Unilever 2006 Annual Report Download - page 42

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Unilever Annual Report and Accounts 2006 39
Report of the Directors (continued)
Corporate governance (continued)
Voting rights
To be entitled to attend and vote at NV General Meetings
shareholders must hold their NV shares on the record date, which
is set by the Directors and is not more than thirty days before the
meeting. Shareholders do not need to block their shares. NV
shareholders can cast one vote for each €0.16 nominal capital
that they hold. This means that they can cast one vote for each
NV ordinary share, or NV New York Registry Share. Shareholders
can vote in person or by proxy. Similar arrangements apply to
holders of depositary receipts issued for NV shares and the
holders of NV preference shares (see pages 41 and 42).
PLC shareholders can cast one vote for each 1.4p nominal capital
that they hold. This means that one vote equals 9/20ths of a
share. Shareholders can vote in person at the meeting or by proxy.
Proxies should be submitted to the Registrars, Computershare
Investor Services PLC, whose details can be found on page 147,
at least 48 hours before the AGM. Shareholders at the PLC 2007
AGM are, however, being asked to approve a change in the
voting rights of PLC’sordinary shares designed to bring the
voting arrangements into line with the consolidation of ordinary
shares of 31⁄9papproved at the 2006 AGM. This will result in
one vote for each 31⁄9pof nominal capital instead of 1.4p of
nominal capital.
More information on the exercise of voting rights can be found
in NV’s and PLC’s Articles of Association and in the respective
Notices of Meetings.
Holders of NV New York Registry Shares or PLC American
Depositary Receipts of shares will receive a proxy form enabling
them to authorise and instruct ABN AMRO N.V.or Citibank, N.A.
respectively to vote on their behalf at the shareholders’ meeting
of NV or PLC. N.V.Elma and United Holdings Limited (the holders
of NV’sspecial shares), other group companies of NV which hold
ordinary or preference shares, and United Holdings Limited, which
owns half of PLC’s deferred stock, are not permitted to vote at
General Meetings.
Voting on each of the resolutions contained in the Notice of
AGMs is conducted by poll. The final vote is published at the
meetings and the outcome of the votes, including the proxy
votes, is put on Unilever’s website. For each resolution, proxy
appointment forms in 2006 provided PLC shareholders with
the option to direct their proxy to vote either for or against the
resolution or to abstain. In 2007, proxy appointment forms will
replace the abstain option with a vote withhold option. Future
PLC proxy forms and voting result announcements will make it
clear that a vote withheld is not a vote in law, and will not be
counted in the calculation of the proportion of votes for and
against the resolution voted on.
Shareholder proposed resolutions
Shareholders of NV may propose resolutions if they individually or
together hold 1% of NV’sissued capital in the form of shares or
depositary receipts for shares, or if they individually or together
hold shares or depositary receipts worth at least €50 million. They
must submit these requests at least 60 days before the date of
the General Meeting, and the request will be honoured unless, in
the opinion of the Boards, it is against a substantive interest of
the Company. Shareholders who together represent at least 10%
of the issued capital of NV can also requisition Extraordinary
General Meetings to deal with specific resolutions.
Shareholders who together hold shares representing at least 5%
of the total voting rights of PLC, or 100 shareholders who hold
on average £100 each in nominal value of PLC capital, can
require PLC to propose a resolution at a General Meeting.
PLC shareholders holding in aggregate one-tenth of the issued
ordinary shares of PLC are able to convene a general meeting
of PLC.
Required majorities
Resolutions are usually adopted at NV and PLC shareholder
meetings by an absolute majority of votes cast, unless there are
other requirements under the applicable laws or NV’s or PLC’s
Articles of Association. For example, there are special
requirements for resolutions relating to the alteration of the
Articles of Association, the liquidation of NV or PLC and the
alteration of the Equalisation Agreement (see below).
Aproposal to alter the Articles of Association of NV can only
be made by the Board of Directors. Such a proposal requires the
prior approval of the meeting of the holders of the special shares.
Aproposal to alter the Memorandum and Articles of Association
of PLC can be made either by the Board of Directors or by
shareholders in the manner permitted under the United Kingdom
Companies Act 1985. Proposals to alter the provisions in the
Articles of Association of NV and PLC relating to the unity of
management require the prior approval of meetings of the
holders of the NV special shares and the PLC deferred stock.
Copies of the Articles of Association of NV and the Memorandum
and Articles of Association of PLC can be found on our website.
Right to hold shares
Unilever places nolimitations on the right to hold NV and PLC
shares.
Foundation Agreements
Equalisation Agreement
The Equalisation Agreement makes the position of the
shareholders of NV and PLC, as far as possible, the same as if they
held shares in a single company. The Agreement regulates the
mutual rights of the shareholders of NV and PLC. Under the
Equalisation Agreement, NV and PLC must adopt the same
financial periods and accounting policies. Dividends are paid in
accordance with a formula relating to the nominal values of NV’s
and PLC’sissued sharecapital.
Since the AGMs in 2006, each NV Ordinary share represents the
same underlying economic interest in the Unilever Group as each
PLC Ordinary share.
We pay ordinary dividends for NV and PLC on the same day.
NV and PLC allocate funds for the dividend from their parts of
our current profits and free reserves. We pay the same amount
on each NV shareas on one PLC sharecalculated at the relevant
exchange rate. For interim dividends this exchange rate is the
average rate for the quarter before we declare the dividend. For
final dividends it is the average rate for the year. In arriving at the
equalised amount we include any tax payable by the Company in
respect of the dividend, but calculate it before any tax deductible
by the Company from the dividend.
The Equalisation Agreement provides that if one company had
losses, or was unable to pay its preference dividends, the loss or
shortfall would be made up out of: