Allegheny Power 2015 Annual Report Download - page 103

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
86
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FES’shareofthepensionandOPEBnet(liability)assetasofDecember31,2015and2014,wasasfollows:
Pension OPEB
2015 2014 2015 2014
(Inmillions)
Net(Liability)Asset $ (303)
$ (295) $ 25
$ 10
FES’shareofthenetperiodicbenefitcost(credit),includingthepensionandOPEBmarktomarketadjustment,forthethreeyears
endedDecember31,2015wasasfollows:
Pension OPEB
2015 2014 2013 2015 2014 2013
(Inmillions)
NetPeriodicCost(Credit) $ 10
$ 150
$ (30)
$ (22) $ (24) $ (40)

4.STOCKBASEDCOMPENSATIONPLANS

FirstEnergygrantsstockbasedawardsthroughtheICP2015,primarilyintheformofrestrictedstockandperformancebased
restrictedstockunits.UnderFirstEnergy'spreviousincentivecompensationplan,theICP2007,FirstEnergyalsograntedstock
optionsandperformanceshares.TheICP2007andICP2015includeshareholderauthorizationtoissue29millionsharesand10
millionshares,respectively,ofcommonstockortheirequivalent.AsofDecember31,2015,approximately9.9millionshareswere
availableforfuturegrantsundertheICP2015assumingmaximumperformancemetricsareachievedfortheoutstandingcyclesof
restrictedstockunits.NosharesareavailableforfuturegrantsundertheICP2007.Anysharesnotissuedduetoforfeituresor
cancellationsareaddedbacktotheICP2015.SharesusedundertheICP2007andICP2015areissuedfromauthorizedbut
unissuedcommonstock.Vestingperiodsrangefromonetotenyears,withthemajorityofawardshavingavestingperiodofthree
years.FirstEnergyalsoissuesstockthroughits401(k)SavingsPlan,EDCP,andDCPD.FirstEnergyrecordsthecompensationcosts
forstockbasedcompensationawardsthatwillbepaidinstockoverthevestingperiodbasedonthefairvalueonthegrantdate,less
estimatedforfeitures.FirstEnergyadjuststhecompensationcostsforstockbasedcompensationawardsthatwillbepaidincash
basedonchangesinthefairvalueoftheawardasofeachreportingdate.FirstEnergyrecordstheactualtaxbenefitrealizedfromtax
deductionswhenawardsareexercisedorsettled.RealizedtaxbenefitsduringtheyearsendedDecember31,2015,2014and2013
were$10million,$13millionand$13million,respectively.Theexcessofthedeductibleamountovertherecognizedcompensation
costisrecordedasacomponentofstockholders’equityandreportedasafinancingactivityontheConsolidatedStatementsofCash
Flows.

StockbasedcompensationcostsandtheamountofstockbasedcompensationexpensecapitalizedrelatedtoFirstEnergyandFES
plansareincludedinthefollowingtables:

FirstEnergyYearsendedDecember31,
StockbasedCompensationPlan 2015 2014 2013
(Inmillions)
RestrictedStockUnits $ 46
$ 26 $ 36
RestrictedStock 2
5 6
PerformanceShares —
5 (10)
401(k)SavingsPlan38
25 25
EDCP&DCPD 3
8 3
Total $ 89
$ 69
$ 60
Stockbasedcompensationcostscapitalized $ 32
$ 23 $ 20



87
FES YearsendedDecember31,
StockbasedCompensationPlan
2015
2014
2013
(Inmillions)
RestrictedStockUnits
$
6
$
4

$
6

PerformanceShares
—
1
(1
)
401(k)SavingsPlan 5

4

4

Total
$
11
$
9
$
9
Stockbasedcompensationcostscapitalized
$
1
$
1

$
1

StockoptionexpensewasnotmaterialforFirstEnergyorFESfortheyearsDecember31,2015,2014or2013.Incometaxbenefits
associatedwithstockbasedcompensationplanexpensewere$12million,$14millionand$23million(FES$2million,$2million
and$1million)fortheyearsended2015,2014and2013,respectively.

RestrictedStockUnits

Beginningwiththeperformancebasedrestrictedstockunitsgrantedin2015,twothirdswillbepaidinstockandonethirdwillbepaid
incash.Priorto2015,allperformancebasedrestrictedstockunitswerepaidinstock.Restrictedstockunitspaidinstockprovidethe
participanttherighttoreceive,attheendoftheperiodofrestriction,anumberofsharesofcommonstockequaltothenumberof
stockunitssetforthintheagreementsubjecttoadjustmentbasedonFirstEnergy'sperformancerelativetofinancialandoperational
performancetargets.Thegrantdatefairvalueofthestockportionoftherestrictedstockunitawardismeasuredbasedonthe
averageofthehighandlowpricesofFEcommonstockonthedateofgrant.Compensationexpenseisrecognizedforthegrantdate
fairvalueofawardsthatareexpectedtovest.Restrictedstockunitspaidincashprovidetheparticipanttherighttoreceivecash
basedonthenumbersofstockunitssetforthintheagreementandvalueoftheequivalentnumberofsharesofFEcommonstockas
ofthevestingdate.Thecashportionoftherestrictedstockunitawardisconsideredaliabilityaward,whichisremeasuredeach
periodbased on FE's stockpriceand projectedperformanceadjustments.The liabilityrecorded forcashperformance based
restrictedstockunitsasofDecember31,2015was$3million.Nocashwaspaidtosettletherestrictedstockunitobligationsin2015.
Thevestingperiodforeachoftheawardswasthreeyears.Dividendequivalentsarereceivedontherestrictedstockunitsandare
reinvestedinadditionalrestrictedstockunitsandsubjecttothesameperformanceconditions.

RestrictedstockunitactivityfortheyearendedDecember31,2015,wasasfollows:

RestrictedStockUnitActivity
Shares
Weighted
AverageGrant
DateFairValue
NonvestedasofJanuary1,2015
2,069,518
$
37.65

Grantedin2015
1,157,755
35.27

Forfeitedin2015
(231,271
)
34.19

Vestedin2015
(1)

(559,114
)
44.58

NonvestedasofDecember31,2015
2,436,888
$
35.26
(1)Excludesdividendequivalentsof89,681earnedduringvestingperiod

Theweightedaveragefairvalueofawardsgrantedin2015,2014and2013were$35.27,$32.17and$39.90respectively.Forthe
yearsendedDecember31,2015,2014,and2013,thefairvalueofrestrictedstockunitsvestedwas$22million,$28million,and$37
million,respectively.AsofDecember31,2015,therewas$32millionoftotalunrecognizedcompensationcostrelatedtononvested
sharebasedcompensationarrangementsgrantedforrestrictedstockunitsthatcostisexpectedtoberecognizedoveraperiodof
approximatelytwoyears.

RestrictedStock

CertainemployeesreceiveawardsofFErestrictedstock(asopposedto"units"withtherighttoreceivesharesattheendofthe
restrictionperiod)subjecttorestrictionsthatlapseoveradefinedperiodoftimeoruponachievingperformanceresults.Thefairvalue
ofrestrictedstockismeasuredbasedontheaverageofthehighandlowpricesofFirstEnergycommonstockonthedateofgrant.
Dividendsarereceivedontherestrictedstockandarereinvestedinadditionalsharesofrestrictedstock.



