Vectren 2010 Annual Report Download - page 97

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95
Following is a reconciliation of the total cost associated with share-based awards recognized in the Company’s financial
statements to its after tax effect on net income:
Year ended December 31,
(In millions) 2010 2009 2008
Total cost of share-based compensation 4.9$ 4.6$ 3.7$
Less capitalized cost 1.7 1.6 0.9
Total in other operating expense 3.2 3.0 2.8
Less income tax benefit in earnings 1.3 1.2 1.1
After tax effect of share-based compensation 1.9$ 1.8$ 1.7$
Restricted Stock & Restricted Stock Unit Plans
The Company periodically grants restricted stock and/or restricted stock units to executives and other key non-officer
employees. The vesting of those grants is contingent upon meeting a total return and/or return on equity performance
objectives. In addition non-employee directors receive a portion of their fees in restricted stock. Grants to executives and key
non-officer employees generally vest at the end of a four-year period, with performance measured at the end of the third year.
Based on that performance, awards could double or could be entirely forfeited. However, a limited number of awards are time-
vested awards that vest ratably over a three year period. Awards to non-employee directors are not performance based and
generally vest over one year. Because executives and non-employee directors have the choice of settling awards in shares,
cash, or deferring their receipt into a deferred compensation plan (where the value is eventually withdrawn in cash), these
awards are accounted for as liability awards at their settlement date fair value. Certain share awards to key non-officer
employees must be settled in shares and are therefore accounted for in equity at their grant date fair value.
A summary of the status of the Company’s restricted stock and restricted unit awards separated between those accounted for
as liabilities and equity as of December 31, 2010, and changes during the year ended December 31, 2010, follows:
Equity Awards
Wtd. Avg.
Grant Date Liability Awards
Shares Fair value Shares/Units Fair value
Restricted awards at January 1, 2010 38,913 27.55$ 606,353
Granted 15,608 24.87 317,003
Vested (9,825) 29.17 (201,971)
Forfeited (3,238) 27.07 (52,493)
Restricted awards at December 31, 2010 41,458 26.19$ 668,892 25.38$
As of December 31, 2010, there was $6.9 million of total unrecognized compensation cost related to restricted stock awards.
That cost is expected to be recognized over a weighted-average period of 2.2 years. The total fair value of shares vested for
liability awards during the years ended December 31, 2010, 2009, and 2008, was $5.0 million, $2.8 million, and $0.4 million,
respectively. The total fair value of equity awards vesting during the year ended December 31, 2010 and 2009 was $0.2 million
and $0.1 million, respectively. No equity awards vested in 2008.
Stock Option Plans
In the past, option awards were granted to executives and other key employees with an exercise price equal to the market price
of the Company’s stock at the date of grant; those option awards generally required 3 years of continuous service and have 10-
year contractual terms. These awards generally vested on a pro-rata basis over 3 years. The last option grant occurred in
2005, and the Company does not intend to issue options in the future. All compensation cost has been recognized. A summary