Coca Cola 2013 Annual Report Download - page 109

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The weighted-average grant date fair value of performance share units granted was $32.67 in 2013, $29.95 in 2012 and $25.58 in
2011. The Company converted performance share units of 54,999 in 2013, 16,267 in 2012 and 19,462 in 2011 to cash equivalent
payments of $1.8 million, $0.6 million and $0.7 million, respectively, to former employees who were ineligible for restricted stock
grants due to certain events such as death or disability.
The following table summarizes information about the conversions of performance share units to restricted stock and restricted
stock units:
Weighted-Average
Share Units Grant Date
(In thousands) Fair Value1
Nonvested on January 1, 2013298 $ 26.54
Conversions of restricted stock units37,830 25.17
Vested and released (406) 25.52
Canceled/forfeited (508) 25.17
Nonvested on December 31, 201327,014 $ 25.17
1The weighted-average grant date fair value is based on the fair values of the performance share units granted.
2The nonvested shares as of January 1, 2013, and December 31, 2013, are presented at the performance share units’ certified award level.
3The converted shares are presented at the performance share units’ certified award level of 150 percent.
The total intrinsic value of restricted shares that were vested and released was $16 million, $148 million and $72 million in 2013,
2012 and 2011, respectively. The total restricted share units vested and released in 2013 were 405,963 at the certified award level.
In 2012 and 2011, the total restricted share units vested and released were 4,301,732 and 2,084,912, respectively.
Replacement performance share unit awards issued by the Company in connection with our acquisition of CCE’s former North
America business are not included in the tables or discussions above and were originally granted under the Coca-Cola
Enterprises Inc. 2007 Incentive Award Plan. These awards were converted into equivalent share units of the Company’s common
stock on the acquisition date and entitle the participant to dividend equivalents (which vest, in some cases, only if the restricted
share units vest), but not the right to vote. Accordingly, the fair value of these units was the quoted value of the Company’s stock
at the grant date.
On the acquisition date, the Company issued 3.3 million replacement performance share unit awards at target with a weighted-
average grant date price of $29.56 per share that were either projected to pay out at, or previously certified at a payout rate of
200 percent. In accordance with accounting principles generally accepted in the United States, the portion of the fair value of the
replacement awards related to services provided prior to the acquisition was included in the total purchase price. The portion of
the fair value associated with future service was recognized as expense in the fourth quarter of 2010. As of January 1, 2011, there
were 3.8 million shares subject to release under these plans based on the 200 percent payout. During 2011, the Company released
3.1 million shares at the 200 percent payout with an intrinsic value of $98 million. During 2012, the Company released 0.6 million
shares at the 200 percent payout with an intrinsic value of $22 million. During 2013, the Company released 0.1 million shares at
the 200 percent payout with an intrinsic value of $5 million. As of December 31, 2013, the Company had no remaining
outstanding replacement performance share units.
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 may
receive payments of dividend equivalents but are not entitled to vote. As of December 31, 2013, the Company had outstanding
nonvested time-based and performance-based restricted stock awards, including restricted stock units, of 700,000 and 81,000,
respectively. Time-based and performance-based restricted stock awards were not significant to our consolidated financial
statements.
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