Coca Cola 2014 Annual Report Download - page 111

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109
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. 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 shares expected to vest and be released related to the vesting period that has already
lapsed. The remaining fair value of the shares expected to vest and be released 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, 2014, the Company had outstanding nonvested
time-based and performance-based restricted stock awards, including restricted stock units, of 571,399 and 57,200, respectively. Time-
based and performance-based restricted stock awards were not significant to our consolidated financial statements.
In 2010, the Company issued time-based restricted stock replacement awards, including restricted stock units, in connection with our
acquisition of CCE’s former North America business. 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, 2014, the Company had no outstanding nonvested time-based restricted
stock replacement awards, including restricted stock units.
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.
We refer to the funded defined benefit pension plan in the United States that is not associated with collective bargaining organizations
as the “primary U.S. plan.” As of December 31, 2014, the primary U.S. plan represented 58 percent and 61 percent of the Company’s
consolidated projected benefit obligation and pension assets, respectively.
In December 2013, the Company modified The Coca-Cola Company Retiree Health Plan. Effective January 1, 2015, the current
prescription drug plan will be replaced by a Company-sponsored Medicare Part D Plan. The change reduced the accumulated
postretirement benefit obligation of the plan by approximately $71 million. The Coca-Cola Refreshments Welfare Plan for Retirees
will not be impacted by this change because of variations in the design of the plan.