Unilever 2000 Annual Report Download - page 82

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Unilever Annual Report & Accounts and Form 20-F 2000 Financial Statements
80
Notes to the consolidated accounts
Unilever Group
Unilever Annual Report & Accounts and Form 20-F 2000
34 Equity based compensation plans continued
The Group applies APB Opinion 25 and related interpretations in accounting for these plans. Accordingly, the Group has recognised only the
following compensation costs, 6 million in 2000, 13 million in 1999 and 1 million in 1998. Had the Group accounted for options under
the requirement of SFAS 123 the impact on reported results would have been as follows:
million
2000 1999 1998
Actual compensation cost recognised 613 1
Pro forma compensation cost under SFAS 123 57 56 34
Actual net profit 1 105 2 771 2 944
Pro forma net profit under SFAS 123 1 054 2 739 2 919
Euros per Fl. 1.12 (1998: Fl. 1) Euro cents per 1.4p (1998: 1.25p)
2000 1999 1998 2000 1999 1998
Actual earnings per share 1.07 2.63 2.63 16.08 39.48 39.47
Pro forma earnings per share 1.02 2.60 2.61 15.32 39.04 39.14
Actual diluted earnings per share 1.05 2.57 2.57 15.69 38.50 38.51
Pro forma diluted earnings per share 1.00 2.54 2.55 14.94 38.06 38.18
The remaining disclosures required by SFAS 123 are given below for each of the plans individually.
The UK Employee Sharesave Plan
The UK Employee Sharesave Plan provides for the granting of options to purchase shares of Unilever PLC to eligible employees of the Group
in the United Kingdom. Under the terms of the plan, eligible employees, to w hom options have been granted, make monthly contributions
to a savings plan approved by the UK Treasury for this purpose. At the end of five years the proceeds from the savings plan may be applied
to purchase ordinary shares of PLC at a price which is not less than 90% of the market value of the shares on a specified date within a
30 day period ending with the date on which the options w ere granted. Any discount from the market price is amortised over the five year
vesting period of the UK Employee Sharesave Plan. In 2000 options w ere granted at the market price. In 2000, 1999 and 1998 the total
amortisation under the Plan amounted to £1.4 million, £2.4 million and £2.1 million respectively.
The maximum number of shares for w hich options can be granted under the UK Employee Sharesave Plan is 316 million.
A summary of the status of the UK Employee Sharesave Plan as at 31 December 2000, 1999 and 1998 and the changes during these years
is presented below:
2000 1999 1998
Weighted Weighted Weighted
Number average Number average Number average
of shares price of shares price of shares price
Outstanding at 1 January 30 777 318 £4.00 32 029 021 £3.58 37 439 231 £2.85
Granted 7 960 043 £4.25 6 252 700 £5.14 6 328 960 £5.94
Exercised (5 717 614) £2.74 (4 521 318) £2.42 (7 192 536) £2.31
Forfeited (6 507 170) £4.84 (2 983 085) £4.30 (4 546 634) £2.81
Outstanding at 31 December 26 512 577 £4.14 30 777 318 £4.00 32 029 021 £3.58
Options exercisable at 31 December 192 156 £2.68 127 864 £2.29 250 070 £2.28
2000 1999 1998
Option value information (a)
Fair value per option (b) £1.05 £1.40 £2.12
Valuation assumptions
Expected option term 5 years 5 years 5 years
Expected volatility 25.56% 25.04% 17.54%
Expected dividend yield 3.31% 2.84% 1.50%
Risk-free interest rate 5.71% 5.17% 6.02%
(a) Weighted average of options granted during each period.
(b) Estimated using Black Scholes option pricing method.