OG&E 2009 Annual Report Download - page 78

A summary of the activity for OGE Energy’s non-vested 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:
Weighted-Average
Number Grant Date
of Units Fair Value
Units Non-Vested at 12/31/08 18,396 $ 30.80
Granted (A) 20,572 $ 20.02
Vested (6,507) $ 33.59
Forfeited (902) $ 26.97
Employee migration (B) 896 $ 20.01
Units Non-Vested at 12/31/09 (C) 32,455 $ 23.22
(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 32,455 performance units not vested at December 31, 2009, 26,988 performance units are assumed to vest at the end of the
applicable vesting period.
At December 31, 2009, there was approximately $0.3 million in unrecognized compensation cost related to non-vested
performance units based on EPS which is expected to be recognized over a weighted-average period of 1.78 years.
Stock Options
The Company recorded no compensation expense in 2009, 2008 or 2007 related to stock options because at December 31,
2006, there was no unrecognized compensation cost related to non-vested options, which became fully vested in January 2007. A
summary of the activity for OGE Energy’s stock options applicable to the Company’s employees at December 31, 2009 and changes
during 2009 are summarized in the following table:
Aggregate Weighted-Average
Number Weighted-Average Intrinsic Remaining
(dollars in millions) of Options Exercise Price Value Contractual Term
Options Outstanding at 12/31/08 77,412 $ 22.21
Exercised (24,068) $ 21.38 $ 0.3
Expired (11,300) $ 28.75 $ 0.3
Employee migration (500) $ 23.58
Options Outstanding at 12/31/09 41,544 $ 20.89 $ 0.7 2.86 years
Options Fully Vested and Exercisable at 12/31/09 41,544 $ 20.89 $ 0.7 2.86 years
Restricted Stock
Under the Plans and in 2008 and 2009, OGE Energy issued restricted stock to certain existing non-officer employees as well
as other executives upon hire to attract and retain individuals to be competitive in the marketplace. The restricted stock vests in one-
third annual increments. Prior to vesting, each share of restricted stock is subject to forfeiture if the recipient ceases to render
substantial services to OGE Energy or a subsidiary for any reason other than death, disability or retirement. These shares may not be
sold, assigned, transferred or pledged and are subject to a risk of forfeiture. In 2009 and 2008, respectively, OGE Energy awarded
6,226 shares and 56,798 shares of restricted stock, of which none and 21,618 related to the Company’s employees. In 2009, there
were 2,915 shares of restricted stock forfeited, of which none related to the Company’s employees.
The Company recorded compensation expense of approximately $0.4 million pre-tax ($0.2 million after tax) and $0.1 million
pre-tax ($0.1 million after tax) in 2009 and 2008, respectively, related to the restricted stock. The fair value of the restricted stock was
based on the closing market price of OGE Energy’s common stock on the grant date. Compensation expense for the restricted stock is
a fixed amount determined at the grant date fair value and is recognized as services are rendered by employees over a three-year
vesting period. Also, the Company treats its restricted stock as multiple separate awards by recording compensation expense
separately for each tranche whereby a substantial portion of the expense is recognized in the earlier years in the requisite service
period. Dividends are accrued and paid during the vesting period and, therefore, are included in the fair value calculation. The
expected life of the restricted stock is based on the non-vested period
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