DTE Energy 2012 Annual Report Download - page 107
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Table of Contents
The Company’s stock incentive program permits the grant of incentive stock options, non-qualifying stock options, stock awards, performance shares
and performance units to employees and members of its Board of Directors. Key provisions of the stock incentive program are:
•Authorized limit is 11,500,000 shares of common stock;
•Prohibits the grant of a stock option with an exercise price that is less than the fair market value of the Company’s stock on the date of the
grant; and
•Imposes the following award limits to a single participant in a single calendar year, (1) options for more than 500,000 shares of common stock;
(2) stock awards for more than 150,000 shares of common stock; (3) performance share awards for more than 300,000 shares of common stock
(based on the maximum payout under the award); or (4) more than 1,000,000 performance units, which have a face amount of $ 1.00 each.
The Company records compensation expense at fair value over the vesting period for all awards it grants.
Stock-based compensation for the reporting periods is as follows:
Stock-based compensation expense
$ 66
$ 52
Tax benefit
25
20
Stock-based compensation cost capitalized in property, plant and equipment
4
3
Options
Options are exercisable according to the terms of the individual stock option award agreements and expire 10 years after the date of the grant. The option
exercise price equals the fair value of the stock on the date that the option was granted. Stock options vest ratably over a 3-year period.
Stock option activity was as follows:
Options outstanding at January 1, 2012 2,764,670
$41.25
Granted —
$ —
Exercised (1,555,227)
$40.78
Forfeited or expired (16,773)
$42.02
Options outstanding at December 31, 2012 1,192,670
$41.86
$ 22
Options exercisable at December 31, 2012 991,826
$41.44
$19
As of December 31, 2012, the weighted average remaining contractual life for the exercisable shares is 4.30 years. As of December 31, 2012, 200,844
options were non-vested. During 2012, 332,026 options vested.
There were no options granted during 2012 or 2011. The intrinsic value of options exercised for the years ended December 31, 2012, 2011 and 2010
was $25 million, $20 million, and $9 million, respectively. Total option expense recognized during 2012, 2011 and 2010 was $0.7 million, $2 million and
$4 million, respectively.
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