PG&E 2007 Annual Report Download - page 128

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126
The following table summarizes stock option activity for PG&E Corporation and the Utility for 2007:
Weighted
Average
Remaining
Weighted Average Contractual Aggregate
Options Shares Exercise Price Term Intrinsic Value
Outstanding at January 1 6,398,970 $ 23.52
Granted(1) 7,285 $ 47.27
Exercised (2,419,272) $ 24.30
Forfeited or expired (104,311) $ 29.28
Outstanding at December 31 3,882,672 $24.00 4.38 $74,131,879
Expected to vest at December 31 872,088 $31.00 6.50 $10,619,107
Exercisable at December 31 2,999,566 $21.93 3.75 $63,459,514
(1) No stock options were awarded to employees in 2007; however, certain non-employee directors of PG&E Corporation were awarded stock options.
The following table summarizes stock option activity for the Utility for 2007:
Weighted
Average
Remaining
Weighted Average Contractual Aggregate
Options Shares Exercise Price Term Intrinsic Value
Outstanding at January 1(1) 4,402,506 $ 23.66
Granted — —
Exercised (1,414,078) $ 23.89
Forfeited or expired (77,563) $ 29.92
Outstanding at December 31(1) 2,910,865 $23.40 4.49 $57,312,688
Expected to vest at December 31 613,950 $30.65 6.41 $ 7,726,688
Exercisable at December 31 2,289,714 $21.43 3.97 $49,586,001
(1) Includes net employee transfers between PG&E Corporation and the Utility.
As of December 31, 2007, there was approximately
$2 million of total unrecognized compensation cost related
to outstanding stock options, of which $1 million was
allocated to the Utility. That cost is expected to be recog-
nized over a weighted average period of 0.5 years for PG&E
Corporation and the Utility.
Restricted Stock
During 2007, PG&E Corporation awarded 607,459 shares
of PG&E Corporation restricted common stock to eligible
participants of PG&E Corporation and its subsidiaries,
of which 428,960 shares were awarded to the Utility’s
eligible participants.
The restricted shares are held in an escrow account. The
shares become available to the employees as the restrictions
lapse. For the restricted stock awarded in 2003, the restric-
tions on 80% of the shares lapse automatically over a period
of four years at the rate of 20% per year. Restrictions on the
remaining 20% of the shares will lapse at a rate of 5% per
year if PG&E Corporation’s annual total shareholder return
(“TSR”) is in the top quartile of its comparator group as
measured at the end of the immediately preceding year.
For restricted stock awarded in 2004 and 2005, there are
no performance criteria and the restrictions will lapse ratably
over four years. For restricted stock awarded in 2006 and
2007, the restrictions on 60% of the shares will lapse auto-
matically over a period of three years at the rate of 20%
per year. If PG&E Corporation’s annual TSR is in the top
quartile of its comparator group, as measured for the three
immediately preceding calendar years, the restrictions on the
remaining 40% of the shares will lapse on the fi rst business
day of the third year. If PG&E Corporation’s TSR is not in
the top quartile for such period, then the restrictions on the
remaining 40% of the shares will lapse on the fi rst business
day of the fi fth year. Compensation expense related to the
portion of the 2007 restricted stock award that is subject to
conditions based on TSR is recognized over the shorter of
the requisite service period and three years.