Unilever 2006 Annual Report Download - page 124

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Unilever Annual Report and Accounts 2006 121
Financial Statements (continued)
Notes to the consolidated accounts Unilever Group
29Share-based compensation plans (continued)
(v) North America Performance Share Programme
This long-term incentive plan for North American managers, introduced in 2001, awards Unilever shares if company performance targets are
met over a three-year period. The amount to be paid to the company by participants to obtain the shares at vesting is zero.
Asummary of the status of the North America Performance Share Programme as at 31 December 2006, 2005 and 2004 and changes during
the years ended on these dates is presented below:
2006 2005 2004
Number of Number of Number of
shares shares shares
Outstanding at 1 January 9516 348 10 749 007 11 255 341
Awarded 2735 732 2742 984 3 456 287
Vested (3 057 630) (3 510 939) (3 819 424)
Forfeited (650 699) (464 704) (143 197)
Outstanding at 31 December 8543 751 9516 348 10 749 007
Exercisable at 31 December –––
2006 2005 2004
Share award value information
Fair value per share award €17.42 €19.02 €15.88
As at 1 January 2006 there were 9 516 348 non-vested share awards at a weighted average fair value of €16.14. As at 31 December 2006
there were 8 543 751 non-vested share awards at a weighted average fair value of €16.93. During 2006 there were 3 189 363 share awards
vested at a weighted average fair value of €15.12.
(vi) Other Plans
The Group also provides a Share Matching Plan, a Restricted Share Plan, and a cash-settled share-based retention plan.
Additional information
As a result of the share-based compensation plans for employees, we areexposed to movements in our own shareprice. We take a flexible
approach to the buying of shares to meet these obligations, not automatically buying shares at grant. In 2001, we entered into a contract with
abank for the forwardpurchase of Unilever shares. This contract was terminated in March 2006.
At31 December 2006, therewereoptions outstanding to purchase 87 114 773 (2005: 99 687 447) ordinary shares in NV or PLC in respect
of share-based compensation plans of NV and its subsidiaries and the North American plans, and 28 832 519 (2005: 33 703 439) ordinary
shares in NV or PLC in respect of share-based compensation plans of PLC and its subsidiaries.
Tosatisfy the options granted, certain NV group companies hold 91 935 752 (2005: 99 695 763) ordinary shares of NV or PLC, and trusts in
Jersey and the United Kingdom hold 16 678 871 (2005: 19 454 453) 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 31⁄9pordinary share. Shares acquired during 2006 represent 0.2%
of the Group’s called up capital. The balance at year end is 3.6% (2005: 3.9%).
The book value of €1 836 million (2005: €2 258 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 23 on page 110). Their market value at 31 December 2006 was
€2 279 million (2005: €2 261 million).
At 31 December 2006 the exercise price of 14 989 001 (2005: 43 740 558) NV and PLC options were above the market price of the shares.
Shares held to satisfy options are accounted for in accordance with IAS 32 and SIC 12. 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 2006 this
includes €7 million (2005: €7 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 117.
Obligations over the following number of shares were granted, exercised, forfeited or expired between 31 December 2006 and 1 March 2007.
In this period we have also, in line with prior years practice, purchased 206 871 NV New York Registry Shares and 259 522 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
Numbers of Numbers
shares of shares
All-Employee Option Plans –443 488
Executive Option Plans –3006 729
Global Performance Share Plan –20 083
TSR Long-Term Incentive Plan ––
North America Performance Share Programme –91 187