STOCK INCENTIVE PLANS

3 Months Ended

Mar. 31, 2015

STOCK INCENTIVE PLANS

STOCK INCENTIVE PLANS

11)STOCK INCENTIVE PLANS

In 2010, we adopted the Chemtura Corporation 2010 Long-Term Incentive Plan (the “2010 LTIP”).  The 2010 LTIP provides for grants of nonqualified stock options (“NQOs”), incentive stock options (“ISOs”), stock appreciation rights, dividend equivalent rights, stock units, bonus stock, performance awards, share awards, restricted stock, time-based restricted stock units (“RSUs”) and performance-based RSUs.  The 2010 LTIP provides for the issuance of a maximum of 11 million shares.  Stock options may be granted under the 2010 LTIP at prices equal to the fair market value of the underlying common shares on the date of the grant.  All outstanding stock options will expire not more than ten years from the date of the grant.  Stock issuances can be from treasury shares or newly issued shares.

Share-based compensation expense was $3 million and $4 million for the quarters ended March 31, 2015 and 2014, respectively.  Stock-based compensation expense was primarily reported in SG&A.

Restricted Stock Units and Performance Shares

In March 2015, the compensation and governance committee of the Board (the “Compensation Committee”) approved the grant of 0.2 million time-based RSUs under the 2015 long-term incentive awards (the “2015 Awards”).  These RSUs vest ratably over a three-year period.

In March 2015, the Compensation Committee also approved the grant of 0.2 million performance shares under the 2015 Awards.  The share grant is subject to a performance multiplier of up to 2 times the targeted award.  The performance measurement period is the three calendar year period ending December 31, 2017 and the performance share metric is the relative total shareholder return against the companies comprising the Dow Jones Chemical Index.  The performance shares will be settled as soon as practicable after the performance period but no later than March 15, 2018.  We used the Monte-Carlo simulation model to determine the fair value of the performance shares.  Using this method, the average per share fair value of these awards was $34.91.

Total remaining unrecognized compensation expense associated with all unvested time-based RSUs and performance shares at March 31, 2015 was $20 million, which will be recognized over the weighted average period of approximately 2 years.