Share-Based Compensation |
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation |
SHARE-BASED COMPENSATION
We have granted stock, restricted stock, phantom units and options to purchase common stock to employees, outside directors and a consultant under the Amended and Restated 2003 Stock Incentive Plan, as amended (the “2003 Plan”), 2011 Incentive Plan, as amended (the “2011 Plan”), the 2015 Long-Term Cash Incentive Plan (the “2015 Plan”) and the 2015 Employee Inducement Incentive Plan (the “Inducement Plan”).
The 2003 Plan and 2011 Plan provide for the issuance of 21.0 million shares and 35.0 million shares, respectively, of our common stock that may be in the form of non-qualified stock options, incentive stock options, purchased stock, restricted (non-vested) stock, bonus (unrestricted) stock, stock appreciation rights, phantom units and other share-based performance awards deemed by the Compensation Committee of our Board (the “Compensation Committee”) to be consistent with the purposes of the 2003 Plan and 2011 Plan. As of December 31, 2016, all of the shares under the 2003 Plan have been granted and 26.5 million shares, net of cancellations, have been granted under the 2011 Plan. See Note 23—Subsequent Events for information regarding the approval of additional awards under the 2011 Plan . The 2015 Plan generally provides for cash-settled awards in the form of stock appreciation rights, phantom unit awards, performance unit awards, other-stock based awards and cash awards. As of December 31, 2016, 6.7 million phantom units have been granted under the 2015 Plan. The Inducement Plan initially provided for the issuance of up to 1.0 million shares of our common stock in the form of non-qualified stock options, restricted stock awards, stock appreciation rights, performance awards, phantom stock awards and other stock-based awards deemed by the Compensation Committee to provide us with an opportunity to attract employees. As of December 31, 2016, 0.2 million shares of restricted stock have been granted under the Inducement Plan. In December 2016, the Compensation Committee recommended, and our Board approved, reducing the remaining shares available for issuance under the Inducement Plan to zero.
In August 2012, the Compensation Committee granted the Long-Term Commercial Bonus Awards for Trains 1 and 2 of the SPL Project, which consisted of approximately $60 million in cash awards and 10 million restricted shares of common stock under the 2011 Plan. During the year ended December 31, 2016, the final 25% of the restricted stock awards granted under this award vested.
In February 2013, the Compensation Committee granted the Long-Term Commercial Bonus Awards related to Trains 3 and 4 of the SPL Project under the 2003 Plan and 2011 Plan. A portion of each employee’s Long-Term Commercial Bonus Award for Trains 3 and 4 of the SPL Project was granted as a stock price award (“Stock Price Award”), with vesting of the Stock Price Award conditional on the achievement of minimum average Company stock price hurdles, and a portion was granted as a milestone award (“Milestone Award”), with vesting of the Milestone Award conditional on certain performance milestones relating to financing and constructing Trains 3 and 4 of the SPL Project. As of December 31, 2016, 100% of the Stock Price Awards had vested and 50% of the Milestone Awards had vested. The remaining 20% and 30% of Milestone Awards will vest upon substantial completion of Train 4 of the SPL Project, as defined in the EPC contract for Trains 3 and 4 of the SPL Project, and on the first anniversary thereof, respectively.
In April 2015, the Compensation Committee recommended and our Board approved the 2014-2018 Long-Term Cash Incentive Program (the “2014-2018 LTIP”) under the 2015 Plan. The 2014-2018 LTIP consists of phantom units settled in cash with five consecutive annual performance periods commencing on November 1 and ending on October 31 of each year from November 1, 2013 through October 31, 2018. Awards under the 2014-2018 LTIP are subject to a three-year vesting schedule, with one-third of the phantom units vesting and becoming payable on each of the first, second and third anniversaries of the date of the grant (except for the initial grant for the 2014 performance period, which was subject to a three-year vesting schedule ending on February 1, 2016, 2017 and 2018). The Compensation Committee recommended and our Board approved the termination of the 2014-2018 LTIP in October 2016.
Total share-based compensation expense consisted of the following (in thousands):
The total unrecognized compensation cost at December 31, 2016 relating to non-vested share-based compensation arrangements was $125.3 million, which is expected to be recognized over a weighted average period of 1.7 years.
During the years ended December 31, 2016, 2015 and 2014, we recognized share-based compensation expense of $5.6 million, zero and $10.8 million, respectively, related to the modification of awards resulting from employee terminations.
We have disclosed the deferred tax benefit realized from share-based compensation exercised during the annual period in Note 14—Income Taxes. A valuation allowance equal to the deferred tax asset has been established due to the uncertainty of realizing the tax benefits related to this deferred tax asset.
Restricted Stock
Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the recipient terminates employment with the Company prior to the lapse of the restrictions. For the years ended December 31, 2016, 2015 and 2014, we issued 273,000 shares, 19,000 shares and 550,000 shares, respectively, of restricted stock awards to our employees, executives, directors and a consultant. These awards vest based on service conditions (one, three or four-year service periods), performance conditions and/or market conditions. The amortization of the value of restricted stock grants is accounted for as a charge to compensation expense or capitalized, depending on the nature of services provided by the employee, with a corresponding increase to additional paid-in-capital over the requisite service period.
Grants of restricted stock to employees and non-employee directors that vest based on service and/or performance conditions are measured at the closing quoted market price of our common stock on the grant date. For restricted stock awards granted to non-employees that vest based on service and/or performance conditions, we record compensation cost equal to the fair value of the award at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date. In addition, compensation cost for unvested restricted stock awards to non-employees is adjusted quarterly for any changes in our stock price.
The table below provides a summary of our restricted stock outstanding as of December 31, 2016 and changes during the year ended December 31, 2016 (in thousands, except for per share information):
The weighted average grant date fair value per share of restricted stock granted during the years ended December 31, 2016, 2015 and 2014 was $34.41, $70.43 and $60.09, respectively. The total grant date fair value of restricted stock vested during the years ended December 31, 2016, 2015 and 2014 was $36.3 million, $50.2 million and $84.0 million, respectively.
Phantom Units
Phantom units are share-based awards granted to employees over a vesting period that entitle the grantee to receive the cash equivalent to the value of a share of our common stock upon each vesting. Phantom units are not eligible to receive quarterly distributions. We initially measure compensation cost based on our stock price on the grant date, which is included in accrued liabilities on our Consolidated Balance Sheets and is adjusted quarterly for any changes in our stock price and period of service rendered. During the years ended December 31, 2016, 2015 and 2014, we granted 1.8 million, 5.9 million and 0.1 million phantom units, respectively, to employees, of which 3.9 million and 4.7 million were outstanding as of December 31, 2016 and 2015, respectively. The value of phantom units vested during the years ended December 31, 2016 and 2015 was $78.3 million and $50.0 million, respectively of which $1.1 million and $45.4 million was recorded as part of accrued liabilities on our Consolidated Balance Sheets as of December 31, 2016 and 2015, respectively. There were no vestings of phantom units during the year ended December 31, 2014.
Stock Options
Stock options to employees are valued at the date of grant using a Black-Scholes valuation model and the cost is recognized over the option vesting period. We did not issue any options to purchase shares of our common stock and did not declare dividends on our common stock during the years ended December 31, 2016, 2015 and 2014.
The table below provides a summary of our options outstanding as of December 31, 2016 and changes during the year ended December 31, 2016:
The total intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $17,000, $2.7 million and $11.9 million, respectively. We received $0.1 million, $2.3 million and $10.8 million in the years ended December 31, 2016, 2015 and 2014, respectively, of proceeds from the exercise of stock options.
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