Unilever 2004 Annual Report Download - page 150

Unilever Annual Report and Accounts 2004 147
Notes to the consolidated accounts
Unilever Group
30 Share-based compensation plans (continued)
Additional information
At 31 December 2004, there were options outstanding to purchase 20 835 073 (2003: 19 625 369) €0.51 ordinary NV shares, and
102 249 614 (2003: 96 512 423) 1.4p ordinary PLC shares in respect of share-based compensation plans of NV and its subsidiaries and the
North American plans, and 5 183 084 (2003: 4 816 994) €0.51 ordinary NV shares and 49 182 073 (2003: 50 494 450) 1.4p ordinary
PLC shares in respect of share-based compensation plans of PLC and its subsidiaries.
To satisfy the options granted, certain group companies hold 25 120 635 (2003: 22 163 785) certificates or depositary receipts of ordinary
shares of NV and 93 851 655 (2003: 84 450 131) 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 48 888 961 (2003: 47 085 636) PLC shares. The book value of the shares held by the trusts, together
with their borrowings, is taken up in the entity accounts of PLC, as required by United Kingdom Urgent Issues Task Force Abstract 38 (UITF 38).
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 2004 represent 0.5% of the Group’s called up capital. The balance at year end is 4.6% (2003: 4.2%).
The book value of €2 587 million (2003: €2 294 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 24 on page 133). Their market value at 31 December 2004 was
€2 273 million (2003: €2 117 million).
At 31 December 2004 the exercise price of 20 224 246 (2003: 17 072 651) NV options and of 88 066 266 (2003: 79 751 021) PLC options
was above the market price of the shares.
Shares held to satisfy options are accounted for in accordance with Netherlands law and United Kingdom UITF 37 and UITF 38. 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 2004 this includes €3 million (2003: €8 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 139.
Obligations over the following number of shares were granted, exercised, forfeited or expired between 31 December 2004 and
25 February 2005. In this period we have purchased 13 700 NV New York shares and 90 800 PLC shares in the form of ADRs to
satisfy awards under the Share Matching Plans, and 637 937 NV shares intended to replenish the hedging position following the use of
existing shares for the €0.05 NV preference shares conversion (see also note 7 on page 112).
Exercised,
Granted forfeited or expired
Shares Shares Shares Shares
of 1.4p(f) of €0.51(g) of 1.4p(f) of €0.51(g)
All-Employee Option Plans – – 320 476 61 562
Executive Option Plans – – 1 268 564 228 147
Share Matching Plans – – 585 875 85 834
TSR Long-Term Incentive Plan ––––
North American Performance Share Plan – – 29 632 3 956
Restricted Share Plan ––––
Other plans ––––
(f) When under a North American Plan, in the form of PLC ADRs.
(g) When under a North American Plan, in the form of NV New York shares.
31 Related party transactions
The following related party balances existed with associate businesses at 31 December:
€ million € million
2004 2003
Trading balances receivable 29 28
Sales agency fees to JohnsonDiversey were incurred of approximately €68 million in 2004 (2003: €77 million; 2002: €85 million).
In July 2004 in the UK, Unilever formed a joint venture with Arlington Science Park Ltd. and sold it property at the Colworth site for a total
consideration of €46 million.
In 2004 Patrick Cescau, the Chairman of Unilever PLC, and his wife purchased a house from Immobilia Transholme B.V., an NV group company,
for €3 348 000 (£2 270 000). The full Boards, acting on the recommendation of the Remuneration Committee and without the participation of
Mr Cescau, gave their prior approvals to the purchase, which was made at full market value based on two independent valuations of the
property.