Burger King 2006 Annual Report Download - page 105

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BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements Ì (Continued)
The following table summarizes information about stock options outstanding at June 30, 2006:
Weighted
Average
Remaining Weighted
Number of Contractual Average
Exercise Price Options Life Exercise Price
$ 3.80 4,686,502 6.29 $ 3.80
7.59 263,250 0.77 7.59
10.25 830,709 9.16 10.25
11.39 384,522 7.74 11.39
17.00 447,886 9.88 17.00
18.91 29,007 9.92 18.91
$21.64 766,363 9.54 $21.64
7,408,239
Restricted Stock Units
During the years ended June 30, 2006, 2005 and 2004, the Company granted 508,379, 482,212 and
109,969 restricted stock units (""RSU's''), respectively, at fair value to certain officers of BKC and its
subsidiaries. In addition, during the years ended June 30, 2006 and 2005, 29,745 and 17,888 shares,
respectively, of common stock were issued in settlement of RSU's and 3,267 RSU's were forfeited during the
year ended June 30, 2006. There were no shares of common stock issued in settlement of RSU's in 2004 and
no RSU's forfeited in 2005 and 2004.
Compensatory Make-Whole-Payment
In February 2006, the Company paid $33 million to holders of vested and unvested stock options and
RSU's of the Company, primarily members of senior management and the Board of Directors, in order to
compensate such holders for the decrease in value of their equity interests as a result of the February 2006
dividend payment. The make-whole payment was recorded as employee compensation cost, and is included in
selling, general and administrative expenses in the accompanying statement of operations for the year ended
June 30, 2006.
Note 17. Retirement Plan and Other Postretirement Benefits
The Company has noncontributory defined benefit plans for its salaried employees in the United States
(the ""Plans'') and noncontributory defined benefit plans for certain employees in the United Kingdom and
Germany. In November 2005, the Company announced that effective December 31, 2005 all benefits accrued
under the Plans would be frozen at the benefit level attained on that date. As a result, the Company
recognized a one-time pension curtailment gain of $6 million, as a component of selling, general and
administrative expenses in the accompanying consolidated statement of operations for the fiscal year ended
June 30, 2006, equal to the unamortized balances as of December 31, 2005 from prior plan amendments and
allowable gains to be realized.
BKC has the Burger King Savings Plan (the ""Savings Plan''), a defined contribution plan that is
provided to all employees who meet the eligibility requirements. Eligible employees may contribute up to 50%
of pay on a pre-tax basis, subject to IRS limitations.
Effective August 1, 2003, BKC implemented the Executive Retirement Plan (""ERP'') for all officers
and senior management. Officers and senior management may elect to defer up to 50% of base pay and up to
93