APS 2012 Annual Report Download - page 165

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
140
The following table is a summary of the status of restricted stock units and stock grants, as of
December 31, 2012 and changes during the year. This table represents only the stock portion of
restricted stock units, per the election on payment discussed in the paragraph above:
Nonvested shares
Shares
Weighted-Average
Grant-Date Fair Value
Nonvested at January 1, 2012
416,231
$ 39.61
Granted
202,278
49.31
Vested
126,959
39.76
Forfeited
10,797
42.63
Nonvested at December 31, 2012
480,753
43.58
The amount of cash required to settle the payments on restricted stock units is (dollars in
millions):
Year
2012
2011
2010
2007 Grant
$ --
$ 1.0
$ 0.9
2008 Grant
1.9
1.6
1.5
2009 Grant
1.7
1.5
1.4
2010 Grant
0.6
0.6
--
2011 Grant
0.7
--
--
Performance Share Awards
Performance share awards were granted to officers and key employees under the 2012 Plan in
2012 and under the 2007 Plan from 2008 to 2011. Performance share awards contain two
performance element criteria that affect the number of shares received after the end of a three-year
performance period if performance criteria conditions are met.
The 2012, 2011 and 2010 performance share grant criteria is based 50% upon the percentile
ranking of Pinnacle West’s total shareholder return at the end of the three-year performance period as
compared with the total shareholder return of all relevant companies in a specified utility index and
the other 50% based upon six non-financial separate performance metrics. The exact number of
shares issued will vary from 0% to 200% of the target award. Shares received include dividend
rights paid in stock equal to the amount of dividends that they would have received had they directly
owned stock equal to the number of vested performance shares from the date of grant to the date of
payment plus interest compounded quarterly.
Performance share awards are accounted for as liability awards, with compensation cost
initially calculated on the date of grant using the Company’s closing stock price, and remeasured at
each balance sheet date. Compensation expense for retirement eligible participants is recognized
immediately. Management also evaluates the probability of meeting the performance criteria at each
balance sheet date. If the performance criteria are not achieved, no compensation cost is recognized
and any previously recognized compensation cost is reversed.
The following table is a summary of the performance shares granted and the weighted-
average fair value for the three years ended 2012, 2011 and 2010: