OG&E 2009 Annual Report Download - page 77

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A summary of the activity for OGE Energy’s non-vested performance units applicable to the Company’s employees based on
TSR at December 31, 2009 and changes during 2009 are summarized in the following table:
Weighted-Average
Number Grant Date
of Units Fair Value
Units Non-Vested at 12/31/08 55,368 $ 30.18
Granted (A) 61,718 $ 25.55
Vested (19,686) $ 24.18
Forfeited (2,708) $ 29.39
Employee migration (B) 2,688 $ 25.57
Units Non-Vested at 12/31/09 (C) 97,380 $ 28.32
(A) Represents target number of units granted. Actual number of units earned, if any, is dependent upon performance and may range
from 0 percent to 200 percent of the target.
(B) Due to certain employees transferring between OGE Energy and its subsidiaries.
(C) Of the 97,380 performance units not vested at December 31, 2009, 80,980 performance units are assumed to vest at the end of the
applicable vesting period.
At December 31, 2009, there was approximately $1.1 million in unrecognized compensation cost related to non-vested
performance units based on TSR which is expected to be recognized over a weighted-average period of 1.74 years.
Performance Units – Earnings Per Share
The Company recorded compensation expense of approximately $0.3 million pre-tax ($0.2 million after tax), $0.3 million
pre-tax ($0.2 million after tax) and $0.3 million pre-tax ($0.2 million after tax) in 2009, 2008 and 2007, respectively, related to the
performance units based on EPS. The fair value of the performance units based on EPS is based on grant date fair value which is
equivalent to the price of one share of OGE Energy’s common stock on the date of grant. The fair value of performance units based
on EPS varies as the number of performance units that will vest is based on the grant date fair value of the units and the probable
outcome of the performance condition. OGE Energy reassesses at each reporting date whether achievement of the performance
condition is probable and accrues compensation expense if and when achievement of the performance condition is probable. As a
result, the compensation expense recognized for these performance units can vary from period to period. There are no post-vesting
restrictions related to OGE Energy’s performance units based on EPS. The grant date fair value of the 2007, 2008 and 2009
performance units was $33.59, $29.22 and $20.02, respectively.
A summary of the activity for OGE Energy’s performance units applicable to the Company’s employees based on EPS at
December 31, 2009 and changes during 2009 are summarized in the following table. Following the end of the performance period
(typically, three years), payout of the performance units based on EPS growth is determined by OGE Energy’s growth in EPS for such
period compared to a target set at the beginning of the period by the Compensation Committee of OGE Energy’s Board of Directors
and payout requires the approval of the Compensation Committee. Payouts, if any, are all made in common stock and are considered
made when approved by the Compensation Committee.
Stock Aggregate
Number Conversion Intrinsic
(dollars in millions) of Units Ratio (D) Value
Units Outstanding at 12/31/08 28,281 1:1
Granted (E) 20,572 1:1
Converted (9,885) 1:1 $ 0.5
Forfeited (902) 1:1
Employee migration (F) 896 1:1
Units Outstanding at 12/31/09 38,962 1:1 $ 0.6
Units Fully Vested at 12/31/09 6,507 1:1 $ 0.2
(D) One performance unit = one share of OGE Energy’s common stock.
(E) Represents target number of units granted. Actual number of units earned, if any, is dependent upon performance and may range
from 0 percent to 200 percent of the target.
(F) Due to certain employees transferring between OGE Energy and its subsidiaries.
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