STOCK-BASED COMPENSATION

The 2014 Incentive Plan is Ameren’s long-term stock compensation plan for eligible employees and directors. The 2006 Incentive Plan was replaced prospectively for new grants beginning in April 2014. The 2014 Incentive Plan provides for a maximum of 8 million common shares to be available for grant to eligible employees and directors. At December 31, 2016, there were 5.8 million common shares remaining for grant under the 2014 Incentive Plan. The 2014 Incentive Plan awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards, and other stock-based awards.

Performance Share Units

A share unit vests and entitles an employee to receive shares of Ameren common stock (plus accumulated dividends) if, at the end of the three-year performance period, certain specified performance or market conditions have been met and if the individual remains employed by Ameren through the required vesting period. The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals. The vesting period for share units awarded in 2015 and 2016 extended beyond the three-year performance period to the payout date, while the vesting period for share units awarded in 2014 matched the three-year performance period and vested on December 31, 2016.

A summary of nonvested performance share units at December 31, 2016, and changes during the year ended December 31, 2016, under the 2006 Incentive Plan and the 2014 Incentive Plan are presented below:



	Performance Share Units
	Share Units		Weighted-average Fair Value per Share Unit
Nonvested at January 1, 2016	1,024,870		$	46.08
Granted^(a)	588,615		44.13
Forfeitures	(15,949	)	45.07
Earned and vested^(b)	(537,897	)	40.12
Nonvested at December 31, 2016	1,059,639		$	48.04


(a)	Includes performance share units (share units) granted to certain executive and nonexecutive officers and other eligible employees in 2016 under the 2014 Incentive Plan.


(b)	Includes share units granted in 2014 that vested as of December 31, 2016 and were earned pursuant to the terms of the award grants. Also includes share units that vested due to attainment of retirement eligibility by certain employees. Actual shares issued for retirement-eligible employees will vary depending on actual performance over the three-year measurement period.

The following table presents the stock-based compensation expense for the years ended December 31, 2016, 2015 and 2014:



	2016		2015		2014
Ameren Missouri	$	4	$	5	$	5
Ameren Illinois	2		3		2
Other^(a)	11		11		12
Ameren	17		19		19
Less income tax benefit	6		7		7
Stock-based compensation expense, net	$	11	$	12	$	12


(a)	Represents compensation expense of employees of Ameren Services. These amounts are not included in the Ameren Missouri and Ameren Illinois amounts above.

Ameren settled performance share units of $83 million, $27 million, and $33 million for the years ended December 31, 2016, 2015, and 2014. There were no significant compensation costs capitalized related to the performance share units during the years ended December 31, 2016, 2015, and 2014. As of December 31, 2016, total compensation cost of $25 million related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 22 months.

The fair value of each share unit awarded in 2016 under the 2014 Incentive Plan was determined to be $44.13, which was based on Ameren's closing common share price of $43.23 at December 31, 2015, and lattice simulations. Lattice simulations are used to estimate expected share payout based on Ameren's total shareholder return for a three-year performance period relative to the designated peer group beginning January 1, 2016. The simulations can produce a greater fair value for the share unit than the applicable closing common share price because they include the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 1.31%, volatility of 15% to 20% for the peer group, and Ameren's attainment of a three-year average earnings per share threshold during the performance period.

The fair value of each share unit awarded in 2015 under the 2014 Incentive Plan was determined to be $52.88, which was based on Ameren’s closing common share price of $46.13 at December 31, 2014, and lattice simulations. The lattice simulations reflected the three-year performance period relative to the designated peer group beginning January 1, 2015. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 1.10%, volatility of 12% to 18% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period.

The fair value of each share unit awarded in 2014, excluding the grants issued in April 2014 for certain executive officers, under the 2006 Incentive Plan and the 2014 Incentive Plan was determined to be $38.90, which was based on Ameren’s closing common share price of $36.16 at December 31, 2013, and lattice simulations. The lattice simulations reflected the three-year performance period relative to the designated peer group beginning January 1, 2014. The significant assumptions used to calculate fair value also included a three-year risk-free rate of 0.78%, volatility of 12% to 18% for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period.