Unilever 2001 Annual Report Download - page 112

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Unilever Annual Report & Accounts and Form 20-F 2001
>109
Shareholder information
CONTROL OF UNILEVER
If you are a holder of NV New York shares or PLC American
Depository Receipts of shares, you will receive a proxy form
enabling you to authorise and instruct ABN AMRO N.V. or
JPMorgan Chase Bank respectively to vote on your behalf
at the shareholders’ meeting of NV or PLC.
Resolutions are usually adopted at NV and PLC shareholder
meetings by an absolute majority of votes cast, unless there
are other requirements under the law or the NV or PLC
Articles. There are special requirements for resolutions
relating to the alteration of NV or PLC’s Articles of
Association or the Equalisation Agreement, or to the
liquidation of NV or PLC.
According to NV’s articles, shareholders who together
represent at least 10% of the issued capital of NV can
propose resolutions for inclusion in the agenda of any
General Meeting. They can also requisition Extraordinary
General Meetings to deal with specific resolutions. However,
following the recommendations of the Committee of
Corporate Governance, the board of directors has confirmed
that shareholders may propose resolutions if:
> they individually or together hold 1% of the issued
capital; or
> they hold shares or depository receipts worth at least
226 890.
They must submit the request at least 60 days before the
date of the General Meeting, and it will be honoured unless,
in the opinion of the board of directors, it is against the
interests of the company.
Under United Kingdom company law,
> shareholders who together hold shares representing at
least 5% of the total voting rights of PLC; or
> at least 100 shareholders who hold on average £100 each
in nominal value of PLC capital
can require PLC to propose a resolution at a
General Meeting.
There are no limitations on the right to hold NV and
PLC shares.
Directors
The directors of NV are able to vote on transactions in which
they are materially interested so long as they are acting in
good faith. In general PLC directors cannot vote in respect
of contracts in which they know they are materially
interested, unless, for example, their interest is shared with
other shareholders and employees.
The borrowing powers of NV directors are not limited by
the Articles of Association of NV. PLC directors have the
power to borrow up to three times the Adjusted Capital
and Reserves of PLC without the sanction of an
ordinary resolution.
The Articles of Association of NV and PLC do not require
directors of NV, or full-time employed directors of PLC, to
hold shares in NV or PLC. Directors of PLC who are not
employed full-time by NV or PLC must hold either £1 000
in nominal value of PLC ordinary shares, or 5 445 in
nominal value of NV ordinary shares. The remuneration
arrangements applicable to directors as employees contain
requirements for the holding and retention of shares (see
Remuneration Report page 42).
Mutual guarantee of borrowings
There is a contractual arrangement between NV and PLC
under which each will, if asked by the other, guarantee the
borrowings of the other. They can also agree jointly to
guarantee the borrowings of their subsidiaries. We use this
arrangement, as a matter of financial policy, for certain
significant public borrowings. The arrangements enable
lenders to rely on our combined financial strength.
Combined earnings per share
Because of the Equalisation Agreement and the other
arrangements between NV and PLC we calculate combined
earnings per share for NV and PLC (see note 7 on page 64).
We base the calculation on the average amount of NV and
PLC’s ordinary capital in issue during the year. For the main
calculation we exclude shares which have been purchased
to satisfy employee share options. We also calculate a
diluted earnings per share figure, where we include these
shares, as well as certain PLC shares which may be issued
in 2038 under the arrangements for the variation of the
Leverhulme Trust (see below).
The process by which we calculate earnings per share
is as follows. First we convert the average capital of NV
and PLC into units using the formula contained in the
Equalisation Agreement: one unit equals 10.7 NV shares
or 71.4 PLC shares. We add these together to find the total
number of units of combined share capital. Then the amount
of net profit in euros which is attributable to ordinary capital
is divided by this total number of units to find the amount
per combined unit. Finally we convert the combined unit
back into NV and PLC ordinary shares, to show the amount
per one share of each. The amount per unit is divided by
10.7 to find the amount per 0.51 share, and by 71.4 to
find the amount per 1.4p share.
Despite the Equalisation Agreement, NV and PLC are
independent corporations, and are subject to different
laws and regulations governing dividend payments in the
Netherlands and the United Kingdom. We assume in
our combined earnings per share calculation that both
companies will be able to pay their dividends out of their
part of our profits. This has always been the case in the
past, but if we did have to make a payment from one to
the other it could result in additional taxes, and reduce
our combined earnings per share.