Unilever 2007 Annual Report Download - page 121

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Unilever Annual Report and Accounts 2007 119
Financial statements continued
Notes to the consolidated accounts Unilever Group
29 Share-based compensation plans (continued)
Additional information
As a result of the share-based compensation plans for employees, we are exposed to movements in our own share price. 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
a bank for the forward purchase of Unilever shares. This contract was terminated in March 2006.
At 31 December 2007, there were options outstanding to purchase 61 579 485 (2006: 88 937 770) ordinary shares in NV or PLC in respect
of share-based compensation plans of NV and its subsidiaries and the North American plans, and 18 296 234 (2006: 29 315 519) ordinary
shares in NV or PLC in respect of share-based compensation plans of PLC and its subsidiaries.
To satisfy the options granted, certain NV group companies hold 68 011 392 (2006: 91 935 752) ordinary shares of NV or PLC, and trusts in
Jersey and the United Kingdom hold 10 920 385 (2006: 16 678 871) 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 31⁄9p ordinary share. Shares acquired during 2007 represent 0.2%
of the Group’s called up capital. The balance at 31 December 2007 was 2.6% (2006: 3.6%).
The book value of €1 305 million (2006: €1 836 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 2007 was
€2 008 million (2006: €2 279 million).
At 31 December 2007 the exercise price of nil (2006: 14 989 001) 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 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 2007 this
includes €nil million (2006: €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 2007 and 1 March 2008.
Number of shares
Exercised,
Granted forfeited or expired
Share Option Plans – 2 104 963
Performance Share Plans – 118 881