Coca Cola 2010 Annual Report Download - page 130

Time-Based and Performance-Based Restricted Stock and Restricted Stock Unit Awards
The Coca-Cola Company 1989 Restricted Stock Award Plan allows for the grant of time-based and performance-based
restricted stock and restricted stock units. The performance-based restricted awards are released only upon the
achievement of specific measurable performance criteria. These awards pay dividends during the performance period.
The majority of awards have specific performance targets for achievement. If the performance targets are not met, the
awards will be canceled. In the period it becomes probable that the performance criteria will be achieved, we recognize
expense for the proportionate share of the total fair value of the grant related to the vesting period that has already
lapsed. The remaining cost of the grant is expensed on a straight-line basis over the balance of the vesting period.
For time-based and performance-based restricted stock awards, participants are entitled to vote and receive dividends
on the restricted shares. The Company also awards time-based and performance-based restricted stock units for which
participants receive payments of dividend equivalents but are not entitled to vote. As of December 31, 2010, the
Company had outstanding nonvested time-based and performance-based restricted stock awards, including restricted
stock units, of 390,000 and 273,000, respectively. Time-based and performance-based restricted awards are not
significant to our consolidated financial statements.
In 2010, the Company issued time-based restricted stock unit replacement awards in connection with our acquisition of
CCE’s North American business. Refer to Note 2. These awards were converted into equivalent shares of the
Company’s common stock. These restricted share awards entitle the participant to dividend equivalents (which vest, in
some cases, only if the restricted share unit vests), but not the right to vote. As of December 31, 2010, the Company
had outstanding nonvested shares of time-based restricted stock unit replacement awards of approximately 829,000.
These time-based restricted stock unit awards are not significant to our consolidated financial statements.
NOTE 13: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Our Company sponsors and/or contributes to pension and postretirement health care and life insurance benefit plans
covering substantially all U.S. employees. We also sponsor nonqualified, unfunded defined benefit pension plans for
certain associates. In addition, our Company and its subsidiaries have various pension plans and other forms of
postretirement arrangements outside the United States.
As part of the Company’s acquisition of CCE’s North American business, we assumed certain liabilities related to
pension and other postretirement benefit plans. Refer to Note 2 for additional information related to this acquisition.
These liabilities relate to various pension, retiree medical and defined contribution plans (referred to herein as the
‘‘assumed plans’’). The assumed plans include participation in multi-employer pension plans in the U.S. See discussion
of multi-employer plans below.
We refer to the funded defined benefit pension plans in the U.S. that are not associated with collective bargaining
organizations as the ‘‘primary U.S. plans.’’ The primary U.S. plans include both the Company’s existing pension plan as
well as one of the pension plans assumed in connection with our acquisition of CCE’s North American business. As of
December 31, 2010, the primary U.S. plans represented 58 percent and 65 percent of the Company’s consolidated
projected pension benefit obligation and pension assets, respectively.
128