Snapple 2008 Annual Report Download - page 119

decides that the awards would have vested to a greater or lesser extent had the performance targets been measured
over the normal period.
The BSRP was available to a group of senior executives of the Company. The maximum number of shares
issued to employees under this plan was three million in each of 2007 and 2006. The fair value of the shares under
the plan was based on the market price of the Cadbury Schweppes ordinary shares on the date of the award. Where
the awards did not attract dividends during the vesting period, the market price was reduced by the present value of
the dividends expected to be paid during the expected life of the awards. Awards made under this plan in 2005 were
classified as liabilities. Awards made in 2006 were classified as equity due to changes in the nature of the plan. The
expense recognized by the Company in respect of these awards was less than $1 million in 2008 and $3 million in
each of 2007 and 2006.
Discretionary Share Option Plans (DSOP)
No option grants were made to Executive Directors in 2007 or 2006 as discretionary share options were
removed as part of Cadbury’s remuneration program. No rights to subscribe for shares or debentures of any Cadbury
company were granted to or exercised by any member of any of the Director’s immediate families during 2007. All
existing discretionary share option plans which apply to Executive Directors used the following criteria:
Annual Grants Made Prior to
May 21, 2004
Annual Grants Made After
May 21, 2004
Market value of option grant made
to Executive Directors ........
Customary grant was 300% of
base salary and the maximum was
400% of base salary.
Maximum of 200% of base salary.
From 2006 onwards, no such
grants are made other than in
exceptional circumstances.
Performance condition ......... Exercise is subject to UEPS
growth of at least the rate of
inflation plus 2% per annum over
three years.
Exercise is subject to real
compound annual growth in UEPS
of 4% for half the award to vest
and 6% real growth for the entire
award to vest over three years,
measured by comparison to the
UEPS in the year immediately
preceding grant.
Re-tests .................... Ifrequired, re-testing has been on
an annual basis on a rolling three-
year base for the life of the option.
If the performance condition is not
met within the first three years,
the option will be retested in year
five with actual UEPS growth in
year five measured in relation to
the original base year.
DSOP resulted in expense recognized by the Company of less than $1 million, $8 million and $10 million in
2008, 2007 and 2006, respectively. The DSOP consisted of the following three plans:
(i) A Share Option Plan for directors, senior executives and senior managers was approved by stock-
holders in May 1994. Options were granted prior to July 15, 2004 and are normally exercisable within a period
of seven years commencing three years from the date of grant, subject to the satisfaction of certain
performance criteria.
(ii) A Share Option Plan for eligible executives (previously called the Cadbury Schweppes Share Option
Plan 1994, as amended at the 2004 Annual General Meeting (“AGM”) held on May 21, 2004). Options were
granted after July 15, 2004, and are normally exercisable up to the 10th anniversary of grant, subject to the
satisfaction of certain performance criteria.
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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)