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Share Based Compensation Plans
12 Months Ended
Dec. 31, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share Based Compensation Plans

NOTE 15 — SHARE BASED COMPENSATION PLANS

Successor’s Management Incentive Plan

On September 1, 2016, we adopted the Titan Energy, LLC Management Incentive Plan (the “MIP”) for the employees, directors and individual consultants of us and our affiliates. On October 26, 2016, the MIP was amended and restated to increase the number of shares that may be issued. The MIP permits the grant of options, phantom shares and restricted and unrestricted common shares, as well as dividend equivalent rights. Subject to adjustment in accordance with the MIP, a maximum of 655,555 common shares may be issued pursuant to awards under the MIP. Common Shares subject to forfeited awards or withheld to satisfy exercise prices or tax withholding obligations will again be available for delivery pursuant to other awards. The MIP has a term of 10 years and will be administered by the Board of Directors, which may delegate to a committee or the Company’s chief executive officer.  On September 1, 2016, 138,750 common shares from the MIP were issued, at a grant date fair value of $4.82 per share, and vested immediately as the service inception date was the date of the Chapter 11 Filings and the service completion date was the Plan Effective Date, resulting in $0.7 million of non-cash compensation expense recorded in general and administrative expenses on the consolidated statement of operations for the Predecessor period from January 1, 2016 through August 31, 2016. Additionally, from September 1, 2016 through December 31, 2016, 438,537 common shares from the MIP were issued, at a grant date fair value of $4.82 per share, 31,120 of which vested immediately and with remaining vesting 33% on each of the next three anniversaries of the date of grant, resulting in $0.4 million of non-cash compensation expense recorded in general and administrative expenses on the consolidated statement of operations for the Successor period from September 1, 2016 through December 31, 2016. Of these shares, 18,500 were forfeited in the Successor period from September 1, 2016 through December 31, 2016.  The grant date fair value of the common shares issued was determined in connection with our estimate of the equity value of the Successor utilizing the discounted cash flow method (see Notes 3 and 9).

Of the 388,917 non-vested common shares outstanding under the MIP at December 31, 2016, 128,340 common shares will vest within the following twelve months. At December 31, 2016, we had $1.7 million in unrecognized compensation expense related to unvested common shares outstanding under the MIP based upon the fair value of the awards, which is expected to be recognized over a weighted average period of 1.7 years.

Predecessor’s 2012 Long-Term Incentive Plan

Our Predecessor’s 2012 Long-Term Incentive Plan (“2012 LTIP”), effective March 2012, provided incentive awards to officers, employees and directors and employees of our Predecessor’s general partner and its affiliates, consultants and joint venture partners (collectively, the “Participants”), who performed services for our Predecessor. The 2012 LTIP was administered by the board of our Predecessor’s general partner, a committee of the board or the board (or committee of the board) of an affiliate (the “LTIP Committee”). Under the 2012 LTIP, the LTIP Committee granted awards of phantom units, restricted units or unit options.

Predecessor’s 2012 LTIP Phantom Units

Phantom units represented rights to receive a common unit, an amount of cash or other securities or property based on the value of a common unit, or a combination of common units and cash or other securities or property upon vesting. Phantom units were subject to terms and conditions determined by the LTIP Committee, which included vesting restrictions. In tandem with phantom unit grants, the LTIP Committee granted distribution equivalent rights (“DERs”), which were the right to receive an amount in cash, securities, or other property equal to, and at the same time as, the cash distributions or other distributions of securities or other property made by our Predecessor with respect to a common unit during the period that the underlying phantom unit was outstanding. During the Predecessor period from January 1, 2016 through August 31, 2016 and the years ended December 31, 2015 and 2014, our Predecessor paid approximately $15,000, $0.7 million and $2.0 million, respectively, with respect to the 2012 LTIP’s DERs. These amounts were recorded as reductions of our Predecessor’s partners’ capital (deficit) on our Predecessor’s consolidated balance sheets.

For the Predecessor year ended December 31, 2014, the 2012 LTIP phantom unit activity was as follows: Outstanding beginning of year: 839,808; Granted: 264,173; Vested: 274,414; Forfeited: 30,375; Outstanding end of year: 799,192.  For the Predecessor year ended December 31, 2015, the 2012 LTIP phantom unit activity was as follows: Outstanding beginning of year: 799,192; Granted: 9,730; Vested: 472,278; Forfeited: 34,539; Outstanding end of year: 302,105. For the Predecessor period from January 1, 2016 through August 31, 2016, the 2012 LTIP phantom unit activity was as follows: Outstanding beginning of year: 302,105; Granted: 30,000; Vested: 24,679; Forfeited: 60,639; Outstanding end of year: none.  As a result of the Chapter 11 Filings, our Predecessor’s 2012 LTIP phantom units were cancelled.

During the Predecessor years ended December 31, 2015 and 2014, our Predecessor recognized 2012 LTIP unit based compensation expense for phantom units of $4.1 million and $6.4 million, respectively, which was recorded in general and administrative expenses on our Predecessor’s consolidated statements of operations.  During the Predecessor period from January 1, 2016 through August 31, 2016 our Predecessor recognized 2012 LTIP unit based compensation expense for phantom units of $0.5 million, including $0.8 million of remaining unrecognized compensation expense due to the 2012 LTIP cancellation, which was recorded in general and administrative expenses on our Predecessor’s consolidated statement of operations.

Predecessor’s 2012 LTIP Unit Options

A unit option was the right to purchase our Predecessor’s common unit in the future at a predetermined price (the exercise price). The exercise price of each option was determined by the LTIP Committee and may be equal to or greater than the fair market value of a common unit on the date the option was granted. The LTIP Committee determined the vesting and exercise restrictions applicable to an award of options, if any, and the method by which the exercise price may be paid by the Participant. Unit option awards expired 10 years from the date of grant.

For the Predecessor year ended December 31, 2014, the 2012 LTIP unit option activity was as follows: Outstanding beginning of year: 1,482,675; Granted: none; Exercised: none; Forfeited: 24,375; Outstanding end of year: 1,458,300.  For the Predecessor year ended December 31, 2015, the 2012 LTIP unit option activity was as follows: Outstanding beginning of year: 1,458,300; Granted: none; Exercised: none; Forfeited: 103,775; Outstanding end of year: 1,354,525. For the Predecessor period from January 1, 2016 through August 31, 2016, the 2012 LTIP unit option activity was as follows: Outstanding beginning of year: 1,354,525; Granted: none; Exercised: none; Forfeited: 40,689; Outstanding end of year: none.  As a result of the Chapter 11 Filings, our Predecessor’s 2012 LTIP unit options were cancelled.

During the Predecessor period from January 1, 2016 through August 31, 2016 and the years ended December 31, 2015 and 2014, our Predecessor recognized 2012 LTIP unit based compensation expense for unit options of approximately $31,000, $0.8 million, and $1.7 million, respectively, which was recorded in general and administrative expenses on our Predecessor’s consolidated statements of operations.

Predecessor’s 2012 LTIP Restricted Units

Restricted units were actual common units to be issued to a Participant that were subject to vesting restrictions and evidenced in such manner as the LTIP Committee deemed appropriate, including book-entry registration or issuance of one or more unit certificates. Prior to or upon the grant of an award of restricted units, the LTIP Committee would condition the vesting or transferability of the restricted units upon continued service, the attainment of performance goals or both. During the Predecessor period from January 1, 2016 through August 31, 2016 and the years ended December 31, 2015 and 2014, there were no restricted units granted or outstanding.  As a result of the Chapter 11 Filings, our Predecessor’s 2012 LTIP was cancelled.