ComEd had 73,709 and 74,182 warrants outstanding to purchase ComEd common stock at December 31, 2013 and 2012, respectively. The warrants entitle the holders to convert such warrants into common stock of ComEd at a conversion rate of one share of common stock for three warrants. At December 31, 2013 and 2012, 24,570 and 24,727 shares of common stock, respectively, were reserved for the conversion of warrants.

Share Repurchase Programs. In April 2004, Exelon's Board of Directors approved a discretionary share repurchase program that allowed Exelon to repurchase shares of its common stock on a periodic basis in the open market. The share repurchase program was intended to mitigate, in part, the dilutive effect of shares issued under Exelon's employee stock option plan and Exelon's ESPP. The aggregate value of the shares of common stock repurchased pursuant to the program cannot exceed the economic benefit received after January 1, 2004 due to stock option exercises and share purchases pursuant to Exelon's ESPP. The economic benefit consists of the direct cash proceeds from purchases of stock and the tax benefits associated with exercises of stock options. The 2004 share repurchase program had no specified limit on the number of shares that could be repurchased and no specified termination date. In 2008, Exelon management decided to defer indefinitely any share repurchases. Any shares repurchased are held as treasury shares, at cost, unless cancelled or reissued at the discretion of Exelon's management. Under the share repurchase programs, 35 million shares of common stock are held as treasury stock with a cost of $2.3 billion at December 31, 2013. During 2013, 2012 and 2011, Exelon had no common stock repurchases.

Exelon grants stock-based awards through its LTIP, which primarily includes stock options, restricted stock units and performance share awards. At December 31, 2013, there were approximately 16 million shares authorized for issuance under the LTIP. For the years ended December 31, 2013, 2012 and 2011, exercised and distributed stock-based awards were primarily issued from authorized but unissued common stock shares.

The Compensation Committee of Exelon's Board of Directors changed the mix of awards granted under the LTIP in 2013 by eliminating stock options in favor of the use of full value shares, consisting of performance shares and restricted stock. The performance share awards granted in 2013 will cliff vest at the end of a three-year performance period. The performance share awards granted in 2012 and earlier had a one-year performance period and vested ratably over three years. To address the reduction in annual award opportunity resulting from the transition to a three-year cliff vesting performance period, the Compensation Committee also approved a one-time grant of performance share transition awards in 2013, which will vest one-third after one year, with the remaining balance vesting over a two-year performance period.

The following table presents the stock-based compensation expense included in Exelon's Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011:

		Year Ended
		December 31,

Components of Stock-Based Compensation Expense		2013		2012		2011

Performance share awards		$	48	$	46	$	26
Restricted stock units			61		50		31
Stock options			3		15		8
Other stock-based awards			6		4		4

Total stock-based compensation expense included in
	operating and maintenance expense		118		115		69

Income tax benefit			(44)		(44)		(27)

Total after-tax stock-based compensation expense		$	74	$	71	$	42

The following table presents stock-based compensation expense (pre-tax) for the years ended December 31, 2013, 2012 and 2011:

	Year Ended
	December 31,

Subsidiaries	2013		2012		2011^(d)

Generation	$	48	$	42	$	31
ComEd		9		11		5
PECO		5		5		5
BGE^(a)		6		5		6
BSC^(b)		50		52		28

Total ^(c)	$	118	$	115	$	69

(a) BGE's stock-based compensation expense (pre-tax) for December 31, 2012 excludes $2 million of cost incurred in 2012 prior to the closing of Exelon's merger with Constellation on March 12, 2012. This amount is not included in Exelon's stock-based compensation expense for the year ended December 31, 2012 shown in the tables titled Components of Stock-Based Compensation Expense and Subsidiaries above.

(b) These amounts primarily represent amounts billed to Exelon's subsidiaries through intercompany allocations. These amounts are not included in the Generation, ComEd, PECO and BGE amounts above.

(c) The stock-based compensation expense (pre-tax) for December 31, 2013 reflects the impact of changes to the retirement eligibility requirements for employees participating in the LTIP. In addition, the stock-based compensation expense at ComEd does not reflect the impact of the ComEd Key Manager Long-Term Performance Program in 2013 for certain employees, which is not considered stock-based compensation expense under the applicable authoritative guidance. In 2012, these employees participated in the Exelon Restricted Stock Award Program.

(d) The total stock-based compensation expense (pre-tax) for December 31, 2011 of $69 million does not include the $6 million expense for BGE as those costs were incurred prior to the closing of Exelon's merger with Constellation on March 12, 2012.

There were no significant stock-based compensation costs capitalized during the years ended December 31, 2013, 2012 and 2011.

Exelon receives a tax deduction based on the intrinsic value of the award on the exercise date for stock options and the distribution date for performance share awards and restricted stock units. For each award, throughout the requisite service period, Exelon recognizes the tax benefit related to compensation costs. The tax deductions in excess of the benefits recorded throughout the requisite service period are recorded to common stock and are included in other financing activities within Exelon's Consolidated Statements of Cash Flows. The following table presents information regarding Exelon's tax benefits for the years ended December 31, 2013, 2012 and 2011:

			Year Ended
			December 31,

			2013		2012		2011
Realized tax benefit when exercised/distributed:

		Stock options	$	0	$	3	$	2
		Restricted stock units		11		11		8
		Performance share awards		11		7		7
		Stock deferral plan		1		0		1

Excess tax benefits included in other financing activities of Exelon’s
	Consolidated Statements of Cash Flows:
		Stock options	$	0	$	2	$	1

Non-qualified stock options to purchase shares of Exelon's common stock are granted under the LTIP. The exercise price of the stock options is equal to the fair market value of the underlying stock on the date of option grant. The vesting period of stock options is generally four years. All stock options expire ten years from the date of grant.

There were no stock options granted in 2013. The Compensation Committee eliminated stock option grants by changing the mix of long-term incentives for senior vice presidents (SVPs) and higher officers from 75% performance shares and 25% stock options to 67% performance shares and 33% restricted stock units.

The value of stock options at the date of grant is expensed over the requisite service period using the straight-line method. The requisite service period for stock options is generally four years. However, certain stock options become fully vested upon the employee reaching retirement-eligibility. The value of the stock options granted to retirement-eligible employees is either recognized immediately upon the date of grant or through the date at which the employee reaches retirement eligibility.

Historically, Exelon has granted most of its stock options in the first quarter of each year. Stock options granted during the remaining quarters of 2012 and 2011 were not significant.

The fair value of each option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The following table presents the weighted average assumptions used in the pricing model for grants and the resulting weighted average grant date fair value of stock options granted for the years ended 2012 and 2011:

	Year Ended December 31,

		2012			2011

Dividend yield			5.28	%		4.84	%
Expected volatility			23.20	%		24.40	%
Risk-free interest rate			1.30	%		2.65	%
Expected life (years)			6.25			6.25
Weighted average grant date fair value (per share)		$	4.18		$	6.22

The assumptions above relate to Exelon stock options granted during the periods presented and therefore do not include stock options that were converted in connection with the merger with Constellation during the year ended 2012.

The dividend yield is based on several factors, including Exelon's most recent dividend payment at the grant date and the average stock price over the previous year. Expected volatility is based on implied volatilities of traded stock options in Exelon's common stock and historical volatility over the estimated expected life of the stock options. The risk-free interest rate for a security with a term equal to the expected life is based on a yield curve constructed from U.S. Treasury strips at the time of grant. For each year presented, the expected life represents the period of time the stock options are expected to be outstanding and is based on the simplified method. Exelon believes that the simplified method is appropriate due to several factors that result in historical exercise data not being sufficient to determine a reasonable estimate of expected term. Exelon uses historical data to estimate employee forfeitures, which are compared to actual forfeitures on a quarterly basis and adjusted as necessary.

The following table presents information with respect to stock option activity for the year ended December 31, 2013:

		Weighted		Weighted
		Average		Average
		Exercise		Remaining
		Price		Contractual	Aggregate
		(per		Life	Intrinsic
	Shares	share)		(years)	Value

Balance of shares outstanding at December 31, 2012	21,903,781	$	45.91
Options reinstated	751,122		38.60
Options exercised	(670,957)		28.02
Options forfeited	(54,743)		39.36
Options expired	(893,758)		49.08

Balance of shares outstanding at December 31, 2013	21,035,445	$	46.07	4.72	$	10

Exercisable at December 31, 2013 (a)	20,188,327	$	46.31	4.58	$	10

The following table summarizes additional information regarding stock options exercised for the years ended December 31, 2013, 2012 and 2011:

	Year Ended
	December 31,

	2013		2012		2011

Intrinsic value^(a)	$	4	$	19	$	5
Cash received for exercise price		19		47		13

(a) The difference between the market value on the date of exercise and the option exercise price.

The following table summarizes Exelon's nonvested stock option activity for the year ended December 31, 2013:


		Weighted Average
		Exercise Price
	Shares	(per share)

Nonvested at December 31, 2012 (a)	1,960,665	$	40.56
Vested	(1,058,804)		40.89
Forfeited	(54,743)		39.36

Nonvested at December 31, 2013 (a)	847,118	$	40.22

(a) Excludes 1,348,913 and 2,647,536 of stock options issued to retirement-eligible employees as of December 31, 2013 and December 31, 2012, respectively, as they are fully vested.

At December 31, 2013, $2 million of total unrecognized compensation costs related to nonvested stock options are expected to be recognized over the remaining weighted-average period of 1.6 years.

Restricted stock units are granted under the LTIP with the majority being settled in a specific number of shares of common stock after the service condition has been met. The corresponding cost of services is measured based on the grant date fair value of the restricted stock unit issued.

The value of the restricted stock units is expensed over the requisite service period using the straight-line method. The requisite service period for restricted stock units is generally three to five years. However, certain restricted stock unit awards become fully vested upon the employee reaching retirement-eligibility. The value of the restricted stock units granted to retirement-eligible employees is either recognized immediately upon the date of grant or through the date at which the employee reaches retirement eligibility. Exelon uses historical data to estimate employee forfeitures, which are compared to actual forfeitures on a quarterly basis and adjusted as necessary.

The following table summarizes Exelon's nonvested restricted stock unit activity for the year ended December 31, 2013:


		Weighted Average
		Grant Date Fair
	Shares	Value (per share)

Nonvested at December 31, 2012 (a)	2,029,161	$	42.12
Granted	2,828,187		31.06
Vested	(842,439)		42.90
Forfeited	(108,199)		36.37
Undistributed vested awards (b)	(520,013)		32.62

Nonvested at December 31, 2013 (a)	3,386,697	$	34.10

(a) Excludes 931,628 and 686,121 of restricted stock units issued to retirement-eligible employees as of December 31, 2013 and December 31, 2012, respectively, as they are fully vested.

(b) Represents restricted stock units that vested but were not distributed to retirement-eligible employees during 2013.

The weighted average grant date fair value (per share) of restricted stock units granted for the years ended December 31, 2013, 2012 and 2011 was $31.06, $39.94 and $43.33, respectively. At December 31, 2013 and 2012, Exelon had obligations related to outstanding restricted stock units not yet settled of $77 million and $58 million, respectively, which are included in common stock in Exelon's Consolidated Balance Sheets. For the years ended December 31, 2013, 2012 and 2011, Exelon settled restricted stock units with fair value totaling $28 million, $25 million and $19 million, respectively. At December 31, 2013, $64 million of total unrecognized compensation costs related to nonvested restricted stock units are expected to be recognized over the remaining weighted-average period of 2.5 years.

Performance share awards are granted under the LTIP. The 2013 and 2012 performance share awards are being settled 50% in common stock and 50% in cash at the end of the three-year performance period except for awards granted to executive vice presidents and higher officers that may be settled 100% in cash if certain ownership requirements are satisfied. The performance shares granted prior to 2012 generally vest and settle over a three-year period with the holders receiving shares of common stock and/or cash annually during the vesting period.

The one-time 2013 performance share transition awards, which provide an opportunity to earn an award contingent on company performance, will be settled 50% in common stock and 50% in cash, except for awards granted to executive vice presidents and higher officers that may be settled 100% in cash if certain ownership requirements are satisfied. One-third of the award vests and is payable after a one-year performance period while the remaining two-thirds vests and is payable after a two-year performance period.

The payout of the 2013 performance share awards and one-time performance share transition awards are based on the Company's performance against specific operational and financial goals set annually during the respective performance periods. As a result, the 2013 performance share awards have been divided into equal tranches for the purpose of expense recognition as though the respective award were multiple awards; with each tranche representing a corresponding fiscal year. The one-time performance share transition awards have also been divided into multiple tranches for the purpose of expense recognition. One tranche reflects the one-third of the awards that vests and are payable after a one-year period. The two-thirds of the one-time performance share transition awards that are subject to a two-year performance period have also been divided into equal tranches; with each tranche representing a corresponding fiscal year. The grant date for each tranche of the 2013 performance share and one-time performance share transition awards is the date in which the performance goals for that fiscal year are approved and communicated, which typically occurs at the corresponding January Compensation Committee meeting.

The 2013 performance share awards and one-time performance share transition awards are recorded at fair value at the grant dates for each tranche, with the estimated grant date fair value based on the expected payout of the award, which may range from 50% to 150% of the payout target. The 2013 performance share awards also include a total shareholder return modifier (TSR) that may increase or decrease the award up to 25% and an individual performance modifier (IPM) that can decrease the award by up to 50% or increase the award by up to 10% for SVPs and higher officers or up to 20% for vice presidents. The one-time performance share transition award is not affected by either TSR or the IPM.

The common stock portion of the performance share and one-time performance share transition awards is considered an equity award being valued based on Exelon's stock price on the grant date. The cash portion of the awards is considered a liability award which is remeasured each reporting period based on Exelon's current stock price. As the value of the common stock and cash portions of the awards are based on Exelon's stock price during the performance period, coupled with changes in the total shareholder return modifier and expected payout of the award, the compensation costs are subject to volatility until payout is established.

The 2012 performance share awards are recorded at fair value at the date of grant with the estimated grant date fair value based on the expected payout of the award, which may range from 75% to 125% of the payout target. The common stock portion is considered an equity award with the 75% payout floor being valued based on Exelon's stock price on the grant date. The cash portion of the award is considered a liability award with the 75% payout floor being remeasured each reporting period based on Exelon's current stock price. The expected payout in excess of the 75% floor for the equity and liability portions are remeasured each reporting period based on Exelon's current stock price and changes in the expected payout of the award; therefore these portions of the award are subject to volatility until the payout is established.

For nonretirement-eligible employees, stock-based compensation costs are recognized over the vesting period of three years using the graded-vesting method. For performance share and one-time performance share transition awards granted to retirement-eligible employees, the value of the performance shares in recognized ratably over the vesting period, which is the year of grant.

The following table summarizes Exelon's nonvested performance share awards activity for the year ended December 31, 2013:


		Weighted Average
		Grant Date Fair
	Shares	Value (per share)

Nonvested at December 31, 2012 (a)	1,312,734	$	40.08
Granted	2,629,171		31.55
Vested	(612,624)		40.13
Forfeited	(24,451)		32.17
Undistributed vested awards (b)	(1,290,640)		34.28

Nonvested at December 31, 2013 (a)	2,014,190	$	32.74

(a) Excludes 1,411,824 and 204,643 of performance share awards issued to retirement-eligible employees as of December 31, 2013 and December 31, 2012, respectively, as they are fully vested.

(b) Represents performance share awards that vested but were not distributed to retirement-eligible employees during 2013.

The weighted average grant date fair value (per share) of performance share awards granted during the years ended December 31, 2013, 2012 and 2011 was $31.55, $39.71, and $43.52, respectively. During the years ended December 31, 2013, 2012 and 2011, Exelon settled performance shares with a fair value totaling $26 million, $23 million and $22 million, respectively, of which $12 million, $3 million and $10 million was paid in cash, respectively. As of December 31, 2013, $34 million of total unrecognized compensation costs related to nonvested performance shares are expected to be recognized over the remaining weighted-average period of 1.7 years.

The following table presents the balance sheet classification of obligations related to outstanding performance share awards not yet settled:


	December 31,

	2013		2012

Current liabilities^(a)	$	13	$	7
Deferred credits and other liabilities^(b)		24		11
Common stock		32		35

Total	$	69	$	53

(a) Represents the current liability related to performance share awards expected to be settled in cash.

(b) Represents the long-term liability related to performance share awards expected to be settled in cash.