Meeting everyday needs of people everywhere - Unilever

Unilever Group Notes to the consolidated accounts
33 Equity based compensation plans (continued)
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1999 1998 1997
00000001111011111011111011111101111 01111 01111
Option value informatio n (a)
Fair value per option (b) £1.40 £2.12 £0.57
Valuation assumptions
Expected option term 5 years 5 years 5 years
Expected volatility 25.04% 17.54% 15.25%
Expected dividend yield 2.84% 1.50% 5.94%
Risk-free interest rate 5.17% 6.02% 6.99%
(a) Weighted average of options granted during each period.
(b) Estimated using Black Scholes option pricing method.
00000001111011111011111011111101111101111101111
The following table summarises information about fixed price stock options outstanding at 31 December 1999:
00000001111011111011111011111101111101111101111
Options Outstanding Options Exercisable
00511110051100511005 00511005
Number Weighted Number
outstanding at average Weighted exercisable at Weighted
Range of 31 December remaining average 31 December average
exercise prices 1999 contractual life exercise price 1999 exercise price
00511 005 005 005 005 005
£2.29 127 864 3 months £2.29 127 864 £2.29
£2.68 5 286 263 1 year £2.68 — —
£2.78 5 883 004 2 years £2.78 — —
£3.71 8 325 975 3 years £3.71 — —
£5.94 5 107 309 4 years £5.94 — —
£5.14 6 046 903 5 years £5.14 — —
00511 005 005 005 005 005
£2.29 to £5.94 30 777 318 £4.00 127 864 £2.29
00000001111011111011111011111101111101111101111
The PLC Option Plans
The PLC Options Plans provide for the granting of options to purchase shares in Unilever PLC and, from 1997 onwards, also shares of
Unilever NV to key employees of the Group. Under the PLC Option Plans, options have been granted on a discretionary basis to
acquire shares at a price which is not less than the market value of the shares on a specified date within a 30 day period ending with
the date on which the options were granted. These options become exercisable after a three year period from the date of grant and
have a maximum term of ten years.
No options to purchase shares may be granted if this would cause the number of PLC shares which shall have been or may be issued
in pursuance of options to exceed the following numbers:
Unilever PLC 1985 Executive Share Option Plan – 79 000 000
Unilever PLC 1985 Unapproved Executive Share Option Plan – 79 000 000
PLC Option Plans – Such number as equals 5% of PLC’s issued ordinary share capital, over a
ten year period.
PLC Option Plans and PLC Sharesave Plan – Such number as equals 3% of PLC’s issued ordinary share capital, over a
three year period.
PLC Option Plans and PLC Sharesave Plan – Such number as equals 10% of PLC’s issued ordinary share capital, over
a ten year period.
A summary of the status of the PLC Option Plans as at 31 December 1999, 1998 and 1997 and of the changes during the years ended
on these dates is presented below:
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For the years ended 31 December: 1999 1998 1997
10511110511 0511110511 0511110511
Weighted Weighted Weighted
Number average Number average Number average
of shares price of shares price of shares price
00000110511 10511 0511 10511 0511 10511
PLC Options
Outstanding at the beginning of the year 10 691 852 £3.80 10 312 216 £3.01 12 633 096 £2.69
10511 10511 0511 10511 0511 10511
Granted 3 577 825 £5.55 2 187 530 £6.68 1 457 400 £4.07
Exercised 1 086 689 £2.56 1 741 396 £2.69 3 600 784 £2.32
Forfeited 54 706 £4.94 66 498 £5.02 177 496 £3.23
10511 10511 0511 10511 0511 10511
Outstanding at the end of the year 13 128 282 £4.37 10 691 852 £3.80 10 312 216 £3.01
10511 10511 0511 10511 0511 10511
Options exercisable at the end of the year 6 039 227 £2.93 4 988 752 £2.73 3 774 648 £2.48
10511110511110511110511110511110511