Coca Cola 2007 Annual Report Download - page 105

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: STOCK COMPENSATION PLANS (Continued)
The following table summarizes information about performance-based restricted stock awards:
2007 2006 2005
Shares
Weighted-
Average
Grant-Date
Fair Value Shares
Weighted-
Average
Grant-Date
Fair Value Shares
Weighted-
Average
Grant-Date
Fair Value
Nonvested on January 1 293,000 $ 43.40 788,000 $ 47.32 838,000 $ 47.62
Granted 28,100 53.43 224,000 43.66 50,000 42.40
Promises to grant 15,700 63.77 —— ——
Vested and released1——(50,000) 56.25 — —
Cancelled/forfeited (50,000) 42.40 (669,000) 47.15 (100,000) 47.38
Nonvested on December 31 286,8002$ 45.67 293,000 $ 43.40 788,0002$ 47.32
1The total fair value of performance-based restricted shares vested and released during the year
ended December 31, 2006, was approximately $2.1 million. The grant-date fair value is the quoted
market value of the Company stock on the respective grant date.
2The nonvested shares on December 31, 2007 and 2005 include promises to grant performance-
based restricted stock of 15,700 and 75,000, respectively. These awards are similar to
performance-based restricted stock, including the payment of dividend equivalents, but were
granted in this manner because the employees were based outside of the United States.
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 criteria 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 generally lapse on the
fifth anniversary of the original award date. Performance share units do not pay dividends during the performance
period. Accordingly, the fair value of these units is the quoted market value of the Company stock on the date of the
grant less the present value of the expected dividends not received during the performance period.
Performance share unit awards require achievement of certain financial measures primarily compound annual
growth in earnings per share or economic profit. These financial measures are adjusted for certain items approved by
the Compensation Committee of the Board of Directors. The purpose of these adjustments is to ensure a consistent year
to year comparison of the specific performance criteria. Economic profit is our net operating profit after tax less the
cost of the capital used in our business. In the event that the financial result equals the target projection, the Company
will grant the number of restricted shares equal to the Target Award in the underlying PSU agreement. In the event the
financial result exceeds the target projection, additional shares up to the Maximum Award may be granted. In the event
the financial result falls below the target projection, a reduced number of shares may be granted. If the financial result
falls below the Threshold Award performance level, no shares will be granted. Performance share unit awards provide
for cash equivalent payments to former executives who become ineligible for restricted stock grants due to certain
events such as death, disability or termination. Of the outstanding granted performance share unit awards as of
December 31, 2007, 743,494; 754,700; and 1,045,639 awards are for the 2005-2007, 2006-2008 and 2007-2009
performance periods, respectively. Based on the Company’s financial results for the 2005-2007 performance period,
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