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Share-Based Compensation | 3 Months Ended
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Mar. 31, 2017
Share-Based Compensation [Abstract] |
Share-Based Compensation |
17. | Share-Based Compensation
Compensation expense consisted of the following:
| Three Months Ended March 31, |
| 2017 |  | 2016 |
Restricted shares and restricted share units |  | $ | 14 |  |  | $ | 4 |
Options |  |  | — |  |  |  | 1 |
Total compensation expense |  | $ | 14 |  |  | $ | 5 |
Tronox Limited Management Equity Incentive Plan (“MEIP”) On June 15, 2012, we adopted the Tronox Limited Management Equity Incentive Plan (the “MEIP”), which permits the grant of awards that are comprised of incentive options, nonqualified options, share appreciation rights, restricted shares, restricted share units, performance awards, and other share-based awards, cash payments, and other forms as the compensation committee of the Board of Directors (the “Board”) in its discretion deems appropriate, including any combination of the above. Subject to further adjustment, the maximum number of shares which may be the subject of awards (inclusive of incentive options) is 20,781,225 Class A Shares. These shares were increased by 8,000,000 on the affirmative vote of our shareholders on May 25, 2016. Restricted Shares During the three months ended March 31, 2017, we did not grant any restricted shares. Our restricted shares vest ratably over a three-year period, are classified as equity awards and are accounted for using the fair value established at the grant date. The following table presents a summary of activity for the three months ended March 31, 2017:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding, January 1, 2017 |  |  | 284,400 |  |  | $ | 6.09 |
Vested |  |  | (107,928 | ) |  |  | 8.00 |
Outstanding, March 31, 2017 |  |  | 176,472 |  |  | $ | 4.92 |
Expected to vest, March 31, 2017 |  |  | 176,472 |  |  | $ | 4.92 |
At March 31, 2017, there was $1 million of unrecognized compensation expense related to nonvested restricted shares, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.5 years. Since the restricted shares were granted to certain members of our Board as indicated above, the unrecognized compensation expense was not adjusted for estimated forfeitures. The total fair value of restricted shares that vested during the three months ended March 31, 2017 was $1 million. Restricted Share Units (“RSUs”) During the three months ended March 31, 2017, we granted RSUs which have time and/or performance conditions. Both the time-based awards and the performance-based awards are classified as equity awards. For the time-based awards, 100,160 RSUs vest ratably over a one-year period and 773,774 RSUs vest ratably over a three-year period, and are valued at the weighted average grant date fair value. For the performance-based awards, 773,774 cliff vest at the end of the three years and 883,538 cliff vest at the end of forty months. Included in the performance-based awards are 773,774 RSUs for which vesting is determined by a Total Stockholder Return (“TSR”) calculation over the applicable measurement period. The TSR metric is considered a market condition for which we use a Monte Carlo simulation to determine the grant date fair value. The 883,538 RSUs were granted, at a grant date fair value of $19.47, to certain executive officers pursuant to an Integration Incentive Award program (the “Integration Incentive Award”) in connection the Cristal Transaction. If the Cristal Transaction does not close by July 1, 2018, then the Integration Incentive Award granted will be forfeited. The following table presents a summary of activity for the three months ended March 31, 2017:
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Outstanding, January 1, 2017 |  |  | 5,587,331 |  |  | $ | 7.19 |
Granted |  |  | 2,531,246 |  |  |  | 17.72 |
Vested |  |  | (1,052,205 | ) |  |  | 8.74 |
Forfeited |  |  | (100,704 | ) |  |  | 13.54 |
Outstanding, March 31, 2017 |  |  | 6,965,668 |  |  | $ | 10.69 |
Expected to vest, March 31, 2017 |  |  | 7,539,300 |  |  | $ | 10.02 |
At March 31, 2017, there was $49 million of unrecognized compensation expense related to nonvested RSUs, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 2.3 years. The weighted-average grant-date fair value of RSUs granted during the three months ended March 31, 2017 and 2016 was $17.72 per share and $4.06 per share, respectively. The total fair value of RSUs that vested during the three months ended March 31, 2017 was $9 million. Options The following table presents a summary of activity for the three months ended March 31, 2017:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Contractual Life (years) |  |  | Intrinsic Value |
Outstanding, January 1, 2017 |  |  | 1,970,481 |  |  | $ | 21.19 |  |  |  | 6.38 |  |  | $ | — |
Forfeited |  |  | (2,285 | ) |  |  | 21.98 |  |  |  |  |  |  |  |  |
Expired |  |  | (31,578 | ) |  |  | 22.44 |  |  |  |  |  |  |  |  |
Outstanding, March 31, 2017 |  |  | 1,936,618 |  |  | $ | 21.17 |  |  |  | 6.13 |  |  | $ | — |
Expected to vest, March 31, 2017 |  |  | 2,557 |  |  | $ | 27.26 |  |  |  | 7.48 |  |  | $ | — |
Exercisable, March 31, 2017 |  |  | 1,934,029 |  |  | $ | 21.16 |  |  |  | 6.13 |  |  | $ | — |
The aggregate intrinsic values in the table represent the total pre-tax intrinsic value (the difference between our share price at the indicated dates and the options’ exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options at the end of the period. The amount will change based on the fair market value of our stock. No options were exercised during the three months ending March 31, 2017 and 2016 and consequently, there was no related intrinsic value. We issue new shares upon the exercise of options. Since no stock options were exercised during the three months ended March 31, 2017 and 2016, no cash was received. At March 31, 2017 there was no unrecognized compensation expense related to options, adjusted for estimated forfeitures. We did not issue any options during the three months ended March 31, 2017. The fair value is based on the closing price of our Class A Shares on the grant date. The risk-free interest rate is based on U.S. Treasury Strips available with a maturity period consistent with the expected life assumption. The expected volatility assumption is based on historical price movements of our peer group. Dividend yield is determined based on the Company’s expected dividend payouts. T-Bucks Employee Participation Plan (“T-Bucks EPP”) During 2012, we established the T-Bucks EPP for the benefit of certain qualifying employees of our South African subsidiaries. We funded the T-Bucks Trust (the “Trust”) with R124 million (approximately $15 million), which was used to acquire Class A Shares. Additional contributions may be made in the future at the discretion of the Board. The T-Bucks EPP is classified as an equity-settled shared-based payment plan, whereby participants were awarded share units in the Trust, which entitles them to receive Class A Shares upon completion of the vesting period on May 31, 2017. Participants are entitled to receive dividends on the shares during the vesting period. Forfeited shares are retained by the Trust, and are allocated to future participants. Compensation costs are recognized over the vesting period using the straight-line method. During 2012, the Trust purchased 548,234 Class A Shares at $25.79 per share, which was the fair value on the date of purchase. The balance at both March 31, 2017 and December 31, 2016 was 548,234 shares. Long-Term Incentive Plan (“LTIP”) We have a LTIP for the benefit of certain qualifying employees of Tronox subsidiaries in South Africa and Australia. The LTIP is classified as a cash-settled compensation plan and is re-measured to fair value at each reporting date. At both March 31, 2017 and December 31, 2016, the LTIP plan liability was less than $1 million.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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