Unilever 2006 Annual Report Download - page 123

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120 Unilever Annual Report and Accounts 2006
Financial Statements (continued)
29 Share-based compensation plans (continued)
(iii) Global Performance Share Plan
The GPSP was introduced in 2005. Under this plan, managers can be awarded conditional shares which will vest three years later at a level
between 0% and 150% (for middle management) or 200% (for higher executives) depending on Unilever’s achievement of set targets for
Underlying Sales Growth and Free Cash Flow over the three-year performance period. The amount to be paid by participants to obtain the
shares at vesting is zero.
Asummary of the status of the GPSP as at 31 December 2006 and 2005 and changes during the year is presented below:
2006 2005
Number of Number of
shares shares
Outstanding at 1 January 3770 644 –
Awarded 3426 757 3771 268
Vested ––
Forfeited (470 972) (624)
Outstanding at 31 December 6726 429 3770 644
Exercisable at 31 December ––
2006 2005
Share award value information
Fair value per share award €17.07 €15.98
As at 1 January 2006 there were 3 770 644 non-vested share awards at a weighted average fair value of €15.87. As at 31 December 2006 there
were 6 726 429 non-vested share awards at a weighted average fair value of €16.47. During 2006 no share awards vested.
(iv) TSR Long-Term Incentive Plan
Under this plan, introduced in 2001, grants are made to Executive Directors and some senior executives. The level of share award which will vest
three years later will vary in accordance with the Total Shareholder Returnin comparison with a peer group (see description on page 27). If the
ranking is below the median, the shareawardwill lapse; the higher the ranking above the median, the higher the shareaward. The amount to
be paid to the company by participants to obtain the shares at vesting is zero.
Asummary of the status of the TSR Long-Term Incentive Plan as at 31 December 2006, 2005 and 2004 and changes during the year ended on
these dates is presented below:
2006 2005 2004
Number of Number of Number of
shares shares shares
Outstanding at 1 January 2150 450 2180 626 1 994 258
Awarded 602 347 689 495 734 699
Vested(a) –– (454 759)
Forfeited (33 971) (21 944) (93 572)
Expired(b) (771 570) (697 727) –
Outstanding at 31 December 1947 256 2150 450 2 180 626
Exercisable at 31 December –––
(a) 2001 award vested 100% as ranking was 6th.
(b) 2002 and 2003 awards expired (zero vesting) as rankings were 13th and 14th respectively.
2006 2005 2004
Share award value information
Fair value per share award(c) €14.08 €13.48 €13.68
(c) Estimated using option pricing models (Monte Carlo) taking account of peer group TSR volatilities and correlations.
As at 1 January 2006 there were 2 150 450 non-vested share awards at a weighted average fair value of €14.13. As at 31 December 2006
therewere 1 947 256 non-vested share awards at a weighted average fair value of €13.83. During 2006 there were 771 570 share awards
at a weighted average fair value of €14.84 which expired on the vesting date.
Notes to the consolidated accounts Unilever Group