Unilever 2005 Annual Report Download - page 138

Financial Statements
Unilever Annual Report and Accounts 2005 135
Notes to the consolidated accounts
Unilever Group
31 Share-based compensation plans (continued)
(ii) Executive Option Plans
Under the Executive Option Plans options are granted to key employees of the Group on a discretionary basis. The exercise price is the market
price at the date of grant. Since the introduction of the Global Performance Share Plan in 2005, it is the intention to make no further grants
under the Executive Option Plans, except for a few premium option grants which result from prior commitments. The plans are made up of the
following:
NV Executive Option Plan
The NV Executive Option Plan provides for the granting of options to purchase shares of Unilever N.V. and, from 1997 onwards, also shares of
Unilever PLC, at a price not lower than the market price on the day the options were granted. These options become exercisable after a three-
year period from the date of grant. The options have a maximum term of five years for the grants made up to 1998 and of ten years for
subsequent grants.
PLC Executive Option Plan
The PLC Executive Option Plan provides for the granting of options to purchase shares of Unilever PLC and, from 1997 onwards, also shares of
Unilever N.V., at a price not lower than the market price on the day the options were granted. These options become exercisable after a three-
year period from the date of grant and have a maximum term of ten years.
North America Executive Stock Option Programme
This programme is covered by the North American 2002 Omnibus Equity Compensation Plan and provides for the granting of options to
purchase a maximum of 40.5 million shares in Unilever N.V. of the New York Registry, and 262.0 million shares of Unilever PLC, at a price not
lower than the market value on the day the options are granted. These options become exercisable over a three-year period from the date of
grant and have a maximum term of ten years.
Managers working in India can participate in an Executive Option Plan relating to Hindustan Lever Limited’s shares. As these are neither NV nor
PLC shares, no figures for this plan are disclosed in this note, but the fair value costs (2005: €2 million; 2004: €3 million) are included in the
costs of Executive Option Plans on page 132.
A summary of the status of the Executive Option Plans as at 31 December 2005 and 2004 and changes during the years ended on these dates
is presented below:
2005 2004
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
NV shares of €0.51
Outstanding at 1 January 14 667 226 €59.05 13 533 478 €59.80
Granted 145 114 €51.36 2 398 183 €54.22
Exercised(e) (287 912) €54.50 (222 975) €51.85
Forfeited (1 193 354) €60.92 (1 041 460) €59.24
Expired ––––
Outstanding at 31 December 13 331 074 €58.89 14 667 226 €59.05
Exercisable at 31 December 7 925 308 €61.82 5 898 593 €58.79
PLC shares of 1.4p
Outstanding at 1 January 95 972 535 £5.41 89 760 385 £5.39
Granted 949 915 £5.11 15 616 482 £5.21
Exercised(e) (5 246 425) £4.64 (3 586 509) £4.25
Forfeited (6 879 031) £5.50 (5 817 823) £5.39
Expired ––––
Outstanding at 31 December 84 796 994 £5.44 95 972 535 £5.41
Exercisable at 31 December 49 151 533 £5.35 38 324 985 £4.99
NV New York shares of €0.51
Outstanding at 1 January 3 337 456 $58.72 3 601 264 $54.83
Granted 21 954 $66.76 429 142 $65.93
Exercised(e) (545 843) $52.73 (641 245) $41.10
Forfeited (80 646) $71.70 (51 705) $66.41
Expired (6 991) $65.70 ––
Outstanding at 31 December 2 725 930 $59.58 3 337 456 $58.72
Exercisable at 31 December 2 344 067 $59.01 2 439 155 $57.62