Snapple 2008 Annual Report Download - page 115

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The following table summarizes information about restricted stock units outstanding as of December 31, 2008
(in millions except per share and share data):
Range of Grant-Date Fair Values per Share
Number
Outstanding
Weighted Average
Remaining
Contractual Term (Years) Aggregate Intrinsic Value
$14.44 - $25.36 ................ 1,028,609 2.35 $17
As of December 31, 2008, there was $18 million of unrecognized compensation costs related to nonvested
restricted stock units granted under the Plan. That cost is expected to be recognized over a weighted-average period
of 2.35 years.
Converted Legacy Plan
Prior to the Company’s separation from Cadbury, certain of its employees participated in stock-based
compensation plans sponsored by Cadbury. These plans provided employees with stock or options to purchase
stock in Cadbury. The expense incurred by Cadbury for stock or stock options granted to DPS’ employees has been
reflected in the Company’s Consolidated Statements of Operations in selling, general, and administrative expenses.
The interests of the Company’s employees in certain Cadbury benefit plans were converted into one of three
Company plans which were approved by the Company’s sole stockholder on May 5, 2008. As a result of this
conversion, the participants in these three plans are fully vested in and will receive shares of common stock of the
Company on designated future dates. Pursuant to SFAS No. 123(R), this conversion qualified as a modification of
an existing award and resulted in the recognition of a one-time incremental stock-based compensation expense of
less than $1 million which was recorded during the year ended December 31, 2008.
As of December 31, 2008, the aggregate number of shares of Company’s common stock that is to be distributed
under these plans is approximately 500,000 shares. These fully vested options are not included under the 2008 stock
option activity detailed above.
Cash Incentive Plans
The Company has an annual cash incentive plan which rewards participating employees by enabling them to
receive performance-based cash compensation. Awards may be made under the cash incentive plan to any employee
of the Company, in the discretion of the compensation committee.
On July 22, 2008, DPS’ Compensation Committee approved a change in the Cash Incentive Plan for the six
months ended December 31, 2008, so that awards will be based on performance against the measures of gross profit
(weighted at 40%) and net income (weighted at 60%). The Compensation Committee determined that these
performance measures were a more appropriate measure of the Company’s performance. Cash Incentive Plan
performance measures for the six months ending June 30, 2008, remained unchanged, namely, underlying operating
profit (weighted to 60%) and net sales (weighted to 40%).
Stock-Based Compensation Plans Prior to Separation from Cadbury
Prior to separation from Cadbury, certain of the Company’s employees participated in stock-based compen-
sation plans sponsored by Cadbury. These plans provided employees with stock or options to purchase stock in
Cadbury Schweppes. Given that the Company’s employees directly benefit from participation in these plans, the
expense incurred by Cadbury for options granted to DPS’ employees has been reflected in the Company’s
Consolidated Statements of Operations in selling, general, and administrative expenses for the periods prior to
separation. Upon separation, DPS sponsors its own stock-based compensation plans and, accordingly, the
91
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)