Unilever 2005 Annual Report Download - page 144

Financial Statements
Unilever Annual Report and Accounts 2005 141
Notes to the consolidated accounts
Unilever Group
31 Share-based compensation plans (continued)
(viii) Other plans
During 2004 Unilever offered a special cash award to selected senior managers with the purpose of retaining them. This cash-settled share-based
plan provides a payment after three years linked to the development of the Unilever share price, on the condition of continued employment with
the Group.
A summary of the status of the other plans as at 31 December 2005 and 2004 and changes during the years ended on these dates is
presented below:
2005 2004
Number of Number of
shares shares
NV €0.51 share substitute
Outstanding at 1 January 300 000 –
Awarded –300 000
Vested ––
Forfeited (5 800) –
Outstanding at 31 December 294 200 300 000
PLC 1.4p share substitute
Outstanding at 1 January 2 000 000 –
Awarded –2 000 000
Vested ––
Forfeited (38 700) –
Outstanding at 31 December 1 961 300 2 000 000
The accrued balance for the cash-settled plan (2005: €13 million; 2004: €2 million) is included in other payables in note 20 on page 113.
Additional information
At 31 December 2005, there were options outstanding to purchase 19 830 853 (2004: 20 835 073) €0.51 ordinary NV shares, and 89 321 974
(2004: 102 249 614) 1.4p ordinary PLC shares in respect of share-based compensation plans of NV and its subsidiaries and the North American
plans, and 4 810 872 (2004: 5 183 084) €0.51 ordinary NV shares and 42 824 050 (2004: 49 182 073) 1.4p ordinary PLC shares in respect of
share-based compensation plans of PLC and its subsidiaries.
To satisfy the options granted, certain NV group companies hold 19 791 377 (2004: 25 120 635) certificates or depositary receipts of ordinary
shares of NV and 89 603 627 (2004: 93 850 655) of PLC and a forward equity contract to buy 10 000 000 PLC shares in 2006, and trusts in
Jersey and the United Kingdom hold 43 232 118 (2004: 48 888 961) PLC shares. The trustees of these trusts have agreed, until further notice,
to waive dividends on these shares, save for the nominal sum of 0.01p per 1.4p ordinary share. Shares acquired during 2005 represent 1.6% of
the Group’s called up capital. The balance at year end is 3.9% (2004: 4.6%).
The book value of €2 258 million (2004: €2 625 million) of all shares held in respect of share-based compensation plans for both NV and PLC is
eliminated on consolidation by deduction from other reserves (see note 25 on page 125). Their market value at 31 December 2005 was €2 261
million (2004: €2 273 million).
At 31 December 2005 the exercise price of 7 850 127 (2004: 20 224 246) NV options and of 44 867 061 (2004: 88 066 266) PLC options was
above the market price of the shares.
Shares held to satisfy options are accounted for in accordance with IAS 32 and SIC12. All differences between the purchase price of the shares
held to satisfy options granted and the proceeds received for the shares, whether on exercise or lapse, are charged to reserves. In 2005 this
includes €7 million (2004: €3 million) for shares held to meet options expiring in the short term which are priced above market value. The basis
of the charge to operating profit for the economic value of options granted is discussed on page 132.
Obligations over the following number of shares were granted, exercised, forfeited or expired between 31 December 2005 and 28 February
2006. In this period we have also, in line with prior years practice, purchased 148 443 NV New York shares and 852 848 PLC shares in the form
of ADRs to satisfy awards under the North America Executive Option and Share Matching Plans.
Exercised,
Granted forfeited or expired
Shares Shares Shares Shares
of 1.4p(m) of €0.51(n) of 1.4p(m) of €0.51(n)
All-Employee Option Plans – – 183 670 37 180
Executive Option Plans – – 2 179 918 240 261
Global Performance Share Plan – – – 1 971
Share Matching Plans – – 4 746 698
TSR Long-Term Incentive Plan ––––
North America Performance Share Programme – – 62 176 8 329
Restricted Share Plan ––––
Other plans ––––
(m) When under a North American plan, in the form of PLC ADRs.
(n) When under a North American plan, in the form of NV New York shares.