DTE Energy 2014 Annual Report Download - page 107
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The number, weighted average exercise price and weighted average remaining contractual life of options outstanding were as follows:
$ 27.00 —
$ 38.00
25,857
$ 27.70
4.16
$ 38.01 —
$ 42.00
82,834
$ 41.77
3.16
$ 42.01 —
$ 45.00
221,487
$ 43.93
4.06
$ 45.01 —
$ 50.00
114,100
$ 47.75
2.15
444,278
$ 43.56
3.41
Stock awards granted under the plan are restricted for varying periods, generally for three years. Participants have all rights of a shareholder with respect
to a stock award, including the right to receive dividends and vote the shares. Prior to vesting in stock awards, the participant: (i) may not sell, transfer,
pledge, exchange or otherwise dispose of shares; (ii) shall not retain custody of the share certificates; and (iii) will deliver to the Company a stock power with
respect to each stock award upon request.
The stock awards are recorded at cost that approximates fair value on the date of grant. The cost is amortized to compensation expense over the vesting
period.
Stock award activity for the years ended December 31 was:
Fair value of awards vested (in millions)
$ 8
$ 9
Restricted common shares awarded
127,785
167,320
Weighted average market price of shares awarded
$ 64.72
$ 53.71
Compensation cost charged against income (in millions)
$ 23
$ 12
The following table summarizes the Company’s restricted stock awards activity for the year ended December 31, 2014:
Balance at December 31, 2013 492,329
$ 53.76
Grants 159,590
$ 70.09
Forfeitures (16,841)
$ 62.41
Vested and issued (218,760)
$ 47.77
Balance at December 31, 2014 416,318
$ 62.82
Performance shares awarded under the plan are for a specified number of shares of common stock that entitle the holder to receive a cash payment,
shares of common stock or a combination thereof. The final value of the award is determined by the achievement of certain performance objectives and
market conditions. The awards vest at the end of a specified period, usually three years. Awards granted in 2014 were primarily deemed to be equity awards.
The stock price and number of probable shares attributable to market conditions for such equity awards are fair valued only at the grant date. Performance
shares awarded prior to 2014 are liability awards and are remeasured to fair value at each reporting period. The Company accounts for performance share
awards by accruing compensation expense over the vesting period based on: (i) the number of shares expected to be paid which is based on the probable
achievement of performance objectives; and (ii) the closing stock price market value. The settlement of the award is based on the closing price at the
settlement date.
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