Eversource 2008 Annual Report Download - page 73

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72
and one-year graded vesting schedules for board members. RSUs are paid in shares,
reduced by amounts sucient to satisfy withholdings, subsequent to vesting. A
summary of RSU transactions for the year ended December 31, 2008 is as follows:
Weighted
Weighted Total Remaining Average
Average Grant-Date Compensation Remaining
RSUs Grant-Date Fair Value Cost Period
RSUs (Units) Fair Value (Millions) (Millions) (Years)
Outstanding at
December 31, 2007 831,000 $22.99
Granted 352,482 $26.82 $9.5
Issued (263,422) $21.94 $5.8
Forfeited (7,069) $25.97 $0.2
Outstanding at
December 31, 2008 912,991 $24.75 $22.6 $9.0 2.0
The per share and total weighted average grant date fair value for RSUs granted was
$28.83 and $9.5 million, respectively, for the year ended December31, 2007 and $19.87
and $7.4 million, respectively, for the year ended December31, 2006. The weighted
average grant-date fair value per share for RSUs issued was $19.77 and $18.50 for the
years ended December 31, 2007 and 2006, respectively. The total weighted average fair
value of RSUs issued was $3.2 million and $2.2 million for the years ended December31,
2007 and 2006, respectively.
The total compensation cost recognized for RSUs was $3.9 million, net of taxes of
approximately $2.6 million for the year ended December 31, 2008, $3.6 million, net of
taxes of approximately $2.4 million for the year ended December 31, 2007 and $2.8
million, net of taxes of approximately $1.9 million for the year ended December 31, 2006.
Stock Options: Prior to 2003, NU granted stock options to certain employees. These
options were fully vested as of December 31, 2005. The fair value of each stock option
grant was estimated on the date of grant using the Black-Scholes option pricing model.
The weighted average remaining contractual lives for the options outstanding at
December 31, 2008 is 2.4 years. A summary of stock option transactions is as follows:
Exercise Price Per Share
Intrinsic
Weighted Value
Options Range Average (Millions)
Outstanding and
exercisable -
December 31, 2005 1,122,541 $14.9375-$22.2500 $18.4484
Exercised (331,943 ) $18.3579 $2.0
Forfeited and cancelled (18,750 ) $20.8885
Outstanding and
exercisable -
December 31, 2006 771,848 $14.9375-$22.2500 $18.4245
Exercised (372,168 ) $18.5005 $4.8
Forfeited and cancelled (2,500 ) $21.0300
Outstanding and
exercisable -
December 31, 2007 397,180 $14.9375-$21.0300 $18.3369
Exercised (76,260 ) $16.2473 $0.6
Forfeited and cancelled - -
Outstanding and
exercisable -
December 31, 2008 320,920 $14.9375-$21.0300 $18.8335 $1.7
Cash received for options exercised during the year ended December 31, 2008 totaled
$1.2 million. The tax benefit realized from stock options exercised totaled $0.3 million
for the year ended December31, 2008.
Employee Share Purchase Plan: NU maintains an ESPP for all eligible employees, which
allows for NU common shares to be purchased by employees at six-month intervals
at 95 percent of the closing market price on the last day of each six-month period.
Employees are permitted to purchase shares having a value not exceeding 25 percent of
their compensation as of the beginning of the purchase period. The ESPP qualifies as a
non-compensatory plan under SFAS No. 123(R), and no compensation expense will be
recorded for ESPP purchases.
During 2008 and 2007, employees purchased 31,250 and 26,451 shares, respectively,
at discounted prices of $26.40 and $23.90 in 2008 and $26.27 and $25.97 in 2007. At
December 31, 2008 and 2007, 1,010,114 and 1,041,364 shares remained available for future
issuance under the ESPP, respectively.
An income tax rate of 40 percent is used to estimate the tax eect on total share-based
payments determined under the fair value-based method for all awards.
E. Other Retirement Benefits
NU provides benefits for retirement and other benefits for certain current and past
company ocers. The actuarially-determined liability for these benefits, which
is included in deferred credits and other liabilities - other on the accompanying
consolidated balance sheets, was $45.4 million and $46.4 million at December 31, 2008
and 2007, respectively. During 2008, 2007 and 2006, $3.8 million, $8.4 million and
$5.6 million, respectively, was expensed related to these benefits. These benefits are
accounted for on an accrual basis and expensed over the service lives of the employees
in accordance with the Accounting Principles Board Opinion (APB) No. 12, “Deferred
Compensation Contracts.”