OG&E 2013 Annual Report Download - page 62

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Restricted Stock
Under the 2008 Stock Incentive Plan and beginning in 2008, the Company
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 the Company or a subsidiary for any reason other than death, disabil-
ity or retirement. These shares may not be sold, assigned, transferred
or pledged and are subject to a risk of forfeiture.
The fair value of the restricted stock was based on the closing
market price of the Company’s common stock on the grant date.
Compensation expense for the restricted stock is a fixed amount deter-
mined 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 since inception of the three-year award cycle. There are no post-
vesting restrictions related to the Company’s restricted stock. The number
of shares of restricted stock granted and the grant date fair value are
shown in the following table.
2013 2012 2011
Shares of restricted stock granted 5,940 10,824 35,804
Fair value of restricted stock granted $29.71 $÷26.72 $÷24.41
A summary of the activity for the Company’s performance units and
restricted stock at December 31, 2013 and changes in 2013 are shown
in the following table.
56 OGE Energy Corp.
Performance Units
Total Shareholder Return Earnings Per Share Restricted Stock
Aggregate Aggregate Aggregate
Number Intrinsic Number Intrinsic Number Intrinsic
(Dollars in millions) of Units Value of Units Value of Shares Value
Units/shares outstanding at 12/31/12 1,069,128 327,838 49,106
Granted 316,162 (A) 74,570 (A) 5,940
Modification 87,150 (B) 87,170 (B) N/A
Converted (377,266) (C) $22.1 (125,760) (C) $÷7.4 N/A
Vested N/A N/A (30,242) $0.9
Forfeited (33,114) (9,792) (1,176)
Units/shares outstanding at 12/31/13 1,062,060 $50.9 354,026 $13.9 23,628 $0.8
Units/shares fully vested at 12/31/13 355,078 $19.3 118,350 $÷8.0
(A) For performance units, this represents the target number of performance units granted. Actual number of performance units earned, if any, is dependent upon performance and may range from
0 percent to 200 percent of the target.
(B) These amounts represent the performance unit grants previously based on earnings before interest, taxes, depreciation and amortization that were converted to performance units based on total
shareholder return or earnings per share as a result of the formation of Enable.
(C) These amounts represent performance units that vested at December 31, 2012 which were settled in February 2013.
Performance Units
Total Shareholder Return Earnings Per Share Restricted Stock
Weighted- Weighted- Weighted-
Average Average Average
Number Grant Date Number Grant Date Number Grant Date
of Units Fair Value of Units Fair Value of Shares Fair Value
Units/shares non-vested at 12/31/12 691,862 $24.40 202,078 $22.00 49,106 $23.61
Granted 316,162 (A) $25.89 74,570 (A) $26.73 5,940 $29.71
Modification 87,150 (B) $36.29 87,170 (B) $30.62 N/A N/A
Vested (355,078) $23.05 (118,350) $20.81 (30,242) $22.57
Forfeited (33,114) $24.96 (9,792) $23.34 (1,176) $26.87
Units/shares non-vested at 12/31/13 706,982 $25.90 235,676 $25.28 23,628 $26.30
Units/shares expected to vest 633,808 (C) 209,938 (C) 23,628
(A) For performance units, this represents the target number of performance units granted. Actual number of performance units earned, if any, is dependent upon performance and may range from 0 per-
cent to 200 percent of the target.
(B) These amounts represent the performance unit grants previously based on earnings before interest, taxes, depreciation and amortization that were converted to performance units based on total
shareholder return or earnings per share as a result of the formation of Enable.
(C) The intrinsic value of the performance units based on total shareholder return and earnings per share is $28.3 million and $5.6 million, respectively.
A summary of the activity for the Company’s non-vested performance
units and restricted stock at December 31, 2013 and changes in 2013
are shown in the following table.