Dominion Power 2006 Annual Report Download - page 89

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
Our results forthe years ended December 31, 2006, 2005 and
2004 include $31 million, $25 million and $15 million,
respectively, of compensation costs and $11 million, $10 million
and $6 million, respectively, of income taxbenefits related to our
stock-based compensation arrangements. Stock-based compensa-
tion cost is reported in other operations and maintenance expense
in our Consolidated Statements of Income.
STOCK OPTIONS
The following table providesasummary of changes in amounts of
stock options outstanding as of and forthe years ended
December 31, 2006, 2005 and 2004. No options were granted
under any plan in 2006, 2005 and 2004.
Shares
Weighted-
average
Exercise Price
Weighted-
average
Remaining
Contractual
Life
Aggregated
Intrinsic
Value (1)
(thousands) (years) (millions)
Outstanding at
December 31, 2003 18,544 $56.97
Exercisable at
December 31, 2003 11,604 $54.44
Exercised (4,632) $47.37 $77
Forfeited/expired (104) $60.89
Outstanding at
December 31, 2004 13,808 $60.17
Exercisable at
December 31, 2004 10,768 $60.01
Exercised (5,579) $59.79 $77
Forfeited/expired (15) $62.53
Outstanding and
exercisable at
December 31, 2005 8,214 $60.43
Exercised (947) $59.76 $19
Forfeited/expired (21) $60.79
Outstanding and
exercisable at
December 31, 2006 7,246 $60.51 3.2 $167
(1) Intrinsic value represents the difference between the exercise price of the
option andthemarket value of our stock.
We issue new shares to satisfy stock option exercises. We
received cash proceeds from the exercise of stock options of
approximately $54 million, $335 million and$220 million in the
years ended December 31, 2006, 2005 and 2004.
RESTRICTED STOCK
The fair value of our restricted stock awards is equal to the market
price of our stock on the date of grant. These awards generally
vest over athree-year service period and are settled by issuing new
shares. The following table provides a summary of restricted stock
activity for the years ended December 31, 2006, 2005 and 2004:
Shares
Weighted-
average
Grant
Date Fair
Value
(thousands)
Nonvested at December 31, 2003 639 $58.80
Granted 582 63.29
Vested (233) 63.26
Cancelled and forfeited (28) 60.95
Nonvested at December 31, 2004 960 $60.34
Granted 249 74.51
Vested (30) 62.46
Cancelled and forfeited (48) 63.27
Nonvested at December 31, 2005 1,131 $63.27
Granted 33870.43
Vested (181) 60.75
Cancelled and forfeited (42) 67.54
Nonvested at December 31, 2006 1,246 $65.43
As of December 31, 2006, unrecognized compensation cost
related to nonvested restricted stock awards totaled $33 million
and is expected to be recognized over aweighted-average period
of 1.5 years. The fair value of restricted stock awards that vested
was $14 million, $2million and$15million in 2006, 2005 and
2004, respectively.Employees may elect tohave sharesof
restricted stock withheld upon vesting to satisfy tax withholding
obligations. The number of shares withheld will vary for each
employee depending on the vesting datefair value of Dominion
stock and the applicable federal, state and local taxwithholding
rates.
88 DOMINION2006 Annual Report