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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
96
DESCRIPTION OF STOCK-BASED COMPENSATION PLANS
Omnibus Stock Incentive Plan of 2009
During 2009, the Company adopted the Omnibus Stock Incentive Plan of 2009 (the "2009 Stock Plan") under which employees,
consultants and non-employee directors may be granted stock options, stock appreciation rights, stock awards, RSUs or PSUs.
This plan provides for the issuance of up to 20,000,000 shares of the Company's common stock. Subsequent to adoption, the
Company's Compensation Committee granted RSUs and PSUs, which vest after three years, and stock options, which vest ratably
over three years. Each RSU and PSU is to be settled for one share of the Company's common stock on the respective vesting date
of the RSU and PSU. No other types of stock-based awards have been granted under the 2009 Stock Plan. Approximately
12,000,000 shares of the Company's common stock were available for future grant as of December 31, 2014. The stock options
issued under the 2009 Stock Plan have a maximum option term of 10 years.
Omnibus Stock Incentive Plan of 2008
In connection with the separation from Cadbury, on May 5, 2008, Cadbury Schweppes Limited, the Company's sole
stockholder, approved the Company's Omnibus Stock Incentive Plan of 2008 (the "2008 Stock Plan") and authorized up to
9,000,000 shares of the Company's common stock to be issued under the Stock Plan. Subsequent to May 7, 2008, the Compensation
Committee granted under the 2008 Stock Plan (a) options to purchase shares of the Company's common stock, which vested ratably
over three years commencing with the first anniversary date of the option grant, and (b) RSUs, which vested over a three year
period for a substantial portion of RSUs. Each RSU was settled for one share of the Company's common stock on the respective
vesting date of the RSU. The stock options issued under the 2008 Stock Plan had a maximum option term of 10 years. There were
no shares outstanding under the 2008 Stock Plan as of December 31, 2014.
STOCK OPTIONS
The tables below summarize information about the Company's stock options granted during the years ended December 31,
2014, 2013 and 2012.
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The risk-
free interest rate used in the option valuation model is based on zero-coupon yields implied by U.S. Treasury issues with remaining
terms similar to the expected term on the options. The expected term of the option represents the period of time that options granted
are expected to be outstanding and is derived by analyzing historic exercise behavior. Expected volatility is based on implied
volatilities from traded options on the Company's stock, historical volatility of the Company's stock and other factors. The
Company's expected dividend yield is based on historical dividends declared.
The weighted average assumptions used to value grant options are detailed below:
For the Year Ended
December 31,
2014 2013 2012
Fair value of options at grant date $ 5.80 $ 6.92 $ 7.05
Risk free interest rate 1.25% 0.68% 0.87%
Expected term of options (in years) 4.4 4.5 5.1
Dividend yield 3.35% 3.39% 3.52%
Expected volatility 20.03% 27.42% 30.64%