Eversource 2010 Annual Report Download - page 118

101
• For grants of performance shares, NU records compensation expense, net of estimated forfeitures, on a straight-line basis over the
vesting period. Performance shares vest based upon the achievement of Company targets. For the majority of performance
shares, fair value is based upon the value of NU's common shares at the date of grant and compensation expense is recorded
based upon the probable outcome of the achievement of Company targets. The remaining performance shares are based upon
the achievement of the Company's share price as compared to an index of similar equity securities. The fair value at the date of
grant for these remaining performance shares was determined using a lattice model and compensation expense is recorded over
the vesting period.
• NU has not granted any stock options since 2002, and no compensation expense has been recorded. All options were fully vested
prior to January 1, 2006.
• For shares sold under the ESPP, no compensation expense is recorded, as the ESPP qualifies as a non-compensatory plan under
relevant accounting guidance.
For the years ended December 31, 2010, 2009 and 2008, tax expense in excess of compensation expense totaling $0.9 million, $0.9
million and $1.6 million, respectively, increased cash flows from financing activities.
NU Incentive Plan: Under the NU Incentive Plan, in which CL&P, PSNH and WMECO participate, NU is authorized to grant up to 4.5
million new shares for various types of awards, including restricted shares, RSUs, performance shares and stock options to eligible
employees and board members. As of December 31, 2010 and 2009, NU had 3,068,850 and 2,363,521 common shares, respectively,
available for issuance under the NU Incentive Plan.
Restricted Shares: NU has granted restricted shares under the 2002 through 2004 incentive programs that are subject to three-year
and four-year graded vesting schedules. The remaining restricted shares under these programs were fully vested as of December 31,
2008 and the total compensation cost recorded had a de minimis impact to NU, CL&P, PSNH and WMECO for the year ended
December 31, 2008.
RSUs: NU has granted RSUs under the 2004 through 2010 incentive programs that are subject to three-year and four-year graded
vesting schedules for employees, and one-year graded vesting schedules for board members. RSUs are paid in shares, reduced by
amounts sufficient to satisfy withholdings, subsequent to vesting. A summary of RSU transactions is as follows:
RSUs
RSUs
(Units)
Weighted
Average
Grant-Date
Fair Value
Total
Grant-Date
Fair Value
(Millions)
Outstanding as of December 31, 2007 831,000
$ 22.99 $ 19.1
Granted 352,482
$ 26.82 $ 9.5
Shares issued (263,422)
$ 21.94 $ 5.8
Forfeited (7,069)
$ 25.97 $ 0.2
Outstanding as of December 31, 2008 912,991
$ 24.75 $ 22.6
Granted 347,112
$ 23.26 $ 8.1
Shares issued (203,888)
$ 25.55 $ 5.2
Forfeited (18,303)
$ 26.26 $ 0.5
Outstanding as of December 31, 2009 1,037,912
$ 24.07 $ 25.0
Granted 258,174
$ 26.03 $ 6.7
Shares issued (267,951)
$ 25.05 $ 6.7
Forfeited (13,656)
$ 24.26 $ 0.3
Outstanding as of December 31, 2010 1,014,479
$ 24.31 $ 24.7
As of December 31, 2010 and 2009, the number and weighted average grant-date fair value of RSUs not vested was 519,900 and
$12.9 million, and 571,673 and $15.2 million, respectively. The number and weighted average grant-date fair value of RSUs vested
during 2010 was 317,866 and $8.3 million, respectively. As of December 31, 2010, 494,579 RSUs were fully vested and 493,905 are
expected to vest.
On November 16, 2010, NU granted 192,309 RSUs to certain executives, contingent upon completion of the proposed merger with
NSTAR, with a three year vesting period that would begin as of the date of completion of the merger.