XML 35 R21.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Equity-Based Compensation | 12 Months Ended
--- | ---
Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity-Based Compensation | NOTE L — EQUITY-BASED COMPENSATION We have various equity incentive compensation plans which provide for the granting of restricted common stock, options for the purchase of our common stock, and other performance-based, equity-based compensation awards to our executive officers, key employees, nonexecutive officers, consultants, and directors. Stock options are exercisable for periods of up to ten years. Compensation cost for all share-based payments is based on the grant date fair value and is recognized in earnings over the requisite service period. Total equity-based compensation expense, before tax, for the three years ended December 31, 2017, 2016, and 2015, was $7.8 million, $13.7 million, and $16.9 million, respectively, and is included in general and administrative expense. Total equity-based compensation expense, net of taxes, for the three years ended December 31, 2017, 2016, and 2015, was $5.0 million, $9.5 million, and $13.9 million, respectively. During 2015, we automated the computation of equity-based compensation expense, converting from a manual calculation of the overall impact of forfeitures and vesting on the amount of expense. As a result of this conversion, and performing a retroactive review of equity-based compensation expense for all periods from 2006 to 2015, we recorded a correcting pre-tax adjustment of $6.7 million during the fourth quarter of 2015. Management does not consider the impact of this cumulative adjustment to be material to any individual annual period. Stock Incentive Plans The TETRA Technologies, Inc. 1990 Stock Option Plan (the "1990 Plan") was initially adopted in 1985 and subsequently amended to change the name, the number, and the type of options that could be granted, as well as the time period for granting stock options. As of December 31, 2004, no further options may be granted under the 1990 Plan. We granted performance stock options under the 1990 Plan to certain executive officers. These granted options have an exercise price per share of not less than the market value at the date of issuance and are fully vested and exercisable. During 1996, we adopted the 1996 Stock Option Plan for Nonexecutive Employees and Consultants (the "Nonqualified Plan") to enable us to award nonqualified stock options to nonexecutive employees and consultants who are key to our performance. As of May 2, 2006, no further options may be granted under the Nonqualified Plan. In May 2006, our stockholders approved the adoption of the TETRA Technologies, Inc. 2006 Equity Incentive Compensation Plan. Pursuant to the TETRA Technologies, Inc. 2006 Equity Incentive Compensation Plan, we were authorized to grant up to 1,300,000 shares in the form of stock options (including incentive stock options and nonqualified stock options); restricted stock; bonus stock; stock appreciation rights; and performance awards to employees, consultants, and non-employee directors. As a result of the May 2006 adoption and approval of the TETRA Technologies, Inc. 2006 Equity Incentive Compensation Plan, no further awards may be granted under our other previously existing plans. As of May 4, 2008, no further awards may be granted under the TETRA Technologies, Inc. 2006 Equity Incentive Compensation Plan. In May 2007, our stockholders approved the adoption of the TETRA Technologies, Inc. 2007 Equity Incentive Compensation Plan. In May 2008, our stockholders approved the adoption of the TETRA Technologies, Inc. Amended and Restated 2007 Equity Incentive Compensation Plan, which among other changes, resulted in an increase in the maximum number of shares authorized for issuance. In May 2010, our stockholders approved further amendments to the TETRA Technologies, Inc. Amended and Restated 2007 Equity Incentive Compensation Plan (renamed as the 2007 Long Term Incentive Compensation Plan) which, among other changes, resulted in an additional increase in the maximum number of shares authorized for issuance. Pursuant to the 2007 Long Term Incentive Compensation Plan, we are authorized to grant up to 5,590,000 shares in the form of stock options (including incentive stock options and nonqualified stock options); restricted stock; bonus stock; stock appreciation rights; and performance awards to employees, consultants, and non-employee directors. In May 2011, our stockholders approved the adoption of the TETRA Technologies, Inc. 2011 Long Term Incentive Compensation Plan. Pursuant to this plan, we were authorized to grant up to 2,200,000 shares in the form of stock options, restricted stock, bonus stock, stock appreciation rights, and performance awards to employees, consultants, and non-employee directors. On May 3, 2013, shareholders approved the TETRA Technologies, Inc. 2011 Long Term Incentive Compensation Plan which, among other things, increased the number of authorized shares to 5,600,000. In June 2011, the Compressco Partners, L.P. 2011 Long Term Incentive Plan ("CCLP Long Term Incentive Plan") was adopted by the board of directors of CCLP’s general partner. The CCLP Long Term Incentive Plan provides for grants of restricted units, phantom units, unit awards and other unit-based awards up to a plan maximum of 1,537,122 common units. On May 3, 2016, shareholders approved the TETRA Technologies, Inc. Third Amended and Restated 2011 Long Term Incentive Compensation Plan which, among other things, increased the number of authorized shares to 11,000,000. Grants of Equity Awards by CCLP During each of the three years ended December 31, 2017, CCLP granted restricted unit, phantom unit, or performance phantom unit awards to certain employees, officers, and directors of its general partner or of our employees. Awards of restricted units and phantom units generally vest over a three year period. Awards of performance phantom units cliff vest at the end of a performance period and are settled based on achievement of related performance measures over the performance period. Phantom units are notional units that entitle the grantee to receive a common unit upon the vesting of the award. Each of the phantom unit and performance phantom unit awards includes distribution equivalent rights that enable the recipient to receive additional units equal in value to the accumulated cash distributions made on the units subject to the award from the date of grant. Accumulated distributions associated with each underlying unit are payable upon settlement of the related phantom unit award (and are forfeited if the related award is forfeited). The following is a summary of CCLP’s equity award activity for the year ended December 31, 2017:
|  | Units |  | Weighted Average Grant Date Fair Value Per Unit
|  | (In Thousands) |  |
Nonvested units outstanding at December 31, 2016 |  | 609 |  |  | $ | 13.41 |
Units granted(1) |  | 290 |  |  | 8.40 |
Units cancelled |  | (173 | ) |  | 16.11 |
Units vested |  | (257 | ) |  | 13.17 |
Nonvested units outstanding at December 31, 2017(2) |  | 469 |  |  | $ | 9.31 |
(1) | The number excludes 289,830 performance-based phantom units, which represents the additional number of common units that would be issued if the maximum level of performance under the awards is achieved.
(2) The number of units granted shown above excludes 176,159 performance-based phantom units, which, when combined with the 18,226 granted (net of 2017 forfeitures), represents the maximum number of common units that would be issued if the maximum level of performance under the awards is achieved. The number of units actually issued under the awards may range from zero to 352,318. Stock Options The weighted average fair value of options granted during the years ended December 31, 2017, 2016, and 2015, was $2.01, $3.16, and $3.17, respectively, using the Black-Scholes option valuation model with the following weighted average assumptions:
|  | Year Ended December 31,
|  | 2017 |  | 2016 |  | 2015
Expected stock price volatility |  | 53% |  |  | 52% |  |  | 49% to 51% |
Expected life of options |  | 4.5 years |  |  | 4.6 years |  |  | 4.6 years |
Risk free interest rate |  | 1.8% |  |  | 1.2% |  |  | 1.41% to 1.51% |
Expected dividend yield |  | — |  |  | — |  |  | — |
The risk-free interest rate is based on the U.S. Treasury yield curve in effect on the grant date for a period commensurate with the estimated expected life of the stock options. Expected volatility is based on the historical volatility of our stock over the period commensurate with the expected life of the stock options and other factors. The dividend yield is based on the current annualized dividend rate in effect during the quarter in which the grant was made. At the time of the stock option grants during each of the years ended December 31, 2017, 2016 and 2015, we had not historically paid any dividends and did not expect to pay any dividends during the expected life of the stock options. The following is a summary of stock option activity for the year ended December 31, 2017:
|  | Shares Under Option |  | Weighted Average Option Price Per Share |  | Weighted-Average Remaining Contractual Life |  | Aggregate Intrinsic Value (in thousands)
|  | (In Thousands) |  |  |  |  |  |
Outstanding at January 1, 2017 |  | 4,387 |  |  | $ | 9.81 |  |  |  |  |
Options granted |  | 1,486 |  |  | 4.46 |  |  |  |  |
Options cancelled |  | (646 | ) |  | 7.34 |  |  |  |  |
Options exercised |  | — |  |  | — |  |  |  |  |
Options expired |  | (10 | ) |  | $ | 14.02 |  |  |  |  |
Outstanding at December 31, 2017 |  | 5,217 |  |  | $ | 8.59 |  |  | 5.7 |  | $ | 308 |
Expected to vest at December 31, 2017 |  | 5,217 |  |  | $ | 8.59 |  |  | 5.7 |  | $ | 308 |
Exercisable at December 31, 2017 |  | 3,642 |  |  | $ | 10.07 |  |  | 4.4 |  | $ | 239 |
Intrinsic value is the difference between the market value of our stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. The total intrinsic value of stock options exercised during December 31, 2017, 2016, and 2015, was approximately $0.0 million, $0.1 million, and $0.2 million, respectively. At December 31, 2017, total unrecognized compensation cost related to unvested stock options of $2.9 million, is expected to be recognized over a weighted-average remaining service period of 1.60 years. Restricted Stock Restricted stock awards are periodically granted to key employees, including grants for employment inducements, as well as to members of our Board of Directors. Employee awards provide for vesting periods ranging from three to five years. Non-employee director grants vest in full before the first anniversary of the grant. Upon vesting of these grants, shares are issued to award recipients. The following is a summary of activity for our outstanding restricted stock awards for the year ended December 31, 2017:
|  | Shares |  | Weighted Average Grant Date Fair Value Per Share
|  | (In Thousands) |  |
Nonvested restricted shares outstanding at December 31, 2016 |  | 805 |  |  | $ | 7.60 |
Granted |  | 1,146 |  |  | 4.18 |
Vested |  | (780 | ) |  | 6.33 |
Cancelled/Forfeited |  | (135 | ) |  | 5.41 |
Nonvested restricted shares outstanding at December 31, 2017 |  | 1,036 |  |  | $ | 5.06 |
Total compensation cost recognized for restricted stock awards was $4.0 million, $8.4 million, and $5.4 million for the years ended December 31, 2017, 2016, and 2015, respectively. Total unrecognized compensation cost at December 31, 2017, related to restricted stock awards is approximately $3.9 million which is expected to be recognized over a weighted-average remaining amortization period of 1.75 years. During the years ended December 31, 2017, 2016, and 2015, the total fair value of shares vested was $4.8 million, $8.4 million and $4.8 million, respectively. During 2017, 2016, and 2015, we received 101,669, 254,858 and 57,336 shares, respectively, of our common stock related to the vesting of certain employee restricted stock. Such surrendered shares received by us are included in treasury stock. At December 31, 2017, net of options previously exercised pursuant to our various equity compensation plans, we have a maximum of 3,646,152 shares of common stock issuable pursuant to awards previously granted and outstanding and awards authorized to be granted in the future. Cash-Settled Stock Appreciation Rights During the third quarter of 2017, we issued a stand-alone, cash-settled stock appreciation rights ("SAR") award to an executive officer. This award is valued by using the Black Scholes option valuation model and such fair value is recognized based on the portion of the requisite service period satisfied as of each valuation date. The fair valuation of the stock appreciation rights liability is increased by, among other factors, increases in our common stock price, and by increases in the volatility of our common stock price. This stock appreciation rights award is reflected as an accrued liability in our consolidated balance sheet. Increases (or decreases) in the fair value of the stock appreciation rights award will increase (decrease) the associated liability and result in future adjustments to earnings for the associated valuation losses (gains). The following table presents the 2017 changes in our outstanding SARs and the associated weighted average exercise price:
|  | Number of SARs |  | Weighted Average Fair Value |  | Weighted Average Exercise Price
|  | (In Thousands) |  |  |  |
Outstanding at December 31, 2016 |  | — |  |  | $ | — |  |  | $ | — |
Granted |  | 134 |  |  | 2.94 |  |  | 4.51 |
Exercised |  | — |  |  | — |  |  | — |
Forfeited |  | — |  |  | — |  |  | — |
Outstanding at December 31, 2017 |  | 134 |  |  | $ | 2.94 |  |  | $ | 4.51 |
We recognized compensation expense associated with our outstanding SARs of $0.1 million in 2017. Outstanding SARs had total intrinsic values of $0.0 million at year-end 2017. We used the following assumptions to determine the fair value of the SARs granted in 2017:
|  | Year Ended December 31,
|  | 2017
Expected stock price volatility |  | 63.2 | %
Expected life of SARs |  | 9.1 years |
Risk free interest rate |  | 2.37 | %
Expected dividend yield |  | — |

X
- 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 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration