Unilever 2005 Annual Report Download - page 139

136 Unilever Annual Report and Accounts 2005
Notes to the consolidated accounts
Unilever Group
31 Share-based compensation plans (continued)
2005 2004
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
PLC shares of 1.4p in the form of ADRs(f)
Outstanding at 1 January 21 367 508 $8.55 20 778 836 $8.32
Granted 146 920 $9.79 2 836 492 $9.63
Exercised(e) (3 388 868) $7.86 (1 940 440) $7.47
Forfeited (357 248) $10.28 (307 380) $9.51
Expired (45 520) $9.32 ––
Outstanding at 31 December 17 722 792 $8.66 21 367 508 $8.55
Exercisable at 31 December 15 201 204 $8.53 15 475 612 $8.31
(e) The weighted average market price of the shares at the time of exercise was as follows: NV shares of €0.51 €58.06 (2004: €57.88); PLC shares
of 1.4p £5.61 (2004: £5.36); NV New York shares of €0.51 $68.79 (2004: $69.42); and PLC shares of 1.4p in the form of ADRs $40.39
(2004: $40.37).
(f) 1 ADR is equivalent to 4 PLC shares.
2005 2004
NV option value information(b)
Fair value per option(c)
NV Executive Option Plan €10.43 €11.43
PLC Executive Option Plan £7.17 £7.67
North America Executive Stock Option Programme $14.74 $13.45
Valuation assumptions
Expected option term 6.0 years 5.9 years
Expected volatility(d) 27.5% 27.5%
Expected dividend yield(g) 3.7% 3.3%
Risk-free interest rate 3.4% 3.1%
PLC option value information(b)
Fair value per option(c)
NV Executive Option Plan €1.68 €1.78
PLC Executive Option Plan £1.16 £1.20
North America Executive Stock Option Programme $2.13 $1.92
Valuation assumptions
Expected option term 6.0 years 5.9 years
Expected volatility(d) 27.5% 27.5%
Expected dividend yield(g) 3.8% 3.5%
Risk-free interest rate 4.7% 4.3%
(b) Weighted average of options granted during each period.
(c) Estimated using Black-Scholes option pricing method.
(d) Based on historic volatility during the last six years.
(g) Based on dividend yield in grant year.
The exercise prices and remaining life of the Executive Option Plans as at 31 December 2005 are as follows:
Options outstanding Options exercisable
Number Weighted Number
outstanding average exercisable
at 31 remaining Weighted at 31 Weighted
Range of December contractual average December average
exercise prices 2005 life exercise price 2005 exercise price
NV shares of €0.51 €42.79 – €60.85 9 117 330 7 years €55.52 3 711 564 €56.84
€63.50 – €73.97 4 213 744 5 years €66.20 4 213 744 €66.20
PLC shares of 1.4p £3.43 – £4.78 14 804 481 5 years £4.56 14 741 104 £4.56
£5.02 – £5.63 29 106 745 7 years £5.29 13 843 080 £5.38
£5.77 – £6.79 40 885 768 7 years £5.87 20 567 349 £5.89
NV New York shares of €0.51 $33.89 – $50.09 391 639 4 years $48.08 391 639 $48.08
$56.13 – $76.69 2 334 291 6 years $61.51 1 952 428 $61.20
PLC shares of 1.4p in the form of ADRs(f) $5.56 – $7.73 4 630 308 5 years $7.13 4 630 308 $7.13
$8.35 – $10.85 13 092 484 6 years $9.20 10 570 896 $9.14
(f) 1 ADR is equivalent to 4 PLC shares.