Unilever N V - Annual Report of Employee Stock Plans (11-K)
26 Juni 2008 - 7:58PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
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For the fiscal year ended December 31, 2007
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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For the transition period from
to
Commission File Number 1-4547 (Unilever N.V.)
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A.
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Full title of the plan and the address of the plan, if different from
that of the issuer named below:
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UNI
Care
SAVINGS
PLAN
UNILEVER
UNITED STATES, INC.
700 SYLVAN AVENUE
ENGLEWOOD CLIFFS, NEW JERSEY 07632
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B.
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Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
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UNILEVER N.V.
WEENA 455
3013 AL, ROTTERDAM
THE NETHERLANDS
UNI
Care
Savings
Plan
Required Information
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Page(s)
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S-1
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B. Financial Statements and Supplemental Schedule:
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1
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Financial Statements
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2
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3
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417
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Supplemental Schedule (*)
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18
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(*)
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Other supplemental schedules required by 29 CFR 2520.103-10 of the Department of Labors
Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 have not been included as they are not applicable.
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C. Exhibit
23.1 Consent of Independent Registered Public Accounting Firm
UNI
Care
Savings
Plan
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons
who administer the employee benefit plan) have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
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UNI
Care
SAVINGS PLAN
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By:
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/s/ Pascale Thomas
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PASCALE THOMAS
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DIRECTOR OF BENEFITS
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Date:
June 26, 2008
S-1
Report of Independent Registered Public Accounting Firm
To the Participants and Administrator of the
UNI
Care
Savings Plan
In our opinion, the accompanying statements of net assets available for benefits and the related
statements of changes in net assets available for benefits present fairly, in all material
respects, the net assets available for benefits of the UNI
Care
Savings Plan (the Plan) at
December 31, 2007 and December 31, 2006, and the changes in net assets available for benefits for
the years then ended in conformity with accounting principles generally accepted in the United
States of America. These financial statements are the responsibility of the Plans management.
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the
purpose of additional analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labors Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental
schedule is the responsibility of the Plans management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
June 23, 2008
1
UNI
Care
Savings Plan
Statements of Net Assets Available for Benefits
As of December 31, 2007 and 2006
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2007
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2006
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Assets
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Investment in the Unilever United States, Inc.
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Master Trust, at fair value
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$
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1,680,934,348
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$
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1,625,317,878
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Loans to participants
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25,695,707
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24,721,346
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Total investments
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1,706,630,055
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1,650,039,224
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Receivables
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Employer contributions
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687,691
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712,563
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Participant contributions
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1,386,155
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1,393,126
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Net assets, at fair value
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1,708,703,901
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1,652,144,913
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Adjustment from fair value to contract value for
interest in the Master Trust relating to fully
benefit-responsive investment contracts
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(12,110,239
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1,216,236
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Net assets available for benefits
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$
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1,696,593,662
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$
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1,653,361,149
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The accompanying notes are an integral part of these financial statements.
2
UNI
Care
Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the years ended December 31, 2007 and 2006
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2007
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2006
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Additions
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Additions to net assets attributed to:
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Net investment income from Plan interest in
Unilever United States Inc. Master Trust
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$
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165,384,566
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$
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151,321,683
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Interest from participant loans
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1,996,193
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1,621,055
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Contributions and other additions:
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Contributions from participants
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53,889,943
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53,904,839
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Contributions from employer
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25,604,905
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26,289,976
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Rollover contributions
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16,401,483
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15,890,420
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Transfer from other plan
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29,163,169
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Total additions
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263,277,090
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278,191,142
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Deductions
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Deductions to net assets attributed to:
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Benefits paid to participants
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214,830,322
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217,322,379
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Transfer to other plan
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4,889,525
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Administrative expenses
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324,730
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288,120
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Total deductions
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220,044,577
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217,610,499
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Net increase
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43,232,513
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60,580,643
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Net assets available for benefits:
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Beginning of year
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1,653,361,149
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1,592,780,506
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End of year
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$
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1,696,593,662
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$
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1,653,361,149
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The accompanying notes are an integral part of these financial statements.
3
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
1.
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Description of the Plan
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The UNI
Care
Savings Plan (the Plan) is a defined contribution plan that is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The
Plan is sponsored by Unilever United States, Inc. (the Company or UNUS) and its assets,
along with the assets of the Savings Plan for Union Employees of Unilever and the Good Humor
Breyers Savings Plan are maintained in the Unilever United States, Inc. Master Trust (the
Master Trust). Conopco, Inc. is the plan sponsor of the Savings Plan for Union Employees
of Unilever and the Good Humor Breyers Savings Plan. The following brief description of
the Plan is provided for general information purposes only. Participants should refer to the
summary plan description for more complete information.
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Eligibility
All employees of the Company and its subsidiaries, divisions and branches scheduled to work
twenty or more hours a week, all employees of Good Humor-Breyers at the Huntington, Indiana
plant represented by the Retail, Wholesale and Department Store Union, UFCW AFL-CIO and its
United Dairy Workers Local 835, on or before June 30, 2007, and all employees of Ben &
Jerrys Homemade at the St. Albans, Vermont plant represented by the International
Brotherhood of Electrical Workers Local 300 are eligible to participate in the Plan, except
for:
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employees covered by collective bargaining agreements other than those above;
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temporary employees;
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directors active only in that capacity;
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nonresident aliens; and
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weekly paid employees of Bestfoods Caribbean, employees of Unilever Home & Personal
Care Manufacturing Company in Las Piedras, Puerto Rico.
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Subject to the exceptions above, employees who are not regularly scheduled to work twenty or
more hours a week can participate in the Plan after completing one year of service.
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Contributions
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Plan participants are permitted to make voluntary contributions to the Plan through payroll
deductions. Before-tax contributions, representing 401(k) contributions, are deposited in a
before-tax account and after-tax contributions, where applicable, are deposited in an
after-tax account. Before-tax contributions per participant were limited to $15,500 for
2007 and $15,000 for 2006.
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The maximum permitted contributions vary as follows:
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A)
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Employees of Bradley Woods Company: 1 to 50% of eligible compensation on a
before-tax basis during 2007 and 1 to 60% of eligible compensation on a before tax basis
during 2006;
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B)
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Employees at the Puerto Rico locations: the lesser of 10% of the eligible
compensation through payroll deductions on a before tax basis or the statutory amount
permitted under the Puerto Rico Code. In addition, 10% of the eligible compensation
through payroll deductions on an after tax basis, not subject to the statutory amount
permitted under the Puerto Rico Code;
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4
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
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C)
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Employees at the St. Albans and Huntington locations in 2007: 1-20% of eligible
compensation through payroll deductions on a before-tax basis, an after-tax basis or a
combination of both, provided that the maximum participant contributions to the
before-tax and after-tax accounts do not exceed 20% of eligible compensation; and.
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D)
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All other employees: 1% to 50% in 2007 and 1 to 20% in 2006 of eligible
compensation through payroll deductions on a before-tax basis, an after-tax basis or a
combination of both, provided that the maximum participant contributions to the
before-tax and after-tax accounts do not exceed 50% and 20%, respectively, of eligible
compensation.
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Participants, other than Puerto Rico employees, who will be age 50 or older by the end of the
Plan year are eligible to make before-tax catch-up contributions. Catch-up contributions are
limited to $5,000 for eligible employees for 2007 and 2006.
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The Company has a matching program in which it contributes a portion of participant
contributions to the participants account. These contributions are recorded in a company
matching account. Company matching contributions vary at the discretion of the Company and
are as follows:
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A)
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Legacy employees of Bestfoods: 100% of the first 6% of eligible earnings until
December 31, 2006;
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B)
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Employees who are covered under the cash balance formula of
the UNI
Care
Retirement Plan or not covered at all under the
UNI
Care
Retirement Plan: 100% of the
first 5% of eligible earnings; and
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C)
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Remaining employees who are covered under the final average
pay formula of the UNI
Care
Retirement Plan: 100% of the first 3% of eligible earnings and 50% of the next
2% of eligible earnings.
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As of January 1, 2007, employees not covered under the
UNI
Care
Retirement Plan are eligible
for employer non-elective contributions at a rate of 4% of eligible earnings following one
year of service.
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All contributions are deposited in the Master Trust.
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Participant Accounts
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Each participants account is credited with (a) the participants contribution, (b) the
Companys contributions, and (c) an allocation of Plan earnings and administrative expenses.
Allocations are based on participant earnings or account balances, as defined. The benefit
to which a participant is entitled is the benefit that can be provided from the vested
portion of the participants account. At December 31, 2007 and 2006, there were 13,363 and
14,019 participants, respectively.
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Vesting
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Participants are fully vested in all of their contributions in the before-tax and after-tax
accounts as well as the earnings thereon. Vesting provisions relating to Company matching
contributions vary at the discretion of the Company and are as follows:
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All employees unless otherwise noted: 100% immediately;
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5
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
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During 2006, Employees of Bradley Woods Company: 33-1/3% after 1 year of service; 66-2/3%
after 2 years of service; and 100% after 3 years of service. This vesting schedule was
discontinued for active employees as of December 31, 2006 and these employees became 100%
vested as of that date. Participants who were on terminated status as of that date are still
subject to the vesting schedule.
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Vesting provisions relating to Company non-elective contributions are 100% after 3 years of
service or attainment of age 65, death or disability.
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Amounts forfeited by non-vested participants who terminated employment during the years ended
December 31, 2007 and 2006 were $10,025 and $56,194, respectively. The balance of
forfeitures was $392,418 and $363,642 as of December 31, 2007 and 2006, respectively.
Forfeitures are available to reduce Company match contributions and administrative expenses.
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Payment of Benefits
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During employment, participants may withdraw all or part of their after-tax account, where
applicable, and earnings thereon. Participants may apply for financial hardship withdrawal
of up to 100% of the value of their after-tax account, where applicable, and the eligible
portion of their vested before-tax account based on plan provisions, prior to attaining age
59-1/2, provided the withdrawal does not exceed the amount of the hardship. Upon attainment
of age 59-1/2, participants may withdraw all or part of their before -tax account, after
-tax account, where applicable, company matching account, and vested non-elective
contribution account.
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Upon termination of employment, participants are entitled to all of their vested balances.
Terminated employees whose vested balances exceed $1,000 may leave their account balances in
the plan until they attain the age 65. Terminated employees whose vested balances are $1,000
or less are subject to an involuntary cash out.
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Retired employees may elect to leave their account balances in the Plan until they attain age
70-1/2 at which time Internal Revenue Service regulations require minimum distributions to be
made. Failure to make a voluntary election to defer payment will result in a total
distribution of vested Plan balances at age 65.
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Participants who retire under the provisions of certain defined benefit plans sponsored by
the Company may roll over their lump sum distribution to the Plan.
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Plan Transfers
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During 2006, approximately $29 million of assets from the Ben & Jerrys Homemade Plan were
transferred into the Plan. Such amount included approximately $548,000 of participants
loans. The Ben & Jerrys Homemade Plan was a qualified structured 401(k) plan of a business
unit of the Unilever group.
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During 2007, approximately $5 million of assets attributable to the account balances of the
union employees at the St. Albans and Huntington locations were transferred from the Plan to
the Savings Plan for the Union Employees of Unilever. This amount included $506,492 of
participant loans.
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6
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
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Investments
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Participants have the option to invest in, and direct the Company matching contributions
towards a wide variety of funds including money market, fixed income, balanced, equity and
the Unilever N.V. Stock Fund. The funds are as follows:
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The INVESCO (also known as PRIMCO) Interest Income Fund is primarily invested in a
diversified portfolio of investment contracts issued by high quality financial
institutions such as insurance companies and banks. Each contract has its own specific
terms, including interest rate and maturity date. The crediting interest rates at
December 31, 2007 and 2006 for the contracts range from 4.51% to 5.34% and 4.65% to
5.32%, respectively. The average crediting interest rates at December 31, 2007 and 2006
for the contracts are 4.95% and 5.20%, respectively.
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Fidelity Asset Manager Fund, NTGI-QM Equity Index Fund, Fidelity Magellan Fund, PIMCO
Total Return Fund Institutional Class, Harbor Capital Appreciation Fund, Unilever N.V.
Stock Fund, Fidelity Growth & Income Portfolio Fund, Fidelity Contrafund, T. Rowe Price
Small Cap Stock Fund, American Funds Washington Mutual Investors Fund Class A,
Fidelity Select Health Care Portfolio Fund, Fidelity Select Technology Portfolio Fund,
Fidelity Select Financial Services Portfolio Fund, Fidelity Select Natural Resources
Portfolio Fund, NTGI-QM Collective Daily Russell 1000 Value Equity Index Fund, Legg
Mason Partners Emerging Markets Equity Fund and the Fidelity Select International Equity
Portfolio Fund.
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Effective July 1, 2008, the Company will introduce Target Date Trusts and brokerage
capabilities to the Plan. Additionally, on August 28, 2008 certain investment funds from
those currently available will be eliminated from the Plan, which will be communicated to
participants in early June 2008.
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Loans to Plan Participants
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At the request of the Plan participants, loans are permitted up to the lesser of $50,000
reduced by the largest outstanding loan balance in the previous 12 months or one-half of the
participants vested interest in accounts less any outstanding loans. Loans bear interest at
a fixed rate based on the Wall Street Journal published prime rate plus one percent, adjusted
quarterly. Loans relating to the acquisition or construction of a participants principal
residence are to be repaid within fifteen years. All other loans are required to be repaid
within five years.
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Interest rates ranging from 5% to 10.5% were charged on the loans for the years ended
December 31, 2007 and 2006.
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For participants that were transferred from the Ben and Jerrys Homemade Plan in 2006, loans
relating to the acquisition or construction of a participants principal residence are to be
repaid within thirty years. All other loans are required to be repaid within five years.
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Administration
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The Plan provides that the Benefits Administration Committee is responsible for the general
administration of the Plan.
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7
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
2.
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Summary of Significant Accounting Policies
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Basis of Accounting
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The financial statements of the Plan are prepared on the accrual basis of accounting in
conformity with accounting standards generally accepted in the United States of America.
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Valuation of Master Trust Investments and Income Recognition
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The assets of the Plan have been commingled in the Master Trust with the assets of the
Savings Plan for Union Employees of Unilever and the Good
Humor-Breyers Savings Plan for
investment and administrative purposes. The investment in the Master Trust represents the
Plans interest in the net assets of the Master Trust. The Plans investment is stated at
fair value and is based on the beginning of the year value of the Plans interest in the
Master Trust plus contributions and allocated investment income less distributions and
allocated expenses. Participants loans are valued at cost plus accrued interest, which
approximates fair value.
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The Plan presents in the Statements of Changes in Net Assets Available for Benefits the
investment income for the Plans interest in the Master Trust, which consists of its
allocated share of investment income, realized gains and losses and the unrealized
appreciation (depreciation) from the Master Trust.
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The Plans interest in the Master Trust represents more than 5 percent of the Plans net
assets available for benefits as of December 31, 2007 and 2006.
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Investment Contracts
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As of December 31, 2006, the Plan adopted the provisions of the Financial Accounting
Standards Board Staff Position (FSP) Nos. AAG INV-1 and SOP 94-4-1, reporting of Fully
Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the
AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans.
The FSP clarifies the definition of fully benefit-responsive investment contracts for
contracts held by defined contribution plans along with the financial statement presentation
and disclosure of such contracts. Investment contracts held by a defined-contribution plan
are required to be reported at fair value. However, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits of a
defined-contribution plan attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would receive if they were to initiate
permitted transactions under the terms of the plan. As required by the FSP, the Statements
of Net Assets Available for Benefits presents the fair value of the investment contracts as
well as the adjustment of the fully benefit-responsive investment contracts from fair value
to contract value. The Statements of Changes in Net Assets Available for Benefits is
prepared on a contract value basis. In adopting the provisions of this FSP, there were no
accounting effects to the Plans financial statements, other than the requisite presentation
of investment contracts fair values in the accompanying Statements of Net Assets Available
for Benefits.
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Further information on the Plans investment contracts is included in Note 4.
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Benefit Payments
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Benefit payments are recorded when paid and include deemed distributions of $5,051 for the
year ended December 31, 2007.
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8
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
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Administrative Expenses
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Investment management fees for all funds and certain professional fees are paid by the Plan.
All other administrative expenses are paid by the Company.
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Use of Estimates
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The preparation of financial statements in conformity with accounting standards generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities and changes therein, and
disclosure of contingent assets and liabilities at the date of the financial statements.
These significant estimates include fair market values of investments. Actual results could
differ from those estimates.
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Risks and Uncertainties
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The Plan provides for various investment options in any combination of stocks, commingled
funds, mutual funds, and other investment securities. Investment securities are exposed to
various risks, such as interest rate, market and credit. Due to the level of risk associated
with certain investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes in risks in
the near term would materially affect participants account balances and the amounts reported
in the December 31, 2007 Statement of Net Assets Available for Benefits.
|
|
|
|
The Master Trust is exposed to credit loss in the event of non-performance by the companies
with whom guaranteed investment contracts are placed. However, the Plan administrator does
not anticipate non-performance by these companies. The Plan administrator believes that the
risk to the Master Trust portfolio from credit loss is not material due to the diversified
nature of the assets held.
|
|
3.
|
|
Tax Status of the Plan
|
|
|
|
The Plan received a favorable tax determination letter, effective August 4, 2003, in which
the Internal Revenue Service stated that the Plan, as then designed, was in compliance with
the applicable requirements of the Internal Revenue Code of 1986, as amended (the Code).
Although the Plan has been amended since then, the Plan administrator and the Plans legal
counsel believe that the Plan is designed and is currently being operated in compliance with
the applicable provisions of the Code. Therefore, no provision for income taxes has been
included in the Plans financial statements.
|
|
4.
|
|
Investments Held by the Master Trust
|
|
|
|
The Master Trust comprises the assets of the Plan, the Savings Plan for Union Employees of
Unilever and the Good Humor-Breyers Savings Plan, all affiliated plans of UNUS. The Plan
has an undivided interest in certain assets of the Master Trust and sole interests in other
assets of the Master Trust. Certain investment assets of the Master Trust, related earnings
and expenses are allocated to the plans participating in the Master Trust based upon the
total of each individual participants share of the Master Trust. On an overall basis, the
Plan has a 91.3% and 91.6% interest in the investments of the Master Trust as of December 31,
2007 and 2006, respectively.
|
|
|
|
The Plans approximate share of investments held by the Master Trust at December 31, 2007 and
2006 were as follows:
|
9
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
2006
|
Short-term Investment Fund
|
|
|
87.9
|
%
|
|
|
88.3
|
%
|
Mutual funds
|
|
|
93.1
|
%
|
|
|
93.2
|
%
|
Commingled funds
|
|
|
93.8
|
%
|
|
|
94.4
|
%
|
Synthetic Guaranteed Investment Contracts
|
|
|
87.8
|
%
|
|
|
88.3
|
%
|
Unilever N.V. Stock
|
|
|
89.2
|
%
|
|
|
89.6
|
%
|
|
|
As of December 31, 2007 and 2006, the investment categories of the Master Trust was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Investments at fair value
|
|
|
|
|
|
|
|
|
Mutual funds
|
|
$
|
819,071,869
|
|
|
$
|
753,181,735
|
|
|
|
|
|
|
|
|
|
|
Synthetic Guaranteed Investment Contracts
|
|
|
611,901,396
|
|
|
|
613,887,040
|
|
|
|
|
|
|
|
|
|
|
Commingled funds
|
|
|
334,167,581
|
|
|
|
337,594,175
|
|
|
|
|
|
|
|
|
|
|
Unilever N.V. Stock
|
|
|
63,779,843
|
|
|
|
47,110,209
|
|
|
|
|
|
|
|
|
|
|
Short-term Investment Fund
|
|
|
12,703,194
|
|
|
|
22,426,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Master Trust and Investments, at fair value
|
|
|
1,841,623,883
|
|
|
|
1,774,200,037
|
|
|
|
|
|
|
|
|
|
|
Adjustment to Contract Value
|
|
|
(13,784,879
|
)
|
|
|
1,377,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Amount
|
|
$
|
1,827,839,004
|
|
|
$
|
1,775,577,428
|
|
|
|
|
|
|
|
|
10
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
The following presents investments that represent 5 percent or more of the Master Trusts net
assets as of December 31, 2007 and 2006:
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
2006
|
Investments at Fair Value as Determined by
Quoted Market Price
|
|
|
|
|
|
|
|
|
Mutual Funds
|
|
|
|
|
|
|
|
|
Fidelity Magellan Fund, 1,672,799 and 1,649,204
shares, respectively
|
|
$
|
157,025,672
|
|
|
$
|
147,636,717
|
|
PIMCO Total Return Institutional Fund, 9,358,575 and
8,747,482 shares, respectively
|
|
|
100,043,382
|
|
|
|
90,798,868
|
|
Fidelity Contrafund, 1,839,215 and 1,813,312 shares,
respectively
|
|
|
134,464,989
|
|
|
|
118,227,958
|
|
|
|
|
|
|
|
|
|
|
Investments at Estimated Fair Value
|
|
|
|
|
|
|
|
|
Synthetic Guaranteed Investment Contracts
|
|
|
|
|
|
|
|
|
Synthetic Guaranteed Investment Contract
JP Morgan Chase Contract # 441619-IAAA
|
|
|
106,966,456
|
|
|
|
105,900,806
|
|
Synthetic Guaranteed Investment Contract
State Street Bank and Trust Company Contract
# 103108
|
|
|
104,498,485
|
|
|
|
106,076,485
|
|
Synthetic Guaranteed Investment Contract
Bank of America Contract # 99-052
|
|
|
104,232,190
|
|
|
|
105,936,516
|
|
Synthetic Guaranteed Investment Contract
IXIS Financial Contract # 1419-01
|
|
|
124,539,676
|
|
|
|
127,502,961
|
|
Synthetic Guaranteed Investment Contract
UBS Financial Contract # 5220
|
|
|
90,704,209
|
|
|
|
10,864,360
|
*
|
|
|
|
|
|
|
|
|
|
Commingled Funds
|
|
|
|
|
|
|
|
|
Fidelity Select International, 6,535,959 and 742,597
shares, respectively
|
|
|
111,896,973
|
|
|
|
101,327,359
|
|
NTGI-QM Equity Index Fund, 12,151,812 and 13,231,580
shares, respectively
|
|
|
159,310,253
|
|
|
|
164,468,535
|
|
11
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
As of December 31, 2007, the fully benefit-responsive contracts of the Master Trust were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major
|
|
|
|
|
|
|
|
|
|
Credit
|
|
|
|
|
|
|
|
|
|
Ratings
|
|
|
Investments
|
|
|
Adjustment to
|
|
|
|
(unaudited)
|
|
|
at fair value
|
|
|
contract value
|
|
JP Morgan Chase (IGT Intermediate
Government Fund)
|
|
AAA
|
|
$
|
106,966,456
|
|
|
$
|
(5,096,007
|
)
|
State Street Bank (IGT Intermediate
Government Fund)
|
|
AA+
|
|
|
104,498,485
|
|
|
|
(2,641,341
|
)
|
Bank of America (IGT Intermediate
Government Fund)
|
|
AA+
|
|
|
104,232,190
|
|
|
|
(2,257,769
|
)
|
NATIXIS Capital Markets (IGT AAA Asset-Backed
Securities Fund)
|
|
AA
|
|
|
124,539,676
|
|
|
|
(1,733,750
|
)
|
ING Life & Annuity (IGT Short-term
Bond Fund)
|
|
AA
|
|
|
80,960,380
|
|
|
|
(671,786
|
)
|
UBS AG (IGT Short-term Bond Fund)
|
|
AA+
|
|
|
90,704,209
|
|
|
|
(1,384,226
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
611,901,396
|
|
|
$
|
(13,784,879
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2006, the fully benefit-responsive contracts of the Master Trust were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Major
|
|
|
|
|
|
|
|
|
|
Credit
|
|
|
|
|
|
|
|
|
|
Ratings
|
|
|
Investments
|
|
|
Adjustment to
|
|
|
|
(unaudited)
|
|
|
at fair value
|
|
|
contract value
|
|
IXIS Financial (IGT AAA Asset-Backed
Securities Fund)
|
|
AAA
|
|
$
|
127,502,961
|
|
|
$
|
(94,707
|
)
|
State Street Bank (IGT WAM AAA or
Better Intermediate Fund)
|
|
AA
|
|
|
106,076,485
|
|
|
|
83,569
|
|
Bank of America (IGT Intermediate
Government Fund)
|
|
AA+
|
|
|
105,936,516
|
|
|
|
257,499
|
|
JP Morgan Chase (IGT PIMCO AAA or
Better Intermediate Fund)
|
|
AA
|
|
|
105,900,806
|
|
|
|
243,325
|
|
ING Life & Annuity (IGT Short-term
Bond Fund)
|
|
AA
|
|
|
80,456,225
|
|
|
|
819,046
|
|
UBS AG (IGT Short-term Bond Fund)
|
|
AA+
|
|
|
77,329,689
|
|
|
|
(4,736
|
)
|
UBS AG (US Treasury Note)
|
|
AA+
|
|
|
10,684,358
|
|
|
|
73,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
613,887,040
|
|
|
$
|
1,377,391
|
|
|
|
|
|
|
|
|
|
|
|
|
12
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
The investment income, net of investment expenses, of the Master Trust net assets for the
years ended December 31, 2007 and 2006 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
2007
|
|
|
2006
|
|
Net appreciation (depreciation) in fair value
of net investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments at Fair Value as Determined by Quoted
Market Price
|
|
|
|
|
|
|
|
|
Mutual funds
|
|
$
|
44,875,991
|
|
|
$
|
(13,269,313
|
)
|
Unilever N.V. stock
|
|
|
16,379,015
|
|
|
|
7,861,687
|
|
|
|
|
|
|
|
|
|
|
Investments at Estimated Fair Value
|
|
|
|
|
|
|
|
|
Commingled funds
|
|
|
25,211,834
|
|
|
|
57,626,588
|
|
|
|
|
|
|
|
|
Net appreciation
|
|
|
86,466,840
|
|
|
|
52,218,962
|
|
|
|
|
|
|
|
|
Interest
|
|
|
30,841,778
|
|
|
|
31,825,809
|
|
Dividends
|
|
|
63,466,933
|
|
|
|
79,361,051
|
|
|
|
|
|
|
|
|
Total net investment income
|
|
$
|
180,775,551
|
|
|
$
|
163,405,822
|
|
|
|
|
|
|
|
|
|
|
Investment Valuation and Income Recognition of Master Trust
|
|
|
|
Master Trust investments are stated at fair value. Investments in mutual funds are valued at
the net asset value of shares held at year end while investments in commingled funds are
stated at fair value based on unit values provided by the administrator which are based on
market values of underlying investments. Unilever N.V. common stock is valued at the last
close price at end of the year. Short-term investments are valued at amortized cost, which is
cost plus accrued interest, which approximates fair value. Investment contracts are stated
at fair value based on the sum of the fair value of the underlying investments and the fair
value of the wrapper. Fixed rate traditional guaranteed investment contracts and
non-participating synthetic fair values are determined using a discounted cash flow method.
The fair value for floating rate traditional guaranteed investment contracts is equal to the
contracts book value.
|
|
|
|
Purchases and sales of securities are recorded as of the trade date. Dividend income is
recorded on the ex-dividend date and interest is recorded on the accrual basis.
|
|
|
|
Investment income for the Master Trust includes net appreciation (depreciation) of
investments, as well as, interest and dividends from investments. The net appreciation
(depreciation) of investments held in the Master Trust consists of the realized gains
(losses) and the unrealized appreciation (depreciation) on these investments.
|
|
|
|
Investment Contracts
|
|
|
|
The Master Trust entered into benefit-responsive investment contracts, such as synthetic
guaranteed investment contracts, with various third party financial institutions. These
benefit-responsive investment contracts are held through the INVESCO (also known as PRIMCO)
Interest Income Fund. Contract values represent contributions made to the investment
contract plus earnings, less participant withdrawals and administrative expenses.
|
|
|
|
A synthetic GIC provides for a fixed return on principal over a specified period of time
through fully benefit-responsive wrapper contracts issued by third party financial
institutions which are
|
13
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
backed by underlying assets owned by the Master Trust. The wrapper contract amortizes the
realized and unrealized gains and losses on the underlying fixed income investments,
typically over the duration of the investments, through adjustments to the future interest
crediting rate (which is the rate earned by participants in the Fund for the underlying
investments). The issuer of the wrapper contract provides assurance that the adjustments to
the interest crediting rate do not result in a future interest crediting rate that is less
than zero. An interest crediting rate less than zero would result in a loss of principal or
accrued interest.
|
|
|
|
Calculating the Interest Crediting Rate in Wrapper Contracts
|
|
|
|
The key factors that influence future interest crediting rates for a wrapper contract
include:
|
|
|
|
The level of market interest rates
|
|
|
|
|
The amount and timing of participant contributions, transfers, and withdrawals
into/out of the wrapper contract
|
|
|
|
|
The investment returns generated by the fixed income investments that back the
wrapper contract
|
|
|
|
|
The duration of the underlying investments backing the wrapper contract
|
|
|
Wrapper contracts interest crediting rates are typically reset on a monthly or quarterly
basis. While there may be slight variations from one contract to another, most wrapper
contracts use a formula that is based on the characteristics of the underlying fixed income
portfolio. Over time, the crediting rate formula amortizes the Funds realized and
unrealized market value gains and losses over the duration of the underlying investments.
|
|
|
|
Because changes in the market interest rates affect the yield to maturity and the market
value of the underlying investments, they can have a material impact on the wrapper
contracts interest crediting rate. In addition, participant withdrawals and transfers from
the Fund are paid at contract value but funded through the market value liquidation of the
underlying investments, which also impacts the interest crediting rate. The resulting gains
and losses in the market value of the underlying investments relative to the wrapper contract
value are presented on the Plans Statements of Net Assets Available for Benefits as the
Adjustment from Fair Value to Contract Value. If the Adjustment from Fair Value to
Contract Value is positive for a given contract, this indicates that the wrapper contract
value is greater than the market value of the underlying investments. The embedded market
value losses will be amortized in the future through a lower interest crediting rate than
would otherwise be the case. And if the Adjustment from Fair Value to Contract Value figure
is negative, this indicates that the wrapper contract value is less than the market value of
the underlying investments. The amortization of the embedded market value gains will cause
the future interest crediting rate to be higher than it otherwise would have been.
|
|
|
|
All wrapper contracts provide for a minimum interest crediting rate of zero percent. In the
event that the interest crediting rate should fall to zero and the requirements of the
wrapper contract are satisified, the wrapper issuers will pay to the Plan the shortfall
needed to maintain the interest crediting rate at zero. This helps to ensure that
participants principal and accrued interest will be protected.
|
|
|
|
Events That Limit the Ability of the Plan to Transact at Contract Value
In certain circumstances, the amount withdrawn from the wrapper contract would be payable at
fair value rather than at contract value. These events include termination of the Plan, a
material adverse change to the provisions of the Plan, if the employer elects to withdraw
from a wrapper
|
14
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
contract in order to switch to a different investment provider, or if the terms of a
successor plan (in the event of the spin-off or sale of a division) do not meet the wrapper
contract issuers underwriting criteria for issuance of a clone wrapper contract. The events
described above that could result in the payment of benefits at market value rather than
contract value are not probable of occurring in the foreseeable future.
|
|
|
|
Issuer-Initiated Contract Termination
|
|
|
|
Examples of events that would permit a wrapper contract issuer to terminate a wrapper
contract upon short notice include the Plans loss of its qualified status, un-cured material
breaches of responsibilities, or material and adverse changes to the provisions of the Plan.
If one of these events was to occur, the wrapper contract issuer could terminate the wrapper
contract at the market value of the underlying investments (or in the case of a traditional
GIC, at the hypothetical market value based upon a contractual formula).
|
|
|
|
The contract values of the synthetic GICs were approximately $598 million and $615 million at
December 31, 2007 and 2006, respectively. Included in the contract values of the synthetic
GICs are approximately $(13.8) and $1.4 million at December 31, 2007 and 2006, respectively,
attributable to wrapper contract providers representing the amounts by which the value of the
investment contracts are less than, in 2007, and greater than, in 2006, the value of the
underlying assets.
|
|
|
|
As of December 31, 2007 and 2006, the average yields for synthetic GICs were as follows:
|
|
|
|
|
|
|
|
|
|
Average yields for synthetic GICs
|
|
2007
|
|
2006
|
Based on actual earnings
|
|
|
5.13
|
%
|
|
|
5.12
|
%
|
Based on interest rate credited to participants
|
|
|
4.84
|
%
|
|
|
5.22
|
%
|
5.
|
|
Transactions with Related Parties and Parties-in-Interest
|
|
|
|
The Unilever N.V. Stock Fund invests in shares of Unilever N.V. Stock. This fund is designed
as a means for employees to participate in the potential long-term growth of Unilever N.V.
The Master Trust held 1,749,310 and 1,728,815 shares at December 31, 2007 and 2006,
respectively, of common stock in Unilever N.V. The Master Trust also earned dividend income
from the common stock of approximately $1.7 million and $2.0 million for the years ended
December 31, 2007 and 2006, respectively. The Master trust had sales and purchases of
$28,903,628 and $28,908,228 respectively, in 2007 and $25,537,794 and
$22,603,526,
respectively, in 2006.
|
|
|
|
Certain Master Trust investments consist of units in investment funds managed by Fidelity.
Fidelity owns these investment funds, and is a party-in-interest as defined by ERISA. In the
opinion of the Plan administrator, fees paid during the year for services rendered by
parties-in-interest were based on customary and reasonable rates for such services.
|
|
6.
|
|
Plan Termination
|
|
|
|
Although it has not expressed any intent to do so, the Company has the right under the Plan
to discontinue its contributions at any time and terminate the Plan, subject to the
provisions of ERISA. In the event of the Plan termination, the participants rights to their
accrued benefits are
|
15
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
|
|
non-forfeitable. Any unallocated assets of the Plan shall be allocated to participant
accounts and distributed in such a manner as the Company may determine.
|
|
7.
|
|
Effects of New Accounting Pronouncements
|
|
|
|
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes, an interpretation on FASB
Statement No. 109. On January 1, 2007, the Plan adopted FIN 48. This interpretation
clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a
tax return. FIN 48 provides guidance on the measurement, recognition, classification and
disclosure of tax positions, along with accounting for the related interest and penalty.
The Plan administrator and the Plans tax counsel believe that the Plan is designed and is
operated in compliance with the applicable requirements of the Internal Revenue Code (see
Note 3). Accordingly, the adoption of FIN 48 did not have any effect on the Plans net
assets available for benefits and changes in net assets in net assets available for
benefits.
|
|
|
|
In September 2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No.
157, Fair Value Measurements. This statement clarifies the definition of fair value,
establishes a framework for measuring fair value, and expands the disclosures on fair value
measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.
The Plan is currently evaluating the statements impact on its financial statements.
|
|
|
|
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets
and Financial Liabilities Including an Amendment of FASB Statement No. 115. This
statement permits entities to choose to measure eligible financial instruments and certain
other items at fair value. The fair value option established by this statement permits all
entities to choose to measure eligible items at fair value on a specified election date or
according to a pre-exiting policy for specified types of eligible items and report
unrealized gains and losses on items for which the fair value option has been elected in the
net assets available for plan benefits at each subsequent reporting date. It will be
effective for fiscal years beginning after November 15, 2007. The Plan is currently
evaluating the statements impact on its financial statements.
|
|
|
|
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities The new standard is intended to improve financial reporting about
derivative instruments and hedging activities by requiring enhanced disclosures to enable
users of the financial statements to better understand their effects on an entitys
financial position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years end interim periods beginning after November 15, 2008,
with early application encouraged. The Plan is currently evaluating the statements impact
on its financial statements.
|
|
16
UNI
Care
Savings Plan
Notes to Financial Statements
December 31, 2007 and 2006
8.
|
|
Reconciliation of Financial Statements to Form 5500
|
|
|
|
The following is a reconciliation of net assets available for benefits as disclosed in the
financial statement at December 31, 2007 to amounts presented in Form 5500:
|
|
|
|
|
|
Net assets available for benefits as disclosed in the
financial statements
|
|
$
|
1,696,593,662
|
|
|
Adjustment from fair value to contract value for interest
in the Master Trust relating to fully benefit-responsive
investment contracts (commingled trust fund)
|
|
|
12,110,239
|
|
|
|
|
|
|
Net assets available for benefits as presented in Form 5500
|
|
$
|
1,708,703,901
|
|
|
|
|
|
|
|
The following is a reconciliation of investment income as disclosed in the financial
statements for the year ended December 31, 2007 to the amounts presented in Form 5500:
|
|
|
|
|
|
Net investment income from Plan interest in Unilever
United States Inc. Master Trust as presented in the
financial statements
|
|
$
|
165,384,566
|
|
|
Adjustment from fair value to contract value at
December 31, 2007
|
|
|
12,110,239
|
|
|
|
|
|
|
Investment income as presented in Form 5500
|
|
$
|
177,494,805
|
|
|
|
|
|
17
UNI
Care
Savings Plan
Schedule H Line 4i Schedule of Assets (Held at End of Year)
December 31, 2007
|
|
|
|
|
|
|
|
|
|
|
(c) Description of Investment Including
|
|
|
|
|
(b) Identify of Issue, Borrower
|
|
Maturity Date, Rate of Interest, Collateral, Par
|
|
|
|
(e) Current
|
|
(a) Lessor or Similar Party
|
|
or Maturity Value
|
|
(d) Cost **
|
|
Value
|
|
* Loans to Participants
|
|
Interest rates ranging from 5.0% to 10.5% and with
maturities through 2035
|
|
|
$
|
25,695,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Investment in Master Trust at fair value,
|
|
|
|
$
|
1,680,934,348
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Denotes a party-in-interest to the Plan
|
|
**
|
|
Not applicable
|
18
UNI
Care
Savings Plan
Index
INDEX OF EXHIBIT
|
|
|
Exhibit Number
|
|
Exhibit
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
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