Snapple 2011 Annual Report Download - page 113

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
93
Additionally, current participants in the SIP and SSP are eligible for an EDC which vests after three years of service with the
Company. The EDC was adopted by the Company during the fourth quarter of 2006 and contributions began accruing for plan
participants effective January 1, 2008 after a one-year waiting period for participant entry into the plan. The Company made
contributions of $16 million, $17 million and $12 million to the EDC for the each of the plan years ended December 31, 2011,
2010 and 2009, respectively.
The Company's employer matching contributions to the SIP and SSP plans were approximately $14 million in 2011, 2010
and 2009.
14. Stock-Based Compensation
The components of stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009, are presented
below (in millions):
Total stock-based compensation expense
Income tax benefit recognized in the income statement
Net stock-based compensation expense
For the Year Ended December 31,
2011
$ 34
(11)
$ 23
2010
$ 29
(10)
$ 19
2009
$ 19
(7)
$ 12
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 is to be settled for one share of the Company's common stock on the respective vesting date of the
RSU. No other types of stock-based awards have been granted under the 2009 Stock Plan. Approximately 16,000,000 shares of
the Company's common stock were available for future grant at December 31, 2011.
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 vest ratably
over three years commencing with the first anniversary date of the option grant, and (b) RSUs, with a substantial portion of RSUs
vesting over a three year period. Each RSU is to be 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 have a maximum option term of 10 years.
Stock Options
The tables below summarize information about the Company's stock options granted during the years ended December 31,
2011, 2010 and 2009.
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. Because
the Company lacks a meaningful set of historical data upon which to develop certain valuation assumptions, including expected
term and volatility of options granted, DPS has elected to develop these valuation assumptions based on information disclosed by
similarly-situated companies, including multi-national consumer goods companies of similar market capitalization. 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 Company's expected dividend yield is based on historical dividends declared.