
Distributions of Rights			121
Other Distributions			122
Changes Affecting Nokia Shares			122
Issuance of Nokia ADSs upon Deposit of Nokia Shares			122
Transfer, Combination and Split Up of ADRs			123
Withdrawal of Shares Upon Cancellation of Nokia ADSs			123
Voting Rights			124
Disclosure of Interests			124
Fees and Charges			125
Amendments and Termination			126
Books of Depositary			126
Limitations on Obligations and Liabilities			127
Pre-Release Transactions			127
Taxes			127
Foreign Currency Conversion			128
Information Relating to the Nokia Depositary			128
COMPARISON OF RIGHTS OF HOLDERS OF NOKIA SHARES AND ALCATEL LUCENT SHARES			129
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			156
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			158
VALIDITY OF NOKIA SHARES			177
EXPERTS			177
ENFORCEABILITY OF CIVIL LIABILITIES			177
WHERE YOU CAN FIND MORE INFORMATION			177
ANNEX A			A-1

 

viii

---

Table of Contents

Nokia Shares are listed and traded on the Nasdaq Helsinki and Nokia ADSs are listed and traded on the NYSE and are registered under the Exchange Act. Alcatel Lucent Shares and OCEANEs are listed and traded on Euronext Paris and Alcatel Lucent ADSs are listed and traded on the NYSE and are registered under the Exchange Act. Accordingly, the Exchange Offer, insofar as it relates to the Alcatel Lucent Shares, OCEANEs and Alcatel Lucent ADSs, and the related issuance of Nokia Shares are subject to the rules and regulations of the United States, France and Finland. Some of the information contained in this exchange offer/prospectus is included because it is required to be included in the French Offer Documentation or in the Finnish prospectus. Some of that information has been prepared in accordance with French or Finnish format and style, which differs from the U.S. format and style for documents of this type.

This exchange offer/prospectus incorporates by reference important business and financial information about Nokia and Alcatel Lucent that is contained in their respective filings with the SEC but which is not included in, or delivered with, this exchange offer/prospectus. This information is available on the SEC’s website at www.sec.gov and from other sources. For more information about how to obtain copies of these documents, see the “Where You Can Find More Information” section of this exchange offer/prospectus. Nokia will also make copies of this information available to you without charge upon your written or oral request to      at     . In order to receive timely delivery of these documents, holders of Alcatel Lucent Shares and OCEANEs must make such a request no later than five U.S. business days before the then-scheduled Expiration Date and holders of Alcatel Lucent ADSs must make such a request no later than five U.S. business days before the then-scheduled ADS Tender Deadline. The Expiration Date is currently                     ,                     and the ADS Tender Deadline is currently                     ,                     but the actual deadlines will be different if the U.S. Offer is extended.

 

ix

---

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER

Below are some of the questions that you as a holder of Alcatel Lucent Securities may have regarding the Exchange Offer and answers to those questions. The answers to these questions do not contain all information relevant to your decision whether to tender your Alcatel Lucent Securities. To better understand the Exchange Offer, Nokia (also referred to as “we,” “us,” or “our”) urges you to read carefully the remainder of this exchange offer/prospectus and the accompanying letter of transmittal.

Why am I receiving this exchange offer/prospectus?

Nokia, a Finnish corporation, is offering, upon the terms and subject to the Conditions set forth in this exchange offer/prospectus and the French Offer Documentation, to acquire all of the Alcatel Lucent Securities through the Exchange Offer whereby Alcatel Lucent Securities will be exchanged for Nokia Shares or Nokia ADSs, as described below. The Exchange Offer is comprised of the U.S. Offer and the French Offer. The U.S. Offer is being made pursuant to this exchange offer/prospectus to all U.S. holders of outstanding Alcatel Lucent Shares, all U.S. holders of outstanding OCEANEs and all holders of outstanding Alcatel Lucent ADSs, wherever located. Holders of Alcatel Lucent ADSs located outside of the United States may participate in the U.S. Offer only to the extent the local laws and regulations applicable to those holders permit them to participate in the U.S. Offer.

What is the purpose of the Exchange Offer?

The purpose of the Exchange Offer is for Nokia to acquire all of the Alcatel Lucent Securities in order to combine the businesses of Nokia and Alcatel Lucent.

What will I receive if the Exchange Offer is completed?

Following the completion of the Exchange Offer, you will receive:

 

•

at your election, 0.55 Nokia Share or 0.55 Nokia ADS for every Alcatel Lucent Share you validly tender into, and do not withdraw from, the U.S. Offer,

 

•

0.55 Nokia ADS for every Alcatel Lucent ADS you validly tender into, and do not withdraw from, the U.S. Offer, and

 

•

Nokia Share for every 2018 OCEANE,          Nokia Share for every 2019 OCEANE and          Nokia Share for every 2020 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer.

The French Offer comprises an offer to exchange 0.55 Nokia Share for every Alcatel Lucent Share, Nokia Share for every 2018 OCEANE,          Nokia Share for every 2019 OCEANE and          Nokia Share for every 2020 OCEANE, made pursuant to separate French Offer Documentation available to holders of Alcatel Lucent Shares and OCEANEs located in France (holders of Alcatel Lucent Shares and OCEANEs located outside of France may not participate in the French Offer except if, pursuant to the local laws and regulations applicable to those holders, they are permitted to participate in the French Offer).

No fractional Nokia Shares or fractional Nokia ADSs will be issued. Holders of Alcatel Lucent Securities tendering into the U.S. Offer or the French Offer will receive cash in lieu of any fractional Nokia Shares or Nokia ADSs to which such holders may otherwise be entitled, following the implementation of a mechanism to resell such fractional Nokia Shares or Nokia ADSs.

 

x

---

Table of Contents

What are the advantages and disadvantages of receiving Nokia ADSs instead of Nokia Shares?

U.S. holders of Alcatel Lucent Securities may prefer to receive Nokia ADSs instead of Nokia Shares because Nokia ADSs trade in the United States on the NYSE, whereas Nokia Shares do not trade on any U.S. market. In addition, Nokia ADSs are eligible for inclusion in DTC. Nokia Shares are not DTC eligible.

You should be aware, however, that the trading volume of the Nokia Shares on the Nasdaq Helsinki has historically been greater than the trading volume of the Nokia ADSs on the NYSE. If this continues, it may be easier for a holder to sell Nokia Shares on the Nasdaq Helsinki than to sell Nokia ADSs on the NYSE. You should also be aware that Nokia ADSs do not trade on any securities exchanges other than the NYSE, including any securities exchange outside of the United States. In addition, various fees are payable by holders of Nokia ADSs to the Nokia depositary in connection with transactions involving Nokia ADSs, including the issuance (other than the issuance of the Nokia ADSs in connection with the Exchange Offer or the subsequent offering period, if any) or the surrender and cancellation of Nokia ADSs. The rights of a holder of Nokia ADSs are also different from the rights of a holder of Nokia Shares with respect to various other matters. We explain these differences under “Description of the Nokia American Depositary Shares” and under “Description of the Nokia Shares and Articles of Association” included elsewhere in this exchange offer/prospectus.

What options are available to the holders of the OCEANEs in connection with the Exchange Offer?

In connection with the Exchange Offer, holders of the OCEANEs may elect to take any of the following steps with respect to their OCEANEs:

 

•

Tender the OCEANEs into the Exchange Offer. The Exchange Offer is being made to all holders of the OCEANEs issued and outstanding and such holders may accept the Exchange Offer by tendering their OCEANEs into the U.S. Offer or the French Offer, as applicable. For every 2018 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive          Nokia Share, for every 2019 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive          Nokia Share and for every 2020 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive          Nokia Share.

 

•

Convert the OCEANEs into Alcatel Lucent Shares at the change of control conversion/exchange ratio. Prior to the opening of the Exchange Offer the conversion/exchange ratio was 1.06 Alcatel Lucent Share for every 2018 OCEANE, 1.00 Alcatel Lucent Share for every 2019 OCEANE and 1.00 Alcatel Lucent Share for every 2020 OCEANE. The opening of the Exchange Offer has resulted in a temporary adjustment to the conversion/exchange ratios applicable to each series of OCEANEs. The adjusted conversion/exchange ratios resulting from the Exchange Offer are          Alcatel Lucent Shares for every 2018 OCEANE,          Alcatel Lucent Shares for every 2019 OCEANE and Alcatel Lucent Shares for every 2020 OCEANE. The right of OCEANEs holders to obtain Alcatel Lucent Shares on the basis of the adjusted conversion/exchange ratios will expire, (x) if the AMF declares that the French Offer is successful, on the date that is 15 French business days after the publication by the AMF of the results of the French Offer (taking into account the results of the U.S. Offer), which is currently expected to be         , or, if there is a subsequent offering period, the date that is 15 French business days after the end of the subsequent offering period of the French Offer; (y) if the AMF declares that the French Offer (taking into account the results of the U.S. Offer) is unsuccessful, the date of publication by the AMF of the result of the French Offer; or (z) if Nokia withdraws the Exchange Offer, the date on which such withdrawal is published. If the holders of the OCEANEs choose to convert their OCEANEs into Alcatel Lucent Shares, they may then be able to tender such Alcatel Lucent Shares into the Exchange Offer in accordance with its terms and Conditions.

 

xi

---

Table of Contents

•

After the completion of the Exchange Offer, request an early redemption of their OCEANEs. If the Exchange Offer is successful (resulting in a change of control of Alcatel Lucent under the terms of the OCEANEs), each holder of the OCEANEs who did not tender their OCEANEs into the Exchange Offer may request that Alcatel Lucent redeem their OCEANEs for cash at par plus, as applicable, accrued interest from the last interest payment date for each series of the OCEANEs until the early redemption date.

 

•

Early redemption decided by the general meeting of the holders of any series of OCEANES. In the event the Alcatel Lucent Shares cease to be listed on Euronext Paris and are not listed on any other regulated market within the European Union within the meaning of the European Union Directive 2004/39/EC, and the Alcatel Lucent ADSs or the Alcatel Lucent Shares cease to be listed on a regulated market in the United States, the representative of the body for each type of OCEANE (le représentant de la masse) may, upon decision of the general meeting of the holders of such OCEANEs, other than Nokia if it holds more than 10% of the relevant series of OCEANEs, make all of such OCEANEs redeemable by Alcatel Lucent at a price in cash equal to par plus, as applicable, accrued interest from the last interest payment date for each of the OCEANEs until the early redemption date.

In addition to the foregoing and in accordance with the terms of the OCEANEs, if the Exchange Offer is successful and subject to applicable law, Nokia reserves the right to cause Alcatel Lucent to redeem for cash at par value plus, as applicable, accrued interest, any series of the OCEANEs if less than 15% of the issued OCEANEs of any such series remain outstanding at any time.

Holders of OCEANEs that remain outstanding after the events described above will remain creditors of Alcatel Lucent with the ability to convert their OCEANEs into Alcatel Lucent Shares at the then applicable conversion/exchange ratio.

As promptly as possible following completion of the Exchange Offer and subject to applicable law and stock exchange rules, Nokia intends to request Euronext Paris to delist Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris and seek to delist Alcatel Lucent ADSs from the NYSE.

For the avoidance of doubt, Nokia does not intend to arrange for any of the OCEANEs to become convertible into Nokia convertible bonds whether as a part of the Exchange Offer or otherwise.

If OCEANEs are converted into Alcatel Lucent Shares during the Exchange Offer and the Exchange Offer is unsuccessful, will former holders of OCEANEs have to surrender their Alcatel Lucent Shares?

No. After conversion has taken place, the OCEANEs are no longer outstanding and the relevant Alcatel Lucent Shares will not have to be surrendered if the Exchange Offer is not successful.

Can holders of Alcatel Lucent Stock Options and Performance Shares participate in the Exchange Offer?

Holders of options to acquire Alcatel Lucent Shares who wish to tender into the Exchange Offer or the subsequent offering period, if any, must exercise their Alcatel Lucent Stock Options, and Alcatel Lucent Shares must be issued to such holders prior to the Expiration Date or the expiration of the subsequent offering period, as applicable.

Pursuant to the Memorandum of Understanding, Alcatel Lucent agreed to accelerate or waive certain terms of the Alcatel Lucent Stock Options, subject to certain conditions.

 

xii

---

Table of Contents

Alcatel Lucent Performance Shares granted by Alcatel Lucent cannot be tendered in the Exchange Offer or the subsequent offering period, if any, unless such Alcatel Lucent Performance Shares have vested and are transferable prior to the Expiration Date or the expiration of the subsequent offering period, as applicable.

Pursuant to the Memorandum of Understanding, Nokia and Alcatel Lucent agreed to implement a mechanism with respect to unvested Performance Shares granted before April 15, 2015 pursuant to which the beneficiaries may waive their rights to receive Performance Shares in exchange for Alcatel Lucent Shares, subject to certain conditions.

What percentage of Nokia will holders of Alcatel Lucent Securities own after the Exchange Offer?

After completion of the Exchange Offer and assuming that all Alcatel Lucent Securities are tendered into the Exchange Offer or the subsequent offering period, if any, former holders of Alcatel Lucent Securities are expected to own approximately 33.5% of the issued and outstanding Nokia Shares on a fully diluted basis.

What are the benefits of a combination of Nokia and Alcatel Lucent?

We believe that the combination of Nokia’s and Alcatel Lucent’s businesses will create significant value for stakeholders of both companies. Following the completion of the Exchange Offer, Nokia will be well-positioned to create the foundation of seamless connectivity for people and things wherever they are. We believe that this foundation is essential for enabling the next wave of technological change, including the “internet of things” and transition to the cloud.

The strategic rationale for combining the two companies includes:

 

•

creation of end-to-end portfolio scope and scale player with leading global positions across products, software and services to meet changing industry paradigms;

 

•

complementary offerings, customers and geographic footprint;

 

•

enhanced research and development capabilities creating an innovation powerhouse with significant combined R&D resources;

 

•

the recent execution track-record on both sides and common vision for the future;

 

•

the opportunity to realize significant cost savings and other synergies; and

 

•

the development of a robust capital structure and strong balance sheet.

Does Alcatel Lucent support the Exchange Offer?

            , Alcatel Lucent’s board of directors, at its meeting of             , has determined that             .

What is the market value of my Alcatel Lucent Securities as of a recent date?

On         , the last trading day before the opening of the Exchange Offer, the closing price of an Alcatel Lucent Share on Euronext Paris was EUR         , the closing price of an Alcatel Lucent ADS on the NYSE was USD         , the last reasonably available quotation of a 2018 OCEANE on Euronext Paris was EUR         , the last reasonably available quotation of a 2019 OCEANE on Euronext Paris was EUR          and the last reasonably available quotation of a 2020 OCEANE on Euronext Paris was EUR         . Please obtain a recent quotation for your Alcatel Lucent Securities prior to deciding whether or not to tender.

 

xiii

---

Table of Contents

What is the expected governance structure of the combined company?

It is contemplated that following the completion of the Exchange Offer, Nokia’s corporate governance structure will include the following:

 

•

Chairman of the board of directors: Risto Siilasmaa;

 

•

President and Chief Executive Officer: Rajeev Suri;

 

•

Nokia’s board of directors having nine or ten members, including         ,          and         , who have been nominated jointly by the Corporate Governance & Nomination committee of the Nokia board of directors and by Alcatel Lucent, one of whom is expected to serve as Vice Chairman of Nokia; and

 

•

Leadership team built on strengths of both Nokia and Alcatel Lucent.

Appointment of members of the Nokia board of directors is subject to approval by Nokia shareholders.

What are the Conditions to the U.S. Offer?

Nokia’s obligation to accept, and to exchange, any Alcatel Lucent Securities validly tendered into the U.S. Offer is subject only to:

 

•

the Minimum Tender Condition; and

 

•

the Nokia Shareholder Approval.

Subject to applicable SEC and AMF rules and regulations, Nokia reserves the right, in its sole discretion, to waive the Minimum Tender Condition to any level at or above the Mandatory Minimum Acceptance Threshold (as defined below).

How does the Nokia shareholders’ vote impact the deal?

Nokia’s obligation to accept, and to exchange, any Alcatel Lucent Securities validly tendered into the Exchange Offer will be subject to, among other Conditions, the Nokia Shareholder Approval.

Nokia’s extraordinary general meeting of shareholders has been convened for          to consider and vote on the resolution contemplated by the Nokia Shareholder Approval. Proxy materials for such meeting were separately distributed by Nokia prior to the date of this exchange offer/prospectus. The resolution must be approved by shareholders representing at least two-thirds of the votes cast and Nokia Shares represented at such extraordinary general meeting of Nokia’s shareholders.

What happens if less than 100% of Alcatel Lucent Securities have been purchased following the completion of the Exchange Offer or the subsequent offering period, if any?

If, at the completion of the Exchange Offer or the subsequent offering period, if any, Nokia owns 95% or more of the share capital and voting rights of Alcatel Lucent (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining outstanding Alcatel Lucent Shares. In addition, if, at the completion of the Exchange Offer or the subsequent offering period, if any, Nokia owns 95% or more of the sum of the outstanding Alcatel Lucent Shares and the Alcatel Lucent Shares issuable upon conversion of all of the OCEANEs then outstanding (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining OCEANEs.

 

xiv

---

Table of Contents

In accordance with French laws and regulations, and subject to the clearance of the AMF, in the event of a squeeze-out described in the preceding paragraph, Nokia intends to offer to the holders of Alcatel Lucent Securities the choice to select between the same consideration as was offered in the Exchange Offer and a cash alternative. Holders of Alcatel Lucent Securities who do not elect to receive one of the two consideration alternatives in the squeeze-out, would receive cash compensation.

If Nokia owns less than 95% of the share capital and voting rights of Alcatel Lucent immediately after the completion of the subsequent offering period, then Nokia reserves the right, subject to applicable law, to (i) commence a buy-out offer for the Alcatel Lucent Securities it does not own on the relevant date pursuant to the AMF General Regulation if at any time thereafter it owns 95% or more of the voting rights of Alcatel Lucent; (ii) commence at any time a simplified offer for the Alcatel Lucent Securities it does not own on the relevant date pursuant to Article 233-1 et seq. of the AMF General Regulation; (iii) cause Alcatel Lucent to be merged into Nokia or an affiliate thereof, contribute assets to, merge certain of its subsidiaries with, or undertake other reorganizations of, Alcatel Lucent; or (iv) take any other steps to consolidate its ownership of Alcatel Lucent.

In addition, Nokia reserves the right, subject to applicable law, at any time after the completion of the Exchange Offer or the subsequent offering period, as applicable, to cause Alcatel Lucent to redeem at par value, plus, as applicable, accrued interest from the date the interest was last paid, to the date set for the early redemption all of the outstanding 2018 OCEANEs, 2019 OCEANEs or 2020 OCEANEs, if less than 15% of the issued OCEANEs of any such series remain outstanding.

Why is there a separate French Offer?

As Alcatel Lucent is a French société anonyme with a listing on Euronext Paris, a French Offer is required pursuant to French laws and regulations and is being conducted in accordance with the AMF General Regulation.

What are the differences between the U.S. Offer and the French Offer?

The terms and conditions of the U.S. Offer and the French Offer are substantially the same. As a result of differences in law and market practice between the United States and France, however, the procedures for accepting the Exchange Offer and tendering Alcatel Lucent Securities, and some of the rights of tendering holders of Alcatel Lucent Securities, under the U.S. Offer and the French Offer, are not identical. The primary difference between the U.S. Offer and the French Offer is that the U.S. Offer is available to U.S. holders of Alcatel Lucent Shares and OCEANEs and to holders of Alcatel Lucent ADSs, wherever located, while the French Offer is available to holders of Alcatel Lucent Shares and OCEANEs located in France (holders of Alcatel Lucent Shares and OCEANEs located outside of France may not participate in the French Offer except if, pursuant to the local laws and regulations applicable to those holders, they are permitted to participate in the French Offer). Holders of Alcatel Lucent ADSs located outside of the United States may participate in the U.S. Offer only to the extent the local laws and regulations applicable to those holders permit them to participate in the U.S. Offer.

How do I validly tender my Alcatel Lucent ADSs into the U.S. Offer?

The steps you must take to validly tender your Alcatel Lucent ADSs will depend on whether you hold your Alcatel Lucent ADSs directly or indirectly through a broker, dealer, commercial bank, trust company or other nominee.

 

•

If you hold Alcatel Lucent ADSs directly and would like to tender them into the Exchange Offer, you must tender them to the U.S. exchange agent prior to the ADS Tender Deadline, which is 5:00 P.M., New York time, on the U.S. business day immediately preceding the

 

xv

---

Table of Contents

Expiration Date, which is             , unless the U.S. Offer is extended. In order to validly tender your directly-held Alcatel Lucent ADSs, you must take the following actions:

 

•

if you hold your Alcatel Lucent ADSs in certificated form, you must complete and sign the letter of transmittal included with this exchange offer/prospectus and return it together with your Alcatel Lucent ADS certificates and any required documentation to the U.S. exchange agent at the appropriate address specified on the back cover page of this exchange offer/prospectus;

 

•

if you hold your Alcatel Lucent ADSs in uncertificated form on the register of the Alcatel Lucent depositary (in direct registration form), you must complete and sign the letter of transmittal included with this exchange offer/prospectus and return it with any required documentation to the U.S. exchange agent at the appropriate address specified on the back cover page of this exchange offer/prospectus; and

 

•

if you hold your Alcatel Lucent ADSs in book-entry form indirectly through DTC, you must tender your Alcatel Lucent ADSs to the U.S. exchange agent by using the ATOP system.

 

•

If you hold your Alcatel Lucent ADSs indirectly through a broker, dealer, commercial bank, trust company or other nominee, you should not complete and sign the letter of transmittal included with this exchange offer/prospectus. Instead, you should instruct your broker, dealer, commercial bank, trust company or other nominee to validly tender your Alcatel Lucent ADSs to the U.S. exchange agent on your behalf.

The U.S. exchange agent has established an additional means for registered holders of uncertificated Alcatel Lucent ADSs to complete and deliver letters of transmittal via the internet, by signing onto a secure website established and maintained by the U.S. exchange agent and filling in the applicable information online. Detailed instructions for completing and delivering the letter of transmittal via the internet (including the applicable password) are set forth in the letter of transmittal being delivered to holders of uncertificated Alcatel Lucent ADSs together with this exchange offer/prospectus.

If your Alcatel Lucent ADSs are not immediately available, you may also follow the guaranteed delivery procedures described in this exchange offer/prospectus.

How do I validly tender my Alcatel Lucent Shares or OCEANEs into the U.S. Offer?

You do not need to complete a letter of transmittal to tender your Alcatel Lucent Shares or OCEANEs into the U.S. Offer.

If you hold Alcatel Lucent Shares or OCEANEs through a custodian that is not a French financial intermediary, your custodian should either forward to you the transmittal materials and instructions sent by the French financial intermediary that holds the Alcatel Lucent Shares or OCEANEs on behalf of the custodian as record owner or send you a separate form prepared by the custodian. If you have not yet received instructions from your custodian, please contact your custodian directly.

If you hold Alcatel Lucent Shares or OCEANEs through a French financial intermediary, your French financial intermediary should send you transmittal materials and instructions for accepting the U.S. Offer before the last day of the offer. If you have not yet received instructions from your French financial intermediary, please contact your French financial intermediary directly.

If your Alcatel Lucent Shares or OCEANEs are held in pure registered form (nominatif pur), you must first request that your Alcatel Lucent Shares or OCEANEs be converted to administered registered form (nominatif administré) or to bearer form (au porteur).

 

xvi

---

Table of Contents

What happens if I validly tender Alcatel Lucent Shares into the U.S. Offer and do not make an election to receive either Nokia Shares or Nokia ADSs in exchange for my Alcatel Lucent Shares?

If you hold Alcatel Lucent Shares and you fail to make an election to receive either Nokia Shares or Nokia ADSs, you will receive Nokia Shares deposited into the same account in which you held your Alcatel Lucent Shares.

How much time do I have to decide whether to tender?

You may tender your Alcatel Lucent Shares and OCEANEs into the U.S. Offer at any time prior to the Expiration Date (which is currently 11:00 A.M., New York City time (5:00 P.M. Paris time), on             , but will change if the U.S. Offer is extended). You may tender your Alcatel Lucent ADSs into the U.S. Offer at any time prior to the ADS Tender Deadline (which is currently 5:00 P.M., New York City time, on the U.S. business day immediately preceding the Expiration Date, which is currently             , unless the U.S. Offer is extended).

Can the Exchange Offer be extended?

Yes. Subject to the applicable rules and regulations of the AMF and the SEC, the Expiration Date and the ADS Tender Deadline may be extended.

Only the AMF has the authority to set or to extend the expiration date of the French Offer. If the French Offer is extended, the AMF will issue a notice of extension on its website http://www.amf-france.org. In addition, Nokia will post a notice of any extension of the French Offer or the U.S. Offer on its website www.nokia.com, and will issue a public announcement. The information on Nokia’s or the AMF’s website is not a part of this exchange offer/prospectus and is not incorporated by reference herein.

Pursuant to the Memorandum of Understanding, Nokia agreed to ensure that, subject to applicable law, the period during which the U.S. Offer is open corresponds to the period during which the French Offer is open (including any extensions or subsequent offering periods in relation to the French Offer), and Nokia expressly reserves the right to extend the U.S. Offer either to match the extension of the French Offer or otherwise. Furthermore, Nokia may be required by the U.S. federal securities laws (including Rule 14e-1 under the Exchange Act) to extend the duration of the U.S. Offer if Nokia makes a material change to the terms of the U.S. Offer.

Will there be a subsequent offering period?

Pursuant to the Memorandum of Understanding and according to the AMF General Regulation, if at the successful completion of the Exchange Offer Nokia owns more than 50% but less than 95% of Alcatel Lucent share capital and voting rights, Nokia agreed to conduct a subsequent offering period after the date of announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer) (subject to the satisfaction or waiver of the Minimum Tender Condition and the receipt of the Nokia Shareholder Approval). The subsequent offering period would be conducted on the same terms as the Exchange Offer, but the Alcatel Lucent Securities properly tendered during the subsequent offering period will not be permitted to be withdrawn and will be accepted without any minimum condition.

Can I withdraw Alcatel Lucent Securities that I have tendered into the U.S. Offer?

Yes. You may withdraw any Alcatel Lucent Shares and OCEANEs tendered into the U.S. Offer at any time prior to the Expiration Date, and you may withdraw any Alcatel Lucent ADSs tendered into the U.S. Offer at any time prior to the ADS Tender Deadline. In addition, in accordance with U.S. securities

 

xvii

---

Table of Contents

laws, you may generally withdraw your tendered Alcatel Lucent Securities tendered into the U.S. Offer if they have not been accepted for exchange within 60 days after the beginning of the offer period. However, these withdrawal rights will not be available following the Expiration Date, in the case of Alcatel Lucent Shares and OCEANEs, or the ADS Tender Deadline, in the case of Alcatel Lucent ADSs, and prior to the commencement of the subsequent offering period, if any. Also, subject to satisfaction of all Conditions other than the Minimum Tender Condition, these withdrawal rights will not be available during the period that the securities tendered into the Exchange Offer are being counted. Pursuant to Rule 14d-7(a)(2) under the Exchange Act, no withdrawal rights will apply to Alcatel Lucent Securities tendered during a subsequent offering period, if any.

How do I withdraw Alcatel Lucent Securities previously tendered into the U.S. Offer?

To withdraw previously tendered Alcatel Lucent ADSs, the U.S. exchange agent must receive a timely written or facsimile transmission notice of withdrawal. Any such notice must specify the name of the person who tendered the Alcatel Lucent ADSs being withdrawn, the number of Alcatel Lucent ADSs being withdrawn and the name of the registered holder if different from that of the person who tendered such Alcatel Lucent ADSs. To withdraw previously tendered Alcatel Lucent Shares or OCEANEs, you should contact your French or non-French financial intermediary or nominee through whom you tendered the Alcatel Lucent Shares or OCEANEs regarding their withdrawal procedures to validly withdraw tendered Alcatel Lucent Shares or OCEANEs in the U.S. Offer.

Will I have to pay any fees or commissions for tendering my Alcatel Lucent Securities?

If your Alcatel Lucent Securities are tendered into the U.S. Offer by your broker, dealer, commercial bank, trust company or other nominee, you will be responsible for any fees or commissions they may charge you in connection with such tender.

You will also be responsible for all governmental charges and taxes payable in connection with tendering your Alcatel Lucent Securities.

Will tendered Alcatel Lucent Securities be subject to proration?

No. Subject to the terms and Conditions, Nokia will acquire any and all Alcatel Lucent Securities validly tendered into, and not withdrawn from, the U.S. Offer.

Can I tender less than all the Alcatel Lucent Securities that I own into the Exchange Offer?

Yes. You may elect to tender all or a portion of the Alcatel Lucent Securities that you own into the U.S. Offer.

If I decide not to tender, how will the Exchange Offer affect my Alcatel Lucent Securities?

The completion of the Exchange Offer is conditioned, among other things, upon the satisfaction or waiver of the Minimum Tender Condition.

If the Exchange Offer is successful, the acquisition by Nokia of Alcatel Lucent Securities in the Exchange Offer will reduce the number of Alcatel Lucent Securities that might otherwise trade publicly and may reduce the number of holders of Alcatel Lucent Securities, which could adversely affect the liquidity and market value of the Alcatel Lucent Securities not acquired in the Exchange Offer.

On opening of the first U.S. business day following the ADS Tender Deadline, the NYSE may suspend trading in the Alcatel Lucent ADSs pending public announcement of the results of the Exchange Offer.

 

xviii

---

Table of Contents

Because the AMF is not expected to announce the results of the French Offer (taking into account the results of the U.S. Offer) until up to nine French trading days after the Expiration Date, holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the U.S. Offer may be unable to trade Alcatel Lucent ADSs on the NYSE during this period. Further, if fewer than 600 000 Alcatel Lucent ADSs would remain outstanding following completion of the Exchange Offer, the NYSE may not resume trading in the Alcatel Lucent ADSs even after the publication of the results of the Exchange Offer. Holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the Exchange Offer may therefore be unable to trade their Alcatel Lucent ADSs on the NYSE at any point following the Expiration Date.

As promptly as practicable following completion of the Exchange Offer and subject to applicable law and Euronext Paris rules, Nokia intends to request Euronext Paris to delist the Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris. Nokia also intends, subject to applicable law, to cause Alcatel Lucent to terminate the Alcatel Lucent deposit agreement and seek to delist the Alcatel Lucent ADSs from the NYSE and, when possible, to deregister the Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act.

Will I have appraisal rights in connection with the Exchange Offer?

No. There are no appraisal or similar rights available to holders of Alcatel Lucent Securities in connection with the Exchange Offer.

What are the tax consequences if I participate or do not participate in the Exchange Offer?

For information on certain French, Finnish, and U.S. tax consequences of the Exchange Offer, see the “Tax Considerations” section of this exchange offer/prospectus. You should consult your own tax advisor on the tax consequences to you of tendering your Alcatel Lucent Securities in the Exchange Offer.

How and where will the outcome of the Exchange Offer be announced?

The AMF will announce the results of the French Offer taking into account the results of the U.S. Offer no later than nine French trading days following the Expiration Date and, if applicable, the ending of the subsequent offering period. In addition, Nokia will post a notice of the results of the Exchange Offer on www.nokia.com, and will issue a public announcement. The information on Nokia’s website is not a part of this exchange offer/prospectus and is not incorporated by reference herein.

When will I receive my Nokia Shares or Nokia ADSs?

You will receive the Nokia Shares or Nokia ADSs you are entitled to receive pursuant to the U.S. Offer approximately five French trading days following the announcement of the results of the French Offer (taking into account the results of the U.S. Offer) by the AMF and, if applicable, of the subsequent offering period. If the Exchange Offer expires and the Conditions are not satisfied or terminated in accordance with applicable law, the U.S. exchange agent will return tendered Alcatel Lucent ADSs to you within one U.S. business day after the expiration or termination of the U.S. Offer, and the tendered Alcatel Lucent Shares or OCEANEs will be returned to you within three U.S. business days after the expiration or termination of the U.S. Offer.

Who can I call with questions?

If you have more questions about the Exchange Offer, you should contact Nokia’s information agent,     , toll-free at     .

 

xix

---

Table of Contents

PRESENTATION OF INFORMATION

Currency and Exchange Rates

In this exchange offer/prospectus, all references to “U.S. dollar,” “USD” and “$” are to the lawful currency of the United States. All references to “euro,” “EUR” and “€” are to the official currency of the member states of the European Union (the “EU”) that adopted the single currency in accordance with the Treaty Establishing the European Economic Community (signed in Rome on March 25, 1957), as amended by the Treaty of European Union signed in Maastricht on February 7, 1992.

The following tables set forth, for the periods indicated, information concerning the exchange rates between the euro and the U.S. dollar based on the noon buying rate for cable transfers as certified by the Federal Reserve Board of New York. Such rates are provided solely for your convenience and are not necessarily the rates used by Alcatel Lucent or Nokia in the preparation of their financial statements or otherwise.

 

		Average ($)				High ($)				Low ($)				Period End ($)
Year ended December 31, 2010			1.3216				1.4536				1.1959				1.3269
Year ended December 31, 2011			1.4002				1.4875				1.2926				1.2973
Year ended December 31, 2012			1.2909				1.3463				1.2062				1.3186
Year ended December 31, 2013			1.3303				1.3816				1.2774				1.3779
Year ended December 31, 2014			1.3210				1.3927				1.2101				1.2101
Six months ended June 30, 2015			1.1090				1.2015				1.0524				1.1154

 

		High ($)				Low ($)
February 2015			1.1462				1.1197
March 2015			1.1212				1.0524
April 2015			1.1174				1.0582
May 2015			1.1428				1.0876
June 2015			1.1404				1.0913
July 2015			1.1150				1.0848

Solely for convenience, this exchange offer/prospectus contains translations of certain euro balances into U.S. dollars at specified rates. These are simply translations, and you should not expect that a euro amount actually represents a stated U.S. dollar amount or that it could be converted into U.S. dollars at specified rates or at all.

Other Information

Within this exchange offer/prospectus, references to the Exchange Offer, the U.S. Offer or the French Offer refer to such offer without any subsequent offering period, unless stated otherwise.

 

xx

---

Table of Contents

 

1

---

Table of Contents

 

2

---

Table of Contents

 

3

---

Table of Contents

 

4

---

Table of Contents

 

5

---

Table of Contents

 

6

---

Table of Contents

 

7

---

Table of Contents

 

8

---

Table of Contents

 

9

---

Table of Contents

 

10

---

Table of Contents

 

11

---

Table of Contents

 

12

---

Table of Contents

 

13

---

Table of Contents

 

14

---

Table of Contents

 

15

---

Table of Contents

 

16

---

Table of Contents

 

17

---

Table of Contents

 

18

---

Table of Contents

 

19

---

Table of Contents

 

20

---

Table of Contents

RISK FACTORS

An investment in Nokia Shares or Nokia ADSs involves risks, some (but not all) of which are related to the Exchange Offer. In considering whether or not to tender your Alcatel Lucent Securities in the U.S. Offer, you should carefully consider the information set forth under this section of this exchange offer/prospectus, the risk factors contained in the Alcatel Lucent 2014 Form 20-F (which is incorporated by reference into this exchange offer/prospectus), the risk factors contained in the Nokia 2014 Form 20-F (which is incorporated by reference into this exchange offer/prospectus) and the other information included or incorporated by reference into this exchange offer/prospectus. Each of the matters described in these risk factors could have a material adverse effect on the businesses, financial condition and/or results of operations of Nokia and Alcatel Lucent (together with their respective subsidiaries) individually or as a combined company and on the market price of the Nokia Shares, the Nokia ADSs and the Alcatel Lucent Securities.

Risk Factors Relating to the Exchange Offer and the Squeeze-out

The exchange ratio of the Exchange Offer is fixed and will not be adjusted in case of any changes in the price of the relevant securities. Because the market price of Nokia Shares and Nokia ADSs fluctuates, holders of Alcatel Lucent Securities cannot be certain of the market value of the Nokia Shares or Nokia ADSs that will be issued in connection with the Exchange Offer.

Following the completion of the Exchange Offer, you will receive (i) at your election, 0.55 Nokia Share or 0.55 Nokia ADS for every Alcatel Lucent Share you validly tender into the Exchange Offer, (ii) 0.55 Nokia ADS for every Alcatel Lucent ADS you validly tender into the Exchange Offer and (iii)              Nokia Share for every 2018 OCEANE,              Nokia Share for every 2019 OCEANE and              Nokia Share for every 2020 OCEANE you validly tender into the Exchange Offer. These exchange ratios are fixed and will not be adjusted in case of any changes in the price of Nokia Shares, Nokia ADSs or Alcatel Lucent Securities. If the price of Nokia Shares or Nokia ADSs decreases, which may occur as the result of a number of reasons (many of which are out of our control), including as a result of the risks described herein, holders of Alcatel Lucent Securities will receive less value for their Alcatel Lucent Securities than the value calculated pursuant to the exchange ratio on the date the Exchange Offer was announced. Because the Exchange Offer may not be completed until the Conditions have been satisfied or waived (please see the section of this exchange offer/prospectus entitled “The Exchange Offer—Terms of the Exchange Offer—Conditions to the Exchange Offer”), a significant period of time may pass between the commencement of the Exchange Offer and the time that we accept Alcatel Lucent Securities for exchange. Therefore, at the time you tender your Alcatel Lucent Securities pursuant to the U.S. Offer, you will not know the exact market value of the Nokia Shares or Nokia ADSs that will be issued if we accept the Alcatel Lucent Securities for exchange. However, tendered Alcatel Lucent Securities may be withdrawn at any time prior to the time they are accepted for exchange pursuant to the Exchange Offer (except during any subsequent offering period or any period during which the tendered Alcatel Lucent Securities are being counted).

Holders of Alcatel Lucent Securities are urged to obtain current market quotations for Nokia Shares, Nokia ADSs and the relevant Alcatel Lucent Securities when they consider whether to tender their Alcatel Lucent Securities pursuant to the Exchange Offer.

The value of the Nokia Shares and the Nokia ADSs may decrease.

It is likely that the price of the Nokia Shares and the Nokia ADSs will fluctuate, even significantly from time to time, and may not always accurately reflect the value of Nokia and its subsidiaries. The value of the Nokia Shares and the Nokia ADSs may decrease. The prices that investors may realize for their

 

21

---

Table of Contents

holdings of Nokia Shares and Nokia ADSs, when they are able to do so, may be influenced by a large number of factors, including factors beyond our control. In addition, stock markets have in the recent past experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could have a material adverse effect on the market price of the Nokia Shares or the Nokia ADSs.

The issuance of Nokia Shares pursuant to the Exchange Offer could lead to the share price of Nokia Shares being adversely affected.

In connection with the completion of the Exchange Offer, Nokia expects to issue approximately              Nokia Shares. The issuance of these new Nokia Shares could depress the market price of the existing Nokia Shares and Nokia ADSs.

Following the Exchange Offer, Nokia may be unable to successfully implement its business plans or successfully integrate Alcatel Lucent’s business or achieve the targeted synergies and other efficiencies.

Nokia and Alcatel Lucent currently operate as independent public companies. After the Exchange Offer, Nokia will be required to allocate significant resources, including management attention, to integrating Alcatel Lucent’s business and implementing its post-acquisition business plans. Achieving the anticipated benefits of the Alcatel Lucent acquisition will depend largely on the timely and efficient integration of the business operations of Nokia and Alcatel Lucent and our ability to successfully implement our post-acquisition business plans. The process of integrating Alcatel Lucent into Nokia’s existing business involves certain risks and uncertainties, and there can be no assurances that Nokia will be able to integrate the two businesses in the manner or within the timeframe currently anticipated. Potential challenges that Nokia may encounter during the integration process include the following:

 

•

the complexities associated with integrating Alcatel Lucent, while simultaneously continuing to provide Nokia’s high quality products and services on a consistent basis;

 

•

the complexities of integrating Alcatel Lucent, which is a company with different products, services, markets and customers as well as conducting the business that includes areas that are new to Nokia;

 

•

the challenges relating to the consolidation of corporate, financial, control and administrative functions, including cash management, foreign exchange/hedging operations, internal and other financing, insurance, financial control and reporting, information technology, communications, compliance and other administrative functions;

 

•

the challenges relating to the coordination of research and development, marketing and other support functions;

 

•

the inability to retain or motivate key employees of the combined company and recruit needed resources;

 

•

disruptions caused for instance by company reorganizations triggered by the acquisition that may result in inefficiency in the organization;

 

•

the inability to achieve the targeted organizational changes, efficiencies or synergies in the targeted time or extent or the costs associated with implementing such changes;

 

•

possible contractual issues with customers, vendors, licensees or other contractual parties, including, for instance, claims regarding ceasing or renegotiation of existing contracts;

 

•

the inability to rationalize as required product lines or retire legacy products and related after-sales services as a result of pre-existing customer commitments;

 

22

---

Table of Contents

•

loss of, or lower volume of business from, key customers, or the inability to renew agreements with existing customers or achieve new customer relationships, including limitations linked to customer policies as regards to aggregate vendor share or supplier diversity policy;

 

•

integration and implementation costs resulting from the acquisition of Alcatel Lucent;

 

•

conditions imposed by laws, regulators or industry standards on our businesses or adverse regulatory or industry developments or litigation affecting the combined company, as a result of the Exchange Offer or otherwise;

 

•

higher than anticipated costs associated with the transaction, including transaction costs;

 

•

potential unknown or larger than estimated liabilities including those related to compliance issues and pension liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the integration and Nokia’s ability to mitigate anticipated and contingent liabilities;

 

•

potential deterioration of Nokia’s and Alcatel Lucent’s brands; and

 

•

performance shortfalls as a result of the diversion of management’s attention caused by completing the Exchange Offer and integrating Alcatel Lucent.

For these reasons, among others, you should be aware that it is possible that the integration process following the Exchange Offer could result in the distraction of Nokia’s management, the disruption of Nokia’s ongoing business or inconsistencies in its services, standards, controls, procedures and policies, any of which could adversely affect the ability of Nokia to maintain relationships with customers, vendors and employees or could otherwise have a material adverse effect on the business, financial conditions and/or results of operations of Nokia.

Nokia’s anticipated benefits from acquiring Alcatel Lucent are based on estimates that are dependent on external factors, and may not be achieved within the envisioned timeframe or at all.

There can be no assurance that Nokia will achieve any of the anticipated benefits of acquiring Alcatel Lucent, including business growth opportunities, cost synergy benefits, increased profitability and other synergy benefits described elsewhere in this exchange offer/prospectus within the timeframe currently estimated by Nokia, or that any such benefits can be achieved at all. The anticipated benefits of acquiring Alcatel Lucent depend, in part, on the efficiency improvement measures that both Nokia and Alcatel Lucent have individually taken in recent years, and are expected to continue to undertake in the near future. While some of these measures have already generated cost savings and operational efficiencies, the full intended benefits of these measures, or any additional initiatives that Nokia or the combined company may take in the future, may not be realized (see Nokia’s and Alcatel Lucent’s annual reports on Form 20-F for more information about the efficiency improvement measures). Furthermore, there can be no assurance that adverse developments in general economic conditions will not limit, eliminate or delay Nokia’s or the combined company’s ability to realize anticipated benefits, which could have a material adverse effect on the business, financial condition and/or results of operations of Nokia or Alcatel Lucent.

In addition, the anticipated cost reductions and other benefits expected to arise from acquiring Alcatel Lucent and the integration of Alcatel Lucent into Nokia’s existing business as well as related costs to implement such measures are derived from the estimates of Nokia and such estimates are inherently uncertain. The estimates included in this exchange offer/prospectus are based on a number of assumptions made in reliance on the information available to Nokia and management’s judgments based on such information, including, without limitation, information relating to the business operations, financial condition and results of operations of Alcatel Lucent. While Nokia believes these estimated

 

23

---

Table of Contents

synergy benefits and related costs are reasonable, the underlying assumptions are inherently uncertain and are subject to a wide variety of significant business, economic, and competitive factors, risks and uncertainties that could cause the actual results to differ materially from those contained in the synergy benefit and related cost estimates.

The completion of the Exchange Offer would constitute a change of control of Alcatel Lucent which would give rise to an obligation to redeem some of Alcatel Lucent’s existing indebtedness.

Alcatel Lucent had approximately EUR 3.6 billion aggregate principal amount of outstanding senior notes as of June 30, 2015, of which EUR 2.1 billion contain a change of control provision. Completion of the Exchange Offer would constitute a “change of control” under the terms of some of Alcatel Lucent’s senior notes. Within 30 days following the change of control, Alcatel Lucent must give notice to each holder of such senior notes and offer to repurchase the relevant notes in cash equal to 101% of the aggregate principal amount of the notes repurchased plus accrued and unpaid interest on a date specified in the notice, which must be no earlier than 30 days and no later than 60 days following the day such notice is distributed. Alcatel Lucent may also make a change of control offer in advance of the change of control conditioned on the consummation of the change of control on the basis that a definitive agreement for the change of control is in place. Alcatel Lucent may not be able to obtain sufficient capital to repurchase or refinance Alcatel Lucent’s outstanding notes in these circumstances. Failure to repurchase the notes as required would result in an event of default under the terms of the notes, which could put Alcatel Lucent in default under agreements governing its other indebtedness, including the acceleration of the payment of any borrowings thereunder, and may have an adverse effect on the value of Alcatel Lucent Securities and, indirectly, on the value of the Nokia Shares.

The completion of the transactions contemplated by the Exchange Offer would constitute a change of control of Alcatel Lucent which would give rise to an obligation to redeem all of the OCEANEs.

If the Exchange Offer is successful (resulting in a change of control of Alcatel Lucent under the terms of the OCEANEs), each holder of the OCEANEs who did not tender their OCEANEs into the Exchange Offer may request that Alcatel Lucent redeem their OCEANEs for cash at par plus, as applicable, accrued interest from the last interest payment date for each series of the OCEANEs until the early redemption date. Alcatel Lucent may not be able to obtain sufficient capital to repurchase or refinance the OCEANEs in these circumstances. Failure to repurchase the OCEANEs as required may result in an event of default under the terms of such series of the OCEANEs, which could put Alcatel Lucent in default under agreements governing its other indebtedness, including the acceleration of the payment of any borrowings thereunder, and may have an adverse effect on the value of Alcatel Lucent Securities and, indirectly, on the value of the Nokia Shares.

The Exchange Offer will trigger certain provisions contained in certain Alcatel Lucent agreements that may require Alcatel Lucent to make change of control payments or permit a counterparty to an agreement with Alcatel Lucent to terminate that agreement.

Alcatel Lucent is a party to various agreements with third parties, including joint venture agreements, certain financing facilities, pension funds agreements, contracts for the performance of engineering and related work/services, IT contracts, technology and intellectual property rights licenses as well as employment agreements that contain change of control provisions that will be triggered upon the completion of the Exchange Offer. Agreements with change of control provisions typically provide for or permit the termination of the agreement upon the occurrence of a change of control of one of the parties, which can be waived by the relevant counterparties. If Nokia and Alcatel Lucent determine that one or more of such waivers are necessary, Alcatel Lucent will make reasonable efforts to seek and

 

24

---

Table of Contents

obtain these waivers. Although Nokia and Alcatel Lucent believe the likelihood of a material consent being withheld is low, there can be no assurance that such consents will be obtained at all or on favorable terms. The inability to obtain waivers from more than one relevant counterparty could have a material adverse effect on the business, financial condition and/or results of operations at Nokia and Alcatel Lucent.

We have not verified the reliability of the Alcatel Lucent information included in, or incorporated by reference into, this exchange offer/prospectus and, as a result, our estimates of the impact of completion of the Exchange Offer on the pro forma financial information in this exchange offer/prospectus may be incorrect.

In respect of information relating to Alcatel Lucent presented in, or incorporated by reference into, this exchange offer/prospectus, including all Alcatel Lucent financial information, we have relied exclusively upon publicly available information, including information publicly filed by Alcatel Lucent with securities regulatory authorities. Although we have no knowledge that would indicate that any statements contained in this exchange offer/prospectus based upon such reports and documents are inaccurate, incomplete or untrue, we were not involved in the preparation of such information and statements and, therefore, cannot verify the accuracy, completeness or truth of such information or any failure by Alcatel Lucent to disclose events that may have occurred, but that are unknown to us, that may affect the significance or accuracy of any such information. Alcatel Lucent has not provided representatives of Nokia with access to Alcatel Lucent’s accounting records, and, therefore, we have not independently verified certain adjustments and assumptions with respect to Alcatel Lucent’s financial information in preparing the pro forma financial information presented in this exchange offer/prospectus. Any financial information regarding Alcatel Lucent that may be detrimental to the combined entity and that has not been publicly disclosed by Alcatel Lucent, or errors in our estimates, may have an adverse effect on the benefits we expect to achieve through the Exchange Offer and may result in material inaccuracies in the pro forma financial information included in this exchange offer/prospectus.

The unaudited pro forma condensed combined financial information in this exchange offer/prospectus is presented for illustrative purposes only and may differ materially from the operating results and financial condition of the combined company following completion of the pro forma events.

The unaudited pro forma condensed combined financial information in this exchange offer/prospectus is presented for illustrative purposes only and is not necessarily indicative of what the combined company’s actual financial position or results of operations would have been had the pro forma events been completed on the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company. The preparation of the pro forma condensed combined financial information is based upon available information and certain assumptions and estimates that Nokia and Alcatel Lucent currently believe are reasonable. The unaudited pro forma condensed combined financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to Alcatel Lucent’s net assets. The purchase price allocation reflected in this exchange offer/prospectus is preliminary, and the final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Alcatel Lucent as of completion of the Exchange Offer. In addition, subsequent to the completion of the Exchange Offer, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this exchange offer/prospectus. See the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

 

25

---

Table of Contents

The Exchange Offer will affect the trading markets for any Alcatel Lucent Securities not acquired by Nokia and, as a result, their liquidity and market value could be adversely affected.

The completion of the Exchange Offer is conditioned, among others, upon the satisfaction of the Minimum Tender Condition or, if waived by Nokia in its sole discretion, the crossing of the Mandatory Minimum Acceptance Threshold. Nokia’s acquisition of Alcatel Lucent Securities below the squeeze-out threshold would decrease both the number of Alcatel Lucent Securities that might otherwise trade publicly and the number of holders of Alcatel Lucent Securities, which could, in turn, also adversely affect the liquidity and market value of the Alcatel Lucent Securities not acquired in the Exchange Offer. In addition, as promptly as practicable following completion of the Exchange Offer and subject to applicable law and Euronext Paris rules, Nokia intends to request Euronext Paris to delist the Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris. Nokia also intends, subject to applicable law, to cause Alcatel Lucent to terminate the Alcatel Lucent deposit agreement and intends to seek to delist the Alcatel Lucent ADSs from the NYSE and, when possible, to deregister the Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act. This could, in turn, also adversely affect the liquidity and market value of the Alcatel Lucent Securities not acquired in the Exchange Offer.

On opening of the first U.S. business day following the ADS Tender Deadline, the NYSE may suspend trading in the Alcatel Lucent ADSs pending public announcement of the results of the Exchange Offer. Because the results of the Exchange Offer are not expected to be announced up to nine French trading days after the Expiration Date, holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the Exchange Offer may be unable to trade Alcatel Lucent ADSs on the NYSE during this period. Further, if fewer than 600 000 Alcatel Lucent ADSs would remain outstanding following completion of the Exchange Offer, the NYSE may not resume trading in the Alcatel Lucent ADSs even after the announcement of the results of the Exchange Offer. Holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the U.S. Offer may therefore be unable to trade their Alcatel Lucent ADSs on the NYSE at any point following expiration of the Exchange Offer.

Alcatel Lucent shareholders will have a reduced ownership and voting interest in the combined company.

Alcatel Lucent shareholders currently have the right to vote in the election of directors of Alcatel Lucent and on certain other matters affecting Alcatel Lucent. Following the Exchange Offer, each Alcatel Lucent shareholder who tendered his or her Alcatel Lucent Shares or Alcatel Lucent ADSs into the Exchange Offer will become a shareholder of Nokia with a percentage ownership of the combined company that is much smaller than the shareholder’s percentage ownership of Alcatel Lucent. After completion of the Exchange Offer and assuming that all Alcatel Lucent Securities are tendered into the Exchange Offer or the subsequent offering period, if any, former holders of Alcatel Lucent Securities are expected to own approximately 33.5% of the issued and outstanding Nokia Shares on a fully diluted basis. Because of this, Alcatel Lucent’s shareholders, as a group, will have substantially less influence on the management and policies of Nokia than they currently have, as a group, with respect to the management and policies of Alcatel Lucent.

The issuance of additional Nokia Shares may dilute all other shareholdings.

Future issuances of Nokia Shares or other securities may dilute the holdings of shareholders and could materially and adversely affect the price of the Nokia Shares, including the Nokia Shares offered in the Exchange Offer. Nokia may issue additional Nokia Shares or securities convertible into Nokia Shares through directed offerings without pre-emptive rights for existing holders in connection with future acquisitions, any share incentive or share option plan or otherwise. Any such additional offering could reduce the proportionate ownership and voting interests of holders of Nokia shares, as well as the earnings per share and the net asset value per share.

 

26

---

Table of Contents

Listing of Nokia Shares on Euronext Paris may not succeed as expected or the listing may not take place at all.

In conjunction with the Exchange Offer, Nokia has applied for the Nokia Shares (including the Nokia Shares to be issued in connection with the Exchange Offer) to be listed on Euronext Paris. Nokia expects to request that Admission be approved to take effect following the completion of the Exchange Offer. However, the Admission may be delayed or may not be approved in all respects or at all. Failure to list the Nokia Shares on Euronext Paris in the manner expected by Nokia’s management, including a delay in such listing, may have a material adverse effect on the completion of the transactions contemplated by the Exchange Offer and on Nokia’s and Alcatel Lucent’s respective businesses, financial conditions and results of operations. In addition, as a consequence of the listing of the Nokia Shares on Euronext Paris, Nokia will be expected to comply with the requirements applicable to issuers whose shares are listed on Euronext Paris. Compliance with said requirements may give rise to increased administrative work and costs, which may have an adverse effect on the financial position and results of operations of Nokia. Moreover, Nokia cannot predict the extent to which liquidity will develop on Euronext Paris, especially given the existing listing of the Nokia Shares on Nasdaq Helsinki and Nokia ADSs on the NYSE. This could reduce the value of your Nokia Shares and impair your ability to sell your Nokia Shares at the time or price at which you wish to sell them. A lack of liquidity on Euronext Paris may also impair Nokia’s ability to raise capital by selling Nokia Shares and may impair Nokia’s ability to acquire or invest in other companies, products or technologies by using Nokia Shares as consideration.

Some of Alcatel Lucent’s directors and executive officers may have financial interests in the Exchange Offer that are different from or are in addition to those of holders of Alcatel Lucent Securities.

Certain members of the board of directors and management of Alcatel Lucent participated in determining the terms of the Exchange Offer. These individuals may have certain interests in the Exchange Offer that are different from, or in addition to, the interests of holders of Alcatel Lucent Securities generally and that may have caused them to view the proposed transaction more favorably and/or differently than you might.

The Alcatel Lucent board of directors was aware of these interests when it considered the Exchange Offer at its meeting of              and determined that             .

Information on the interests of executive officers and directors of Alcatel Lucent in the Exchange Offer is described in Alcatel Lucent’s Solicitation/Recommendation Statement on Schedule 14D-9, which is being distributed to the holders of Alcatel Lucent Securities together with this exchange offer/prospectus and is incorporated herein by reference.

Holders of Nokia ADSs may not be able to exercise voting rights or receive distributions as readily as holders of Nokia Shares.

Holders of Nokia Shares and Nokia ADSs may have to provide certain beneficial ownership information in order to be able to exercise voting rights in respect of their Nokia Shares and to exercise the voting rights of the Nokia Shares underlying their Nokia ADSs. In addition, holders of Nokia ADSs who would like to vote with their underlying Nokia Shares at general meetings of Nokia’s shareholders must instruct the Nokia depositary on how to vote these underlying Nokia Shares. Neither Nokia nor the Nokia depositary can guarantee that you will receive the notice for any general meeting or any voting materials provided by the Nokia depositary in time to ensure that you are able to instruct the Nokia depositary to vote the Nokia Shares represented by your Nokia ADSs. Furthermore, the Nokia depositary and its agents are not responsible for failure to carry out voting instructions or for the manner of carrying out voting instructions. Therefore, there is a risk that your vote may not be carried

 

27

---

Table of Contents

out in the manner intended and, in such instance, there would be no recourse available to you. You also may not receive the distributions that Nokia makes on the Nokia Shares or any value for them if it is illegal or impracticable for the Nokia depositary to make them available to you.

Upon your receipt of Nokia Shares in the U.S. Offer, you will become a shareholder in Nokia, a Finnish corporation, which may change certain shareholder rights and privileges you hold as a shareholder of Alcatel Lucent, a French corporation.

Nokia is a Finnish corporation and is governed by the laws of the Republic of Finland, its articles of association and the rules and regulations applicable to it as a result of the listing of the Nokia Shares on relevant markets from time to time, such as the rules of the Nasdaq Helsinki and the NYSE. Finnish law extends to shareholders certain rights and privileges that may not exist under French law and, conversely, may not extend certain rights and privileges that you currently have as a shareholder of Alcatel Lucent, which is governed by the laws of the French Republic and Alcatel Lucent’s articles of association. For a detailed comparison of the rights of Nokia shareholders with the rights of Alcatel Lucent shareholders, please see the section entitled “Comparison of Rights of Holders of Nokia Securities and Alcatel Lucent Securities.”

You may be forced to transfer your Alcatel Lucent Securities to Nokia if Nokia conducts a squeeze-out under French law or takes other steps to consolidate its ownership of Alcatel Lucent.

If, at the completion of the Exchange Offer or the subsequent offering period, if any, Nokia owns 95% or more of the share capital and voting rights of Alcatel Lucent (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining outstanding Alcatel Lucent Shares. In addition, if, at the completion of the Exchange Offer or the subsequent offering period, if any, Nokia owns 95% or more of the sum of the outstanding Alcatel Lucent Shares and the Alcatel Lucent Shares issuable upon conversion of all of the OCEANEs then outstanding (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining OCEANEs.

If Nokia owns less than 95% of the share capital and voting rights of Alcatel Lucent immediately after the completion of the subsequent offering period, then Nokia reserves the right, subject to applicable law, to (i) commence a buy-out offer for the Alcatel Lucent Securities it does not own on the relevant date pursuant to Article 236-3 of the AMF General Regulation if at any time after the completion of the Exchange Offer it owns 95% or more of the voting rights of Alcatel Lucent; (ii) commence at any time a simplified offer for the Alcatel Lucent Securities it does not own on the relevant date pursuant to Article 233-1 et seq. of the AMF General Regulation; (iii) cause Alcatel Lucent to be merged into Nokia or an affiliate thereof, contribute assets to, merge certain of its subsidiaries with, or undertake other reorganizations of, Alcatel Lucent; or (iv) take any other steps to consolidate its ownership of Alcatel Lucent.

In addition, Nokia reserves the right, at any time after the completion of the Exchange Offer or the subsequent offering period, as applicable, and subject to applicable law, to cause Alcatel Lucent to redeem at par value plus accrued interest from the date the interest was last paid, to the date set for the early redemption all of the outstanding 2018 OCEANEs, 2019 OCEANEs or 2020 OCEANEs, if less than 15% of the issued OCEANEs of any such series remain outstanding.

As a result of some of the foregoing steps, you may be forced to transfer your Alcatel Lucent Securities to Nokia by operation of law or otherwise.

 

28

---

Table of Contents

Any failure by Nokia to promptly complete the squeeze-out of the remaining outstanding Alcatel Lucent Securities could adversely affect the market value of the Nokia Shares and the Nokia ADSs, and Nokia may be unable to fully realize the anticipated benefits of the Exchange Offer.

The completion of the Exchange Offer is conditioned upon the satisfaction of the Minimum Tender Condition or, if waived by Nokia in its sole discretion, the crossing of the Mandatory Minimum Acceptance Threshold. Thus, at the completion of the Exchange Offer, Nokia may own more than 50% but less than 95% of the share capital and voting rights of Alcatel Lucent Shares. Pursuant to the AMF General Regulation, Nokia must own 95% or more of the share capital and voting rights of Alcatel Lucent to implement a squeeze-out of the remaining outstanding Alcatel Lucent Shares, and 95% or more of the sum of the outstanding Alcatel Lucent Shares and the Alcatel Lucent Shares issuable upon conversion of all of the OCEANEs to implement a squeeze-out of the remaining outstanding OCEANEs (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation). In addition, under French law, a squeeze-out must be implemented within three months after the expiration of a public offer period for Alcatel Lucent Securities, such as the Exchange Offer.

Any temporary or permanent delay in acquiring all Alcatel Lucent Securities could adversely affect Nokia’s ability to integrate Alcatel Lucent’s business, including achieving targeted business benefits and synergies, as well as the market value of the Nokia Shares and Nokia ADSs and Nokia’s access to capital and other sources of funding on acceptable terms.

If the Alcatel Lucent Shares remain listed on Euronext Paris for a significant period of time following completion of the Exchange Offer, AMF may not allow a squeeze-out of the remaining outstanding Alcatel Lucent Securities or Euronext Paris may refuse to delist Alcatel Lucent Shares, which would adversely affect Nokia’s ability to integrate Alcatel Lucent’s business into the Nokia group. In addition, Nokia may be unable to delist Alcatel Lucent ADSs from the NYSE or deregister Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act, which would result in more onerous regulatory compliance obligations for the combined company and affect Nokia’s ability to fully integrate Alcatel Lucent’s business into Nokia group.

Consummation of the Exchange Offer may result in adverse tax consequences to Nokia resulting from a change of ownership of Alcatel Lucent.

We have not had access to certain information concerning Alcatel Lucent’s tax situation. It is possible that the completion of the Exchange Offer may result in adverse tax consequences arising from a change of ownership of Alcatel Lucent. The tax consequences of a change of ownership of a corporation can lead to an inability to carry-over certain tax attributes, including, but not limited to, tax losses, tax credits and/or tax basis of assets. In addition, the change of ownership may result in other tax costs not normally associated with the ordinary course of business. Such other tax costs include, but are not limited to, stamp duties, land transfer taxes, franchise taxes and other levies. The fact that Nokia is unaware of information relevant to a determination of the potential tax consequences and related costs represents an additional transaction risk.

Certain shareholders may be unable to exercise their pre-emptive rights.

Certain holders of Nokia Shares or Nokia ADSs resident in, or with a registered address in, certain jurisdictions other than Finland, France, or the United States, may not be able to exercise their pre-emptive rights in respect of the Nokia Shares, including the Nokia Shares offered in the Exchange Offer, in any future offerings unless a registration statement, or the equivalent thereof under the applicable laws of their respective jurisdictions, is effective with respect to such Nokia Shares or an exemption from any registration or similar requirements under the applicable laws of their respective jurisdictions is available. In such cases, holders of Nokia Shares or Nokia ADSs who cannot exercise their pre-emptive rights may experience dilution in their holdings in Nokia. Further, if the number of

 

29

---

Table of Contents

holders of Nokia Shares or Nokia ADSs who cannot exercise their pre-emptive rights is large and the subscription rights of holders of Nokia Shares or Nokia ADSs are sold on the market, this could have an adverse effect on the price of the subscription rights.

Risk Factors Relating to Nokia’s Business and Financing

Should the current uncertain market conditions continue or deteriorate, Nokia or the combined company may not be able to receive sufficient financing.

General uncertainty as well as adverse developments in the financial market and general economic conditions, in particular, effects of the continued uncertainty or worsening of the current economic and financial situation, for instance in Greece and Puerto Rico, could have a material adverse effect on Nokia’s ability to obtain sufficient financing needed by Nokia to carry out its business after completion of the Exchange Offer. The uncertain market conditions may mean that the price of the financing needed by Nokia will increase and that it will be less readily available. Nokia could, at any given point in time, encounter difficulties in raising funds and, as a result, lack the access to liquidity it needs, which in turn may have a material adverse effect on the business, financial condition and/or results of operations of Nokia and Alcatel Lucent.

Nokia’s or the combined company’s ability to make scheduled payments on its debt is subject to general economic, financial, competitive, market, regulatory and other factors that may be beyond its control. There can be no assurance that Nokia’s or the combined company’s operations will continue to generate sufficient cash flow to allow it to service its debt, to fund its working capital, pension programs, capital expenditure and research and development requirement and to engage in future acquisitions. Failure to do so could have a material adverse effect on the business, financial condition and/or results of operations of Nokia and Alcatel Lucent.

Nokia’s or the combined company’s credit ratings may not reflect all risks and may not improve in the future.

Moody’s and Standard & Poor’s have assigned credit ratings to Nokia. These ratings may not reflect the potential impact of all risks relating to Nokia’s business or the potential impact of the combination with Alcatel Lucent. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time. Should Nokia’s credit rating be downgraded, this could increase the financial costs of Nokia and thereby have a material adverse effect on the business, financial condition and/or results of operations of Nokia and Alcatel Lucent.

Nokia has set a goal of re-establishing its investment grade credit rating. Although Moody’s and Standard & Poor’s upgraded Nokia’s credit rating in 2014 with a positive outlook, there can be no assurance that Nokia or the combined company may in the future achieve an investment grade credit rating at the targeted time or at all. Failure to obtain an investment grade credit rating may have a material adverse effect on the business, financial condition and/or results of operations of Nokia and Alcatel Lucent.

In addition to the risks described herein, you should read and consider risk factors specific to Nokia’s businesses that will also affect the combined company after the Exchange Offer, described in the Nokia 2014 Form 20-F or in Nokia’s Report on Form 6-K, furnished to the SEC on August 14, 2015 and all of which are incorporated by reference into this exchange offer/prospectus.

Risk Factors Relating to Alcatel Lucent’s Business

In addition to the risks described herein, you should read and consider risk factors specific to Alcatel Lucent’s businesses that will also affect the combined company after the Exchange Offer, described in

 

30

---

Table of Contents

the Alcatel Lucent 2014 Form 20-F or in Alcatel Lucent’s Report on Form 6-K, furnished to the SEC on August 5, 2015 and all of which are incorporated by reference into this exchange offer/prospectus (other than the constant currency statements in the segment and division discussion).

Risk Factors Relating to the Proposed Sale of our HERE business

The proposed sale of Nokia’s HERE business may not be completed in a timely manner, or at all.

The outcome, transaction timeline and closing of the proposed sale of our HERE business may not materialize as expected, or at all. We may not be able to satisfy conditions precedent, including closing conditions related to the proposed sale of the HERE business in a timely manner, or at all, including obtaining required regulatory approvals.

Also, if we fail to sell our HERE business following the public announcement of the proposed sale, it may have an adverse effect on HERE’s brand, customer and supplier relationships and its reputation. This is particularly the case given that we propose to sell HERE to some of its top customers.

If the proposed sale of the HERE business fails to complete, it could have a material adverse effect on the business, financial condition and/or results of operations of Nokia, or on the combined results of operation of Nokia and Alcatel Lucent following completion of the Exchange Offer.

The proposed sale of our HERE business may be time-consuming and divert management attention.

The proposed sale of our HERE business may be time-consuming and divert the efforts and focus of our management and other key employees from their day-to-day business responsibilities.

 

31

---

Table of Contents

INDICATIVE TIMETABLE

You should take note of the dates and times set forth in the schedule below in connection with the U.S. Offer. These dates and times may be changed by Nokia in accordance with the terms of the Exchange Offer, the Conditions and the Memorandum of Understanding, as described in this exchange offer/prospectus.

 

Event		Calendar Date
Beginning of offer period		New York City time on
Extraordinary general meeting of Nokia shareholders		(a)
ADS Tender Deadline		5:00 P.M., New York City time, on             (b)
		11:00 A.M., New York City time
Expiration Date		(5:00 P.M. Paris time), on             (b)
Expected announcement by the AMF of the results of the French Offer (taking into account the results of the U.S. Offer)		On or prior to             (c)
Nokia ADSs are expected to begin trading on the NYSE (on a “when-issued” basis)		On or about
Expected settlement date		(b)(d)
Nokia Shares expected to begin trading on Euronext Paris		On or about
Subsequent offering period		(e)

 

(a)	We are not asking you for a proxy pursuant to this exchange offer/prospectus and you are requested not to send us a proxy in response hereto.

(b)

Subject to the applicable rules and regulations of the AMF and the SEC, the French Offer period and the U.S. Offer period, respectively, may be extended. If the French Offer period is extended, the AMF will issue a notice of extension on its website http://www.amf-france.org. In addition, Nokia will post a notice of any extension of the French Offer or the U.S. Offer on the website www.nokia.com, and will issue a public announcement. The information on Nokia’s or the AMF’s website is not a part of this exchange offer/prospectus and is not incorporated by reference herein.

(c)	The AMF will announce the results of the French Offer taking into account the results of the U.S. Offer no later than nine French trading days following the Expiration Date.

(d)

In the event that the Conditions have been satisfied or, if applicable, waived, Nokia will accept for exchange and will exchange all Alcatel Lucent Securities that have been validly tendered into, and not withdrawn from, the Exchange Offer as of the Expiration Date and Nokia will deliver the Nokia Shares and Nokia ADSs approximately five French trading days following the announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer), in accordance with applicable French and U.S. laws and regulations.

(e)

According to Article 232-4 of the AMF General Regulation, if the Exchange Offer is successful and if Nokia holds less than 95% of the share capital and voting rights of Alcatel Lucent, the subsequent offering period will commence in connection with the French Offer within ten French trading days following the publication of the results of the French Offer (taking into account the results of the U.S. Offer) by the AMF, for a period of at least ten French trading days. Nokia intends to provide a subsequent offering period for the U.S. Offer to match the French Offer.

 

32

---

Table of Contents

THE TRANSACTION

Background of the Exchange Offer

The following summarizes the material events (but only those material events) that led to the signing of the Memorandum of Understanding and does not purport to catalogue every conversation or meeting among representatives of Nokia and Alcatel Lucent.

In the ordinary course of business, Nokia and Alcatel Lucent each periodically reviews and evaluates industry developments and strategic options to enhance its respective shareholder value, including assessing potential strategic options and business acquisitions and combinations and engaging in preliminary discussions with other industry participants.

In the summer of 2013, Alcatel Lucent contacted representatives of Nokia to discuss possible strategic transactions involving the two companies.

On July 19, 2013, Stephen Elop, the then President and Chief Executive Officer of Nokia, and Michel Combes, Chief Executive Officer of Alcatel Lucent, met in Brussels, Belgium, to discuss various strategic options involving Nokia and Alcatel Lucent, including a potential combination of Nokia Solutions and Networks with Alcatel Lucent, or a potential combination of Nokia Solutions and Networks and Alcatel Lucent’s wireless business.

In August and September 2013, following the initial discussions between the Chief Executive Officers of Nokia and Alcatel Lucent, further meetings and telephone conversations were held involving Timo Ihamuotila, Executive Vice President and Chief Financial Officer, from Nokia and Jesper Ovesen, the then Executive Chairman of Nokia Solutions and Networks, and Philippe Camus, Chairman of Alcatel Lucent, Michel Combes and Jean Raby, Chief Financial and Legal Officer, from Alcatel Lucent. These discussions focused on high level issues with respect to a potential combination of Nokia Solutions and Networks and Alcatel Lucent, including various scenarios for the structuring of any such combination. The Nokia board of directors was updated on these discussions in its meetings on September 17 and 29, 2013.

On October 2, 2013, Risto Siilasmaa, Chairman of the Nokia board of directors and Timo Ihamuotila met with Philippe Camus and Michel Combes in London, England, at the offices of Sullivan & Cromwell LLP (“Sullivan & Cromwell”), external legal advisor to Alcatel Lucent, with Philippe Camus participating via a video conference link from New York to discuss the potential combination of Nokia Solutions and Networks and Alcatel Lucent at a conceptual level. At this meeting, Nokia representatives indicated that timing of any discussions was not optimal from Nokia’s perspective given the then ongoing sale of Nokia’s Devices and Services business to Microsoft.

Between October 2013 and March 2014, the Nokia board of directors received updates on the discussions with Alcatel Lucent representatives and discussed various strategic options available for Nokia Solutions and Networks in its meetings.

Between October 2013 and May 2014, Nokia and Alcatel Lucent engaged in periodic contacts to assess willingness to reengage on discussions of a potential strategic transaction and continued high level discussions on possible transaction terms and structures during this period.

On April 30, 2014, Nokia’s board of directors met and reviewed in detail different strategic options for Nokia’s networks business. It was concluded that assets of Alcatel Lucent—either the wireless business or the entire Alcatel Lucent—constituted the best strategic fit for Nokia. Representatives of Nokia subsequently contacted representatives of Alcatel Lucent to re-engage on discussions of a potential strategic transaction.

In the summer of 2014, substantive discussions between Nokia and Alcatel Lucent resumed following a call between Timo Ihamuotila and Jean Raby, where Alcatel Lucent proposed to contribute its wireless business to Nokia Solutions and Networks in return for a minority interest in the enlarged

 

33

---

Table of Contents

Nokia Solutions and Networks. The scope of the contribution excluded legacy pension liabilities in the United States, which would have remained with Alcatel Lucent. There were no further discussions on a combination of Nokia Solutions and Networks and Alcatel Lucent.

On July 29, 2014, a Nokia team led by Samih Elhage, Executive Vice President and Chief Financial and Operating Officer of Nokia Networks met with Alcatel Lucent representatives, including Jean Raby, Remi Thomas, Senior Vice President Mergers & Acquisitions of Alcatel Lucent, and Philippe Keryer, Chief Strategy and Innovation Officer of Alcatel Lucent, in Paris, France, to discuss at a high level the potential contribution of Alcatel Lucent’s wireless business to Nokia Solutions and Networks in return for a minority interest in the enlarged Nokia Solutions and Networks.

On August 6, 2014, Timo Ihamuotila and Samih Elhage had a telephone conversation with Jean Raby concerning a potential contribution of Alcatel Lucent’s wireless business to Nokia Solutions and Networks in return for a minority interest in the enlarged Nokia Solutions and Networks. The discussion focused on the strategic rationale for such transaction and the potential structuring matters.

Throughout August 2014, there were a series of telephone discussions involving representatives of Nokia, including Timo Ihamuotila and Samih Elhage, and representatives of Alcatel Lucent, including Jean Raby and Philippe Keryer, regarding the potential contribution of Alcatel Lucent’s wireless business to Nokia Solutions and Networks in return for a minority interest in the enlarged Nokia Solutions and Networks, particularly around the scope of the assets to be contributed, the terms of any non-compete and a strategic partnership in IP routing. Nokia and Alcatel Lucent concluded that it was not possible to arrive at satisfactory terms for the potential contribution of Alcatel Lucent’s wireless business to Nokia Solutions and Networks in return for a minority interest in the enlarged Nokia Solutions and Networks, largely as a result of remaining overlap in the businesses and the potential conflicts created by Alcatel Lucent holding a minority interest in the enlarged Nokia Solutions and Networks business. Nokia and Alcatel Lucent agreed they would continue to explore other possible strategic transactions that would not raise similar concerns, including a sale of Alcatel Lucent’s wireless business to Nokia.

On September 4, 2014, Nokia and Alcatel Lucent re-engaged in negotiation of a possible sale of Alcatel Lucent’s wireless business to Nokia and entered into a non-disclosure agreement.

On September 15, 2014, Nokia representatives, including Timo Ihamuotila, Maria Varsellona, Executive Vice President and Chief Legal Officer of Nokia and Samih Elhage met in London, England, with Jean Raby, Remi Thomas and Philippe Keryer, to discuss a potential sale of Alcatel Lucent’s wireless business to Nokia and the mechanics for a potential carve out of Alcatel Lucent’s wireless business from the rest of Alcatel Lucent.

Between September 15, 2014 and September 22, 2014, representatives of Nokia and Alcatel Lucent engaged in several telephonic discussions and exchanged emails with respect to a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussions focused on the carve out of Alcatel Lucent’s wireless business from the rest of Alcatel Lucent and matters related to the treatment of Alcatel-Lucent Shanghai Bell, Co. Ltd. (“ASB”), a joint venture between Alcatel Lucent and China Huaxin Post and Telecommunication Economy Development Center, in connection with a potential transaction between Nokia and Alcatel Lucent.

On September 22, 2014, Nokia representatives, including Samih Elhage, together with representatives of J.P. Morgan Limited (“J.P. Morgan”), financial advisor to Nokia, and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden Arps”), external legal advisor to Nokia, participated in an Alcatel Lucent management presentation in Chicago, Illinois, U.S., with respect to Alcatel Lucent’s wireless business. The presentation was led by Dave Geary, Alcatel Lucent President of Wireless, Steven Sherman, Chief Financial Officer of Wireless, and Remi Thomas, and was also attended by the representatives of Zaoui & Co. Ltd. (“Zaoui”), financial advisor to Alcatel Lucent, and Sullivan & Cromwell, external legal advisor to Alcatel Lucent.

 

34

---

Table of Contents

On September 28, 2014, Rajeev Suri, President and Chief Executive Officer of Nokia, called Michel Combes and indicated that, subject to the approval of the Nokia board of directors and other customary conditions, including completion of due diligence, Nokia would be prepared to submit a non-binding offer to purchase Alcatel Lucent’s wireless business for approximately EUR 600 million. Mr. Combes advised Mr. Suri that a purchase price of EUR 600 million would be insufficient for management to recommend the transaction to Alcatel Lucent’s board, but that Alcatel Lucent would continue to negotiate and conduct due diligence exercises with a view to improving the terms of the transaction. Following further negotiations and due diligence, Nokia indicated that it would be prepared to offer up to EUR 1.1 billion for the purchase of Alcatel Lucent’s wireless business.

On October 6, 2014, Nokia representatives, including Timo Ihamuotila and Samih Elhage, together with representatives of J.P. Morgan and Skadden Arps, participated in an Alcatel Lucent management presentation in Paris, France, at the offices of Sullivan & Cromwell focusing on the carve-out of Alcatel Lucent’s wireless business. The presentation was led by Dave Geary and Remi Thomas, and was also attended by Jean Raby and the representatives of Zaoui and Sullivan & Cromwell.

On October 13, 2014, the Nokia board of directors held a conference call meeting, where it resolved to authorize the management of Nokia to make a non-binding offer to acquire Alcatel Lucent’s wireless business.

On October 15, 2014, Nokia sent a letter to Alcatel Lucent with a non-binding indicative offer for the acquisition of Alcatel Lucent’s wireless business. The letter offered to acquire Alcatel Lucent’s wireless business (with such scope as identified in the letter) for EUR 1.15 billion cash payable at closing of the transaction plus EUR 250 million cash payable post-closing, subject to Nokia’s ability to repatriate certain cash funds held by Alcatel Lucent’s wireless business. The letter included several assumptions and numerous conditions, including performance of a due diligence review of Alcatel Lucent’s wireless business to Nokia’s satisfaction, the delivery to Nokia of a comprehensive plan for the carve out of Alcatel Lucent’s wireless business from Alcatel Lucent, completion of the carve out in all material respects before closing of the transaction and negotiation of definitive documentation to implement the transaction.

Between October 19, 2014 and November 3, 2014, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of J.P. Morgan, Zaoui, Skadden Arps and Sullivan & Cromwell participated in a series of conference calls, discussing Nokia’s non-binding indicative offer letter and its terms and conditions. The discussions focused on Nokia’s indicative price, the process for carving out Alcatel Lucent’s wireless business from the rest of the company, and the scope of and responsibility for regulatory conditions.

On November 13, 2014, representatives of Sullivan & Cromwell sent to representatives of Skadden Arps the initial draft term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia.

On November 13, 2014, representatives of Nokia, J.P. Morgan and Skadden Arps met with the representatives of Alcatel Lucent, Zaoui and Sullivan & Cromwell in London, England, at the offices of Sullivan & Cromwell to discuss the initial draft term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the conditions precedent for the signing of definitive documentation and closing of the transaction and termination rights that may be available to either party.

On November 16, 2014, the Nokia board of directors held a conference call meeting, during which Nokia management briefed the board of directors on the progress in the negotiations to acquire the

 

35

---

Table of Contents

Alcatel Lucent wireless business. At the meeting, the Nokia board of directors resolved to authorize the management of Nokia to continue to engage with the representatives of Alcatel Lucent with respect to a potential acquisition of Alcatel Lucent’s wireless business.

On November 17, 2014, Rajeev Suri and Timo Ihamuotila met with Michel Combes and Jean Raby in Helsinki, Finland to discuss the material aspects of the draft term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the purchase price adjustment mechanism, logistics of carving out the wireless business from Alcatel Lucent, the transaction timeline and transaction termination fees. Alcatel Lucent proposed that the parties consider discussions on a potential combination of the businesses of Nokia and Alcatel Lucent, but no substantive discussions on this potential combination occurred at this time. After this meeting, the management of Nokia began exploring with its outside advisors the possibility of an acquisition of Alcatel Lucent by Nokia. Nokia’s management reported its findings to Nokia’s board of directors at a meeting held on December 2, 2014.

On November 21, 2014, representatives of J.P. Morgan and Skadden Arps met in London, England, at the offices of Zaoui with the representatives of Zaoui and Sullivan & Cromwell to discuss the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the inclusion of a non-compete provision into a potential transaction as well as a standstill provision, regulatory conditions and a potential fiduciary out provision for Alcatel Lucent in connection with a superior proposal.

On November 21, 2014, representatives of Skadden Arps sent to representatives of Sullivan & Cromwell a revised draft of the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia, which reflected significant outstanding differences on key transaction terms, including purchase price, purchase price adjustment mechanism, reorganization steps, closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and treatment of ASB.

On November 24, 2014, representatives of Nokia, including Timo Ihamuotila, Maria Varsellona and Samih Elhage, and representatives of J.P. Morgan and Skadden Arps met in Paris, France, at the offices of Skadden Arps with the representatives of Alcatel Lucent, including Jean Raby, Remi Thomas and Philippe Keryer, and the representatives of Zaoui and Sullivan & Cromwell to discuss the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the purchase price adjustment mechanism, logistics of carving out the wireless business from Alcatel Lucent, the transaction timeline and transaction termination fees.

On December 2, 2014, the Nokia board of directors held a meeting in London, England. The board of directors was updated by management on the progress of the negotiations with Alcatel Lucent and key aspects of those negotiations, including potential issues that may arise in connection with such transaction. At that meeting, the Nokia board of directors resolved to authorize Nokia management to continue to engage with the representatives of Alcatel Lucent with respect to a potential acquisition of Alcatel Lucent’s wireless business, and also to explore, in parallel, together with Nokia’s outside advisors, a potential acquisition of Alcatel Lucent by Nokia and the benefits and potential issues of such combination.

During December 2014, representatives of Nokia and Alcatel Lucent engaged in several telephonic discussions and exchanged emails with respect to the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussions focused on key terms, including the acquisition consideration, purchase price adjustment mechanism, allocation of risk with respect to regulatory conditions and the size of the transaction termination fee.

 

36

---

Table of Contents

On January 5, 2015, representatives of Sullivan & Cromwell sent to representatives of Skadden Arps a revised draft of the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia, which reflected continuing discussions on key terms, including purchase price, purchase price adjustment mechanism, closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and treatment of ASB.

On January 7, 2015, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, and representatives of J.P. Morgan and Skadden Arps met in Berlin, Germany with the representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell to discuss the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the purchase price adjustment, logistics of carving out the wireless business from Alcatel Lucent and the size of the transaction termination fee. Following this discussion, Mr. Ihamuotila and Mr. Raby had a separate discussion in general terms on a potential acquisition of Alcatel Lucent by Nokia.

On January 9, 2015, representatives of Skadden Arps sent to representatives of Sullivan & Cromwell a revised draft of the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia, which reflected continuing discussions on purchase price, purchase price adjustment mechanism, closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and definition of material adverse effect.

On January 14, 2015, representatives of Alcatel Lucent and their advisors presented carve-out financial information in respect of Alcatel Lucent’s wireless business to representatives of Nokia and their advisors in Munich, Germany.

On January 14, 2015, representatives of Sullivan & Cromwell sent to representatives of Skadden Arps a revised draft of the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia reflecting the continuing discussions on key terms, including purchase price, closing conditions, allocation of regulatory risk, termination rights, reverse transaction termination fees and definition of material adverse effect.

On January 16, 2015, Risto Siilasmaa met with Philippe Camus, Chairman of the board of directors of Alcatel Lucent, in Paris, France to discuss the potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on high level issues associated with the potential acquisition, including the proposed purchase price and transaction timeline, as well as the potential acquisition of Alcatel Lucent by Nokia.

On January 19, 2015, representatives of Nokia, including Timo Ihamuotila, Maria Varsellona and Samih Elhage, and representatives of J.P. Morgan and Skadden Arps participated in a conference call with the representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell to discuss the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. The discussion focused on the termination provisions for a potential transaction and the closing conditions.

On January 20, 2015, the Nokia board of directors held a meeting in Espoo, Finland, where the board of directors reviewed the results of Nokia management’s preliminary assessment of a potential acquisition of Alcatel Lucent by Nokia by way of an exchange offer and the benefits and drawbacks associated with such combination as compared to the acquisition of Alcatel Lucent’s wireless business. At that meeting, the Nokia board of directors resolved to authorize Nokia management to engage in a limited due diligence review of Alcatel Lucent with respect to a potential acquisition of Alcatel Lucent by Nokia.

 

37

---

Table of Contents

On January 23, 2015, representatives of Skadden Arps sent to representatives of Sullivan & Cromwell a revised draft of the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia, which reflected significant remaining differences on purchase price, customer consent closing condition, allocation of regulatory risk, termination rights and size of reverse transaction termination fee.

On January 26, 2015, Timo Ihamuotila called Jean Raby, informing him that Nokia would like to explore the possibility of acquiring Alcatel Lucent. Mr. Raby stated that Alcatel Lucent was prepared to engage in preliminary discussions on this topic. Mr. Ihamuotila stated that Nokia would like to engage in a due diligence review of Alcatel Lucent with a view to a potential acquisition of Alcatel Lucent by Nokia. Mr. Ihamuotila and Mr. Raby agreed that Nokia would perform limited due diligence review of Alcatel Lucent, focusing on Alcatel Lucent’s pension liability, intellectual property and regulatory and compliance matters. On January 29, 2015, representatives of Nokia sent to representatives of Alcatel Lucent a due diligence request list for such review. Alcatel Lucent provided reciprocal due diligence requests, and engaged in due diligence and valuation exercises in respect of Nokia.

On January 27, 2015, representatives of Nokia, including Maria Varsellona and Samih Elhage, and representatives of J.P. Morgan and Skadden Arps participated in a conference call with the representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell to discuss the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia.

On February 2, 2015, representatives of Nokia and its advisors met in Paris, France, at the offices of Sullivan & Cromwell with the representatives of Alcatel Lucent and its advisors to conduct due diligence review of Alcatel Lucent with respect to a potential acquisition of Alcatel Lucent by Nokia. Due diligence discussions focused on Alcatel Lucent’s pensions liabilities, as well as regulatory and compliance matters. Nokia and Alcatel Lucent continued to perform limited reciprocal due diligence review of each other’s businesses on select topics, including pension liability, regulatory and compliance matters, intellectual property and ASB until April 14, 2015.

On February 5, 2015, Risto Siilasmaa and Philippe Camus had a telephone conversation where they generally discussed the status of negotiations between the parties and a potential strategic transaction.

On February 9, 2015, Rajeev Suri met with Michel Combes in London, England to discuss a potential sale of Alcatel Lucent’s wireless business to Nokia and to conduct a high level discussion of the rationale for a potential acquisition of Alcatel Lucent by Nokia.

Between February 13, 2015 and February 17, 2015, representatives of Nokia and Alcatel Lucent held a series of telephone conversations, discussing the term sheet for a potential acquisition of Alcatel Lucent’s wireless business by Nokia. At the conclusion of these discussions, a number of material issues set forth in the draft term sheet remained outstanding and unresolved, including the timeline and conditions for the planned carve out and related possible price implications. As a result of the negotiations and discussions to date, Nokia and Alcatel Lucent also viewed a potential acquisition of Alcatel Lucent’s wireless business by Nokia as having significant obstacles to execution associated with separation and relationships with other stakeholders, and that a full combination of the businesses of Nokia and Alcatel Lucent could be comparatively advantageous from both a strategic and a value creation standpoint. In particular, certain customers of Alcatel Lucent had expressed concerns about the potential disruption to business that a sale of Alcatel Lucent’s wireless business would entail, given the long period needed to separate the wireless business from the other businesses of Alcatel Lucent. Nokia and Alcatel Lucent also recognized that a combination would be consistent with market preference for large vendors with scale and scope, particularly in 5G. Following February 17, 2015, Nokia and Alcatel Lucent did not resume substantive discussions with respect to a potential acquisition

 

38

---

Table of Contents

of Alcatel Lucent’s wireless business by Nokia and did not execute any additional documentation with respect to any such transaction.

On February 20, 2015, the Nokia board of directors held a conference call meeting, where it resolved to authorize the management of Nokia to fully engage in discussions with the representatives of Alcatel Lucent with respect to a potential acquisition of Alcatel Lucent by Nokia.

On February 27, 2015, the Nokia board of directors held a conference call meeting to discuss the preliminary results of the due diligence review of Alcatel Lucent and the valuation of Alcatel Lucent. The board of directors resolved to authorize Nokia representatives to make a non-binding offer to acquire Alcatel Lucent.

On March 5, 2015, representatives of Nokia, including Risto Siilasmaa, Rajeev Suri, Timo Ihamuotila and Maria Varsellona met with representatives of Alcatel Lucent, including Philippe Camus, Michel Combes and Jean Raby, in Paris, France, at the offices of Sullivan & Cromwell. At the meeting, Mr. Siilasmaa and Mr. Suri communicated to Mr. Camus and Mr. Combes Nokia’s non-binding offer to acquire Alcatel Lucent for 0.491 Nokia Shares for each Alcatel Lucent Share. In addition, Nokia representatives discussed other terms and conditions and various aspects of a potential transaction. Mr. Camus and Mr. Combes indicated that Alcatel Lucent viewed the offer to be inadequate in light of its view of the relative values of Alcatel Lucent Shares and Nokia Shares.

On March 8, 2015, representatives of Nokia, met in London, England, at the offices of Skadden Arps with representatives of Alcatel Lucent to conduct limited financial due diligence review of Alcatel Lucent to assist Nokia in its valuation of Alcatel Lucent. Alcatel Lucent engaged in reciprocal due diligence and valuations exercises in respect of Nokia.

On March 9, 2015, Rajeev Suri met with Michel Combes in Paris, France to discuss the transaction timeline and the scope and length and the extent of each company’s due diligence efforts.

On March 10, 2015, Risto Siilasmaa met with Philippe Camus in London, England for an overall discussion of the potential transaction and significant obstacles to announcing a transaction.

Between March 11, 2015 and March 14, 2015, representatives of Nokia, J.P. Morgan, Skadden Arps, Alcatel Lucent, Zaoui and Sullivan & Cromwell held a series of telephonic discussions concerning key terms of a potential transaction. The discussions focused on the scope and length of due diligence review and transaction timing, as well as standstill and exclusivity proposals. Nokia and Alcatel Lucent were not able to reach any agreement on possible standstill or exclusivity provisions at this time.

On March 15, 2015, the Nokia board of directors held a conference call meeting. Nokia management updated the board of directors on the status of its discussions with Alcatel Lucent and interim results of Nokia’s due diligence review. The Nokia board of directors resolved to authorize Nokia management to continue to engage in discussions with Alcatel Lucent and to continue to perform reciprocal due diligence review.

On March 16, 2015, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, and representatives of J.P. Morgan and Skadden Arps met in London, England at the offices of Sullivan & Cromwell with the representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell, to discuss the non-financial terms of the combination, including the conditions precedent of a potential exchange offer by Nokia to acquire Alcatel Lucent. The discussion focused on the timing of the Nokia extraordinary general meeting of shareholders contemplated by the Nokia Shareholder Approval and the level of the minimum tender condition.

 

39

---

Table of Contents

On March 17, 2015, Risto Siilasmaa, Timo Ihamuotila and Maria Varsellona met with Philippe Camus, Michel Combes and Jean Raby in London, England, at the offices of Skadden Arps to discuss the proposed exchange ratio, offer structure and key offer terms, including offer conditions. Representatives of Nokia presented a revised proposal with an exchange ratio range of 0.514 to 0.538 Nokia Shares per Alcatel Lucent Share, as compared to the offer of 0.491 Nokia Shares per Alcatel Lucent Share made on March 5, 2015. Mr. Camus responded that Alcatel Lucent viewed the offer to be inadequate in light of its view of the relative values of Alcatel Lucent Shares and Nokia Shares. Representatives of Nokia informed representatives of Alcatel Lucent that the Nokia board of directors was not yet prepared to revise the exchange ratio and that the board of directors was meeting on March 25, 2015 to further discuss a potential transaction with Alcatel Lucent.

On March 22, 2015, Risto Siilasmaa and Philippe Camus had a telephone conversation where they discussed the proposed exchange ratio, handling of Alcatel Lucent’s submarine business and Nokia’s governance structure after the potential acquisition.

On March 25, 2015, Risto Siilasmaa and Philippe Camus had a telephone conversation where they discussed the proposed exchange ratio and Nokia’s approach to the transaction.

On March 25, 2015, the Nokia board of directors held an in-person meeting in Espoo, Finland, where the board of directors resolved to authorize Nokia representatives to communicate to the Alcatel Lucent representatives an increased exchange ratio.

On March 27, 2015, representatives of Nokia, including Risto Siilasmaa, Rajeev Suri, Timo Ihamuotila and Maria Varsellona met with representatives of Alcatel Lucent, including Philippe Camus, Michel Combes and Jean Raby in London, England, at the offices of Sullivan & Cromwell. Mr. Siilasmaa and Mr. Suri began the meeting by confirming Nokia’s offer to acquire Alcatel Lucent for 0.538 Nokia Shares for each Alcatel Lucent Share. Following negotiations between the parties, the representatives of Nokia and Alcatel Lucent agreed on the exchange ratio of 0.550 Nokia Shares for each Alcatel Lucent Share, subject to the approval of the board of directors Alcatel Lucent.

On March 29, 2015, Philippe Camus telephoned Risto Siilasmaa to inform him of the support of Alcatel Lucent’s board for the proposed exchange ratio, subject to agreement on other terms of the proposed transaction.

On March 30, 2015, representatives of Skadden Arps sent the initial draft of the Memorandum of Understanding to the representatives of Sullivan & Cromwell.

On April 1, 2015, Risto Siilasmaa had a telephone conversation with Philippe Camus where they discussed the proposed exchange ratio and communications with the French government.

On April 2, 2015, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, and representatives of J.P. Morgan and Skadden Arps met in Paris, France, at the offices of Sullivan & Cromwell with representatives of Alcatel Lucent, including Jean Raby, and the representatives of Zaoui and Sullivan & Cromwell to discuss the key terms of the Memorandum of Understanding, including responsibility for the regulatory approvals in connection with the Exchange Offer and Exchange Offer conditions.

On April 5, 2015, representatives of Sullivan & Cromwell sent a revised draft of the Memorandum of Understanding to the representatives of Skadden Arps, which reflected continuing discussions on key terms, including scope of representations, warranties and covenants, closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and board and shareholder recommendation processes.

 

40

---

Table of Contents

On April 6, 2015, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, J.P. Morgan and Skadden Arps held a conference call with representatives of Alcatel Lucent, including Jean Raby, Zaoui and Sullivan & Cromwell to discuss the key terms of the Memorandum of Understanding, including transaction conditions and termination fees.

On April 8, 2015, representatives of Skadden Arps sent a revised draft of the Memorandum of Understanding to the representatives of Sullivan & Cromwell, which reflected continuing discussions on key terms, including scope of representations, warranties and covenants, closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and board and shareholder recommendation processes.

On April 10, 2015 and April 11, 2015, the full management teams of Nokia, including Rajeev Suri, Timo Ihamuotila and Maria Varsellona, and Alcatel Lucent, including Michel Combes, Jean Raby and Remi Thomas, held reciprocal all-day management presentations and due diligence sessions in London, England, at the offices of Skadden Arps. These reciprocal due diligence sessions covered, among other things, financial, human resources, legal, pensions, compliance, tax and business line specific diligence matters. Representatives of J.P. Morgan, Zaoui, Skadden Arps and Sullivan & Cromwell also participated in these sessions.

On April 11, 2015, representatives of Sullivan & Cromwell sent a revised draft of the Memorandum of Understanding to the representatives of Skadden Arps, which reflected continuing discussions on key terms, including closing conditions, allocation of regulatory risk, termination rights, transaction termination fees and board and shareholder recommendation processes.

On April 12, 2015, representatives of Nokia, including Rajeev Suri, Timo Ihamuotila and Maria Varsellona, and representatives of J.P. Morgan and Skadden Arps met with the representatives of Alcatel Lucent, including Michel Combes, Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell, in London, England, at the offices of Skadden Arps to discuss the Memorandum of Understanding. The parties agreed on the scope and timing of the remaining transaction conditions at this meeting.

On April 13, 2015, Michel Combes contacted the Ministry of Economy and Finance of the French Republic to inform them of a potential transaction between Nokia and Alcatel Lucent.

On April 13, 2015, representatives of Skadden Arps sent a revised draft of the Memorandum of Understanding to the representatives of Sullivan & Cromwell, which reflected continuing discussions on key terms, including the minimum tender condition, allocation of regulatory risk, termination rights and transaction termination fees.

On April 13, 2015, the Nokia board of directors held an in-person meeting in London, England, where the board of directors was updated on the developments in negotiations with Alcatel Lucent and the transaction timeline.

On April 13, 2015, Alcatel Lucent’s board met in Paris, France, at the offices of Sullivan & Cromwell and by video conference. The meeting was also attended by members of Alcatel Lucent’s senior management and representatives from Zaoui and Sullivan & Cromwell. Alcatel Lucent’s board evaluated the terms of the proposed transaction, including the exchange ratio and terms of the draft Memorandum of Understanding. Members of Alcatel Lucent’s senior management updated Alcatel Lucent’s board on developments with respect to the proposed acquisition of Alcatel Lucent by Nokia since the previous meeting of the board, including the conclusions of the reciprocal due diligence and valuation exercises carried out by Alcatel Lucent in respect of Nokia. Zaoui and Sullivan & Cromwell reviewed the financial and legal terms of the Memorandum of Understanding, based on an advanced

 

41

---

Table of Contents

draft of the Memorandum of Understanding. Zaoui explained the financial terms of the Exchange Offer and the potential impact on the holders of Alcatel Lucent Shares, including the premium implied by the exchange ratio and considerations regarding valuation of Alcatel Lucent and Nokia. Sullivan & Cromwell also discussed the fiduciary duties of Alcatel Lucent’s board in considering the Memorandum of Understanding and the timetable of the proposed transaction.

On April 13, 2015, rumors of a possible offer or transaction by Nokia to acquire Alcatel Lucent’s wireless business were publicly reported, following previous rumors of the potential sale of HERE by Nokia.

On April 14, 2015, in response to the rumors, Nokia and Alcatel Lucent issued a joint public announcement prior to the open of markets in Europe confirming that they were in advanced discussions with respect to a potential full combination, which would take the form of a public exchange offer by Nokia for Alcatel Lucent.

On April 14, 2015, representatives of Nokia, including Timo Ihamuotila and Maria Varsellona, and representatives of J.P. Morgan and Skadden Arps met with representatives of Alcatel Lucent, including Jean Raby and Remi Thomas, and the representatives of Zaoui and Sullivan & Cromwell, in Paris, France, at the offices of Skadden Arps to finalize the remaining terms of the Memorandum of Understanding, including agreement on the size of the termination fees.

On April 14, 2015, the Nokia board of directors held a conference call meeting, where it resolved to approve the proposed acquisition of Alcatel Lucent and the execution of the Memorandum of Understanding.

On April 14, 2015, the board of directors of Alcatel Lucent held a conference call meeting, which was also attended by representatives of Alcatel Lucent’s senior management, Zaoui and Sullivan & Cromwell. Management provided an update on discussions with Nokia since the previous board meeting, while Zaoui and Sullivan & Cromwell reviewed the final financial and legal terms of the Memorandum of Understanding. Zaoui delivered to Alcatel Lucent’s board of directors its oral opinion, which was confirmed by delivery of a written opinion dated April 14, 2015, to the effect that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered, and qualifications and limitations described in its written opinion, the exchange ratio proposed to be paid to the holders (other than Nokia) of Alcatel Lucent Shares and ADSs was fair from a financial point of view to such holders, as further described under the section entitled “—Opinion of Alcatel Lucent’s Financial Advisor” below. The opinion delivered by Zaoui is filed as an exhibit to the registration statement of which this exchange offer/prospectus forms a part. Following additional discussion and consideration of the Memorandum of Understanding and the terms and conditions of the Exchange Offer, the Board unanimously approved the terms of the Memorandum of Understanding and the draft press release announcing the transaction.

On April 15, 2015, Nokia and Alcatel Lucent executed the Memorandum of Understanding.

On April 15, 2015, prior to the open of markets in Europe, Nokia and Alcatel Lucent jointly announced the execution of the Memorandum of Understanding and the proposed acquisition of Alcatel Lucent by Nokia by way of an exchange offer by Nokia for all outstanding equity securities of Alcatel Lucent.

After the announcement of the execution of the Memorandum of Understanding, Alcatel Lucent promptly began the information process of its French Group Committee (Comité de Groupe France) in order to obtain its opinion on the proposed public exchange offer. Between April 15, 2015 and June 1, 2015, Alcatel Lucent, with Nokia’s participation, held a series of meetings with the French Group Committee and responded to its information and other requests. The consultations were conducted in

 

42

---

Table of Contents

accordance with the French law and practice. On June 1, 2015, Alcatel Lucent’s French Group Committee delivered its opinion, indicating that it does not oppose the proposed acquisition of Alcatel Lucent by Nokia.

On June 4, 2015, further to the French Group Committee consultation process, the board of directors of Alcatel Lucent expressed its full support for the proposed combination with Nokia. The opinion of the French Group Committee will be included as part of Alcatel Lucent’s offer response document to be filed with the AMF in response to the French offer which is expected to be filed by Nokia with the AMF as soon as the material regulatory approvals are obtained.

In addition, following the execution of the Memorandum of Understanding, Nokia and Alcatel Lucent promptly began the filings and regulatory review processes in all relevant jurisdictions necessary for the consummation and implementation of the Exchange Offer and the combination of the businesses of Nokia and Alcatel Lucent. As of the date hereof, all material regulatory approvals for the Exchange Offer have been received. Refer to the section entitled “The Exchange Offer—Legal Matters; Regulatory Approvals” for further discussion of the applicable regulatory approvals.

On             , Nokia filed its Schedule TO with the SEC and commenced the U.S. Offer.

Disclosure of Certain Information Relating to Alcatel Lucent

Prior to the signing of the Memorandum of Understanding, Nokia had access to certain limited information about Alcatel Lucent and its subsidiaries for purposes of conducting its due diligence review and Alcatel Lucent had access to certain limited information about Nokia. The significant elements of such information are contained in the Alcatel Lucent 2014 Form 20-F or the Nokia 2014 Form 20-F, as applicable.

Nokia considers that apart from the publicly available information or the information contained in this exchange offer/prospectus, it has not received specific information relating to, directly or indirectly, Alcatel Lucent and its subsidiaries and which would be likely, if made public, to have a significant influence on the share price of Alcatel Lucent Securities.

Reasons for the Exchange Offer

We believe that the combination of Nokia’s and Alcatel Lucent’s businesses will create significant value for stakeholders of both companies. Following the completion of the Exchange Offer, Nokia will be well-positioned to create the foundation of seamless connectivity for people and things wherever they are. We believe that this foundation is essential for enabling the next wave of technological change, including the Internet of Things and transition to the cloud.

The strategic rationale for combining the two companies includes:

 

•

creation of end-to-end portfolio scope and scale player with leading global positions across products, software and services to meet changing industry paradigms;

 

•

complementary offerings, customers and geographic footprint;

 

•

enhanced research and development capabilities creating an innovation powerhouse with significant combined R&D resources;

 

•

the recent execution track-record on both sides and common vision for the future;

 

•

the opportunity to realize significant cost savings and other synergies; and

 

•

the development of a robust capital structure and strong balance sheet.

 

43

---

Table of Contents

End-to-end portfolio scope and scale player with leading global positions across products, software and services to meet changing industry paradigms

The driver of the changes we are seeing in the world around us and the demands being placed on the networks of the future are increasingly complex. Demand for seamless and ubiquitous access is combining with ever-increasing requirements for network analytics and network intelligence. We believe that this is requiring broader, deeper, and more sophisticated end-to-end capabilities, which very few companies can offer.

The growing complexity of product demands are set against a number of other shifting industry paradigms. Customer consolidation has been ongoing for a number of years now and has created fewer, larger players with broader global needs. Convergence is happening rapidly across both fixed and mobile, as well as IP and cloud. Virtualization is leading to increased network efficiency and scalability. Furthermore, web scale companies and certain large enterprise verticals are growing as a customer base for carrier-grade technologies

Combining Nokia with Alcatel Lucent will bring together the complementary capabilities of both companies with an end-to-end portfolio of software, services and products, which will be weighted towards next-generation technologies enabling us to provide better solutions to customers and access new opportunities in an expanded, addressable market.

Following the completion of the Exchange Offer, the combined company is expected to be a leader in technologies such as fixed broadband, LTE, IP routing, cloud applications and advanced analytics, positioning the company as either the number one or two player in most key business areas. We expect to have the scale to service the very largest global multinational customers with a broader range of products, software and services across a wider geographic footprint, which we believe will make us the strategic partner of choice for the long term. We believe that the Exchange Offer provides a very compelling path to achieving and accelerating the long term strategies vision that Nokia has laid out in its 10-year strategy to be a global technology leader in the programmable world.

Complementary offerings, customers and geographic footprint

The Exchange Offer brings together two businesses which we believe have highly complementary portfolios and geographies, bringing together the best of fixed and mobile, IP routing, core networks, cloud applications and services. Together, Nokia and Alcatel Lucent will have particular strength in the United States, China, Europe and Asia-Pacific. We believe that the combined company will be positioned to target a larger addressable market with an improved growth profile. Based on our estimates, the addressable market of the combined company in 2014 was approximately 50% larger than the current addressable networks market for Nokia alone, increasing from approximately EUR 84 billion to approximately EUR 130 billion. Based on Nokia’s internal estimates, the combined company is expected to have a stronger growth profile than Nokia’s current addressable market, and we estimate, based on our internal data, that the addressable market of the combined company would enjoy a Compound Annual Growth Rate (“CAGR”) of approximately 3.5% for 2014-2019.

Enhanced research and development capabilities creating an innovation powerhouse with significant combined R&D resources

The combined company will have significant innovation capabilities, with Alcatel Lucent’s Bell Labs and Nokia’s FutureWorks, as well as Nokia Technologies. The latter is expected to stay as a separate entity with a clear focus on licensing and the incubation of new technologies.

With more than 40 000 research and development employees, of which over 30 000 are software engineers, and combined 2014 research and development spending of EUR 4.7 billion, the combined

 

44

---

Table of Contents

company will be well positioned to accelerate development of future technologies including 5G, IP and software-defined networking, cloud and analytics, as well as digital health and digital media, bringing significant benefits to its customers.

The recent execution track-record on both sides and common vision for the future

We believe that both companies are in a far better position to combine at this point in time and the combination is being conducted from a position of strength. Both companies have recently improved their operational efficiency and agility through significant restructurings, Nokia has purchased Siemens share of Nokia Siemens Network, divested substantially all of its Devices & Services business to Microsoft and has announced the pending disposal of our HERE digital mapping and location services business, while Alcatel Lucent is coming to the end of the Shift plan.

Through its restructuring program, Nokia became a leader in Mobile Broadband while strengthening its financial position and having achieved one of the industry-leading profitabilities. Similarly, Alcatel Lucent has rebuilt its capital base through refinancings and divestments and refocused on IP Networking, Cloud and Ultra Broadband, leading to Alcatel Lucent’s improvement in profitability and free cash flow. We expect to build on these learnings to make the expected integration of Nokia and Alcatel Lucent as seamless as possible.

Both companies share a common vision for the future, and believe that this transaction is the next logical step of our successful transformations and at the right time for both companies. Following the completion of the Exchange Offer, Nokia is expected to be well positioned to create the foundation of seamless connectivity which we believe is essential for enabling the next wave of technological change in our industry.

The opportunity to realize significant cost savings and other synergies

The combined company would target approximately EUR 900 million of operating cost synergies to be achieved on a full year basis in 2019, assuming completion of the Exchange Offer no later than the end of the first half of 2016. The operating cost synergies are expected to create a long-term structural cost advantage, coming from a wide range of areas, including:

 

•

organizational streamlining, rationalization of overlapping products and services, central functions, and regional and sales organizations;

 

•

reduction of various overhead costs in real estate, manufacturing and supply-chain, information technology and overall general and administrative expenses, including redundant public company costs;

 

•

procurement given expanded purchasing requirements of the combined company; and

 

•

R&D efficiencies, particularly in wireless.

The combined company would also target approximately EUR 200 million of reductions in interest expenses to be achieved on a full-year basis in 2017. The transaction is expected to be accretive to Nokia earnings on a non-IFRS basis (excluding restructuring charges and amortization of intangibles) in 2017. These targets both assume completion of the Exchange Offer no later than the end of the first half of 2016.

The development of a robust capital structure and strong balance sheet

The combined company will benefit from enhanced financial resources for growth and investment purposes. The combined company is expected to have a strong balance sheet, which will support our

 

45

---

Table of Contents

ambition to re-establish our long-term investment-grade rating. Assuming conversion of all OCEANES and completion of the sale of our HERE business, the pro forma net cash position of the combined company at June 30, 2015 would have been EUR 8.1 billion and pro forma cash and cash equivalents of the combined company at June 30, 2015 would have been EUR 10.5 billion. Net cash is a non-IFRS financial measure. Refer to “Selected Unaudited Pro Forma Combined Financial Information” for a description of how we define and calculate net cash. Following the completion of the Exchange Offer, Nokia intends to evaluate the resumption of a capital structure optimization program for the combined group, and remains committed to having an efficient capital structure.

Reasons for the Alcatel Lucent Board of Directors’ View on the Exchange Offer

Opinion of the Financial Advisor to the Alcatel Lucent Board of Directors

Nokia Shareholder Meeting

The Nokia board of directors resolved on              to call an extraordinary general meeting of Nokia shareholders to consider and vote on the resolution contemplated by the Nokia Shareholder Approval and the election of             ,              and              to the Nokia board of directors. The extraordinary general meeting is currently scheduled for             . Proxy materials related to the extraordinary general meeting have been separately distributed by Nokia. We are not asking you for a proxy pursuant to this exchange offer/prospectus and you are requested not to send us a proxy in response hereto.

The resolution contemplated by the Nokia Shareholder Approval must be approved by shareholders representing at least two-thirds of the votes cast and Nokia Shares represented at the extraordinary general meeting. Nokia’s obligation to accept, and to exchange, any Alcatel Lucent Securities validly tendered into and not withdrawn from the Exchange Offer is subject to, among other Conditions, receipt of the Nokia Shareholder Approval.

In accordance with the Memorandum of Understanding, the Corporate Governance & Nomination committee of the Nokia board of directors and Alcatel Lucent have jointly identified             ,              and              as nominees to the Nokia board of directors. The election of these director nominees would be subject to a completion of the Exchange Offer. The election of each director nominee at the extraordinary general meeting must be approved by shareholders representing at least a majority of the votes cast at the extraordinary general meeting.

Director Nominee Biographies

Director Compensation

Director Nominee Share Ownership

 

Name		Shares		ADSs

 

46

---

Table of Contents

Director Nominee Related Party Transactions

There have been no material transactions during the last three fiscal years to which any director nominee, or any relative or spouse of any director nominee, was a party. There is no significant outstanding indebtedness owed to Nokia by any director nominee.

Intentions of Nokia over the next twelve months

Industrial, commercial and financial strategy and policy

If the Exchange Offer is successful, it is expected to create an innovation leader in next generation technology and services for an IP-connected world. The headquarters of the combined company would be in Finland with strategic business locations and major R&D centers in France, as well as other countries including Germany, the United States and China. The strategic goal of the combination is to create a combined company with an end-to-end portfolio scope and scale and leading global positions across next generation network technologies and services.

We believe that Nokia and Alcatel Lucent have highly complementary assets, technologies and portfolios, bringing together fixed and mobile broadband, IP routing, core networks, cloud applications and services, as well as complementary geographical exposures, with particular strength in the United States, China, Europe and Asia-Pacific.

The combination is expected to create access to an expanded addressable market. In addition, together the companies are expected to be better equipped to meet the increasingly complex needs of customers globally given the industry trends: global Telco consolidation and convergence; expansion to quad-play offerings and delivering seamless experiences across multiple screens and applications; timing of the 5G investment cycle; and transition to the cloud.

The combined company would also utilize its unique innovation capabilities and is expected to be in a position to accelerate development of future technologies including 5G, IP and software-defined networking, cloud and analytics.

Also, Nokia expects to maintain its long term financial target to return to an investment grade credit rating and intends to manage the capital structure of the combined company accordingly, including by retaining adequate gross and net cash positions and by proactively reducing indebtedness accordingly. Nokia’s intention to optimize its capital structure includes intention to maintain an efficient capital structure and intention to continue annual dividend payments following the completion of the Exchange Offer. Nokia also intends to evaluate the resumption of a capital structure optimization program for the combined group following the completion of the Exchange Offer.

The combined company would target approximately EUR 900 million of operating cost synergies in 2019—in addition to the remaining reduction targets under Alcatel Lucent’s current Shift Plan. These synergies are expected to be derived from four main areas:

 

•

organizational streamlining, including support functions and regional and sales organizations;

 

•

infrastructure costs, including reduction of various overhead costs in real estate, manufacturing and supply-chain infrastructure, information technology, and overall general and administrative expenses, including redundant public company costs;

 

•

procurement, given expanded purchasing requirements of the combined company; and

 

•

R&D, particularly in wireless.

In addition, the combined company would target approximately EUR 200 million of reductions in interest expenses in 2017 by reducing outstanding indebtedness.

 

47

---

Table of Contents

The transaction is structured as an acquisition of Alcatel Lucent by Nokia, with a clear governance structure for the execution of the integration.

 

•

We have appointed an Integration Planning Head, who reports directly to Rajeev Suri.

 

•

Integration planning is done separately from our day-to-day operations, in order to minimize disruption to the ongoing business and to allow our employees to continue to focus on delivering successful business results, as well as comply with applicable competition laws and regulations.

 

•

We will dedicate our integration efforts to business areas with highest impact—for example wireless infrastructure, sales and channel operations and support functions—to ensure maximum competitiveness and innovation once we start the combined operations.

Management of Nokia and Alcatel Lucent

It is contemplated that following the completion of the Exchange Offer, Nokia’s corporate governance structure will include the following:

 

•

Chairman of the board of directors: Risto Siilasmaa.

 

•

President and Chief Executive Officer: Rajeev Suri.

 

•

Nokia’s board of directors having nine or ten members, including             ,              and             , who have been nominated jointly by the Corporate Governance & Nomination committee of the Nokia board of directors and by Alcatel Lucent, one of whom is expected to serve as Vice Chairman of Nokia.

 

•

Leadership team built on strengths of both Nokia and Alcatel Lucent.

In addition, following the completion of the Exchange Offer, Nokia intends to propose changes to the composition of Alcatel Lucent’s board of directors. The composition of the Alcatel Lucent board of directors will take into account the new share ownership structure of Alcatel Lucent and in particular, the ownership level of Nokia.

Intentions of Nokia with respect to employment in France

We are a global company, with deep roots and heritage in many parts of the world. When we join with Alcatel Lucent, we expect that France, where Alcatel Lucent is a fundamental participant in the technology ecosystem, will be a vibrant center of the combined company. We intend to be an important contributor to the overall development of the broader technology ecosystem and a driver of innovation in France.

Consistent with this goal, we expect that after the completion of the Exchange Offer we will have a presence in France that spans leading innovation activities including a 5G/Small Cell Research & Development Centre of Excellence; a Cyber-Security lab similar to our existing facility in Berlin designed to support European collaboration on the topic; and a continued focus on Bell Labs and wireless Research & Development. Engaging with and supporting projects and academic efforts that enhance the development of future technologies will remain an important priority.

We intend to maintain employment in France that is consistent with Alcatel Lucent’s end-2015 Shift Plan commitments, with a particular focus on the key sites of Villarceaux (Essonne) and Lannion (Côtes d’Armor). In addition, we expect to expand Research & Development employment with the addition of several hundred new positions targeting recent graduates with skills in future-oriented technologies, including 5G, to ensure ongoing support for customers, activities for support services and pre- and post-sales are expected to continue as well.

 

48

---

Table of Contents

Synergies

The combined company would target approximately EUR 900 million of operating cost synergies to be achieved on a full-year basis in 2019, assuming completion of the Exchange Offer no later than the end of the first half of 2016. The operating cost synergies are expected to create a long-term structural cost advantage, coming from a wide-range of areas, including:

 

•

organizational streamlining, rationalization of overlapping products and services, central functions, and regional and sales organizations;

 

•

reduction of various overhead costs in real estate, manufacturing and supply-chain, information technology and overall general and administrative expenses, including redundant public company costs;

 

•

procurement given expanded purchasing requirements of the combined company; and

 

•

R&D efficiencies, particularly in wireless.

The combined company would also target approximately EUR 200 million of reductions in interest expenses to be achieved on a full-year basis in 2017. The transaction is expected to be accretive to Nokia earnings on a non-IFRS basis (excluding restructuring charges and amortization of intangibles) in 2017. These targets both assume completion of the Exchange Offer no later than the end of the first half of 2016.

Dividend Policy

Nokia does not have a quantitative distribution policy but it does generally view annual dividends as an important mechanism to return value to its shareholders. The proposals for dividend distribution of Nokia and, until the squeeze-out, if any, is implemented, Alcatel Lucent will continue to be determined by their respective managing bodies as regards their distribution capabilities, financial situation and the needs for the companies.

Squeeze-out

If, at the completion of the Exchange Offer or the subsequent offering period, as the case may be, Nokia owns 95% or more of the share capital and voting rights of Alcatel Lucent (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining outstanding Alcatel Lucent Shares.

If, at the completion of the Exchange Offer or, if applicable, the subsequent offering period Nokia owns 95% or more of the sum of the outstanding Alcatel Lucent Shares and Alcatel Lucent Shares issuable upon conversion of all of the OCEANEs (Alcatel Lucent Shares held in treasury being considered as held by Nokia for the purpose of the calculation), Nokia intends to request from the AMF, within three months of the expiration of the French Offer period, the implementation of a squeeze-out for the remaining OCEANEs.

To implement the foregoing squeeze-out, Nokia will file with the AMF a new offer document, which must be cleared by the AMF. The AMF clearance will depend, among other things, on the evaluation of Alcatel Lucent Securities provided by Nokia and the fairness report of the independent expert which will be appointed by Alcatel Lucent’s board of directors in accordance with the AMF General Regulation. In accordance with French law and regulations, in such a squeeze-out, Nokia intends to offer to the holders of Alcatel Lucent Securities the choice between the same consideration as was offered in the Exchange Offer and a cash alternative. Holders of Alcatel Lucent Securities who do not elect to receive one of the two consideration alternatives in the squeeze-out, would receive the cash compensation.

 

49

---

Table of Contents

If a squeeze-out constitutes a tender offer for U.S. securities law purposes, it may be made to U.S. holders of Alcatel Lucent Securities in reliance on the “Tier I” exemption from the U.S. tender offer rules pursuant to Regulation 14D under the Exchange Act. As a result, the squeeze-out could be conducted in accordance with French law only. In addition, in such case, any Nokia Shares (including Nokia Shares represented by Nokia ADSs) offered in a minority buy-out offer would be exempt from the registration requirements of the Securities Act pursuant to Rule 802 promulgated under the Securities Act. Nokia has not determined whether any squeeze-out will be made to U.S. holders of Alcatel Lucent Securities, and expects to make such a determination based on, among other factors, the then number of U.S. holders and the availability of “Tier I” exemptive relief.

In addition, Nokia reserves the right, subject to applicable law, at any time after the completion of the Exchange Offer or the subsequent offering period, as applicable, to cause Alcatel Lucent to redeem at par value plus accrued interests from the date the interest was last paid, to the date set for the early redemption all of the outstanding 2018 OCEANEs, 2019 OCEANEs or 2020 OCEANEs, if less than 15% of the issued OCEANEs of any such series remain outstanding.

If Nokia owns less than 95% of the share capital and voting rights of Alcatel Lucent immediately after the completion of the Exchange Offer or, if applicable, the subsequent offering period for the Exchange Offer, then Nokia reserves the right, subject to applicable law, to (i) commence a buy-out offer for the Alcatel Lucent Securities it does not own on the relevant date pursuant to Article 236-3 of the AMF General Regulation if at any time after the completion of the Exchange Offer it owns 95% or more of the voting rights of Alcatel Lucent, (ii) commence at any time a simplified offer for the Alcatel Lucent securities it does not own on the relevant date pursuant to Article 233-1 et seq. of the AMF General Regulation, (iii) cause Alcatel Lucent to be merged into Nokia or an affiliate thereof, contribute assets to, merge certain of its subsidiaries with, or undertake other reorganizations of, Alcatel Lucent. In addition, Nokia intends to request to delist Alcatel Lucent Shares and OCEANEs from Euronext Paris and to seek to delist Alcatel Lucent ADSs from the NYSE, whether or not Alcatel Lucent Shares have been delisted from Euronext Paris, and, when possible, to deregister Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act or (iv) take any other steps to consolidate its ownership of Alcatel Lucent.

Integration and Reorganization

The strategic direction of Alcatel Lucent will be to continue to offer leading solutions in Alcatel Lucent’s business lines by taking advantage of the increased customer base attributable to the combination of Nokia and Alcatel Lucent. Nokia intends to integrate Alcatel Lucent into the Nokia group as soon as possible if the Exchange Offer is successful. In addition, if the Exchange Offer is successful, Nokia intends to propose changes to the composition of the Alcatel Lucent board of directors. The composition of the Alcatel Lucent board of directors will take into account the new share ownership structure of Alcatel Lucent and in particular, the ownership level of Nokia.

 

50

---

Table of Contents

THE MEMORANDUM OF UNDERSTANDING

The following is a summary of certain provisions of the Memorandum of Understanding. This summary is qualified in its entirety by reference to the Memorandum of Understanding, which is included in this exchange offer/prospectus as Annex A. This summary may not contain all the information about the Memorandum of Understanding that is important to the holders of Alcatel Lucent Securities and you should read the Memorandum of Understanding in its entirety.

The Memorandum of Understanding incorporated by reference into this exchange offer/prospectus contains representations, warranties and covenants by each of Nokia and Alcatel Lucent. These representations and warranties were made solely for the benefit of the other party to the Memorandum of Understanding and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in the Memorandum of Understanding by disclosures that were made to the other party in connection with the negotiation of the Memorandum of Understanding; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the Memorandum of Understanding, the French Offer filing date or such other date or dates as may be specified in the Memorandum of Understanding. Information concerning the subject matter of the representations, warranties and covenants may change after the date of the Memorandum of Understanding, which subsequent information may or may not be fully reflected in public disclosures. In addition, such representations, warranties and covenants may have been qualified by certain disclosures not reflected in the text of the Memorandum of Understanding and may apply standards of materiality and other qualifications and limitations in a way that is different from what may be viewed as material by holders of Alcatel Lucent Securities. Only Nokia and Alcatel Lucent are parties to the Memorandum of Understanding, which does not confer any rights upon or give any causes of action to the holders of Alcatel Lucent Securities. Neither holders of Alcatel Lucent Securities nor any other third parties should rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of Alcatel Lucent, Nokia, or any of their respective subsidiaries or affiliates.

Nokia acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this exchange offer/prospectus not misleading.

The Exchange Offer

The Memorandum of Understanding provides that the Exchange Offer is being conducted on the terms and subject to the Conditions set forth in the section of this exchange offer/prospectus entitled “The Exchange Offer.”

Additional Exchange Mechanisms

In accordance with the additional exchange mechanisms described in the Memorandum of Understanding, Nokia and Alcatel Lucent established the acceleration and liquidity mechanism described in the section entitled “The Exchange Offer—Treatment of Alcatel Lucent Free Shares, Stock Options and Performance Shares” in this exchange offer/prospectus.

Representations and Warranties

Under the Memorandum of Understanding, each of Nokia and Alcatel Lucent makes customary and generally reciprocal representations and warranties to the other party with respect to: organization,

 

51

---

Table of Contents

good standing and qualification; capitalization; corporate authority; non-contravention; required consents; reports, financial statements, internal control and disclosure control; and absence of certain changes and litigation.

Alcatel Lucent also makes customary representations and warranties to Nokia with respect to certain matters relating to intellectual property and legal compliance.

French Group Committee Consultation

In accordance with the Memorandum of Understanding and applicable law, Alcatel Lucent’s French Group Committee (Comité de Groupe France) consultation process was completed and the French Group Committee issued its opinion on June 1, 2015. On June 4, 2015, following the issuance of the French Group Committee opinion, the Alcatel Lucent board of directors issued a statement expressing its full support for the proposed combination with Nokia.

Consents and Approvals

Nokia and Alcatel Lucent have agreed to cooperate to obtain all regulatory consents in connection with the Exchange Offer. Each of Nokia and Alcatel Lucent also agreed to use its reasonable best efforts to take all actions and to do all things necessary or advisable under applicable law to consummate the Exchange Offer.

Nokia received all regulatory approvals required for the implementation of the Exchange Offer pursuant to the Memorandum of Understanding prior to the filing of the French Offer with the AMF. Refer to the section of this exchange offer/prospectus entitled “The Exchange Offer—Legal Matters; Regulatory Approvals.”

Conduct of the Business Pending the Exchange Offer

The Memorandum of Understanding provides that from the date of the Memorandum of Understanding until the earlier to occur of the Exchange Offer completion date or the termination of the Memorandum of Understanding, except as subject to customary conditions and consents, each of Nokia and Alcatel Lucent has agreed to conduct the business of Nokia or Alcatel Lucent, as applicable, and their respective subsidiaries in the ordinary course consistent with past practice.

During the same time period, each of Nokia and Alcatel Lucent has agreed (subject to certain exceptions) not to (i) make any material amendment to its organizational documents; (ii) split, combine or reclassify its outstanding shares; (iii) declare, set aside or pay any type of dividend, whether payable in cash, share or property, in respect of its shares; or (iv) launch any repurchase program with respect to its shares not publicly announced as of the date of the Memorandum of Understanding.

During the same time period, each of Nokia and Alcatel Lucent has agreed (subject to certain exceptions) not to and to cause its subsidiaries not to:

 

(a)

(i) issue, sell, or dispose of any of its shares or its subsidiaries’ shares, or (ii) pledge or create a lien, in each of cases (i) and (ii) with respect to (A) any of its shares or of its subsidiaries’ shares, (B) any securities convertible into or exchangeable or exercisable for its shares or any of its subsidiaries’ shares, (C) any options, warrants, calls, commitments or rights of any kind to acquire, its shares or any of its subsidiaries’ shares, or (D) any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with its shareholders or its subsidiaries’ shareholders on any matter;

 

52

---

Table of Contents

(b)

incur any long-term indebtedness for borrowed money (including any guarantee of such indebtedness);

 

(c)

in one or several transactions, transfer, exchange, swap or otherwise create a material lien on or dispose (whether by way of merger, consolidation, sale of shares or assets, or otherwise) of any material portion of its consolidated assets, including shares of its subsidiaries; and

 

(d)

in one or several transactions, acquire (whether by merger, consolidation, purchase or otherwise) any person or assets.

In addition, during the same time period Alcatel Lucent has agreed not to and to cause its subsidiaries not to (subject to certain exceptions):

 

(a)

(i) settle or agree to a compromise in respect of certain material claims or litigation, or (ii) (A) modify, amend or terminate certain material contracts, or (B) waive, release or assign any material rights or claims under any of such contracts;

 

(b)

enter into certain “non-compete” or similar contracts;

 

(c)

abandon, fail to maintain or assign any material intellectual property; and

 

(d)

enter into certain material arrangements that in certain circumstances would purport to have a binding effect on Nokia or any of its direct or indirect subsidiaries (other than Alcatel Lucent and its subsidiaries) or any of their respective patents.

Nokia Shareholder Meeting

Pursuant to the Memorandum of Understanding, the Nokia board of directors resolved on              to call an extraordinary general meeting of Nokia shareholders to consider and vote on the resolution contemplated by the Nokia Shareholder Approval and the election of             ,             and             to the Nokia board of directors, as more fully described in the section “The Transaction—Nokia Shareholder Meeting” of this exchange offer/prospectus.

No Solicitation of Alternate Proposals

The Memorandum of Understanding provides that, during the term of the Memorandum of Understanding, Alcatel Lucent undertakes:

 

(a)

not to and to cause its subsidiaries not to and to use its reasonable best efforts to cause its and its subsidiaries’ senior officers, directors or representatives not to:

 

(i)

initiate, solicit, induce, or take any action with a view to facilitate or encourage, any inquiries, proposals or offers that constitute, or would reasonably be expected to lead to, an Alternate Proposal (as defined below);

 

(ii)

engage or otherwise participate in any discussions or negotiations (including by way of furnishing non-public information or granting access to any of the properties or assets of Alcatel Lucent or its subsidiaries) with any person relating to any inquiries, proposals or offers that constitute, or would reasonably be expected to lead to, an Alternate Proposal;

 

(iii)

accept, approve, endorse or recommend any Alternate Proposal;

 

 

53

---

Table of Contents

(iv)

approve or recommend or execute or enter into, any letter of intent, agreement in principle, memorandum of understanding, tender offer agreement, merger agreement, acquisition agreement, business combination agreement, joint venture agreement, option agreement or other similar agreement in respect of any Alternate Proposal; or

 

(v)

propose publicly or agree to do any of the foregoing related to any Alternate Proposal; and

 

(b)

to promptly after becoming aware of a receipt of an Alternate Proposal or of any request for non-public information or inquiry relating to Alcatel Lucent by any person or a group of persons who has or would reasonably be expected to make any Alternate Proposal, provide Nokia with notice of the terms and conditions of such Alternate Proposal, request or inquiry.

Notwithstanding the foregoing, if at any time Alcatel Lucent receives a bona fide written Alternate Proposal or any written request for non-public information or inquiry relating to Alcatel Lucent by any person or group of persons who has or is expected to make any bona fide written Alternate Proposal, in each case that the Alcatel Lucent board of directors determines in good faith constitutes or is reasonably likely to lead to a Superior Proposal, Alcatel Lucent may engage in any of the actions described in paragraph (a)(ii) above provided that (i) the person or group of persons making such Alternate Proposal or request, as applicable, for non-public information or inquiry has signed a confidentiality agreement with Alcatel Lucent on terms not less restrictive in any material respect on such person or group of persons than the confidentiality agreement between Nokia and Alcatel Lucent and containing (A) no exclusivity provision or provision (unless waived by such person) inconsistent with the terms of the no solicitation provision of the Memorandum of Understanding and (B) a standstill provision of a duration of at least one year (subject to customary exceptions), and (ii) all information which is provided to such person or group of persons but was not previously provided to Nokia must be provided to Nokia as promptly as practicable.

“Alternate Proposal” with respect to Alcatel Lucent means any offer or proposal for, or any indication of interest in by any person or group of persons, in one or a series of related transactions (other than the Exchange Offer) involving (i) any direct or indirect acquisition or purchase of (A) the Alcatel Lucent Securities that would result in any person or a group of persons owning 15% or more of the Alcatel Lucent Shares (either directly or after conversion or exercise of such Alcatel Lucent Securities) or (B) assets of Alcatel Lucent or any of its subsidiaries, including by way of the acquisition or purchase of, or subscription to, any class of equity securities or voting rights of any of its subsidiaries, that represent (or generate) 15% or more of the consolidated gross revenue, consolidated EBITDA or consolidated gross assets of Alcatel Lucent, as presented in the most recent audited annual consolidated financial statements of Alcatel Lucent; or (ii) any merger, reorganization, restructuring, contribution, share exchange, consolidation, business combination, joint venture, recapitalization, liquidation, dissolution or similar transaction involving Alcatel Lucent or any of its subsidiaries or any of their respective assets meeting the tests set forth in prong (i)(B) of this definition, but with the exception of (x) intra-group reorganizations and transactions or (y) any transfer, sale, disposition, exchange or distribution of all or part of Alcatel Lucent’s interest in Alcatel Lucent Submarine Networks in accordance with the terms of the Memorandum of Understanding, provided that such transfer, sale, disposition, exchange or distribution does not involve or require the issuance of any Alcatel Lucent Shares.

“Superior Proposal” means any bona fide written Alternate Proposal from any person or group of persons (provided that, for the purpose of this definition, all references to “15%” in the definition of “Alternate Proposal” are replaced by “30%” with respect to prong (i)(A) of the Alternate Proposal definition and are replaced by “50%” with respect to prong (i)(B) of the Alternate Proposal definition) that the Alcatel Lucent Board determines in good faith (after consultation with its outside legal counsel

 

54

---

Table of Contents

and financial advisors in each case of international repute) (i) to be more favorable to Alcatel Lucent, the holders of the Alcatel Lucent Securities and the other stakeholders of Alcatel Lucent than the Exchange Offer, taking into account, among other things, (x) all legal, financial, regulatory, timing, financing and other aspects of the Alternate Proposal, the Memorandum of Understanding and the Exchange Offer on the terms described in the Memorandum of Understanding (including the respective conditions to and the respective expected timing and risks of consummation), (y) any improved terms that Nokia may have offered pursuant to and in accordance with the Memorandum of Understanding (as described further below), and (z) the corporate interest (intérêt social) of Alcatel Lucent and (ii) the Alcatel Lucent Board determines in good faith (after consultation with its outside legal counsel and financial advisors in each case of international repute) that failure to pursue such Alternate Proposal would be inconsistent with its fiduciary duties under applicable law.

Change in Alcatel Lucent Board Recommendation

Except as described below, after the date of this exchange offer/prospectus Alcatel Lucent agreed not to make a Change in Alcatel Lucent Board Recommendation (as defined below). Alcatel Lucent is permitted to:

 

(a)

at any time make a Change in Alcatel Lucent Board Recommendation in response to the receipt of any bona fide written Alternate Proposal that the Alcatel Lucent Board determines in good faith constitutes a Superior Proposal. Unless such Superior Proposal is in the form of a formal offer filed and cleared with the AMF, prior to the Alcatel Lucent Board making such a Change in Alcatel Lucent Board Recommendation, Alcatel Lucent agreed to send a written notice thereof to Nokia. Upon receipt of such notice by Nokia, Alcatel Lucent agreed, upon the request of Nokia in its sole discretion, to negotiate in good faith with Nokia during a period of five MoU Business Days from the date on which Nokia received such notice with respect to any changes to the terms of Memorandum of Understanding or the Exchange Offer irrevocably offered by Nokia. If the Alcatel Lucent Board determines in good faith (after consultation with its outside legal counsel and financial advisors in each case of international repute), after giving effect to such changes as are irrevocably offered by Nokia, that such Alternate Proposal (i) continues to constitute a Superior Proposal and (ii) the failure to make a Change in Alcatel Lucent Board Recommendation in response to such Superior Proposal would be inconsistent with its fiduciary duties under applicable law, then Alcatel Lucent may make a Change in Alcatel Lucent Board Recommendation in response to such Superior Proposal; and

 

(b)

at any time following reasonable notice to Nokia, make a Change in Alcatel Lucent Board Recommendation in response to a material adverse effect with respect to Nokia, if the Alcatel Lucent Board determines in good faith (after consultation with its outside legal counsel and financial advisors in each case of international repute) that its failure to do so would be inconsistent with its fiduciary duties under applicable law.

“Change in Alcatel Lucent Board Recommendation” means, at any time following the issuance of the Alcatel Lucent Board Recommendation, Alcatel Lucent (through the Alcatel Lucent Chief Executive Officer or the Chairman of the Alcatel Lucent Board) or the Alcatel Lucent Board (i) withdrawing, amending, qualifying or modifying, or publicly proposing to withdraw, amend, qualify or modify, the Alcatel Lucent Board Recommendation in a manner materially adverse to Nokia, (ii) approving or recommending any Alternate Proposal, including by making any public statements that expressly and unequivocally support any Alternate Proposal, or (iii) failing, upon the request of Nokia, to recommend against any publicly announced bona fide and credible Alternate Proposal within ten MoU Business Days after the initial public announcement thereof, provided that any material change in price or any other material term of such Alternate Proposal shall be deemed to be a new Alternate Proposal for purposes of this clause (iii); and provided further that, with respect to any action or inaction of the

 

55

---

Table of Contents

Alcatel Lucent Chief Executive Officer or the Chairman of the Alcatel Lucent Board (without the consent of the Alcatel Lucent Board), none of clauses (i), (ii) or (iii) constitute a Change in Alcatel Lucent Board Recommendation if the Alcatel Lucent Board, within two MoU Business Days of the relevant action or inaction, issues a statement expressly and unequivocally rejecting such action or inaction and re-issuing the Alcatel Lucent Board Recommendation.

Nokia Board Recommendation

On         , the Nokia board of directors determined, subject to its fiduciary duties under applicable law and the terms and conditions of the Memorandum of Understanding, to recommend that the Nokia shareholders vote in favor of the resolution presented to them to approve the authorization for the Nokia board of directors to issue such number of new Nokia Shares as may be necessary for delivering the Nokia Shares offered in consideration for the Alcatel Lucent Securities tendered into the Exchange Offer and the appointment of the three members of the Nokia board of directors identified jointly by the Corporate Governance & Nomination committee of the Nokia board of directors and by Alcatel Lucent, in each case subject to the completion of the Exchange Offer.

Change in Nokia Board Recommendation

Except as set forth below, the Nokia board of directors agreed not to make a Change in Nokia Board Recommendation (as defined below). Notwithstanding the foregoing, at any time prior to the Nokia shareholder vote with respect to the Nokia Shareholder Approval, the Nokia board of directors may make a Change in Nokia Board Recommendation in response to a Nokia Intervening Event (as defined below) if it determines in good faith that its failure to do so would be inconsistent with its fiduciary duties under applicable law, after giving effect to such changes as are offered by Alcatel Lucent within ten MoU Business Days after receiving the notice thereof to address such Nokia Intervening Event. Prior to the Nokia board of directors making a Change in Nokia Board Recommendation, Nokia agreed to send a written notice to Alcatel Lucent that Nokia intends to take such action. Upon receipt of such notice by Alcatel Lucent, Nokia agreed, upon the request of Alcatel Lucent in its sole discretion, to negotiate in good faith with Alcatel Lucent during a period of ten MoU Business Days from the date on which Alcatel Lucent received such notice with respect to any changes to the terms of the Memorandum of Understanding or the Exchange Offer irrevocably offered by Alcatel Lucent. If the Nokia board of directors determines in good faith (after consultation with its outside legal counsel and financial advisors in each case of international repute), after giving effect to such changes as are irrevocably offered by Alcatel Lucent, that its failure to make a Change in Nokia Board Recommendation in connection with such Nokia Intervening Event continues to be inconsistent with its fiduciary duties under applicable law, then Nokia may make a Change in Nokia Board Recommendation in connection with such Nokia Intervening Event.

“Change in Nokia Board Recommendation” means Nokia (through the Nokia President & Chief Executive Officer or the Chairman of the Nokia board of directors) or the Nokia board of directors (i) at any time withdrawing, amending, qualifying or modifying, or publicly proposing to withdraw, amend, qualify or modify, the Nokia Board Recommendation in a manner materially adverse to Alcatel Lucent or the holders of the Alcatel Lucent Securities provided that, with respect to any action or inaction of the Nokia President & Chief Executive Officer or the Chairman of the Nokia board of directors (without the consent of the Nokia board of directors), none of the foregoing shall constitute a Change in Nokia Board Recommendation if the Nokia board of directors, within two MoU Business Days of the relevant action or inaction, issues a statement expressly and unequivocally rejecting such action or inaction and re-issuing the Nokia Board Recommendation or (ii) at the time Nokia convenes or holds the Nokia general meeting, the Nokia board of directors failing to reiterate the Nokia Board Recommendation.

 

 

56

---

Table of Contents

“Nokia Intervening Event” means any change, condition, effect, event or occurrence that is unknown to and not reasonably foreseeable by the Nokia board of directors on the date of the Memorandum of Understanding, which change, condition, effect, event or occurrence becomes known to the Nokia board of directors prior to obtaining the Nokia Shareholder Approval; provided, however, that none of the following (or the consequences thereof) will constitute a Nokia Intervening Event: (i) any action taken by any party pursuant to the Memorandum of Understanding or in connection with the transactions contemplated by the Memorandum of Understanding; (ii) any changes in the market price or trading volume of the Alcatel Lucent Securities or the Nokia Shares or the respective credit ratings of Alcatel Lucent or Nokia; (iii) the receipt, existence of or terms of any proposal by a third party to acquire (directly or indirectly) an interest, assets, securities or enter into an arrangement (including any merger, reorganization, restructuring, contribution, share exchange, consolidation, business combination, joint venture, recapitalization, liquidation, dissolution or similar transaction) in respect of Nokia or any of Nokia’s subsidiaries or any inquiry relating thereto, or the implementation of any such arrangements; (iv) any change, condition, effect, event or occurrence relating to the transactions contemplated by the Memorandum of Understanding; or (v) any change, condition, effect, event or occurrence referred to in clauses (i) through (ix)  of the definition of “Material Adverse Effect” (as set forth in the Memorandum of Understanding).

Indemnification and D&O Insurance

Subject to the completion of the Exchange Offer and for six years following the completion of the Exchange Offer, Nokia agreed to cause Alcatel Lucent or its subsidiaries to indemnify and provide advancement of expenses to all past and present directors and senior officers of Alcatel Lucent on terms not less favorable to such director or senior officer than those provided to him or her by Alcatel Lucent or its subsidiaries on the date of the Memorandum of Understanding. The preceding indemnity provision will be deemed satisfied if Alcatel Lucent or Nokia purchase a six-year “tail” prepaid policy on the relevant terms.

Conditions to the Filing of the French Offer

Pursuant to the Memorandum of Understanding, the filing of the French Offer with the AMF was subject to certain customary conditions precedent, including the following:

 

•

absence of injunction or law in effect immediately prior to the filing of the French Offer making illegal, restraining, enjoining or otherwise prohibiting the Exchange Offer;

 

•

receipt of competition approvals including (i) expiration or termination of the waiting period pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (ii) approval pursuant to Council Regulation (EC) No. 139/2004, and (iii) approval pursuant to the merger control laws in the following countries: Brazil, Canada, China, India, Japan, Taiwan and Russia;

 

•

the authorization of the Ministry of Economy and Finance of the French Republic and the receipt of the required approval of the Committee on Foreign Investment in the United States;

 

•

accuracy of the representations and warranties of Alcatel Lucent, subject to a materiality standard;

 

•

performance of the covenants under the Memorandum of Understanding by Alcatel Lucent, subject to a materiality standard;

 

•

reiteration or issuance of the Alcatel Lucent Board Recommendation; and

 

 

57

---

Table of Contents

•

absence of a continuing Material Adverse Effect (as defined in the Memorandum of Understanding) with respect to Alcatel Lucent.

All of the foregoing conditions were satisfied or waived prior to the filing of the French Offer with the AMF on                      , 2015.

Termination of the Memorandum of Understanding

The Memorandum of Understanding may be terminated by mutual agreement of Nokia and Alcatel Lucent.

After the commencement of the U.S. Offer, the Memorandum of Understanding may be terminated either by Nokia or Alcatel Lucent with a written notice to the other party (subject to certain exceptions):

 

(a)

if, pursuant to Article 232-11 of the AMF General Regulation, the French Offer has been withdrawn by Nokia, or the AMF has published a notice that the French Offer was not successful;

 

(b)

if any relevant governmental authority of competent jurisdiction shall have (i) denied in writing any regulatory consent required under the Memorandum of Understanding or (ii) enacted, issued, promulgated or granted any restricting law prohibiting the transaction contemplated by the Memorandum of Understanding;

 

(c)

if the Alcatel Lucent board of directors withdraws its support for the Exchange Offer in connection with a Superior Proposal; or

 

(d)

prior to the completion of the Exchange Offer if the resolution related to the Nokia Shareholder Approval has been submitted at the Nokia extraordinary general meeting and the Nokia Shareholder Approval shall not have been validly obtained.

After the commencement of the Exchange Offer, the Memorandum of Understanding may be terminated by Nokia with a written notice to Alcatel Lucent (subject to certain exceptions) for any reason other than in connection with a Superior Proposal or in response to a material adverse effect with respect to Nokia if the Alcatel Lucent board of directors withdraws its support for the Exchange Offer.

After the commencement of the Exchange Offer, the Memorandum of Understanding may be terminated by Alcatel Lucent with a written notice to Nokia (subject to certain exceptions) if the Nokia board of directors makes a Change in Nokia Board Recommendation.

The Memorandum of Understanding contains certain other termination provisions that have expired prior to commencement of the U.S. Offer.

Even if the Memorandum of Understanding was terminated, such a termination would not automatically result in the withdrawal of the French Offer. According to Article 232-11 of the AMF General Regulation, an offeror may only withdraw its offer in limited circumstances.

Termination Fees

After the commencement of the Exchange Offer, Nokia may be obligated to pay to Alcatel Lucent:

 

(a)

EUR 150 million if the Memorandum of Understanding is terminated due to a failure to obtain Nokia Shareholder Approval;

 

 

58

---

Table of Contents

(b)

EUR 300 million if the Memorandum of Understanding is terminated due to (i) Change in Nokia Board Recommendation or (ii) material breach by Nokia of the Memorandum of Understanding and Nokia or Nokia’s board of directors having taken deliberate action to frustrate the obtaining of the Nokia Shareholder Approval; or

 

(c)

EUR 400 million if the Memorandum of Understanding is terminated due to a relevant authority of competent jurisdiction having enacted or otherwise issued an injunction or a restricting law with respect to the Exchange Offer.

After the commencement of the Exchange Offer, Alcatel Lucent may be obligated to pay to Nokia:

 

(a)

EUR 300 million if the Memorandum of Understanding is terminated due to (i) Alcatel Lucent board of directors decision or measure leading to withdrawal of the French Offer pursuant to Article 232-11 of the AMF General Regulation or (ii) change in Alcatel Lucent Board Recommendation; or

 

(b)

EUR 300 million if (i) a certain type of an Alternate Proposal is publicly announced or otherwise communicated to Alcatel Lucent, (ii) Alcatel Lucent does not make a Change in Alcatel Lucent Board Recommendation, (iii) the Exchange Offer is terminated due to failure to satisfy the Minimum Tender Condition and (iv) within 12 months of such termination, Alcatel Lucent enters into and consummates an agreement with respect to such Alternate Proposal with the person making such Alternate Proposal.

The Memorandum of Understanding contains certain other termination fee provisions that expired prior to commencement of the U.S. Offer.

Standstill

Nokia and Alcatel Lucent agreed to reciprocal standstill periods, subject to customary exceptions, with respect to the other party’s securities following certain events of termination of the Memorandum of Understanding. The standstill periods would last until the longer of the 12-month anniversary of the termination date of the Memorandum of Understanding and the 18-month anniversary of the date of the Memorandum of Understanding.

Exchange Ratio Adjustment Mechanism

According to the Memorandum of Understanding, if between the date of the Memorandum of Understanding (i.e., April 15, 2015) and the settlement date of the Exchange Offer or, if any, the subsequent offering period (or the relevant settlement date with respect to any additional acceleration mechanism of the Alcatel Lucent Stock Options and Performance Shares plans), (i) the outstanding Alcatel Lucent Shares or Nokia Shares are changed into a different number of shares or a different class by reason of any share dividend, subdivision, reclassification, split, reverse split, combination or exchange of shares, or (ii) Alcatel Lucent or Nokia resolve to pay any dividend (other than, with respect to Nokia, the ordinary dividend of 0.14 euros paid by Nokia in 2015), or (iii) Alcatel Lucent or Nokia make any other distribution to its security holders or shareholders in each case with a record date before the settlement of the Exchange Offer or, if any, the subsequent offering period (or the relevant settlement date with respect to any additional acceleration mechanism of the Alcatel Lucent Stock Options and Performance Shares plans), then the consideration offered to the holders of Alcatel Lucent Securities pursuant to the Exchange Offer will be appropriately adjusted to provide to the holders of such Alcatel Lucent Securities the same economic effect as contemplated by the Memorandum of Understanding prior to such event.

 

59

---

Table of Contents

THE EXCHANGE OFFER

Terms of the Exchange Offer

Nokia, a Finnish corporation, is offering, upon the terms and subject to the Conditions set out in this exchange offer/prospectus and the French Offer Documentation to acquire all of the Alcatel Lucent Securities through the Exchange Offer whereby Alcatel Lucent Securities will be exchanged for Nokia Shares or Nokia ADSs, as described below.

As of the opening of the Exchange Offer, Nokia does not own, directly or indirectly, acting alone or in concert, any Alcatel Lucent Securities. As of the date of this exchange offer/prospectus, Nokia has not entered into any agreements to acquire Alcatel Lucent Securities outside of the Exchange Offer.

The Exchange Offer is comprised of the U.S. Offer and the French Offer. The U.S. Offer is being made pursuant to this exchange offer/prospectus to:

 

•

all U.S. holders of outstanding Alcatel Lucent Shares,

 

•

all holders of outstanding Alcatel Lucent ADSs, wherever located, and

 

•

all U.S. holders of outstanding OCEANEs.

For every Alcatel Lucent Share you validly tender into, and do not withdraw from, the U.S. Offer, you will receive, at your election, 0.55 Nokia Share or 0.55 Nokia ADS. For every Alcatel Lucent ADS you validly tender into, and do not withdraw from, the U.S. Offer, you will receive 0.55 Nokia ADS. For every 2018 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive              Nokia Share, for every 2019 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive              Nokia Share and for every 2020 OCEANE you validly tender into, and do not withdraw from, the U.S. Offer, you will receive              Nokia Share. Holders of Alcatel Lucent ADSs located outside of the United States may participate in the U.S. Offer only to the extent the local laws and regulations applicable to those holders permit them to participate in the U.S. Offer.

The French Offer to exchange 0.55 Nokia Share for every Alcatel Lucent Share,              Nokia Share for every 2018 OCEANE,              Nokia Share for every 2019 OCEANE, and              Nokia Share for every 2020 OCEANE, is being made pursuant to the French Offer Documentation available to holders of Alcatel Lucent Shares and OCEANEs who are located in France (holders of Alcatel Lucent Shares and OCEANEs who are located outside of France may not participate in the French Offer except if, pursuant to the local laws and regulations applicable to those holders, they are permitted to participate in the French Offer).

After completion of the Exchange Offer and assuming that all Alcatel Lucent Securities are tendered into the Exchange Offer or the subsequent offering period, if any, former holders of Alcatel Lucent Securities are expected to own approximately 33.5% of the issued and outstanding Nokia Shares on a fully diluted basis.

Nokia’s obligation to exchange Nokia Shares for Alcatel Lucent Securities pursuant to the Exchange Offer is subject to the Conditions described under “—Conditions to the Exchange Offer.”

Holders of Alcatel Lucent Securities who tender their securities for Nokia Shares or Nokia ADSs pursuant to the Exchange Offer will not be obligated to pay any charges or expenses of the U.S. exchange agent, of the Nokia depositary or of the Alcatel Lucent depositary.

 

60

---

Table of Contents

Holders whose Alcatel Lucent Securities are tendered for Nokia Shares or Nokia ADSs pursuant to the Exchange Offer by a broker, dealer, commercial bank, trust company or other nominee will be responsible for any fees or commissions such nominees may charge in connection with such tender. Holders of Alcatel Lucent Securities who tender their securities pursuant to the Exchange Offer will also be responsible for all governmental charges and taxes payable in connection with such tender.

Offer Period

The U.S. Offer commenced on              following Nokia’s filing of the Schedule TO with the SEC. The U.S. Offer and withdrawal rights for tenders of Alcatel Lucent Shares and OCEANEs into the U.S. Offer will expire at the Expiration Date (which is 11:00 A.M., New York City time (5:00 P.M., Paris time) on              unless the U.S. Offer is extended). The ADS Tender Deadline for validly tendering and withdrawing Alcatel Lucent ADSs in the U.S. Offer will expire at 5:00 P.M., New York City time, on the U.S. business day immediately preceding the Expiration Date, which will be              unless the U.S. Offer is extended.

Extension, Termination and Amendment

Pursuant to the Memorandum of Understanding, Nokia has agreed to ensure that, subject to applicable law, the period during which the U.S. Offer is open (which will be at least 20 U.S. business days) corresponds to the period during which the French Offer is open (including any extensions or subsequent offering periods in relation to the French Offer). According to Article 231-34 of the AMF General Regulation, during the offer period, only the AMF can extend the French Offer. The AMF may extend the French Offer period in certain circumstances, including if a competing offer is filed, if the terms of the French Offer are improved, if the AMF’s decision to clear the French Offer is being appealed, or in case it requires the amendment of the French Offer Documentation relating, in particular, to the legal, financial and accounting characteristics of Nokia or Alcatel Lucent, due to an omission or inaccuracy. Subject to the U.S. federal securities laws and the Memorandum of Understanding, Nokia expressly reserves the right to extend the U.S. Offer either to match the extension of the French Offer or otherwise.

Furthermore, Nokia may be required by the U.S. federal securities laws (including Rule 14e-1 under the Exchange Act) to extend the U.S. Offer, if Nokia makes a material change to the terms of the U.S. Offer. For example, if Nokia changes the percentage of Alcatel Lucent Securities sought in the U.S. Offer or the exchange ratio applicable to the U.S. Offer within ten U.S. business days prior to the then-scheduled Expiration Date, the U.S. Offer will be extended so that it will expire no less than ten U.S. business days after the change is first published, sent or given to holders of Alcatel Lucent Securities in order to allow adequate dissemination and investor response to the change. If Nokia makes any other material change to the terms of the U.S. Offer or in the information concerning the U.S. Offer, or waives a material condition of the U.S. Offer, Nokia will extend the U.S. Offer, if required by applicable law, for a period sufficient to allow you to consider the amended terms of the U.S. Offer. Nokia will comply with Rule 14d-4(d)(2) under the Exchange Act in connection with material changes to the terms of the U.S. Offer. If Nokia is required to extend the U.S. Offer pursuant to the SEC rules and regulations, it intends to seek AMF’s consent to a corresponding extension of the French Offer. There is no guarantee that AMF would grant such consent, which may lead to different offering periods for the French Offer and the U.S. Offer.

To the extent permitted by applicable rules and regulations of the AMF and the SEC and subject to the Memorandum of Understanding, Nokia expressly reserves the right to, at any time and from time to time:

 

•

terminate or amend the U.S. Offer (and not accept at expiration of the offer period any Alcatel Lucent Securities) upon the failure of any of the Conditions described in this exchange offer/prospectus below under “—Conditions to the Exchange Offer”;

 

61

---

Table of Contents

•

revoke the French Offer with the prior approval of the AMF if (i) the Exchange Offer becomes without purpose, or (ii) (A) Alcatel Lucent adopted measures which modify its substance during the offer period or in case the Exchange Offer is successful, or (B) the measures taken by Alcatel Lucent render the continuation of the Exchange Offer particularly onerous. Revocation of the French Offer would likely have a material adverse effect on the U.S. Offer, including the likely failure of the Minimum Tender Condition; and

 

•

waive any Condition or otherwise amend the Exchange Offer in any respect, provided that, under the AMF General Regulations, Nokia may not amend the terms of the French Offer in a manner adverse to the shareholders and any amendment must be made no later than five French trading days prior to the expiration of the French Offer period and requires the prior approval of the AMF. A waiver of a material condition or any other material change to the U.S. Offer, if that waiver or change occurs ten or five U.S. business days, as applicable, prior to the date the U.S. Offer is scheduled to expire, may also require the extension of the U.S. Offer as described above. Under the AMF General Regulation, the Minimum Tender Condition is waived by Nokia, the Exchange Offer will lapse if Nokia fails to cross the Mandatory Minimum Acceptance Threshold. In addition, pursuant to the Memorandum of Understanding, Nokia cannot, without the prior written consent of Alcatel Lucent, amend, modify, supplement or waive any term of the Exchange Offer or Condition, other than the Minimum Tender Condition, in a manner materially adverse to Alcatel Lucent or the holders of Alcatel Lucent Securities.

In addition, as described further in “—Conditions to the Exchange Offer”, we may waive the Minimum Tender Condition to any level above the Mandatory Minimum Acceptance Threshold at the time of announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer) without extending the Exchange Offer period.

To extend, terminate, waive a Condition to or amend the U.S. Offer, Nokia will notify the U.S. exchange agent by written notice or oral notice confirmed in writing. If Nokia determines to extend, terminate, waive a Condition to or amend the Exchange Offer, it will seek any required approval of the AMF and, upon such approval, or if such approval is not required, no later than 9:00 A.M., New York City time, on the next U.S. business day after such extension, termination, waiver or amendment, it will make public announcement thereof. Subject to applicable law (including Rule 14d-4(d)(1) under the Exchange Act, which requires that any material change in the information published, sent or given to shareholders in connection with the U.S. Offer be promptly disseminated to security holders in a manner reasonably designed to inform security holders of that change) and without limiting the manner in which Nokia may choose to make any public announcement, Nokia does not assume any obligation to publish, advertise or otherwise communicate any public announcement of this type, as explained below, other than by issuing a public announcement. In addition, Nokia will post notice of any public announcement of this type on Nokia’s website at www.nokia.com. The information on such website is not a part of this exchange offer/prospectus and is not incorporated by reference herein.

If Nokia extends the period of time during which the U.S. Offer is open, the U.S. Offer will expire at the latest time and date to which Nokia extends the Expiration Date or ADS Tender Deadline, as applicable. During any such extension, all Alcatel Lucent Securities validly tendered into, and not withdrawn from, the U.S. Offer prior to that date will remain subject to your right to withdraw your Alcatel Lucent Securities, except during the subsequent offering period, as discussed below. You should read the discussion under “—Withdrawal Rights” for more information about your ability to withdraw tendered Alcatel Lucent Securities.

Subsequent Offering Period

A subsequent offering period is an additional period of time after Nokia has acquired Alcatel Lucent Securities in the Exchange Offer during which holders may tender, but not withdraw, Alcatel Lucent

 

62

---

Table of Contents

Securities and receive the Exchange Offer consideration. Pursuant to the Memorandum of Understanding, and according to Article 232-4 of the AMF General Regulation, if more than 50% but less than 95% of the share capital and voting rights of Alcatel Lucent have been tendered in and not withdrawn from the Exchange Offer, there will be a subsequent offering period for the French Offer. Under the AMF General Regulation, the subsequent offering period for the French Offer will begin no later than ten French trading days following the publication by the AMF of the results of the French Offer (taking into account the results of the U.S. Offer) and must last at least ten French trading days. Pursuant to the Memorandum of Understanding, Nokia has agreed to ensure that, subject to applicable law, the period during which the U.S. Offer is open corresponds to the period during which the French Offer is open (including subsequent offering periods in relation to the French Offer). If a subsequent offering period is provided, Nokia will publicly announce the results of the Exchange Offer, including the approximate number and percentage of Alcatel Lucent Securities tendered to date, no later than nine French trading days after the expiration of the Exchange Offer period and will thereafter begin the subsequent offering period in accordance with AMF General Regulation. Nokia expressly reserves the right in its sole discretion to conduct a subsequent offering period for the U.S. Offer either to match the subsequent offering period of the French Offer or otherwise. Nokia also expressly reserves the right, in is sole discretion, to extend the subsequent offering period for the U.S. Offer by giving oral or written notice to the U.S. exchange agent.

Pursuant to Rule 14d-7(a)(2) under the Exchange Act, no withdrawal rights apply to Alcatel Lucent Securities tendered during a subsequent offering period and no withdrawal rights apply during the subsequent offering period with respect to the Alcatel Lucent Securities previously tendered in the U.S. Offer and accepted for exchange. The same consideration will be received by Alcatel Lucent Security holders tendering in the Exchange Offer or in a subsequent offering period. Please see the section of this exchange offer/prospectus entitled “—Withdrawal Rights.”

Withdrawal Rights

Alcatel Lucent ADSs tendered into the U.S. Offer can be withdrawn at any time prior to the ADS Tender Deadline. However, these withdrawal rights will not be available following the expiration of the U.S. Offer and prior to the commencement of the subsequent offering period, if any. In addition, subject to satisfaction of all Conditions other than the Minimum Tender Condition, these withdrawal rights will not be available during the period that the securities tendered into the Exchange Offer are being counted. For your withdrawal of your Alcatel Lucent ADSs to be effective, the U.S. exchange agent must receive a timely written notice of withdrawal. Any such notice must specify the name of the person who tendered the Alcatel Lucent ADSs being withdrawn, the number of Alcatel Lucent ADSs being withdrawn and the name of the registered holder if different from that of the person who tendered such Alcatel Lucent ADSs.

If certificates evidencing Alcatel Lucent ADSs being withdrawn have been delivered or otherwise identified to the U.S. exchange agent, then, prior to the physical release of such certificates, (1) the U.S. exchange agent also must receive the name of the registered holder and the serial numbers of the particular certificate evidencing the Alcatel Lucent ADSs and (2) the signature(s) on the notice of withdrawal must be guaranteed by an eligible institution unless such Alcatel Lucent ADSs have been tendered for the account of an eligible institution. If Alcatel Lucent ADSs have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of the securities.

Alcatel Lucent Shares or OCEANEs tendered for exchange may be withdrawn at any time prior to the Expiration Date. However, these withdrawal rights will not be available following the expiration of the offer period and prior to the commencement of the subsequent offering period, if any. In addition,

 

63

---

Table of Contents

subject to satisfaction of all Conditions other than the Minimum Tender Condition, these withdrawal rights will not be available during the period that the securities tendered into the Exchange Offer are being counted. To withdraw previously tendered Alcatel Lucent Shares or OCEANEs, you should contact the French or non-French financial intermediary or nominee through whom you tendered regarding their withdrawal procedures. If you wish to withdraw your Alcatel Lucent Shares or OCEANEs, it is your responsibility to ensure that the financial intermediary that has been instructed to tender your Alcatel Lucent Shares or OCEANEs receives proper instruction to withdraw the tender of those Alcatel Lucent Shares or OCEANEs sufficiently in advance of the Expiration Date.

In addition, in accordance with U.S. securities laws, tendered Alcatel Lucent Securities may generally be withdrawn if they have not been accepted for exchange within 60 days after commencement of the U.S. Offer.

During any subsequent offering period no withdrawal rights will apply to Alcatel Lucent Securities tendered during such subsequent offering period, pursuant to Rule 14d-7(a)(2) under the Exchange Act.

Nokia will decide all questions as to the form and validity (including time of receipt) of any notice of withdrawal in its sole discretion, and its decision will be final and binding. None of Nokia, the U.S. exchange agent, the information agent nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or will incur any liability for failure to give any such notification.

Any Alcatel Lucent Securities properly withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer. However, you may retender withdrawn Alcatel Lucent Securities by following one of the procedures discussed in the section of this exchange offer/prospectus entitled “—Procedure for Tendering” at any time prior to the Expiration Date or the ADS Tender Deadline, as applicable, or during any subsequent offering period.

Conditions to the Exchange Offer

Nokia’s obligation to accept, and to exchange, any Alcatel Lucent Securities validly tendered into the Exchange Offer will be subject only to:

 

•

the satisfaction of the Minimum Tender Condition or, if waived by Nokia in its sole discretion, the crossing of the Mandatory Minimum Acceptance Threshold; and

 

•

the receipt of the Nokia Shareholder Approval.

For purposes of the Minimum Tender Condition, the “fully diluted” Alcatel Lucent Shares will be calculated as follows: (i) in the numerator, the sum of (A) Alcatel Lucent Shares (including Alcatel Lucent Shares represented by ADSs) validly tendered into, and not withdrawn from, the Exchange Offer and (B) Alcatel Lucent Shares issuable upon conversion of the OCEANEs validly tendered into, and not withdrawn from, the Exchange Offer taking into account the relevant OCEANEs’ conversion ratio applicable on the date of completion of the Exchange Offer; and (ii) in the denominator, the sum of (A) all Alcatel Lucent Shares issued and outstanding on the date of completion of the Exchange Offer and (B) all Alcatel Lucent Shares issuable at any time prior to, on or after the date of completion of the Exchange Offer upon the exercise of any outstanding options, warrants, convertible securities or rights to purchase, subscribe or be allocated, newly issued Alcatel Lucent Shares, including upon conversion of the OCEANEs (taking into account the relevant OCEANEs’ conversion ratio applicable on the date of completion of the Exchange Offer), exercise of Alcatel Lucent Stock Options or realization of Alcatel Lucent Performance Shares.

 

•

Under the AMF General Regulation, Nokia may waive the Minimum Tender Condition until the date of publication by the AMF of the results of the French Offer (taking into account the

 

64

---

Table of Contents

results of the U.S. Offer). If Nokia waives the Minimum Tender Condition, by application of the provisions of Article 231-9 (I) of the AMF General Regulation, the Exchange Offer will lapse if, on the date of the expiration of the Exchange Offer period, Nokia does not hold a number of Alcatel Lucent Shares representing at least the Mandatory Minimum Acceptance Threshold.

 

•

If necessary to reach the Mandatory Minimum Acceptance Threshold, Nokia undertakes to convert a sufficient number of OCEANEs tendered into the Exchange Offer so that Nokia holds sufficient number of Alcatel Lucent Shares to cross the Mandatory Minimum Acceptance Threshold. The conversion of such OCEANEs will be deemed to have retroactive effect to the date of expiration of the Exchange Offer period for the purpose of calculating the Mandatory Minimum Acceptance Threshold.

The Mandatory Minimum Acceptance Threshold would be calculated as follows:

 

•

the numerator being the sum of (i) all Alcatel Lucent Shares validly tendered into the Exchange Offer (including Alcatel Lucent Shares represented by Alcatel Lucent ADSs) as of the expiration date of the Exchange Offer period and (ii) all Alcatel Lucent Shares issuable upon conversion of the OCEANEs validly tendered into the Exchange Offer as of the expiration date of the Exchange Offer period, taking into account the relevant OCEANE’s conversion/exchange ratio applicable on the expiration date of such Exchange Offer; and

 

•

the denominator being the sum of (i) all Alcatel Lucent Shares issued and outstanding (including Alcatel Lucent Shares represented by Alcatel Lucent ADSs) as of the expiration date of the Exchange Offer period and (ii) all Alcatel Lucent Shares issuable upon conversion of the OCEANEs validly tendered into the Exchange Offer as of the expiration date of the Exchange Offer, taking into account the relevant OCEANE’s conversion/exchange ratio applicable on the expiration date of the Exchange Offer.

Subject to the SEC rules and regulation (including the SEC rules that require that material changes of a condition be promptly disseminated to shareholders in a manner reasonably designed to inform them of such changes), Nokia expressly reserves the right, at any time, and from time to time, to waive the Minimum Tender Condition, by giving oral or written notice of the waiver to the U.S. exchange agent and by making a public announcement in accordance with the procedures outlined in “—Extension, Termination and Amendment” above. If the Minimum Tender Condition is waived by Nokia, the Exchange Offer will lapse if Nokia fails to cross the Mandatory Minimum Acceptance Threshold.

In addition, in accordance with the French law and practice, Nokia may waive the Minimum Tender Condition to any level above the Mandatory Minimum Acceptance Threshold at the time of announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer). If Nokia elects to waive the Minimum Tender Condition at the time of announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer), Nokia would do each of the following:

 

•

announce that we may waive or reduce the Minimum Tender Condition at least five U.S. business days before the Expiration Date;

 

•

disseminate such announcement through a press release and other methods reasonably calculated to inform U.S. holders of the Alcatel Lucent Securities of the possibility of a waiver or reduction;

 

•

the press release would state that the Minimum Tender Condition may be waived to the level of the Mandatory Minimum Acceptance Threshold on the date of the announcement of the results of the French Offer (taking into account the results of the U.S. Offer);

 

•

during the five U.S. business day period after the announcement of a possible waiver or reduction, withdrawal rights would be provided in accordance with the terms of the U.S. Offer;

 

65

---

Table of Contents

•

the announcement would advise Alcatel Lucent Security holders to withdraw tendered Alcatel Lucent Securities immediately if their willingness to tender into the U.S. Offer would be affected by the reduction or waiver of the Minimum Tender Condition;

 

•

a subsequent offering period of not less than five U.S. business days would be provided with respect to the U.S. Offer after the announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer) (and a simultaneous waiver or reduction of the Minimum Tender Condition); and

 

•

all conditions of the Exchange Offer, other than the Minimum Tender Condition, would be satisfied or waived after the Expiration Date (at which time, the withdrawal rights would be terminated).

If we waive the Minimum Tender Condition in accordance with the foregoing provisions at the time of announcement of the results of the French Offer (taking into account the results of the U.S. Offer), the Exchange Offer would be successful and, upon settlement, Nokia would own Alcatel Lucent Securities at a level above the Mandatory Acceptance Threshold but below the Minimum Tender Condition. In accordance with French law, at the Mandatory Minimum Acceptance Threshold, Nokia would control Alcatel Lucent.

In addition, following such waiver, we would, in accordance with the AMF General Regulation, provide a subsequent offering period of not less than ten French trading days with respect to the French Offer. We would provide a subsequent offering period with respect to the U.S. Offer to match the subsequent offering period of the French Offer, with such subsequent offering period being not less than five U.S. business days. Holders of Alcatel Lucent Securities that did not tender their Alcatel Lucent Securities into the Exchange Offer prior to the Expiration Date, would be able to tender their Alcatel Lucent Securities into the subsequent offering period in accordance with the terms thereof.

Nokia’s obligation to file the French Offer with the AMF under the Memorandum of Understanding was subject to certain other conditions precedent, including receipt of certain regulatory approvals, accuracy of representations and warranties, compliance with covenants and absence of a material adverse effect. All these conditions were satisfied or waived prior to filing of the French Offer with the AMF. Refer to the Memorandum of Understanding included in Annex A to this exchange offer/prospectus for a description of such conditions.

Procedure for Tendering

You must follow the procedures described below in a timely manner in order to tender your Alcatel Lucent Securities.

The steps you must take to validly tender into the Exchange Offer will depend on whether you hold Alcatel Lucent Shares, Alcatel Lucent ADSs or OCEANEs and whether you hold such Alcatel Lucent Shares, Alcatel Lucent ADSs or OCEANEs directly or indirectly through a broker, dealer, commercial bank, trust company or other nominee.

Holders of Alcatel Lucent ADSs

If you hold Alcatel Lucent ADSs, you may tender your Alcatel Lucent ADSs into the U.S. Offer through the U.S. exchange agent, who will receive and hold tendered Alcatel Lucent ADSs for exchange on behalf of Nokia and, following completion of the Exchange Offer or the subsequent offering period, as applicable, will exchange such Alcatel Lucent ADSs for Nokia ADSs. While you could withdraw the Alcatel Lucent Shares represented by your Alcatel Lucent ADSs and tender those Alcatel Lucent Shares into the U.S. Offer, it may not be in your best interests to do so because you will have to pay a

 

66

---

Table of Contents

withdrawal fee to the Alcatel Lucent depositary in an amount equal to USD 5.00 or less per 100 Alcatel Lucent ADSs (or portion thereof) surrendered to the Alcatel Lucent depositary in exchange for withdrawal of Alcatel Lucent Shares. The Alcatel Lucent ADS depositary receipt facility will be closed to deposits and withdrawals for four U.S. business days prior to the ADS Tender Deadline. Alcatel Lucent ADSs may not be tendered into the French Offer.

In tendering your Alcatel Lucent ADSs into the U.S. Offer, you should consider the following:

 

•

you will receive Nokia ADSs;

 

•

you will not have to pay any Nokia ADS issuance fee to the Nokia depositary;

 

•

you will not have to pay any Alcatel Lucent ADS cancellation fee to the Alcatel Lucent depositary; and

 

•

you will not have to pay any fee to the U.S. exchange agent to tender your Alcatel Lucent ADSs.

If you hold Alcatel Lucent ADSs and would like to tender them into the U.S. Offer, you should follow the procedures described below. Nokia has retained Citibank, N.A. to act as the U.S. exchange agent in connection with the U.S. Offer.

Please note that, in accordance with Finnish law, Finnish citizens that own Nokia Shares must be registered directly on the Nokia shareholder register and thus cannot hold Nokia ADSs.

You must follow the procedures described below in a timely manner in order to tender your Alcatel Lucent ADSs into the U.S. Offer.

THE METHOD OF DELIVERY OF ADS CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT YOUR ELECTION AND RISK. ALCATEL LUCENT ADSs WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE U.S. EXCHANGE AGENT (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, NOKIA RECOMMENDS THAT YOU USE PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

 

•

If you hold your Alcatel Lucent ADSs directly in certificated form and you would like to tender them in the U.S. Offer, you must complete and sign the enclosed letter of transmittal and return it together with your Alcatel Lucent ADS certificates and all other required documentation to the U.S. exchange agent at the appropriate address specified on the back cover page of this exchange offer/prospectus no later than the ADS Tender Deadline, which is 5:00 P.M., New York City time on the U.S. business day immediately preceeding the Expiration Date, which will be             , unless the U.S. Offer is extended. The time involved in tendering Alcatel Lucent ADSs held directly in certificated form will vary depending on the time it takes you to complete the letter of transmittal and deliver it, your Alcatel Lucent ADS certificates and any other required documentation by registered mail to the U.S. exchange agent. If your Alcatel Lucent ADS certificates are not available, you may still tender your Alcatel Lucent ADSs in accordance with the guaranteed delivery procedures set forth under “—Guaranteed Delivery”.

 

•

If you hold your Alcatel Lucent ADSs in uncertificated form on the register of the Alcatel Lucent depositary (in direct registration form), you must complete and sign the letter of transmittal included with this exchange offer/prospectus and return it with any required documentation to the U.S. exchange agent at the appropriate address specified on the back cover page of this exchange offer/prospectus no later than the ADS Tender Deadline, which is

 

67

---

Table of Contents

5:00 P.M., New York City time on             , unless the U.S. Offer is extended. The time involved in tendering your Alcatel Lucent ADSs held directly in uncertificated form will vary depending on the time it takes you to complete the letter of transmittal and deliver it and any other required documentation by registered mail to the U.S. exchange agent.

 

•

If you hold your Alcatel Lucent ADSs directly in book-entry form through DTC and you would like to tender them in the U.S. Offer, you must tender your Alcatel Lucent ADSs by book-entry transfer using the ATOP system no later than the ADS Tender Deadline, which is 5:00 P.M., New York City time on the U.S. business day immediately preceding the Expiration Date, which will be             , unless the U.S. Offer is extended.

 

•

If you hold your Alcatel Lucent ADSs indirectly through a broker, dealer, commercial bank, trust company or other nominee, you should not complete and sign the letter of transmittal included with this exchange offer/prospectus. Instead, you should instruct your broker, dealer, commercial bank, trust company or other nominee to validly tender your Alcatel Lucent ADSs in the U.S. Offer through the U.S. exchange agent on your behalf sufficiently in advance of the ADS Tender Deadline so that the broker, dealer, commercial bank, trust company or other nominee can effect such tender through the U.S. exchange agent on your behalf prior to the ADS Tender Deadline. If you hold Alcatel Lucent ADSs indirectly through a broker, dealer, commercial bank, trust company or other nominee, the time involved to validly tender your Alcatel Lucent ADSs will vary depending on the time it takes you to instruct your broker, dealer, commercial bank, trust company or other nominee to validly tender your Alcatel Lucent ADSs in the U.S. Offer through the U.S. exchange agent and (i) if your Alcatel Lucent ADSs are evidenced by ADS certificates, the time it takes your broker, dealer, commercial bank, trust company or other nominee to complete the letter of transmittal on your behalf and deliver it and your Alcatel Lucent ADS certificates and any other required documentation by registered mail to the U.S. exchange agent or (ii) if you hold Alcatel Lucent ADSs in book-entry form through DTC, the time it takes your broker, dealer, commercial bank, trust company or other nominee to validly tender your Alcatel Lucent ADSs by book-entry transfer.

The U.S. exchange agent has established an additional means for registered holders of uncertificated Alcatel Lucent ADSs to complete and deliver letters of transmittal via the internet, by signing onto a secure website established and maintained by the U.S. exchange agent and filling in the applicable information online. Detailed instructions for completing and delivering the letter of transmittal via the internet (including the applicable password) are set forth in the letter of transmittal being distributed to holders of uncertificated Alcatel Lucent ADSs.

The U.S. exchange agent will receive and hold all tendered Alcatel Lucent ADSs for the benefit of Nokia. If all the Conditions have been satisfied or waived by Nokia, then the Alcatel Lucent ADSs will be accepted for exchange in the Exchange Offer.

Delivery of documents to DTC will not constitute delivery to the U.S. exchange agent.

If the certificates for Alcatel Lucent ADSs are registered in the name of a person other than the signer of the letter of transmittal, or if consideration is to be delivered or certificates for Alcatel Lucent ADSs not validly tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, then the validly tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed by an eligible institution as described above.

No alternative, conditional or contingent tenders of Alcatel Lucent ADSs will be accepted, and no fractional Alcatel Lucent ADSs will be purchased. By delivering the letter of transmittal, you waive any right to receive any notice of the acceptance of your Alcatel Lucent ADSs for exchange.

 

68

---

Table of Contents

All properly completed and duly executed letters of transmittal, Alcatel Lucent ADS certificates and any other required documents or, in the case of delivery of the letters of transmittal via internet, all letters of transmittal delivered via the U.S. exchange agent’s designated website or, in the case of a book-entry transfer, all agent’s messages, delivered to the U.S. exchange agent by you or on your behalf will be deemed, without any further action by the U.S. exchange agent, to constitute acceptance by you of the U.S. Offer with respect to your Alcatel Lucent ADSs validly tendered in the U.S. Offer upon the terms and subject to the conditions set forth in this exchange offer/prospectus and the accompanying letter of transmittal.

If your Alcatel Lucent ADSs are not accepted for exchange for any reason, your Alcatel Lucent ADS certificates or your Alcatel Lucent ADSs in book-entry form will be returned promptly after the expiration or termination of the U.S. Offer or your proper withdrawal of the Alcatel Lucent ADSs from the U.S. Offer, as applicable. In the case of Alcatel Lucent ADSs in book-entry form, such return will be effected by crediting such Alcatel Lucent ADSs to the account at DTC from which they were transferred. In the case of certificated ADSs, the return will be effected by mailing the applicable certificated ADSs to the address on the books and records of the Alcatel Lucent depositary.

Alcatel Lucent ADSs in respect of which a valid tender has been made will be held subject to the control of, or in an account controlled by, the U.S. exchange agent, and consequently you will not be able to sell, assign, transfer or otherwise dispose of such securities until such time as (i) you withdraw your Alcatel Lucent ADSs from the U.S. Offer, (ii) your Alcatel Lucent ADSs have been exchanged for Nokia ADSs (in which case you will only be able to sell, assign, transfer or otherwise dispose of the Nokia ADSs received in respect of your Alcatel Lucent ADSs) or (iii) your Alcatel Lucent ADSs have been returned to you if the U.S. Offer expires or is terminated or because they were not accepted for exchange.

Guaranteed Delivery

If you wish to tender Alcatel Lucent ADSs pursuant to the U.S. Offer and your Alcatel Lucent ADSs are not immediately available or you otherwise cannot deliver the Alcatel Lucent ADS certificates (the “Alcatel Lucent ADRs”) and all other required documents to the U.S. exchange agent prior to the ADS Tender Deadline, you may nevertheless tender such Alcatel Lucent ADSs into the U.S. Offer provided that all of the following conditions are satisfied:

 

•

the tender is made by or through a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in good standing in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchanges Medallion Program, or is otherwise an “Eligible Guarantor Institution” (as defined in Rule 17Ad-15 under the Exchange Act) (referred to collectively as “Eligible Institutions”);

 

•

a properly completed and duly executed notice of guaranteed delivery, substantially in the form made available by us, is received by the U.S. exchange agent as provided below on or prior to the ADS Tender Deadline; and

 

•

within three U.S. business days after the date of execution of such notice of guaranteed delivery, you deliver to the U.S. exchange agent, either:

 

•

your Alcatel Lucent ADRs, in proper form for transfer, together with a properly completed and duly executed letter of transmittal, with any required signature guarantee, or

 

•

a confirmation of a book-entry transfer of your Alcatel Lucent ADSs into the account of the U.S. exchange agent at DTC as described above, together with a properly completed and duly executed letter of transmittal, with any required signature guarantee or an agent’s message.

 

69

---

Table of Contents

The notice of guaranteed delivery may be delivered by hand or transmitted by facsimile transmission mailed to the U.S. exchange agent, or may be delivered by agent’s message in DTC’s ATOP system. The notice of guaranteed delivery must in all cases include a guarantee by an Eligible Institution in the form set forth in such notice. Delivery of documents to DTC in accordance with its procedures does not constitute delivery to the U.S. exchange agent.

Holders of Alcatel Lucent Shares

If you hold Alcatel Lucent Shares, there are three possible ways to validly tender them into the U.S. Offer:

 

•

you can tender your Alcatel Lucent Shares in exchange for Nokia ADSs;

 

•

you can tender your Alcatel Lucent Shares in exchange for Nokia Shares; or

 

•

you can deposit your Alcatel Lucent Shares into the Alcatel Lucent ADS program, receive Alcatel Lucent ADSs representing your deposited Alcatel Lucent Shares and tender those Alcatel Lucent ADSs in exchange for Nokia ADSs—in which case you will have to pay the Alcatel Lucent ADS issuance fee to the Alcatel Lucent depositary of $5.00 (or less) per 100 Alcatel Lucent ADSs issued. The Alcatel Lucent ADS program will be closed to deposits and withdrawals for four U.S. business days prior to the ADS Tender Deadline.

In deciding which method you should use to validly tender your Alcatel Lucent Shares into the U.S. Offer, you should consider the following:

If you validly tender your Alcatel Lucent Shares and elect to receive Nokia ADSs:

 

•

you will need to provide registration and delivery information for the Nokia ADSs you are entitled to receive;

 

•

you will receive Nokia ADSs;

 

•

you will not have to pay any issuance fee to the Nokia depositary; and

 

•

you will not have to pay any fee to the U.S. exchange agent to tender your Alcatel Lucent Shares.

If you validly tender your Alcatel Lucent Shares and elect to receive Nokia Shares or fail to make an election:

 

•

you will receive Nokia Shares;

 

•

your Nokia Shares will be in uncertificated form and, at your election, may be deposited into either (i) the same account in which you held your Alcatel Lucent Shares or (ii) your personal book-entry account with a Finnish book-entry operator, into your account with a financial intermediary or your broker’s, dealer’s, commercial bank’s, trust company’s or other nominee’s book-entry account with a Finnish book-entry operator or a financial intermediary. If you fail to make an election, or your election instruction is determined, in our sole discretion, to be deficient, your Nokia Shares will be deposited into the same account in which you held your Alcatel Lucent Shares; and

 

•

you will not have to pay any fee to the U.S. exchange agent to tender your Alcatel Lucent Shares.

If a tendering holder fails to elect to receive Nokia ADSs or fails to provide the requisite Nokia ADS registration and delivery information, such holder will receive Nokia Shares.

Please note that, in accordance with Finnish law, Finnish citizens that own Nokia Shares must be registered directly on the Nokia shareholder register and thus cannot hold Nokia ADSs.

 

70

---

Table of Contents

If you hold Alcatel Lucent Shares and would like to deposit them in the Alcatel Lucent ADS program, receive Alcatel Lucent ADSs representing your deposited Alcatel Lucent Shares and tender those Alcatel Lucent ADSs into the U.S. Offer through the U.S. exchange agent, you should tender the Alcatel Lucent ADSs representing your deposited Alcatel Lucent ADSs by following the procedures described above in “—Holders of Alcatel Lucent ADSs.” It may, however, not be in your best interests to do so because you will have to pay an issuance fee to the Alcatel Lucent depositary in an amount equal to USD 5.00 or less per 100 Alcatel Lucent ADSs (or portion thereof) issued by the Alcatel Lucent depositary in exchange for the Alcatel Lucent Shares deposited. The Alcatel Lucent ADS program will be closed to deposits and withdrawals for four U.S. business days prior to the ADS Tender Deadline.

You must follow the procedures described below in a timely manner in order to tender your Alcatel Lucent Shares into the U.S. Offer.

THE METHOD OF DELIVERY OF ANY AND ALL REQUIRED DOCUMENTS IS AT YOUR ELECTION AND RISK. ALCATEL LUCENT SHARES WILL BE DEEMED DELIVERED ONLY WHEN THE TENDERING FORMALITIES SET OUT BELOW HAVE BEEN DULY COMPLETED.

 

•

If you hold your Alcatel Lucent Shares through a French financial intermediary, you should not complete the letter of transmittal. Instead, your French financial intermediary should send you transmittal materials and instructions for participating in the U.S. Offer. If you have not yet received instructions from your French financial intermediary, please contact your French financial intermediary directly.

 

•

If you hold your Alcatel Lucent Shares through a custodian that is not a French financial intermediary, you should not complete the letter of transmittal. Instead, your custodian should either forward you the transmittal materials and instructions sent by the French financial intermediary that holds the Alcatel Lucent Shares on behalf of your custodian as record owner or send a separate form prepared by your custodian. If you have not yet received instructions from your custodian, please contact your custodian directly.

If the Alcatel Lucent Shares you hold are registered in direct nominative form (nominatif pur) in the Alcatel Lucent shareholders register and you wish to tender your Alcatel Lucent Shares into the U.S. Offer, you must register them in administrated nominative form (nominatif administré) with a licensed financial intermediary of your choice, unless you have previously requested their conversion into bearer form. Nokia draws your attention to the fact that if you request the conversion of your Alcatel Lucent Shares into bearer form, you forfeit any benefits related to the holding of shares in nominative form if the Exchange Offer is not successful.

Holders of OCEANEs

If you hold OCEANEs, there are two possible ways to validly tender them into the U.S. Offer:

 

•

you can tender your OCEANEs in exchange for Nokia Shares; or

 

•

you can convert your OCEANEs into Alcatel Lucent Shares at the change of control conversion/exchange ratio and tender the resulting Alcatel Lucent Shares.

In deciding which method you should use to validly tender your OCEANEs into the U.S. Offer, you should consider the following:

 

•

If you validly tender your OCEANEs and elect to receive Nokia Shares or fail to make an election:

 

•

you will receive              Nokia Shares for every 2018 OCEANE,              Nokia Shares for every 2019 OCEANE and              Nokia Shares for every 2020 OCEANE tendered;

 

71

---

Table of Contents

•

your Nokia Shares will be in uncertificated form and, at your election, may be deposited into either (i) the same account in which you hold your OCEANEs or (ii) your personal book-entry account with a Finnish book-entry operator, into your account with a financial intermediary or your broker’s, dealer’s, commercial bank’s, trust company’s or other nominee’s book-entry account with a Finnish book-entry operator or a financial intermediary;

 

•

if you fail to make an election, or your election instruction is determined, in our sole discretion, to be deficient, your Nokia Shares will be deposited into the same account in which you held your OCEANEs; and

 

•

you will not have to pay any fee to the U.S. exchange agent to tender your OCEANEs.

 

•

If you elect to convert your OCEANEs into Alcatel Lucent Shares at the change of control conversion/exchange ratio and tender the resulting Alcatel Lucent Shares:

 

•

upon conversion, you will receive              Alcatel Lucent Shares for every 2018 OCEANE,              Alcatel Lucent Shares for every 2019 OCEANE and              Alcatel Lucent Shares for every 2020 OCEANE that you convert; and

 

•

you may tender the resulting Alcatel Lucent Shares in accordance with the procedures outlined in “—Holders of Alcatel Lucent Shares” above.

You must follow the procedures described below in a timely manner in order to tender your OCEANEs into the U.S. Offer.

THE METHOD OF DELIVERY OF ANY AND ALL REQUIRED DOCUMENTS IS AT YOUR ELECTION AND RISK. OCEANEs WILL BE DEEMED DELIVERED ONLY WHEN THE TENDERING FORMALITIES SET OUT BELOW HAVE BEEN DULY COMPLETED.

 

•

If you hold your OCEANEs through a French financial intermediary, you should not complete the letter of transmittal. Instead, your French financial intermediary should send you transmittal materials and instructions for participating in the U.S. Offer. If you have not yet received instructions from your French financial intermediary, please contact your French financial intermediary directly.

 

•

If you hold your OCEANEs through a custodian that is not a French financial intermediary, you should not complete the letter of transmittal. Instead, your custodian should either forward you the transmittal materials and instructions sent by the French financial intermediary that holds the OCEANEs on behalf of your custodian as record owner or send a separate form prepared by your custodian. If you have not yet received instructions from your custodian, please contact your custodian directly.

If the OCEANEs you hold are registered in direct nominative form (nominatif pur) in the Alcatel Lucent shareholders register and you wish to tender your OCEANEs into the U.S. Offer, you must register them in administrated nominative form (nominatif administré) with a licensed financial intermediary of your choice, unless you have previously requested their conversion into bearer form. Nokia draws your attention to the fact that if you request the conversion of your OCEANEs into bearer form, you forfeit any benefits related to the holding of OCEANEs in nominative form if the Exchange Offer is not successful.

Other Requirements

If the letter of transmittal, notice of guaranteed delivery or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or other

 

72

---

Table of Contents

persons acting in a fiduciary or representative capacity, such persons should so indicate when signing. Proper evidence of authority to act must be submitted by such persons, although we may waive this requirement.

If any Alcatel Lucent Share or OCEANE or other evidence of ownership has been mutilated, destroyed, lost or stolen, you must:

 

•

furnish to your French financial intermediary or U.S. custodian satisfactory evidence of ownership and of the destruction, loss or theft or such document;

 

•

indemnify your French financial intermediary or U.S. custodian against loss; and

 

•

comply with any other reasonable requirements.

If any Alcatel Lucent ADR has been mutilated, destroyed, lost or stolen, you must contact the Alcatel Lucent ADS depositary and comply with the requirements under the deposit agreement to obtain a replacement Alcatel Lucent ADR before you will be able to tender those Alcatel Lucent ADSs in this U.S. Offer.

Your tender of Alcatel Lucent Securities pursuant to any of the procedures described above in “—Holders of Alcatel Lucent ADSs”, “—Holder of Alcatel Lucent Shares” and “—Holders of OCEANEs” will constitute your binding agreement with us to the terms of the U.S. Offer and Conditions.

Validity of Tenders

Nokia will determine questions as to the validity, form, eligibility, including time of receipt, and acceptance for exchange of any tender of Alcatel Lucent Securities, in Nokia’s sole discretion, and Nokia’s determination shall be final and binding. Nokia reserves the absolute right to reject any and all tenders of Alcatel Lucent Securities that Nokia determines are not in proper form or the acceptance of or exchange for which may be unlawful. Nokia also reserves the absolute right to waive any defect or irregularity in the tender of any Alcatel Lucent Securities of any particular holder, whether or not similar defects or irregularities are waived in the case of other holders. No tender of Alcatel Lucent Securities will be deemed to have been validly made until all defects and irregularities in tenders of Alcatel Lucent Securities have been cured or waived. None of Nokia, the U.S. exchange agent nor any other person will be under any duty to give notification of any defects or irregularities in the tender of any Alcatel Lucent Securities, and none of them will incur any liability for failure to give any such notification. Nokia’s interpretation of the terms of the Exchange Offer and Conditions, including the letter of transmittal and instructions thereto, will be final and binding.

Announcement of Results

The AMF will announce the results of the French Offer, taking into account the results of the U.S. Offer, no later than nine French trading days following the expiration of the French Offer period and, if applicable, the expiration of the subsequent offering period. In addition, Nokia will also announce the results of the Exchange Offer and, if applicable, the subsequent offering period by means of a public announcement to be issued on the date of announcement of the results by the AMF. In addition, notice will be posted on Nokia’s website at www.nokia.com. The information on Nokia’s website is not a part of this exchange offer/prospectus and is not incorporated by reference herein.

Settlement and Delivery of Securities

If the Conditions have been satisfied or, if applicable, waived, Nokia will accept for exchange and will exchange all Alcatel Lucent Securities that have been validly tendered into, and not withdrawn from,

 

73

---

Table of Contents

the Exchange Offer and Nokia will issue and deliver the Nokia Shares, and will cause its depositary to issue and deliver Nokia ADSs through the U.S. exchange agent, approximately five French trading days following the announcement of the results of the French Offer by the AMF, in accordance with applicable Finnish, French and U.S. rules and regulations. With respect to the subsequent offering period, if any, in accordance with the AMF General Regulation, Nokia will accept for exchange and will exchange all Alcatel Lucent Securities that have been validly tendered into the Exchange Offer during the subsequent offering period and Nokia will issue and deliver the Nokia Shares and will cause its depositary to issue and deliver Nokia ADSs through the U.S. exchange agent approximately five French trading days following the announcement of the results of the French Offer by the AMF during the subsequent offering period, in accordance with applicable French and U.S. rules and regulations.

If you validly tender Alcatel Lucent ADSs to the U.S. exchange agent, Nokia will deposit the Nokia Shares issuable in respect of the Alcatel Lucent ADSs accepted for exchange in the U.S. Offer with the custodian of the Nokia depositary. The Nokia depositary will then issue Nokia ADSs representing such Nokia Shares. The U.S. exchange agent will distribute such Nokia ADSs to the holders of Alcatel Lucent ADSs acquired in the U.S. Offer as follows:

 

•

if you hold your Alcatel Lucent ADSs directly in certificated or uncertified form and you or your nominee validly tendered your Alcatel Lucent ADSs in the U.S. Offer by means of delivery of a letter of transmittal, the U.S. exchange agent will register the applicable number of uncertificated Nokia ADSs in your name and mail to you a confirmation of such registration; or

 

•

if you hold your Alcatel Lucent ADSs in book-entry form through DTC and such Alcatel Lucent ADSs were delivered to the U.S. exchange agent by book-entry transfer using the ATOP system, the U.S. exchange agent will deliver the applicable number of Nokia ADSs to DTC for forwarding to the account of your nominee at DTC.

Please note that, in accordance with Finnish law, Finnish citizens that own Nokia Shares must be registered directly on the Nokia shareholder register and thus can only hold Nokia Shares in their book entry account with a Finnish book-entry operator.

If you validly tender Alcatel Lucent Shares into the U.S. Offer and elect to receive Nokia ADSs, Nokia will issue the Nokia Shares in respect of the Alcatel Lucent Shares accepted for exchange in the Exchange Offer and deposit such Nokia Shares with the Nokia depositary, and the Nokia depositary will then issue Nokia ADSs representing such Nokia Shares. The U.S. exchange agent will distribute such Nokia ADSs to the holders of Alcatel Lucent Shares acquired in the U.S. Offer by mailing a confirmation of registration to the specified person. If a tendering holder fails to elect to receive Nokia ADSs or fails to provide the requisite Nokia ADS registration and delivery information, such holder will receive Nokia Shares.

If you validly tender Alcatel Lucent Shares or OCEANEs in the U.S. Offer and elect to receive Nokia Shares or, in connection with tendering your Alcatel Lucent Shares, fail to make an election, Nokia will issue uncertificated Nokia Shares in respect of the Alcatel Lucent Shares or OCEANEs accepted for exchange in the U.S. Offer and, at your election, will deposit them into either (i) the same account in which you held your Alcatel Lucent Shares or OCEANEs or (ii) your personal book-entry account with a Finnish book-entry operator, into your account with a financial intermediary or your broker’s, dealer’s, commercial bank’s, trust company’s or other nominee’s book-entry account with a Finnish book-entry operator or a financial intermediary. If you fail to make an election or if your election instruction is determined, in our sole discretion, deficient, your Nokia Shares will be deposited into the same account in which you held your Alcatel Lucent Shares or OCEANEs. You will be able to deposit these Nokia Shares with the custodian of the Nokia depositary for issuance of Nokia ADSs representing such Nokia Shares. You will, however, have to pay an issuance fee to the Nokia depositary in an amount equal to USD 5.00 or less per 100 Nokia ADSs (or portion thereof) issued in exchange for the deposit of Nokia Shares.

 

74

---

Table of Contents

Under no circumstances will interest be paid on the exchange of Alcatel Lucent Securities, regardless of any delay in making the exchange or any extension of the Exchange Offer.

We expect that Nokia ADSs to be issued in connection with the Exchange Offer or the subsequent offering period, if any, will begin trading on the NYSE on a “when-issued” basis before the completion of the Exchange Offer or the subsequent offering period, if any, which is expected to occur approximately five French trading days after the announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer) or the subsequent offering period, if any. “When-issued” trading of Nokia ADSs will continue until the completion of the Exchange Offer or the subsequent offering period, if any. The “when-issued” trades of Nokia ADSs are expected to settle after issuance of the newly issued Nokia ADSs pursuant to the Exchange Offer or the subsequent offering period, as applicable.

Treatment of Fractional Nokia Shares or Nokia ADSs

No fractional Nokia Shares or Nokia ADSs will be issued by Nokia in the context of the Exchange Offer, including during the subsequent offering period. Holders of Alcatel Lucent Securities who tender in the Exchange Offer, including during the subsequent offering period, a number of Alcatel Lucent Securities which does not entitle them to a whole number of new Nokia Shares or Nokia ADSs, will be considered as having expressly agreed to participate in the mechanism to resell new fractional Nokia Shares or ADSs described below for the fractional Nokia Shares or Nokia ADSs to which they are entitled.

Resale Mechanism for Nokia ADSs

Promptly after the completion of the Exchange Offer, the U.S. exchange agent will aggregate all fractional entitlements to new Nokia ADSs in order to obtain a whole number of new Nokia ADSs and will sell them on the open market for the account of the applicable tendering holders of Alcatel Lucent Securities participating in this resale mechanism promptly after receipt of the applicable Nokia Shares from Nokia. The cash amount (with respect to Nokia ADSs, in U.S. dollars, rounded to the nearest U.S. cent, it being noted that 0.50 U.S. cents will be rounded to one U.S. cent) will be paid to the applicable tendering holders of Alcatel Lucent Securities as soon as possible following such date. The holders of Alcatel Lucent Securities who participate in this mechanism to resell fractional Nokia ADS entitlements will receive the net proceeds of sales pro rata to their participation in this mechanism, net of applicable fees, taxes, and expenses (including, without limitation, brokerage fees).

Resale Mechanism for Nokia Shares

Promptly after the completion of the Exchange Offer,              will aggregate all fractional entitlements to new Nokia Shares in order to obtain a whole number of new Nokia Shares and will sell them on the open market for the account of the applicable tendering holders of Alcatel Lucent Securities participating in this resale mechanism promptly after receipt of the applicable Nokia Shares from Nokia. The cash amount (with respect to Nokia Shares, in U.S. dollars, rounded to the nearest U.S. cent, it being noted that 0.50 U.S. cents will be rounded to one U.S. cent) will be paid to the applicable tendering holders of Alcatel Lucent Securities as soon as possible following such date. The holders of Alcatel Lucent Securities who participate in this mechanism to resell fractional Nokia Share entitlements will receive the net proceeds of sales pro rata to their participation in this mechanism, net of applicable fees, taxes, and expenses (including, without limitation, brokerage fees).

However, under no circumstances will any interest be paid on the cash amount to be received by a holder of Alcatel Lucent Securities in return for a fractional Nokia Share or Nokia ADS, even in the event of late payment of this amount.

 

75

---

Table of Contents

At the end of any subsequent offering period, the same mechanism to resell fractional Nokia Shares or Nokia ADSs will be implemented in order to treat any fractional Nokia Shares or Nokia ADSs generated during the subsequent offering period.

Share Issuance and Power of Attorney

The Nokia Shares (including the Nokia Shares represented by Nokia ADSs) to be issued in the U.S. Offer will be created by means of an issuance of new ordinary shares of Nokia. In order to settle the Exchange Offer, it is contemplated that the general meeting of shareholders of Nokia will resolve to authorize the Nokia board of directors to issue new Nokia Shares in deviation from the shareholders’ pre-emptive rights as consideration to the holders of Alcatel Lucent Securities who have tendered their Alcatel Lucent Securities into the Exchange Offer, and that the Nokia board of directors will make a resolution to issue new Nokia Shares based on the authorization by the general meeting of shareholders (and register such issuance of new shares with the Finnish Trade Register on settlement). See “Description of the Nokia Shares and Articles of Incorporation—Shares and Share Capital of Nokia.” This issuance of shares will be effected by way of contribution-in-kind of Alcatel Lucent Securities by the U.S. exchange agent acting in its own name, but for the account of the shareholders who have validly tendered their Alcatel Lucent Securities in the U.S. Offer.

If you tender your Alcatel Lucent ADSs in the U.S. Offer, you will be deemed to accept that, in connection with the share issuance described above, the U.S. exchange agent will undertake to contribute your Alcatel Lucent ADSs or the Alcatel Lucent ADSs in its own name, but for your account. In addition, by tendering the Alcatel Lucent ADSs you will authorize the U.S. exchange agent and, if applicable, the Alcatel Lucent depositary, to take the following actions for your account if the Exchange Offer is successful:

 

•

Execute a subscription commitment and enter into a contribution-in-kind agreement with Nokia pursuant to which Nokia will issue to the U.S. exchange agent for your account 0.55 Nokia Share in exchange of each Alcatel Lucent ADS you have validly tendered in, and not withdrawn from, the U.S. Offer; and

 

•

Upon issuance of the Nokia Shares for your account: instruct (a) the U.S. exchange agent to deposit the Nokia Shares issued for your account with the custodian for the Nokia ADS program and (b) the Nokia depositary to issue and deliver Nokia ADSs representing the deposited shares to you or your nominee.

Representations and Covenants of Tendering Holders

Representations and Covenants of Tendering Holders of Alcatel Lucent ADSs

Upon tendering Alcatel Lucent ADSs in the U.S. Offer, a tendering holder of Alcatel Lucent ADSs is deemed to:

 

•

instruct the U.S. exchange agent to accept the U.S. Offer on behalf of the tendering holder with respect to the Alcatel Lucent ADSs (which shall, except where the context otherwise requires, be deemed to include, without limitation, the Alcatel Lucent Shares represented thereby) delivered with the letter of transmittal;

 

•

subject to, and effective upon, acceptance for payment for the Alcatel Lucent ADSs tendered with the letter of transmittal, in accordance with the terms of the U.S. Offer, sell, assign and transfer to, or upon the order of, Nokia all right, title and interest in and to all the Alcatel Lucent ADSs being tendered by the letter of transmittal (and any and all other Alcatel Lucent Shares or other securities issued or issuable in respect thereof) and all dividends, distributions (including, without limitation, distributions of additional Alcatel Lucent ADSs or

 

76

---

Table of Contents

Alcatel Lucent Shares) and rights declared, paid or distributed in respect of such Alcatel Lucent Shares or securities on or after the settlement date of the U.S. Offer (collectively, “Distributions”) and irrevocably appoints Citibank, N.A., as the U.S. exchange agent, the true and lawful agent and attorney-in-fact of the tendering holder, with full knowledge that the U.S. exchange agent is also acting as the agent of Nokia in connection with the U.S. Offer, with respect to such Alcatel Lucent ADSs and the Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), (a) to deliver the Alcatel Lucent ADRs and any Distributions to the U.S. exchange agent or, if tender is by book-entry transfer, transfer Alcatel Lucent ADSs and any Distributions to the account of the U.S. exchange agent at DTC, together, in any such case, with all accompanying evidences of transfer and authenticity to the U.S. exchange agent or upon the order of the U.S. exchange agent, in each case, acting upon the instruction of Nokia, (b) to surrender such Alcatel Lucent ADSs for the purpose of withdrawal of the underlying Alcatel Lucent Shares in accordance with the Alcatel Lucent deposit agreement, (c) to instruct the Alcatel Lucent depositary to deliver the certificates evidencing the Alcatel Lucent Shares underlying the Alcatel Lucent ADSs, or transfer ownership of such Alcatel Lucent Shares underlying the Alcatel Lucent ADSs on the account books maintained with respect to the Alcatel Lucent Shares, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Nokia, (d) to combine the tendering holder’s fractional entitlements to Nokia ADSs with other fractional entitlements and sell them on the NYSE or any other securities exchange, (e) to tender, or to cause to be tendered, the Alcatel Lucent Shares underlying the tendered Alcatel Lucent ADSs as part of the French centralizing procedures as soon as practicable after the Expiration Date, and (f) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Alcatel Lucent ADSs (and all Alcatel Lucent Shares represented thereby) and any Distributions, all in accordance with the terms and conditions of the U.S. Offer. The tendering holder of Alcatel Lucent ADSs agrees that Nokia may instruct the U.S. exchange agent to take the actions specified in clauses (a), (b), (c) or (e) above prior to acceptance by Nokia of those Alcatel Lucent ADSs for exchange in the U.S. Offer. Nokia shall not have the rights specified in clauses (d) or (f) above until it has irrevocably accepted those Alcatel Lucent ADSs tendered in the U.S. Offer. Upon acceptance by Nokia of tendered Alcatel Lucent ADSs in the U.S. Offer, the tendering holder of Alcatel Lucent ADSs shall have no further rights with respect to those Alcatel Lucent ADSs, except that the holder shall have a right to receive from Nokia the Nokia ADSs subject to and in accordance with the terms and conditions of the U.S. Offer;

 

•

irrevocably appoint each designee of Nokia as the attorney-in-fact and proxy of the tendering holder, each with full power of substitution, to exercise all voting and other rights of the tendering holder in such manner as each such attorney and proxy or his substitute shall, in his sole discretion, deem proper and otherwise act (by written consent or otherwise), with respect to all of the Alcatel Lucent ADSs tendered (and any associated Distributions) that have been accepted for payment by Nokia prior to the time of any vote or other action (and any and all other Alcatel Lucent Shares or other securities or rights issued or issuable in respect of such Alcatel Lucent ADSs) at any meeting of securityholders of Alcatel Lucent (whether annual or special and whether or not an adjourned or postponed meeting), any actions by written consent in lieu of any such meeting or otherwise. This proxy and power of attorney is coupled with an interest in the tendered Alcatel Lucent ADSs, is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of the Alcatel Lucent ADSs by Nokia in accordance with the terms and conditions of the U.S. Offer. Such acceptance for payment shall revoke any other proxy or written consent granted by the tendering holder at any time with respect to such Alcatel Lucent ADSs (and all such other Alcatel Lucent Shares or other securities or rights), and no subsequent proxies will be given or written consents will be executed by the tendering holder (and if given or executed, will not

 

77

---

Table of Contents

be deemed effective). The tendering holder understands that, in order for the Alcatel Lucent ADSs to be deemed validly tendered, immediately upon Nokia’s acceptance of such Alcatel Lucent ADSs, Nokia or its designee must be able to exercise full voting, consent and other rights with respect to such Alcatel Lucent ADSs (and any associated distributions), including, the right to instruct the Alcatel Lucent depositary with respect to voting at any meeting of Alcatel Lucent’s stockholders;

 

•

represent and warrant that it has full power and authority to accept the U.S. Offer and to tender, exchange, sell, assign and transfer the Alcatel Lucent ADSs (and any associated Distributions) tendered by the letter of transmittal (and any and all other Alcatel Lucent Shares or other securities or rights issued or issuable in respect of such Alcatel Lucent ADSs), and that when the same are accepted for payment by Nokia, Nokia will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims; and

 

•

agree to, upon request, execute and deliver all additional documents deemed by the U.S. exchange agent or Nokia to be necessary or desirable to complete the sale, assignment and transfer of the Alcatel Lucent ADSs (and any associated Distributions) tendered hereby (and any and all other Alcatel Lucent Shares or other securities or rights issued or issuable in respect of such Alcatel Lucent ADSs).

All authority conferred or agreed to be conferred pursuant to these representations and covenants shall not be affected by, and shall survive, the death or incapacity of and any obligation of the tendering holder shall be binding upon the heirs, personal representatives, successors and assigns of the tendering holder.

Representations and Covenants of Tendering Holders of Alcatel Lucent Shares and OCEANEs

Upon tendering the Alcatel Lucent Shares or OCEANEs in the U.S. Offer, the tendering holder of such Alcatel Lucent Shares or OCEANEs is deemed to:

 

•

on the terms and subject to the conditions of the U.S. Offer (including, if the U.S. Offer is extended or amended, the terms and conditions of such extension or amendment), and subject to, and effective upon, acceptance for exchange of, and exchange for, the Alcatel Lucent Shares and OCEANEs tendered in accordance with the terms of the U.S. Offer, sell, assign and transfer to, or upon the order of, Nokia, all right, title and interest in and to all of the Alcatel Lucent Shares and OCEANEs being tendered and any and all dividends, distributions (including, without limitation, distributions of additional Alcatel Lucent Shares or OCEANEs), rights or other securities issued or issuable in respect of such Alcatel Lucent Shares and OCEANEs on or after the completion of the U.S. Offer, and appoints Nokia the true and lawful agent and attorney-in-fact of such holder with respect to such Alcatel Lucent Shares and OCEANEs (and any Distributions) with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to the fullest extent of such holder’s rights with respect to such Alcatel Lucent Shares and OCEANEs (and any Distributions) (a) to transfer ownership of such Alcatel Lucent Shares and OCEANEs (and any Distributions) on the account books of Alcatel Lucent, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of Nokia, (b) to present such Alcatel Lucent Shares and OCEANEs (and any Distributions) for transfer on the books of Alcatel Lucent and (c) to receive all benefits and otherwise exercise all rights of beneficial ownership of such Alcatel Lucent Shares and OCEANEs (and any Distributions), all in accordance with the terms and the conditions of the U.S. Offer. The tendering holder is deemed to instruct the financial intermediary to tender, or to cause to be tendered, the Alcatel Lucent Shares and OCEANEs as part of the French centralizing procedures;

 

78

---

Table of Contents

•

irrevocably appoint the designees of Nokia, and each of them, the attorneys-in-fact and proxies, each with full power of substitution, to the full extent of such holder’s rights with respect to the Alcatel Lucent Shares and OCEANEs tendered which have been accepted for exchange by Nokia and with respect to any Distributions. Subject to applicable law, the designees of Nokia will, with respect to the Alcatel Lucent Shares and OCEANEs (and any associated Distributions) for which the appointment is effective, be empowered to exercise all voting, consent and any other similar rights of such holder, as they, in their sole discretion, may deem proper at any ordinary, extraordinary or adjourned meeting of Alcatel Lucent’s shareholders or bondholders, by written consent in lieu of any such meeting or otherwise. This proxy and power of attorney shall be irrevocable and coupled with an interest in the tendered Alcatel Lucent Shares and OCEANEs. Such appointment is effective upon the acceptance by Nokia of the Alcatel Lucent Shares and OCEANEs tendered. If the U.S. Offer is successful, Nokia will be deemed to have accepted for exchange Alcatel Lucent Shares and OCEANEs validly tendered and not withdrawn on the Expiration Date, as set forth in the final results of the French Offer (taking into account the results of the U.S. Offer) published by the AMF. Upon the effectiveness of such appointment, without further action, all prior powers of attorney, proxies and consents given with respect to such Alcatel Lucent Shares and OCEANEs (and any associated Distributions) will be revoked, and no subsequent powers of attorney, proxies, consents or revocations may be given (and, if given, will not be deemed effective). Nokia reserves the right to require that, in order for Alcatel Lucent Shares and OCEANEs to be deemed validly tendered, immediately upon Nokia’s exchange of such Alcatel Lucent Shares and OCEANEs, subject to applicable law, Nokia must be able to exercise full voting or consent rights with respect to such Alcatel Lucent Shares and OCEANEs (and any associated Distributions), including voting at any meeting of shareholders or bondholders; and

 

•

represent and warrant that the tendering holder has full power and authority to tender, sell, assign and transfer the Alcatel Lucent Shares and OCEANEs (and any Distributions) and, when the same are accepted for exchange by Nokia, Nokia will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim. The tendering holder will be deemed to agree to, upon request, execute and deliver any additional documents deemed by the financial intermediary or Nokia to be necessary or desirable to complete the sale, assignment and transfer of the Alcatel Lucent Shares and OCEANEs (and any Distributions) tendered. In addition, the tendering holder will be deemed to agree to promptly remit and transfer to the financial intermediary for the account of Nokia any and all Distributions in respect of the Alcatel Lucent Shares and OCEANEs tendered, accompanied by appropriate documentation of transfer; and, pending such remittance or appropriate assurance thereof, Nokia shall be entitled to all rights and privileges as owner of any such Distributions and may withhold the entire consideration offered pursuant to the Exchange Offer or deduct from such consideration offered the amount or value thereof, as determined by Nokia in its sole discretion.

All authority conferred or agreed to be conferred pursuant to these representations and covenants shall not be affected by, and shall survive, the death or incapacity of and any obligation of the tendering holder shall be binding upon the heirs, personal representatives, successors and assigns of the tendering holder.

Certain Consequences of the Exchange Offer

After a successful completion of the Exchange Offer, Nokia is expected to own between 50% and 100% of Alcatel Lucent. As a result, Nokia will be in a position to exert influence over the strategic, operating and financial policies of Alcatel Lucent. If the squeeze-out is implemented, Nokia’s ownership

 

79

---

Table of Contents

of Alcatel Lucent would increase to 100% and Nokia would be entitled to all benefits resulting from that ownership, including all income generated by Alcatel Lucent’s operations and any future increase in Alcatel Lucent’s value and the right to elect all members of the Alcatel Lucent board of directors. Similarly, Nokia would also bear the risk of losses generated by Alcatel Lucent’s operations and any decrease in the value of Alcatel Lucent after such an acquisition.

Trading in Alcatel Lucent Securities During and After the Exchange Offer Period

During the Exchange Offer period, Alcatel Lucent Shares and OCEANEs not validly tendered into the Exchange Offer will continue to trade on Euronext Paris and Alcatel Lucent ADSs not validly tendered into the U.S. Offer will continue to trade on the NYSE.

On opening of the first U.S. business day following the ADS Tender Deadline, the NYSE may suspend trading in the Alcatel Lucent ADSs pending public announcement of the results of the Exchange Offer. Because the results of the Exchange Offer are not expected to be announced until up to nine French trading days after the Expiration Date, holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the Exchange Offer may be unable to trade Alcatel Lucent ADSs on the NYSE during this period.

Trading in Alcatel Lucent Shares, Alcatel Lucent ADSs and OCEANEs may continue on Euronext Paris and the NYSE, as applicable, after the completion of the Exchange Offer, depending on the number of such Alcatel Lucent Securities not acquired in the Exchange Offer. However, following the completion of the Exchange Offer and depending on the number of remaining Alcatel Lucent Shares outstanding, Nokia intends, subject to applicable law and securities exchange regulations, to (i) request from Euronext Paris the delisting of the Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris and (ii) seek to delist the Alcatel Lucent ADSs from the NYSE (as discussed below in this section under “—Reduced Liquidity of Alcatel Lucent Securities”).

Listings of the Nokia Shares

Nokia has applied for the Nokia Shares (including the Nokia Shares to be issued in connection with the Exchange Offer) to be admitted for listing to Euronext Paris. Nokia expects that Admission will take effect following the completion of the Exchange Offer. Nokia will apply for a listing of the Nokia Shares and Nokia ADSs to be issued in connection with the Exchange Offer on the Nasdaq Helsinki and the NYSE, respectively. We expect that Nokia ADSs to be issued in connection with the Exchange Offer or the subsequent offering period, if any, will begin trading on the NYSE on a “when-issued” basis before the completion of the Exchange Offer or the subsequent offering period, if any, which is expected to occur approximately five French trading days after the announcement of the results of the French Offer by the AMF (taking into account the results of the U.S. Offer) or the results of the subsequent offering period, if any.

Reduced Liquidity of Alcatel Lucent Securities

After completion of the Exchange Offer, and as applicable, after any subsequent offering period, Nokia intends, subject to applicable law and securities exchange regulations, to (i) request from Euronext Paris the delisting of the Alcatel Lucent Shares and OCEANEs from the regulated market of Euronext Paris and (ii) seek to delist the Alcatel Lucent ADSs from the NYSE and, when possible, to deregister the Alcatel Lucent Shares and Alcatel Lucent ADSs under the Exchange Act.

If any of these delistings or the deregistration were to occur, there may be no publicly traded Alcatel Lucent Shares, OCEANEs or Alcatel Lucent ADSs, which would likely reduce their respective liquidity and market value. Even if such delistings or the deregistration do not occur, the Exchange Offer will

 

80

---

Table of Contents

reduce the number of Alcatel Lucent Shares, OCEANEs and Alcatel Lucent ADSs that might otherwise trade publicly and will reduce the number of holders of Alcatel Lucent Shares, OCEANEs and Alcatel Lucent ADSs which could, in turn, also adversely affect the liquidity and market value of the Alcatel Lucent Shares, OCEANEs and Alcatel Lucent ADSs not acquired in the Exchange Offer.

On opening of the first U.S. business day following the ADS Tender Deadline, the NYSE may suspend trading in the Alcatel Lucent ADSs pending public announcement of the results of the Exchange Offer. Because the AMF is not expected to announce the results of the French Offer (taking into account the results of the U.S. Offer) until up to nine French trading days after the Expiration Date, holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the U.S. Offer may be unable to trade Alcatel Lucent ADSs on the NYSE during this period. Further, if fewer than 600 000 Alcatel Lucent ADSs remain outstanding following completion of the Exchange Offer, the NYSE may not resume trading in the Alcatel Lucent ADSs after the publication of the results of the Exchange Offer. Accordingly, holders of Alcatel Lucent ADSs who do not tender their Alcatel Lucent ADSs in the U.S. Offer may be unable to trade their Alcatel Lucent ADSs on the NYSE at any point following the ADS Tender Deadline. As of June 30, 2015, there were 499 863 626 Alcatel Lucent ADSs outstanding.

Quotations of the Alcatel Lucent Securities might still be available from another source. The extent of the market for the Alcatel Lucent Securities and the availability of such quotations would, however, depend upon the number of holders of these securities remaining at such time, the interest in maintaining a market in the Alcatel Lucent Securities on the part of securities firms and other factors.

Termination of the Alcatel Lucent Deposit Agreement

As promptly as practicable after completion of the Exchange Offer or the subsequent offering period, if any, Nokia intends, subject to applicable law, to cause Alcatel Lucent to terminate the Alcatel Lucent deposit agreement. Following such termination, the Alcatel Lucent depositary would perform no further acts under the Alcatel Lucent deposit agreement, except to receive and hold (or sell) distributions on the deposited securities and deliver the deposited securities being withdrawn.

Following the termination of the deposit agreement, the Alcatel Lucent depositary may do either of the following:

 

•

instruct its custodian to register all Alcatel Lucent Shares underlying the remaining Alcatel Lucent ADSs with Alcatel Lucent in registered form (nominatif pur) and provide Alcatel Lucent with a copy of the ADR register. Upon receipt of such instructions, Alcatel Lucent would register in registered form (nominatif pur) the Alcatel Lucent Shares represented by the Alcatel Lucent ADSs reflected on the register in each such holder’s name; or

 

•

sell Alcatel Lucent Shares underlying the remaining Alcatel Lucent ADSs and (as long as it may lawfully do so) would hold in a segregated account the net proceeds of such sales, together with any other cash then held by it under the Alcatel Lucent deposit agreement, without liability for interest, in trust for the pro rata benefit of the holders of Alcatel Lucent ADSs not theretofore surrendered.

 

81

---

Table of Contents

Dilutive Effect on Nokia Shareholders

The following table sets forth a breakdown of total number of shares and voting rights of Nokia as of December 31, 2014.

 

Shareholders		Number of shares				% of the total number of shares				% of voting  rights(4)
BlackRock, Inc.(1)			188 661 118				5.04	%			5.17	%
Dodge & Cox(2)			180 888 014				4.83	%			4.96	%
Varma Mutual Pension Insurance Company(3)			72 222 000				1.93	%			1.98	%
Ilmarinen Mutual Pension Insurance Company(3)			54 719 000				1.46	%			1.50	%
The State Pension Fund(3)			24 000 000				0.64	%			0.66	%
Schweizerische Nationalbank(3)			22 057 000				0.59	%			0.60	%
Elo Mutual Pension Insurance Company(3)			19 100 000				0.51	%			0.52	%
Svenska Litteratursällskapet i Finland rf(3)			14 312 000				0.38	%			0.39	%
Keva (Local Government Pensions Institution)(3)			11 951 000				0.32	%			0.33	%
Folketrygdfondet(3)			11 752 000				0.31	%			0.32	%
Nordea Fennia Fund(3)			10 300 000				0.27	%			0.28	%
Sigrid Jusélius Stiftelse(3)			7 000 000				0.19	%			0.19	%
Treasury shares			96 900 800				2.59	%			0.00	%
Other			3 031 181 314				80.94	%			83.09	%
Total			3 745 044 246				100	%			100	%

 

(1)	According to Schedule 13G filed with the SEC on January 12, 2015.

(2)	According to Schedule 13G filed with the SEC on February 13, 2015.

(3)	Shareholder registered in Finland.

(4)	Treasury shares are not included in calculating voting rights.

Following the completion of the Exchange Offer, if Nokia owns 100% of Alcatel Lucent Securities, the breakdown of the total number of shares and voting rights of Nokia would be as follows (based on the breakdown of its total number of shares on December 31, 2014):

 

Shareholders		Number of shares		% of the total number of shares				% of voting rights
BlackRock, Inc.
Dodge & Cox
Varma Mutual Pension Insurance Company
Ilmarinen Mutual Pension Insurance Company
The State Pension Fund
Schweizerische Nationalbank
Elo Mutual Pension Insurance Company
Svenska Litteratursällskapet i Finland rf
Keva (Local Government Pensions Institution)
Folketrygdfondet
Nordea Fennia Fund
Sigrid Jusélius Stiftelse
Treasury shares
Other
Total					100	%			100	%

 

82

---

Table of Contents

Status as “Margin Securities”

The Alcatel Lucent Shares and Alcatel Lucent ADSs are currently “margin securities”, as such term is defined under the rules of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of these securities. Following completion of the Exchange Offer, Nokia intends to seek to delist the Alcatel Lucent ADSs from the NYSE. This delisting would cause the Alcatel Lucent Shares and Alcatel Lucent ADSs to cease being “margin securities” for the purposes of the margin regulations of the Federal Reserve Board, in which event these securities could no longer be used as collateral for loans made by brokers.

Accounting Treatment

Nokia prepares its consolidated financial statements in accordance with IFRS. The acquisition of Alcatel Lucent is expected to be accounted for as a business combination using the acquisition method of accounting under IFRS with Nokia considered as the acquirer. This means that Nokia will allocate the purchase consideration to the fair value of Alcatel Lucent’s identifiable assets and assumed liabilities at the acquisition date, with any excess of the purchase consideration over the net identifiable net assets acquired be recognized as goodwill. Under IFRS, goodwill is not amortized but is tested for impairment at least annually.

No Appraisal Rights

There are no appraisal or similar rights available to holders of Alcatel Lucent Securities in connection with the Exchange Offer.

Fees and Expenses

Nokia retained              as presenting bank (banque présentatrice) for the French Offer and Nokia’s financial advisor in connection with the Exchange Offer, and certain of its affiliates have in the past provided, and may in the future provide, financial advisory or financing services to Nokia and its affiliates and have received, and may receive in the future, fees for rendering these services.

Nokia retained Citibank, N.A. to act as the U.S. exchange agent to receive and hold Alcatel Lucent ADSs validly tendered into, and not withdrawn from, the U.S. Offer, for the benefit of Nokia. Nokia will pay the U.S. exchange agent reasonable and customary compensation for its services in connection with the U.S. Offer, will reimburse the U.S. exchange agent for its reasonable out-of-pocket expenses and will indemnify the U.S. exchange agent against certain liabilities and expenses.

Nokia retained          as information agent in the United States in connection with the Exchange Offer. The information agent may contact holders of Alcatel Lucent Securities by mail, telephone or other means and may request that brokers, dealers, commercial banks, trust companies and other nominees who hold Alcatel Lucent Securities on behalf of beneficial owners of these Alcatel Lucent Securities, forward material relating to the Exchange Offer to such beneficial owners. Nokia will pay the information agent reasonable and customary compensation for these services in addition to reimbursing the information agent for its reasonable out-of-pocket expenses. Nokia has agreed to indemnify the information agent against certain liabilities and expenses in connection with the Exchange Offer, including certain liabilities under the U.S. federal securities laws.

The total fees expenses incurred by Nokia and its affiliates in connection with the Exchange Offer and listing of the Nokia Shares on Euronext Paris and listing of the newly issued Nokia Shares and Nokia ADSs on the Nasdaq Helsinki and the NYSE, respectively, including fees and other costs related to external financial and legal advisors and of any other experts and consultants, as well as communication costs, are estimated to be approximately EUR              (excluding tax).

 

83

---

Table of Contents

Statutory Exemption from Certain U.S. Tender Offer Requirements

The Exchange Offer qualifies as a “Tier II” offer in accordance with Rule 14d-1(d) under the Exchange Act and is, as a result, exempt from certain provisions of otherwise applicable U.S. statutes and rules relating to tender offers. In separating our offers into the U.S. Offer and the French Offer we are relying on the Tier II exemption from Rule 14d-10 under the Exchange Act. In addition, we intend to rely on the Tier II exemption from Rule 14d-11(c) and Rule 14d-11(d) on the conditions for the provision of a subsequent offering period, Rule 14e-1(c) on prompt payment and Rule 14e-1(d) on the procedures for giving notices of any extensions of the length of the tender offer, where we will follow French law and practice.

We may rely on other Tier II exemptions and may need to request additional relief from the SEC if the implementation of the French tender offer law and practice is inconsistent with the U.S. tender offer rules and practice. If we are unable to obtain such additional relief, we may have to amend the U.S. Offer to the extent we are permitted to do so as a matter of French law and regulations. While we do not anticipate that any amendment will be required that would be prohibited by French law, if such conflict arises we may be unable to complete the Exchange Offer.

Matters Relevant for OCEANEs Holders

On July 3, 2013, Alcatel Lucent issued 349 414 680 of the 2018 OCEANEs. The terms and conditions of the 2018 OCEANEs are set out in the securities note that is included in the prospectus that received the visa No. 13-305 of the AMF on June 26, 2013, established for the issuance of the 2018 OCEANEs. The 2018 OCEANEs, which have a par value of EUR 1.80, with an annual interest rate of 4.25%, and with a maturity date of July 1, 2018, are convertible at any time after August 12, 2013, and give right to 1.06 new or existing Alcatel Lucent Shares for every 2018 OCEANE (after adjustment of the conversion/exchange ratio following the share capital increase of December 9, 2013), subject to the adjustments provided for by the prospectus and pursuant to the conditions of the said prospectus. As of June 30, 2015, 349 413 670 2018 OCEANEs were outstanding.

On June 10, 2014, Alcatel Lucent issued 167 500 000 of the 2019 OCEANEs. The terms and conditions of the 2019 OCEANEs are set out in the securities note that is included in the prospectus that received the visa No. 14-254 of the AMF on June 2, 2014, established for the issuance of the 2019 OCEANEs and the 2020 OCEANEs. The 2019 OCEANEs, which have a par value of EUR 4.11, with an annual interest rate of 0%, and with a maturity date of January 30, 2019, are convertible at any time after July 20, 2014, and give right to one new or existing Alcatel Lucent Share for every 2019 OCEANE, subject to the adjustments provided for by the prospectus and pursuant to the conditions of the said prospectus. As of June 30, 2015, 167 500 000 2019 OCEANEs were outstanding.

On June 10, 2014, Alcatel Lucent issued 114 499 995 of the 2020 OCEANEs. The terms and conditions of the 2020 OCEANEs are set out in the securities note, which is included in the prospectus that received the visa No. 14-254 of the AMF on June 2, 2014, established for the issuance of the 2019 OCEANEs and 2020 OCEANEs. The 2020 OCEANEs, which have a par value of EUR 4.02, with an annual interest rate of 0.125%, and with a maturity date of January 30, 2020, are convertible at any time after July 20, 2014, and give right to one new or existing Alcatel Lucent Share for every 2020 OCEANE, subject to the adjustments provided for by the prospectus and pursuant to the conditions of the said prospectus. As of June 30, 2015, 114 499 995 2020 OCEANEs were outstanding.

 

84

---

Table of Contents

Conversion of OCEANE Bonds in the Event of a Tender Offer

Under the terms of each of the OCEANEs, since the Exchange Offer may lead to a Change of Control (as defined below) of Alcatel Lucent, the opening of the Exchange Offer resulted in adjustment of the conversion/exchange ratio for the duration of the Adjustment Period (as defined below) in accordance with the following formula:

NCER = CER x (1 + OCEANE Issue Premium x (D/DT))

where:

 

•

“NCER” means the OCEANEs new conversion/exchange ratio applicable during the Adjustment Period;

 

•

“CER” means the conversion/exchange ratio in effect before the Exchange Offer opening date, such conversion/exchange ratio being 1.06 Alcatel Lucent Share for every 2018 OCEANE, one Alcatel Lucent Share for every 2019 OCEANE, and one Alcatel Lucent Share for every 2020 OCEANE;

 

•

“OCEANE Issue Premium” means the premium, expressed as a percentage, determined by comparing the par value per unit of the OCEANEs to the reference price of the Alcatel Lucent’s Shares used at the time the final terms of the OCEANEs were determined, such premium being 36.8% for the 2018 OCEANEs, 40.2% for the 2019 OCEANEs and 37.1% for the 2020 OCEANEs;

 

•

“D” means the number of days between the Exchange Offer opening date (inclusive) and the OCEANE maturity date (excluded), with the maturity date being July 1, 2018 for the 2018 OCEANEs, January 30, 2019 for the 2019 OCEANEs and January 30, 2020 for the 2020 OCEANEs; and

 

•

“DT” means the number of days between the issuance date of the OCEANEs (inclusive) (such date being July 3, 2013 for the 2018 OCEANEs and June 10, 2014 for the 2019 OCEANEs and 2020 OCEANEs) and the maturity date of the OCEANEs (exclusive) (such number of days being 1 824 days for the 2018 OCEANEs, 1 695 days for the 2019 OCEANEs and 2 060 days for the 2020 OCEANEs).

As a result of the Exchange Offer, the adjusted conversion/exchange ratios (or the NCERs) are              for the 2018 OCEANEs,              for the 2019 OCEANEs and              for the 2020 OCEANEs.

The adjustment of the conversion/exchange ratio discussed above will, pursuant to the terms of the respective securities notes of the OCEANEs, benefit only those holders of OCEANEs who will exercise their conversion/exchange right, between (and including):

 

(a)

the opening date of the Exchange Offer (which is             ), and

 

(b)

(i) (x) if the AMF declares that the French Offer is successful, the date that is 15 French business days after the publication by the AMF of the results of the French Offer (taking into account the results of the U.S. Offer), which is currently expected to be             , or, if there is a subsequent offering period, the date that is 15 French business days after the end of the subsequent offering period of the French Offer, or (y) if the AMF declares that the French Offer (taking into account the results of the U.S. Offer) is unsuccessful, the date of publication by the AMF of the results of the French Offer; or

 

(ii)

if Nokia withdraws the Exchange Offer, the date on which such withdrawal is published.

This period is referred to as the “Adjustment Period.”

 

85

---

Table of Contents

For the purpose of the OCEANEs, the term “Change of Control” means acquisition by one or more individual(s) or legal entity or entities, acting alone or in concert, of the control of Alcatel Lucent, with “control” meaning the holding (directly or indirectly through the intermediary of companies themselves controlled by the individual(s) or entity or entities concerned) (x) the majority of voting rights attached to the Alcatel Lucent Shares or (y) more than 40% of these voting rights if no other Alcatel Lucent shareholder, acting alone or in concert, holds (directly or indirectly through the intermediary of companies controlled by this or these shareholders) a higher percentage of voting rights.

In the event of the conversion of the OCEANEs during the Adjustment Period, the corresponding Alcatel Lucent Shares will be delivered within a maximum of three French business days of the OCEANEs conversion request date.

In the event of an adjustment, Alcatel Lucent is obligated to notify the holders of OCEANEs of such adjustment, at the latest within five French business days, by means of a notice published in a financial newspaper with general distribution in France.

Early Redemption in the Event of a Change of Control

In the case of the occurrence of a Change of Control (as would be the case if the Exchange Offer is successful), any holder of OCEANEs may, at its option, request that Alcatel Lucent redeems for cash the OCEANEs owned by such holder at par plus, as applicable, accrued interest from the last interest payment date for each series of the OCEANEs until the early redemption date.

If the Exchange Offer is successful, Alcatel Lucent is expected to inform the holders of OCEANEs of any Change of Control by means of a notice distributed by Alcatel Lucent and posted on its website (www.alcatel-lucent.com) as well as in a notice to be issued by Euronext Paris at the latest within 30 calendar days following the effective Change of Control. These notices are expected to remind the holders of OCEANEs that they have the right to request the early redemption of their OCEANEs and to indicate (i) the early redemption date which would be between the 25th and the 30th French business day following the distribution date of the notice by Alcatel Lucent, (ii) the redemption amount and (iii) the period, of at least 15 French business days following the distribution date of the notice by Alcatel Lucent, during which the early redemption requests for the OCEANEs must be received by the centralizing agent.

To obtain early redemption of the OCEANEs, holders of OCEANEs must file a request with the financial intermediary holding their OCEANEs in a securities account. Any such demand may not be revoked once it is received by the relevant financial intermediary.

Requests for early redemption and the corresponding OCEANEs must be received by the centralizing agent no later than the fifth French business day before the early redemption date.

In such case, the OCEANEs, where an early redemption was requested, will be redeemed at a price equal to par plus, as applicable, accrued interests from the date the interest was last paid preceding the date of early redemption, to the date set for the early redemption.

Early Redemption in the Event of Delisting of the Alcatel Lucent Shares

Pursuant to the terms of the securities notes relating to the issue of each of the OCEANEs, the representative of the body (Masse) of the OCEANEs (Représentant de la Masse) may, upon decision of the general meeting of the holders of OCEANEs (other than Nokia if it holds more than 10% of the relevant series of OCEANEs), acting under conditions of quorum and majority provided for by law, by written notice sent to Alcatel Lucent, with a copy to the centralizing agent, request the early redemption

 

86

---

Table of Contents

of such series of the OCEANEs by Alcatel Lucent at a price equal to par plus, as applicable, accrued interests from the last interest payment date for each of the OCEANEs until the early redemption date, if (i) Alcatel Lucent’s Shares cease to be listed on Euronext Paris and are not listed on any other regulated market within the European Union and (ii) the Alcatel Lucent ADSs or Alcatel Lucent Shares cease to be listed on a regulated market in the United States.

As a consequence, such early redemption right may be triggered in connection with the Exchange Offer in the event of implementation of a compulsory squeeze-out procedure for Alcatel Lucent Shares, or of delisting of Alcatel Lucent Shares on Euronext Paris and the Alcatel Lucent ADSs on the NYSE.

Early Redemption of a Series of OCEANEs If the Outstanding OCEANEs of Such Series Represent Less Than 15% of the Issued OCEANEs of any Such Series

Pursuant to the terms of the prospectus relating to the issue of each of the OCEANEs, Alcatel Lucent may, at its option and at any time, subject to advance notice of at least 30 calendar days, redeem at par value plus, as applicable, accrued interests from the date the interest was last paid, to the date set for the early redemption all of the outstanding 2018 OCEANEs, 2019 OCEANEs or 2020 OCEANEs, if less than 15% of the issued OCEANEs of any such series remain outstanding. If the Exchange Offer is successful, Nokia expressly reserves the right, subject to applicable law, to cause Alcatel Lucent to effect such redemption at any relevant time.

The holders of OCEANEs will retain the ability to exercise their OCEANEs conversion/exchange right up to and including the seventh French business day immediately preceding the early redemption date.

Legal Matters; Regulatory Approvals

General

We are not aware of any governmental license or regulatory permit that appears to be material to Alcatel Lucent’s business that might be adversely affected by Nokia’s acquisition of Alcatel Lucent Securities pursuant to the Exchange Offer or, except as described below, of any approval or other action by any government or governmental administrative or regulatory authority or agency, domestic or foreign, that would be required for Nokia’s acquisition or ownership of Alcatel Lucent Securities pursuant to the Exchange Offer. Should any of these approvals or other actions be required, Nokia currently contemplates that these approvals or other actions will be sought. There can be no assurance that any of these approvals or other actions, if needed, will be obtained (with or without substantial conditions) or that if these approvals were not obtained or these other actions were not taken adverse consequences might not result to Alcatel Lucent’s or our business.

Regulatory Approvals for the Exchange Offer

Pursuant to the Memorandum of Understanding, the filing of the French Offer with the AMF was conditional on the receipt of approvals (or expiration of the relevant waiting periods) from antitrust or similar authorities in nine jurisdictions identified below. In addition, the filing of the French Offer with the AMF was subject to the authorization of the Ministry of Economy and Finance of the French Republic and the receipt of the required approval of the Committee on Foreign Investment in the United States.

Antitrust Approvals

United States. Under the Hart-Scott-Rodino Act of 1976 (the “HSR”), the Exchange Offer may not be consummated until HSR notifications have been made and the applicable waiting period has expired or been terminated. Nokia and Alcatel Lucent filed their respective HSR notifications for the transaction on May 18, 2015. On June 16, 2015, the United States Department of Justice granted early termination of the HSR waiting period.

 

87

---

Table of Contents

European Union. Under the Council Regulation (EC) No. 139/2004 of the Council of the European Union, the Exchange Offer requires notification to and prior approval by the European Commission. Nokia received the European Commission’s approval for the Exchange Offer on July 24, 2015.

People’s Republic of China. Under the Chinese Anti-Monopoly Law of 2008, the Exchange Offer cannot be completed until it is reviewed and approved by the Ministry of Commerce of the People’s Republic of China (“MOFCOM”). On             , 2015, MOFCOM informed Nokia that             .

Other jurisdictions. The filing of the French Offer with the AMF was also subject to approval or expiration of the relevant waiting periods with respect to the antitrust regulations in Canada, India, Japan, Russia and Taiwan. The last of these approvals was received on .

Other Regulatory Approvals

Exon-Florio/CFIUS. Pursuant to the Exon-Florio Amendment to the Defense Production Act of 1950, 50 U.S.C. App.§2170, as amended, on             , the Committee on Foreign Investment in the United States (“CFIUS”) notified Nokia and Alcatel Lucent that there were no unresolved national security concerns regarding the Exchange Offer and its implications for the U.S. operations of Nokia and Alcatel Lucent.

Ministry of Economy, Industry and Digital Sector of the French Republic. In accordance with the French laws and regulations on foreign investments in France (Articles L. 151-1 et al. and R. 153-1 et al. of the French Financial and Monetary Code), Nokia filed an authorization request letter with the Ministry of Economy, Industry and Digital Sector of the French Republic (the “MINEFI”) on May 18, 2015. On            , the MINEFI informed Nokia that             .

AMF Regulation of the French Offer

Banking and Insurance Supervisory Authorities. Pursuant to the AMF General Regulation, prior to the opening of the French Offer with the AMF, Nokia was required to obtain approvals (or expiration of the relevant waiting periods) from the banking and/or insurance supervisory authorities in France (Autorité de Contrôle Prudentiel et de Résolution), Luxembourg (Commissariat aux Assurances), and Vermont (United States) (Vermont Department of Financial Regulation), as a result of the indirect change of control, if the Exchange Offer is successful, of the French banking company Electro Banque and the Luxembourg reinsurance company Electro Re, both directly wholly-owned subsidiaries of Alcatel Lucent, as well as the Luxembourg insurance company Electro Assurance and the U.S. insurance company First Beacon Insurance Company, both directly wholly-owned subsidiaries of Electro Re. Nokia obtained the approvals of the Vermont Department of Financial Regulation on July 9, 2015, the Commissariat aux Assurances on             , and the Autorité de Contrôle Prudentiel et de Résolution on             .

On             ,             , acting on Nokia’s behalf as presenting bank (banque présentatrice) for the French Offer, filed with the AMF a letter containing the material terms of the French Offer and a draft of the offer document with respect to the French Offer.

Pursuant to Article 231-13 of the AMF General Regulation,             , acting as presenting bank (banque présentatrice) for the French Offer, guarantees the content and the irrevocable nature of the undertakings made by Nokia in the context of the French Offer.

Following the filing of the French Offer with the AMF, the AMF published on the same day on its website (www.amf-france.org) the material terms of the French Offer in an official notice.

 

88

---

Table of Contents

According to Article 231-16 of the AMF General Regulations, the draft French Offer Documentation has been made available to the public for free by the presenting bank, and has been published on the websites of the AMF and Nokia. In addition, a public announcement relating to the terms of the French Offer has been issued by Nokia on             .

A draft response document (projet de note en réponse) has also been filed on             by Alcatel Lucent with the AMF. Such draft response document contains in particular the report of the independent expert appointed by Alcatel Lucent board of directors in the context of the French Offer, the reasoned opinion of Alcatel Lucent’s board of directors on the Exchange Offer and the opinion of Alcatel Lucent’s French Group Committee on the Exchange Offer.

On             , 2015, the AMF declared the French Offer compliant with applicable laws and regulations and granted its visa with respect to the French offer documentation.

The French offer documentation having received the visa of the AMF, and Nokia’s French document relating, in particular, to its legal, financial and accounting characteristics having made freely available to the public by Nokia and the presenting bank no later than the day before the opening of the French Offer, the French Offer commenced on             . These documents are also made available on the website of the AMF. Prior to the opening of the Exchange Offer, the AMF published an opening notice announcing the opening of the French Offer, and Euronext Paris published a notice announcing the calendar and the terms and conditions of the French Offer. A public announcement detailing the terms of provision of these documents has also been published on             .

The French Offer will remain open for a period of 25 French trading days, unless it is extended or terminated earlier in accordance with the AMF General Regulation.

Following the expiration of the French Offer period, the AMF will announce the results of the French Offer (taking into account the results of the U.S. Offer) by a notice which will be published no later than nine French trading days following the expiration of the French Offer period and Euronext Paris will indicate in a notice the date of settlement of the French Offer.

According to Article 232-4 of the AMF General Regulation, if the Exchange Offer is successful and if Nokia holds less than 95% of the share capital or voting rights of Alcatel Lucent, the subsequent offering period will commence in connection with the French Offer within ten French trading days following the publication of the results of the French Offer (taking into account the results of the U.S. Offer) by the AMF, for a period of at least ten French trading days. Prior to the commencement of the subsequent offering period, the AMF will publish a reopening notice.

Following the expiration of the subsequent offering period, the AMF will announce the results of the French Offer (taking into account the results of the U.S. Offer) by a notice which will be published no later than nine French trading days following the expiration date of the subsequent offering period of the French Offer and Euronext Paris will indicate in a notice the date of settlement of the subsequent offering period of the French Offer.

Certain Relationships with Alcatel Lucent and Interests of Nokia in the Exchange Offer

Except as set forth in this exchange offer/prospectus, neither Nokia nor, after due inquiry and to the best of Nokia’s knowledge and belief, any of its directors, executive officers or other affiliates has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Alcatel Lucent, including any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies. Except as

 

89

---

Table of Contents

otherwise described in this exchange offer/prospectus, there have been no contacts, negotiations or transactions since April 15, 2015, between Nokia, any of Nokia’s subsidiaries or, after due inquiry and to the best knowledge and belief of Nokia, any of the persons listed on Schedule I to this exchange offer/prospectus, and Alcatel Lucent or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, an exchange offer or other acquisition of securities, an election of directors, or a sale or other transfer of a material amount of assets.

The name, citizenship, business address, business telephone number, principal occupation or employment, and five-year employment history for each of the directors and executive officers of Nokia and certain other information are set forth in Schedule I to this exchange offer/prospectus. Except as described in this exchange offer/prospectus and in Schedule I hereto, none of Nokia or, after due inquiry and to the best knowledge and belief of Nokia, any of the persons listed on Schedule I to this exchange offer/prospectus, has during the last ten years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. Except as set forth in this exchange offer/prospectus, to Nokia’s knowledge, after reasonable inquiry, none of the persons listed on Schedule I hereto, nor any of their respective associates or majority owned subsidiaries, beneficially owns or has the right to acquire any securities of Alcatel Lucent or has effected any transaction in securities of Alcatel Lucent during the past 60 days.

Other than as described below, Nokia does not believe that the Exchange Offer and the squeeze-out will result in a change of control under any of Nokia’s stock option plans or any change in control agreement between Nokia and any of its employees. As a result, no other options or equity grants held by such persons will vest as a result of the Exchange Offer or the squeeze-out, if any.

In 2015, Nokia reimbursed Alcatel Lucent EUR 20 000 for the costs of performing a shareholder analysis in accordance with Rule 14d-1 under the Exchange Act, in connection with the Exchange Offer. In 2015, Nokia also reimbursed Alcatel Lucent EUR 8 000 for the cost of performing a shareholder analysis in connection with the Exchange Offer for jurisdictions outside the United States. In addition, pursuant to Rule 14d-5 under the Exchange Act, Nokia paid Alcatel Lucent USD             in 2015 for the approximate cost of mailing materials related to the Exchange Offer.

In addition to disclosures made in the Nokia 2014 Form 20-F the following arrangements may be triggered by the acquisition of Alcatel Lucent by Nokia.

As described in Nokia 2014 Form 20-F, the service contract of Rajeev Suri, President and Chief Executive Officer, includes a limited termination event that applies until June 30, 2016 subject to specified circumstances. If Mr. Suri’s employment with Nokia is terminated by Nokia within six months of the completion of the Exchange Offer (and at or prior to June 30, 2016), and other specified circumstances of the limited termination event are fulfilled, he would be entitled to, in addition to normal severance payment payable upon his termination by Nokia for reasons other than cause, to a pro rated value of unvested equity awards under the Nokia Networks Equity Incentive Plan (the “EIP”). Subject to this limited time treatment of unvested equity awards under the EIP, all of Mr. Suri’s other unvested equity will be forfeited.

Also, in connection with the Exchange Offer, Nokia entered into an agreement with Samih Elhage, Executive Vice President and Chief Financial and Operating Officer of Nokia Networks, pursuant to which, if Mr. Elhage’s employment with Nokia is terminated (other than for cause) by Nokia within 12 months of completion of the Exchange Offer he would be entitled to, in addition to normal severance payment payable upon his termination by Nokia for reasons other than cause, to pro rata

 

90

---

Table of Contents

settlement of the value of his EIP options. Further, Mr Elhage has the right to trigger termination and pro-rata settlement of his EIP options after the completion of the Exchange Offer if he is offered a role within Nokia with materially less responsibility or less total target cash compensation.

In addition, in connection with the Exchange Offer, Nokia entered into personal agreements with certain senior management participants in EIP, including Samih Elhage, Executive Vice President and Chief Financial and Operating Officer of Nokia Networks, pursuant to which, if their respective employment with Nokia is terminated (other than for cause) by Nokia within 12 months of completion of the Exchange Offer they would be entitled to, in addition to normal severance payment payable upon their termination by Nokia for reasons other than cause, to pro-rata settlement of the value of their EIP options. Further, such participants have the right to trigger termination and pro-rata settlement of their respective EIP options after the completion of the Exchange Offer if they are offered a role within Nokia with materially less responsibility or less total target cash compensation.

Interests of Executive Officers and Directors of Alcatel Lucent in the Exchange Offer

Certain members of the board of directors and management of Alcatel Lucent participated in determining the terms of the Exchange Offer. These individuals may have certain interests in the Exchange Offer that are different from, or in addition to, the interests of holders of Alcatel Lucent Securities generally and that may have caused them to view the proposed transaction more favorably and/or differently than you might.

The Alcatel Lucent board of directors was aware of these interests when it considered the Exchange Offer at its meeting of                  and determined that                 .

Information on the interests of executive officers and directors of Alcatel Lucent in the Exchange Offer is described in Alcatel Lucent’s Solicitation/Recommendation Statement on Schedule 14D-9, which is being distributed to holders of Alcatel Lucent Securities together with this exchange offer/prospectus and is incorporated herein by reference.

Treatment of Alcatel Lucent Stock Options and Performance Shares

Alcatel Lucent Stock Options

Holders of Alcatel Lucent Stock Options who wish to tender in the Exchange Offer or the subsequent offering period, if any, must exercise their Alcatel Lucent Stock Options, and Alcatel Lucent Shares must be issued to such holders prior to the Expiration Date or the expiration of the subsequent offering period, as applicable.

Pursuant to the Memorandum of Understanding, Alcatel Lucent agreed to accelerate or waive certain terms of the Alcatel Lucent Stock Options, subject to certain conditions.

In respect of holders of Alcatel Lucent Stock Options who elect not to accept the acceleration, the terms and conditions of their Alcatel Lucent Stock Options will remain unchanged, including the performance and presence conditions.

Alcatel Lucent Performance Shares

Alcatel Lucent Performance Shares cannot be tendered in the Exchange Offer or the subsequent offering period, if any, unless such Performance Shares have vested and are transferable prior to the Expiration Date or the expiration of the subsequent offering period, as applicable. Pursuant to the

 

91

---

Table of Contents

Memorandum of Understanding, Nokia and Alcatel Lucent agreed to implement a mechanism with respect to the unvested Performance Shares granted before April 15, 2015 pursuant to which the beneficiaries may waive their rights to receive Performance Shares in exchange for Alcatel Lucent Shares, subject to certain conditions.

The number of Alcatel Lucent Shares delivered in exchange for the beneficiary’s waiver of rights to receive Performance Shares would be equal to the total number of Performance Shares which would be granted to the relevant beneficiary if all presence conditions and performance conditions were fulfilled, minus, in the relevant countries, the number of Alcatel Lucent Shares which have to be sold in order to cover payable tax charges. However, in respect of performance conditions relating to periods ending prior to the date of acceleration, the Alcatel Lucent Shares will be delivered only to the extent such conditions have been fulfilled in accordance with their terms.

In respect of beneficiaries who elect not to accept the acceleration, the terms and conditions of their Performance Shares will remain unchanged, including the performance conditions and the presence conditions. Nokia and Alcatel Lucent agreed however to adjust the performance conditions attached to any such Performance Shares as a result of the closing of the Exchange Offer and Alcatel Lucent amended the terms and conditions of the applicable Performance Share plans correspondingly.

Liquidity Mechanism

Pursuant to the Memorandum of Understanding, Nokia and Alcatel Lucent have agreed to enter into a liquidity agreement with the holders of Alcatel Lucent Performance Shares allocated after April 15, 2015, pursuant to which, in case of (i) delisting of the Alcatel Lucent Shares, (ii) holding by Nokia, directly or indirectly, of more than 85% of the Alcatel Lucent Shares, or (iii) average daily trading volume of Alcatel Lucent Shares on Euronext Paris falling below five million (5 000 000) Alcatel Lucent Shares for twenty consecutive French trading days, in each case, at the date of expiration of the applicable legal, tax, regulatory or governance constraints or holding periods (the “Lock-Up Period”), all Alcatel Lucent Performance Shares would be automatically exchanged by Nokia into Nokia Shares on the next French trading day after the end of the Lock-Up Period.

The exchange ratio offered in the liquidity agreement would correspond to the exchange ratio of the Exchange Offer, subject to certain adjustments, in case of financial transactions of Nokia or Alcatel Lucent.

 

92

---

Table of Contents

FINANCIAL ANALYSIS OF THE EXCHANGE OFFER

Under French law and the AMF General Regulation, the French Offer documentation (specifically the note d’information) must include a description of the financial terms of the French Offer using a multi-criteria financial analysis. Since this financial analysis has been made available in the French Offer documentation, a translation of the financial analysis is also included in this exchange offer/prospectus. The financial analysis was performed solely to comply with French regulations in connection with the preparation of the French Offer documentation. This financial analysis was not relied on in any way by Nokia in connection with establishing the consideration offered in the Exchange Offer. Representatives of             and             assisted Nokia by compiling and reviewing data used in, and performing certain calculations for purposes of, this financial analysis. However, this financial analysis does not constitute an opinion of             or             or any of their respective affiliates regarding the fairness of the consideration offered in the Exchange Offer from a financial point of view or otherwise to either the holders of Alcatel Lucent Securities or the holders of Nokia Shares or Nokia ADSs and is not intended to, and does not, constitute a recommendation to any holder of Alcatel Lucent Securities with respect to the Exchange Offer. Neither             ,              nor any of their respective affiliates has made any independent valuation or appraisal of the assets or liabilities of Nokia or Alcatel Lucent, nor has             ,              or any of their respective affiliates been furnished with any such appraisals. Moreover, this financial analysis is not intended to, and does not, represent the views of             ,             or any of their respective affiliates as to the underlying valuation, future performance or long-term viability of Nokia or Alcatel Lucent, or the prices at which Nokia Shares or Nokia ADSs will trade upon or subsequent to announcement or consummation of the Exchange Offer.

The above is a translation from French of the original disclosure regarding the financial analysis of the Exchange Offer set forth in the French Offer documentation. Certain terminology has been conformed to the defined terms used in this exchange offer/prospectus and certain typographical conventions have been conformed to United States usage.

 

93

---

Table of Contents

TAX CONSIDERATIONS

France Income Tax Consequences

According to Article 244 bis B and C of the French Tax Code, subject to the provisions of applicable international tax treaties, any capital gain realized from the transfer of Alcatel Lucent Securities in the context of the Exchange Offer by persons (i) who are not tax residents of France within the meaning of Article 4 B of the French Tax Code (i.e., natural persons who do not have their home or their main place of residence in France; who do not carry on in France, as their main professional activity, either as a self-employed person or as an employee, and who do not have the center of their main interests in France), or (ii) whose registered office is located outside France, will not be, in principle, subject to French tax unless either (A) they carry on a professional activity in France through a permanent establishment or a fixed base in France to which their Alcatel Lucent Securities are related, or (B) they have held, at any time during the five years preceding the transfer, directly or indirectly, alone or with related individuals, more than 25% of the shares or voting rights in Alcatel Lucent.

However, capital gains of persons or entities who are resident, established or incorporated outside France and in Non Cooperative States or Territories (“NCST”) within the meaning of Article 238-0 A of the French Tax Code, will be taxed at a flat rate of 75%, regardless of the percentage of shares or voting rights they hold in Alcatel Lucent. A list of the NCST is published in a French Ministerial Decree and updated annually.

Everyone should consult their own tax advisor about French income tax consequences.

United States Federal Income Tax Consequences

The following is a general discussion of the principal U.S. federal income tax consequences to U.S. holders (as defined below) of (i) the exchange of Alcatel Lucent Securities for Nokia Shares and Nokia ADSs (together “Nokia Securities”) pursuant to the Exchange Offer, (ii) the squeeze-out of outstanding Alcatel Lucent Securities, and (iii) the ownership of Nokia Securities received in the Exchange Offer or the squeeze-out of Alcatel Lucent Securities. The following discussion is based on the Internal Revenue Code, as amended (the “Code”), the U.S. Treasury regulations promulgated thereunder, and judicial and administrative authorities, rulings and decisions, all as in effect as of the date of this offer to exchange. These authorities may change, possibly with retroactive effect, and any such change could affect the accuracy of the statements and conclusions set forth in this discussion. This discussion does not address the 3.8% Medicare tax, any state or local tax consequences, nor does it address any U.S. federal tax considerations other than those pertaining to the U.S. federal income tax.

The following discussion applies only to U.S. holders of Alcatel Lucent Securities that (i) participate in the Exchange Offer or the squeeze-out of Alcatel Lucent Securities, and (ii) hold Alcatel Lucent Securities and will hold Nokia Securities as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). Further, this discussion does not purport to consider all aspects of U.S. federal income taxation that might be relevant to U.S. holders in light of their particular circumstances and does not apply to holders subject to special treatment under the U.S. federal income tax laws, such as:

 

•

dealers or brokers in securities, commodities or foreign currencies;

 

•

traders in securities that elect to apply a mark-to-market method of accounting;

 

•

banks and certain other financial institutions;

 

•

insurance companies;

 

•

mutual funds;

 

94

---

Table of Contents

•

tax-exempt organizations;

 

•

holders liable for the alternative minimum tax;

 

•

partnerships or other pass-through entities or investors in partnerships or such other pass-through entities;

 

•

regulated investment companies;

 

•

real estate investment trusts;

 

•

former citizens or residents of the United States;

 

•

U.S. expatriates;

 

•

holders whose functional currency is not the U.S. dollar;

 

•

holders who hold Alcatel Lucent Securities or Nokia Securities as part of a hedge, straddle, constructive sale or conversion transaction or other integrated investment;

 

•

a person who owns or has owned directly, indirectly or constructively, 10% or more of the voting stock of Alcatel Lucent prior to the Exchange Offer;

 

•

holders who acquired Alcatel Lucent Securities or Nokia Securities pursuant to the exercise of employee stock options, through a tax qualified retirement plan or otherwise as compensation; or

 

•

holders who exercise appraisal rights.

This discussion is based in part upon the representations of the Alcatel Lucent depositary and the Nokia depositary and the assumption that each obligation in the Alcatel Lucent deposit agreement (and any related agreement) and the Nokia deposit agreement (and any related agreement) will be performed in accordance with its terms, and that the representations contained in each deposit agreement are true. For U.S. federal income tax purposes, a holder of Nokia ADSs or Alcatel Lucent ADSs, as applicable, will be treated as the holder of the underlying Nokia Shares or Alcatel Lucent Shares, as applicable, represented by those ADSs. Accordingly, the following discussion, except where otherwise expressly noted, applies equally to U.S. holders of Nokia or Alcatel Lucent ADSs, on the one hand, and Alcatel Lucent or Nokia Shares on the other.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Alcatel Lucent Securities or Nokia Securities, as the case might be, that is:

 

•

a citizen or individual resident of the United States;

 

•

a corporation (or any other entity or arrangement treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia;

 

•

a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more U.S. persons, within the meaning of Section 7701(a)(3)) of the Code, who have the authority to control all substantial decisions of the trust, or (B) that otherwise has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or

 

•

an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source.

If an entity treated as a partnership for U.S. federal income tax purposes holds Alcatel Lucent Securities or Nokia Securities, the tax treatment of a partner will generally depend upon the status of

 

95

---

Table of Contents

the partner and the activities of the partnership. Each such partner having an interest in Alcatel Lucent Securities or Nokia Securities is urged to consult its own tax advisor.

U.S. holders should consult their own tax advisors regarding the U.S. federal, state, local and other tax consequences of the Exchange Offer, the squeeze-out of Alcatel Lucent Securities, and of holding and disposing of Nokia Securities in their particular circumstances. Currently, reciprocal tax treaties, with protocols thereto, are in effect between the United States and Finland, and the United States and France. U.S. holders should consult their tax advisors with respect to the effect of such treaties (and their respective protocols) on the Exchange Offer, the squeeze-out of Alcatel Lucent Securities, and the owning and disposing of Nokia Securities in their particular circumstances.

U.S. Federal Income Tax Consequences of Exchanging Alcatel Lucent Securities Pursuant to the Exchange Offer and the Squeeze-out of Alcatel Lucent Securities

Possible Characterizations of the Exchange of Alcatel Lucent Shares and Alcatel Lucent ADSs and the Squeeze-out of Alcatel Lucent Shares and Alcatel Lucent ADSs

The receipt of Nokia Securities by U.S. holders in exchange for Alcatel Lucent Shares or Alcatel Lucent ADSs pursuant to the Exchange Offer or the squeeze-out of Alcatel Lucent Shares and Alcatel Lucent ADSs is expected to be a taxable transaction for U.S. federal income tax purposes, and is not expected to qualify as a tax-free reorganization under any provision of the Code. If any U.S. holders receive cash in exchange for Alcatel Lucent Shares or Alcatel Lucent ADSs pursuant to the squeeze-out of Alcatel Lucent Shares or Alcatel Lucent ADSs (other than cash received pursuant to the mechanism put in place to sell fractional Nokia Shares or Nokia ADSs), such exchange also is expected to be a taxable transaction for U.S. federal income tax purposes.

The tax consequences to U.S. holders will depend, in part, on whether the exchange of Alcatel Lucent Shares and Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer and the subsequent squeeze-out of Alcatel Lucent Shares or Alcatel Lucent ADSs are treated as a single integrated transaction for U.S. federal income tax purposes. If the transactions are so treated, and any holders of Alcatel Lucent Shares or Alcatel Lucent ADSs receive cash in the squeeze-out in exchange for such Alcatel Lucent Shares or Alcatel Lucent ADSs (other than cash received pursuant to the mechanism put in place to sell fractional Nokia Shares or Nokia ADSs), then the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs pursuant to the Exchange Offer and the subsequent squeeze-out of Alcatel Lucent Shares or Alcatel Lucent ADSs will be taxable to all U.S. holders, regardless of whether such holders receive solely Nokia Securities in exchange for their Alcatel Lucent Shares or Alcatel Lucent ADSs (whether pursuant to the Exchange Offer or the squeeze-out). It is possible, however, that either (i) all holders of Alcatel Lucent Shares and Alcatel Lucent ADSs participate in the Exchange Offer (and thus receive solely Nokia Securities in exchange for their Alcatel Lucent Shares or Alcatel Lucent ADSs), or (ii) no holder of Alcatel Lucent Shares or Alcatel Lucent ADSs receives cash in exchange for such Alcatel Lucent Shares or Alcatel Lucent ADSs in the squeeze-out (other than cash received pursuant to the mechanism put in place to sell fractional Nokia Shares or Nokia ADSs) (although cash is the default consideration, such holder may elect to receive Nokia Securities in the squeeze-out). In either such event, the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs for Nokia Securities (whether pursuant to the Exchange Offer or the squeeze-out) would be tax-free.

Alternatively, if the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer and the squeeze-out of Alcatel Lucent Shares and Alcatel Lucent ADSs were treated as separate transactions for U.S. federal income tax purposes, then (i) if Nokia acquires Alcatel Lucent Shares and Alcatel Lucent ADSs constituting “control” (i.e., at least 80% of the combined amount of Alcatel Lucent Shares and Alcatel Lucent ADSs) pursuant to the Exchange Offer, then the exchange of Alcatel Lucent Shares and Alcatel Lucent ADSs for Nokia Securities pursuant to

 

96

---

Table of Contents

the Exchange Offer would be tax-free to U.S. holders, or (ii) if Nokia does not acquire Alcatel Lucent Shares or Alcatel Lucent ADSs constituting “control” pursuant to the Exchange Offer, then the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer would be a taxable transaction. The exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs in the squeeze-out (whether in exchange for cash or Nokia Securities) would in any case be a taxable transaction if any holder of Alcatel Lucent Shares or Alcatel Lucent ADSs received cash.

Possible Characterizations of the Exchange of OCEANEs and the Squeeze-out of OCEANEs

In both of the scenarios discussed above, if the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs for Nokia Securities (whether pursuant to the Exchange Offer or in the squeeze-out) were tax-free, the treatment of the exchange of OCEANEs would depend on whether the OCEANEs are considered “securities” for U.S. federal income tax purposes. There is no precise definition under U.S. federal income tax law of the term “security,” and all facts and circumstances pertaining to a debt instrument must be considered in determining whether it constitutes a “security” for U.S. federal income tax purposes. Generally, corporate debt obligations with original terms to maturity of less than five years do not constitute securities and corporate debt obligations with original terms to maturity of ten years or more do constitute securities for U.S. federal income tax purposes. Based on the terms of the OCEANEs, it is likely that the OCEANEs would not be treated as “securities” for U.S. federal income tax purposes. Accordingly, even if the exchange of Alcatel Lucent Shares or Alcatel Lucent ADSs (whether pursuant to the Exchange Offer or in the squeeze-out) were tax-free, the exchange of OCEANEs (whether for Nokia Securities pursuant to the Exchange Offer or for Nokia Securities or cash in the squeeze-out) would be a taxable transaction.

Possible Alternative Transactions

As described in “The Transaction—Intentions of Nokia over the next twelve months—Squeeze-Out,” if Nokia acquires less than 95% of the Alcatel Lucent Securities pursuant to the Exchange Offer, Nokia reserves the right to enter into certain transactions to acquire the remaining Alcatel Lucent Securities, one of which would be to cause Alcatel Lucent to be merged into Nokia or an affiliate thereof. It is possible, depending on the terms of the transaction and the consideration paid, that such transaction may qualify as tax-free for U.S. federal income tax purposes, whether or not any such transaction were integrated with the exchange of Alcatel Lucent Shares and Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer. If such transaction is integrated with the exchange of Alcatel Lucent Shares and Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer and takes certain forms (including, potentially, the merger of Alcatel Lucent with and into certain affiliates of Nokia), it may cause the exchange by U.S. holders of Alcatel Lucent Shares and Alcatel Lucent ADSs for Nokia Securities pursuant to the Exchange Offer to be tax-free. Because the existence and terms of any such transaction cannot be known as of the completion of the Exchange Offer, U.S. holders are urged to consult their tax advisors regarding the consequences that any such transaction may have.

Intended Characterization of the Exchange of Alcatel Lucent Securities and the Squeeze-out of Alcatel Lucent Securities

Nokia and Alcatel Lucent intend to take the position that the exchanges of Alcatel Lucent Securities for Nokia Securities pursuant to the Exchange Offer and the squeeze-out are treated as part of a single integrated transaction for U.S. federal income tax purposes and expect that such exchanges will be taxable. The remainder of this discussion assumes such treatment. Nevertheless, such position is not binding on the IRS or the courts, and the taxable nature of the transactions depends, in part, on facts that cannot be known as of the completion of the Exchange Offer. Accordingly, U.S. holders are urged to consult their tax advisors regarding the consequences of the exchange of Alcatel Lucent Securities for Nokia Securities pursuant to the Exchange Offer or the receipt of cash or Nokia Securities in the squeeze-out of Alcatel Lucent Securities.

 

97

---

Table of Contents

U.S. Federal Income Tax Consequences of a Taxable Transaction

U.S. holders of Alcatel Lucent Securities generally will recognize gain or loss equal to the difference, if any, between (1) (i) the sum of the fair market value of Nokia Securities received by such U.S. holder in the Exchange Offer and any cash received in lieu of any fractional Nokia Securities to which such holder may otherwise be entitled, or (ii) the sum of the cash and fair market value of Nokia Securities (including any cash received in lieu of any fractional Nokia Securities to which such holder may otherwise be entitled) received by such U.S. holder in the squeeze-out of Alcatel Lucent Securities, as applicable, and (2) such U.S. holder’s adjusted tax basis in the Alcatel Lucent Securities surrendered in exchange therefor. For this purpose, U.S. holders of Alcatel Lucent Securities must calculate gain or loss separately for each identified block of Alcatel Lucent Securities exchanged (that is, Alcatel Lucent Securities acquired at the same cost in a single transaction).

A U.S. holder’s gain or loss in Alcatel Lucent Securities generally will be capital gain or loss. Non-corporate U.S. holders, including individuals, who have held the Alcatel Lucent Securities for more than one year will be eligible for reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss generally will be treated as U.S. source income or loss for foreign tax credit limitation purposes.

For U.S. federal income tax purposes, a U.S. holder’s aggregate tax basis in the Nokia Securities received pursuant to the offer will be equal to the fair market value of the Nokia Securities received by such U.S. holder on the date Alcatel Lucent Securities are exchanged pursuant to the exchange offer, and a U.S. holder’s holding period with respect to such Nokia Securities will begin on the day following the date such U.S. holder’s Alcatel Lucent Securities are exchanged pursuant to the Exchange Offer.

U.S. federal income tax law does not specifically identify how U.S. holders should determine the fair market value of the Nokia Securities on the date of exchange. Fair market value generally is the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the facts. There are several possible methods of measuring such value, including: (i) the opening trading price of Nokia Securities quoted on NYSE or the Nasdaq Helsinki Ltd. on the first regular trading day after the exchange; (ii) the average of the high and low trading price of Nokia Securities quoted on NYSE or the Nasdaq Helsinki Ltd. on the first regular trading day after the exchange; and (iii) the closing trading price of Nokia Securities quoted on NYSE or the Nasdaq Helsinki Ltd. on the first regular trading day after the exchange. U.S. holders should consult their tax advisors with respect to the determination of the fair market value of the Nokia Securities as of the date of the exchange.

U.S. holders of Alcatel Lucent Securities should consult their tax advisors as to the specific tax consequences of the receipt of Nokia Securities in exchange for Alcatel Lucent Securities pursuant to the Exchange Offer, and the receipt of cash and/or Nokia Securities pursuant to the squeeze-out of Alcatel Lucent Securities, in each case, including the applicability and effect of the alternative minimum tax and any state, local, foreign and other tax laws.

The discussion in this section assumes that Alcatel Lucent is not, and has not been at any time during the holding period of a U.S. holder that disposes of Alcatel Lucent Securities pursuant to the Exchange Offer or the squeeze-out, a passive foreign investment company (“PFIC”) for U.S. federal income tax purpose. If Alcatel Lucent were a PFIC or had been a PFIC at any time during the holding period of a U.S. holder that disposes of Alcatel Lucent Securities pursuant to the Exchange Offer or the squeeze-out, the U.S. federal income tax consequences to such holder would be different from those described above. U.S. holders are urged to consult their own tax advisors regarding whether Alcatel Lucent is or has been, during such U.S. holders’ holding period of their Alcatel Lucent Securities, a PFIC and regarding the tax consequences to them of such status of Alcatel Lucent.

 

98

---

Table of Contents

U.S. Federal Income Tax Consequences of Ownership of Nokia Securities

Taxation of Dividends and Other Distributions on Nokia Securities

Subject to the PFIC rules discussed below, the gross amount of distributions made to a U.S. holder with respect to Nokia Securities generally will be included in such U.S. holder’s gross income as ordinary dividend income on the date of actual or constructive receipt by the depositary, in the case of Nokia ADSs, or by a U.S. holder, in the case of Nokia Shares, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain records of earnings and profits in accordance with U.S. Federal income tax principles, U.S. holders should expect that the full amount of any distribution will be reported as dividend. Dividends will not be eligible for the dividends-received deduction allowed to corporations.

Under the Finnish Income Tax Act and the Act on Taxation of Non-residents’ Income, non-residents of Finland are generally subject to a withholding tax at a rate of 30% for non-corporate taxpayers, and 20% for corporate taxpayers, payable on dividends paid by a Finnish resident company. However, pursuant to the Convention between the Government of the United States of America and the Government of the Republic of Finland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, as amended (the “U.S.-Finland Treaty”), dividends paid to U.S. holders generally will be subject to Finnish withholding tax at a reduced rate of 15% of the gross amount of the dividend (see “Tax Considerations—Finnish Income Tax Consequences of Ownership and Disposal of Nokia Securities”).

Provided that certain holding period and other requirements are met, certain non-corporate U.S. holders are eligible for reduced rates of U.S. federal income tax at a maximum rate of 20% in respect of “qualified dividend income.” Dividends paid with respect to Nokia Securities generally will be qualified dividend income if we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid, a PFIC. We currently believe that dividends paid with respect to Nokia Securities will constitute qualified dividend income for U.S. federal income tax purposes; however, this is a factual matter and is subject to change. U.S. holders of Nokia Securities are urged to consult their own tax advisors regarding the availability to them of the reduced dividend tax rate.

For U.S. foreign tax credit purposes, dividends will generally be treated as income from foreign sources and will constitute passive category income. Depending on a U.S. holder’s particular facts and circumstances, a U.S. holder may be eligible to claim a foreign tax credit in respect of Finnish income taxes withheld with respect to dividends received on Nokia Securities. If a U.S. holder does not elect to claim a foreign tax credit for foreign taxes withheld, such U.S. holder may be permitted instead to claim a deduction in respect of such withholding taxes, but only for a year in which such U.S. holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex and their outcome depends in large part on each U.S. holder’s particular facts and circumstances. Accordingly, U.S. holders should consult their own tax advisors regarding the availability and computation of the foreign tax credit in light of their own particular circumstances.

Dividends paid in euros will be included in a U.S. holder’s income on the date of such U.S. holder’s (or in the case of ADSs, the depositary’s) receipt of the dividend in an amount equal to the U.S. dollar value of the dividen