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56 Unilever Annual Report on Form 20-F 1999 Report of the Directors
Remuneration report
a three year period. The maximum number of options
depended on seniority. The maximum aggregate value of
the exercise prices of options that could be held at any
one time was four times appropriate salary.
Under the terms of options to acquire ordinary shares in
NV, some individuals may be or have been granted the
right to elect to receive the equivalent cash value instead
of receiving shares on the exercise of their options.
This right is rescindable by the company (NV or a wholly
owned subsidiary of NV) which granted such options,
while they remain unexercised. It is the general intention
of the company that this right will remain extended where
it may be unduly disadvantageous to an individual not to
have such a right.
Under the terms of the PLC Unapproved Share Option
Scheme (formerly the PLC Expatriate Share Option
Scheme), PLC has the right to substitute the equivalent
cash value for any individual’s right to acquire shares on
the exercise of their options. It is not PLC’s intention to
exercise this right except in circumstances where it may
be unduly disadvantageous to an individual were it not
to do so. Accordingly, no amount has been charged
as a compensation expense during the year ended
31 December 1999 in respect of this scheme.
The PLC Sharesave Scheme covers all directors of PLC and
employees of its United Kingdom subsidiaries meeting
minimum service and United Kingdom taxation residence
requirements. Participants to whom options have been
granted make monthly contributions to a savings scheme
approved by the United Kingdom Treasury for this
purpose. At the end of five years the proceeds from the
savings scheme may be applied to obtain ordinary shares
of PLC at a price which is not less than 90% of the
market value of the shares on a specified date within
a thirty day period ending with the date on which the
options were granted.
The Unilever Savings Related Share Option Scheme
(Ireland) operated in a similar manner to the PLC
Sharesave Scheme for employees of Group companies
in the Republic of Ireland. Following a change in the law,
options are no longer granted under this scheme.
All directors of NV and all employees of Unilever
Nederland B.V. may participate in the share option scheme
for employees in the Netherlands if they are on the payroll
at the moment of grant. In respect of grants made in
1995, 1996 and 1997 an employee also had to be a
participant in the Save-As-You-Earn Scheme. For grants
made in 1998 and subsequent years there was no
requirement for employees to participate in the Save-As-
You-Earn Scheme. The grant of share options takes place
after a resolution to such effect has been adopted by the
Board of Unilever Nederland B.V. The share options are
granted at 100% of the market price at the moment of
the grant. Options granted prior to 1998 can be exercised
during a period of five years from the date of grant.
Options granted in 1998 and subsequent years can only
be exercised on the fifth anniversary of the grant date.
In 1998 and 1999 each participant was granted an option
to acquire 50 NV share s .
Under the Unilever North America 1999 Employee Stock
Purchase Plans, employees meeting minimum service
requirements are granted options to purchase shares of
NV at a special price, which is some 90% of the market
price at the grant date, through a payroll deduction
programme over a two year period.
NV intends to meet the obligations under the NV options
by transferring previously purchased shares to directors
and employees as the options are exercised. Any excess of
cost over option price in respect of shares acquired for this
purpose, together with any movement in the market value
above option price in respect of shares not yet acquired
for this purpose, is charged against the results over the
vesting period. During the year ended 31 December 1999
the maximum amount of this charge which could be
regarded as compensatory, should all individuals with a
right to receive cash as an alternative to shares exercise
such a right, was less than Fl. 15 million.
De Doffer B.V., a wholly owned subsidiary of NV, has
acquired such number of NV shares as will be sufficient
to satisfy the obligations Unilever United States, Inc. has
incurred so far under the Unilever North America 1992
Stock Option Plan and the Unilever North American 1999
Employee Stock Purchase Plan. The excess of cost over the
option price with respect to the shares acquired for this
purpose is charged against results for the period.
In 1990, the Unilever Employee Share Trust was
established to purchase and hold ordinary shares of PLC
to satisfy options granted under the PLC 1985 Sharesave
Scheme and the PLC 1985 Executive Share Option
Schemes. In 1995 the Unilever Employee Share Trust
(Jersey) was established for the same purpose, and in
1997 the powers of this trust were extended to enable
it to purchase and hold shares of NV to satisfy options
granted under the Unilever PLC International 1997
Executive Share Option Scheme.