Share-Based Compensation

We have share-based compensation plans that permit the grant of options, stock appreciation rights, RSAs, restricted share units (“RSUs”), performance share awards, performance unit awards (“PUs”), other share-based awards and cash-based awards to any employee, non-employee directors and other individual service providers or any affiliate. In addition, we also have share-based compensation provisions under our Employee Share Purchase Plan (“ESPP”). For RSAs and RSUs, compensation expense is recognized on a straight-line basis over the requisite service period for the separately vesting portion of each award. For PUs, compensation expense is recognized on a straight-line basis over the requisite service period for the entire award.

The provisions of each award vary based on the type of award granted and are determined by the Compensation Committee of our Board of Directors. Those awards, such as stock options that are based on a specific contractual term, will be granted with a term not to exceed 10 years. Upon grant of an RSA, the recipient has the rights of a shareholder, including but not limited to the right to vote such shares and the right to receive any dividends paid on such shares, but not the right to disposition prior to vesting. Recipients of RSUs do not have the rights of a shareholder until such date as the shares are issued or transferred to the recipient. As of December 31, 2017, approximately 33 million shares were available for grant under our share-based compensation plans.

Share-Based Compensation Expense

We recognized the following share-based compensation expense during each of the years ended December 31, 2017, 2016 and 2015:



	Year Ended December 31,
(Dollars in millions)	2017		2016		2015
Share-based Compensation	$	70	$	87	$	73
Related Tax (Provision) Benefit	—		—		14

Options

Stock options were granted with an exercise price equal to or greater than the fair market value of our shares as of the date of grant. We used the Black-Scholes option pricing model to determine the fair value of stock options awarded. The estimated fair value of our stock options was expensed over their vesting period, which was generally one to four years. There were no stock options granted during 2017, 2016 or 2015. During 2017 and 2016, no stock options were exercised. The intrinsic value of stock options exercised during 2015 was $15 million. All options were fully vested.

A summary of option activity for the year ended December 31, 2017, is presented below:



	Options		Weighted Average Exercise Price		Weighted Average Remaining Term	Aggregate Intrinsic Value
	(In thousands)					(In thousands)
Outstanding at December 31, 2016	598		$	12.59	0.91 years	$	—
Exercised	—		—
Expired	(398	)	10.42
Outstanding and Vested at December 31, 2017	200		16.92		0.89 years	—

Exercisable at December 31, 2017	—		—		0.00 years	—

Restricted Share Awards and Restricted Share Units

RSAs and RSUs vest based on continued employment, generally over a three-year period. The fair value of RSAs and RSUs is determined based on the closing price of our shares on the date of grant. The total fair value, less assumed forfeitures, is expensed over the vesting period. The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2017, 2016 and 2015 was $4.26, $6.20 and $11.94, respectively. The total fair value of RSAs and RSUs vested during the years ended December 31, 2017, 2016 and 2015 was $30 million, $38 million and $37 million, respectively. As of December 31, 2017, there was $59 million of unrecognized compensation expense related to unvested RSAs and RSUs, which is expected to be recognized over a weighted average period of two years. A summary of RSA and RSU activity for the year ended December 31, 2017 is presented below:



	RSA		Weighted Average Grant Date Fair Value		RSU		Weighted Average Grant Date Fair Value
	(In thousands)				(In thousands)
Non-Vested at December 31, 2016	137		$	17.42	12,794		$	9.15
Granted	—		—		10,876		4.26
Vested	(86	)	17.35		(5,946	)	9.56
Forfeited	(11	)	16.35		(2,455	)	8.63
Non-Vested at December 31, 2017	40		17.87		15,269		5.58

Performance Units

The performance units we granted in 2017, 2016 and 2015 vest over three years and the performance units we granted prior to 2015 vest at the end of a three-year period assuming continued employment and the Company’s achievement of certain market-based performance goals. Depending on the performance levels achieved in relation to the predefined targets, shares may be issued for up to 200% of the units awarded. If the established performance goals are not met, the performance units will expire unvested and no shares will be issued. The grant date fair value of the performance units we have granted was determined through use of the Monte Carlo simulation method. The assumptions used in the Monte Carlo simulation during the year ended December 31, 2017, included a weighted average risk-free rate of 1.17%, volatility of 67.0% and a zero dividend yield. The weighted-average grant date fair value of the performance units we granted during the years ended December 31, 2017, 2016 and 2015 was $6.06, $5.11 and $10.45, respectively. For the year ended December 31, 2017, 145 thousand shares were issued for the performance units related to the departure of a former executive officer. The total fair value of these shares was $1 million. For the years ended December 31, 2016 and 2015 we did not issue any shares. As of December 31, 2017, there was $9 million of unrecognized compensation expense related to performance units, which is expected to be recognized over a weighted average period of one year.

A summary of performance unit activity for the year ended December 31, 2017, is presented below:



	Performance Units		Weighted Average Grant Date Fair Value
	(In thousands)
Non-vested at December 31, 2016	1,932		$	7.08
Granted	3,070		6.06
Vested	(145	)	6.25
Forfeited	(1,767	)	7.15
Non-vested at December 31, 2017	3,090		6.07

Employee Stock Purchase Plan

In June 2016, our shareholders adopted our ESPP and approved 12 million shares to be reserved for issuance under the plan. The ESPP permits eligible employees to make payroll deductions to purchase Weatherford stock. Each offering period has a six-month duration beginning on either March 1 or September 1. Shares are purchased at 90% of the lower of the closing price for our common stock on the first or last day of the offering period. We issued 3 million shares under the ESPP as of December 31, 2017.