Coca Cola 2004 Annual Report Download - page 100

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Coca-Cola Company and Subsidiaries
NOTE 13: RESTRICTED STOCK, STOCK OPTIONS AND OTHER STOCK PLANS (Continued)
Performance Share Unit Awards
In 2003, the Company modified its use of performance-based awards and established a program to grant
performance share unit awards under the 1989 Restricted Stock Award Plan to executives. The number of
performance share units earned shall be determined at the end of each performance period, generally three
years, based on performance measurements determined by the Board of Directors and may result in an award of
restricted stock for U.S. participants and certain international participants at that time. The restricted stock may
be granted to other international participants shortly before the fifth anniversary of the original award.
Restrictions on such stock lapse generally on the fifth anniversary of the original award date. Generally,
performance share unit awards are subject to the performance criteria of compound annual growth in earnings
per share over the performance period, as adjusted for certain items approved by the Compensation Committee
of the Board of Directors (‘‘adjusted EPS’’). The purpose of these adjustments is to ensure a consistent year to
year comparison of the specified performance measure.
Performance share unit Target Awards for the 2004-2006 and 2005-2007 performance periods require
adjusted EPS growth in line with our Company’s internal projections over the performance period. In the event
adjusted EPS exceeds the target projection, additional shares up to the Maximum Award may be granted. In the
event adjusted EPS falls below the target projection, a reduced number of shares as few as the Threshold Award
may be granted. If adjusted EPS falls below the Threshold Award performance level, no shares will be granted.
Of the outstanding granted performance share unit awards as of December 31, 2004, 741,985 and 769,462
awards are for the 2004-2006 and 2005-2007 performance periods, respectively. In addition, 72,000 performance
share unit awards, with predefined qualitative performance measures other than adjusted EPS and other release
criteria that differ from the program described above, are included in the performance share units granted
in 2004.
The following table summarizes information about performance share unit awards:
Number of Share Units
2004 2003
Outstanding on January 1, 798,931 —
Granted1953,196 798,931
Cancelled/Forfeited (168,680) —
Outstanding on December 31, 1,583,447 798,931
Threshold Award 950,837 399,466
Target Award 1,583,447 798,931
Maximum Award 2,339,171 1,198,397
1In 2004 and 2003, the Company granted performance share unit awards with average fair values of
$38.71 and $46.78, respectively.
The Company did not recognize any compensation expense in 2004 for awards from the 2004-2006
performance period, as it is not probable the Threshold Award performance level will be achieved.
98