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80
PSP grants are made in performance-based restricted
stock units. The 2012 PSP awards issued to certain
members of senior management were accounted for as
liability awards, which were remeasured at fair value at
each balance sheet date. The valuation of these PSP
liability awards was computed based on the same
methodology as the PSP equity awards. On December
8, 2014, IP eliminated the election for executives to
withhold more than the minimum tax withholding for the
2013 and 2014 grants making them equity awards.
The following table sets forth the assumptions used to
determine compensation cost for the market condition
component of the PSP plan:
Twelve Months Ended
December 31, 2015
Expected volatility 19.01%-36.02%
Risk-free interest rate 0.21%-1.10%
The following summarizes PSP activity for the three
years ending December 31, 2015:
Share/Units
Weighted
Average
Grant Date
Fair Value
Outstanding at December 31, 2012 8,660,855 $28.37
Granted 3,148,445 40.76
Shares issued (3,262,760)32.48
Forfeited (429,051) 34.58
Outstanding at December 31, 2013 8,117,489 31.20
Granted 3,682,663 46.82
Shares issued (4,025,111)37.18
Forfeited (499,107) 43.10
Outstanding at December 31, 2014 7,275,934 34.98
Granted 1,863,623 53.25
Shares issued (2,959,160)37.09
Forfeited (322,664) 53.97
Outstanding at December 31, 2015 5,857,733 $38.69
EXECUTIVE CONTINUITY AND RESTRICTED STOCK AWARD
PROGRAMS
The Executive Continuity Award program provides for
the granting of tandem awards of restricted stock and/
or nonqualified stock options to key executives. Grants
are restricted and awards conditioned on attainment of
a specified age. The awarding of a tandem stock option
results in the cancellation of the related restricted
shares. The final award under this program was paid
in 2013.
The service-based Restricted Stock Award program
(RSA), designed for recruitment, retention and special
recognition purposes, also provides for awards of
restricted stock to key employees.
The following summarizes the activity of the Executive
Continuity Award program and RSA program for the
three years ending December 31, 2015:
Shares
Weighted
Average
Grant Date
Fair Value
Outstanding at December 31, 2012 151,549 $30.49
Granted 67,100 44.41
Shares issued (88,775) 32.30
Forfeited (17,500) 37.75
Outstanding at December 31, 2013 112,374 36.24
Granted 89,500 48.19
Shares issued (83,275) 33.78
Forfeited (4,000) 45.88
Outstanding at December 31, 2014 114,599 47.03
Granted 36,300 50.06
Shares issued (27,365) 45.35
Forfeited (3,166) 50.04
Outstanding at December 31, 2015 120,368 $48.24
At December 31, 2015, 2014 and 2013 a total of 16.2
million, 16.3 million and 17.8 million shares,
respectively, were available for grant under the ICP.
Stock-based compensation expense and related
income tax benefits were as follows:
In millions 2015 2014 2013
Total stock-based compensation
expense (included in selling and
administrative expense) $ 114 $118$137
Income tax benefits related to stock-
based compensation 88 92 74
At December 31, 2015, $126 million of compensation
cost, net of estimated forfeitures, related to unvested
restricted performance shares, executive continuity
awards and restricted stock attributable to future
performance had not yet been recognized. This amount
will be recognized in expense over a weighted-average
period of 1.6 years.