STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

NOTE 19. STOCK-BASED COMPENSATION

Stock-based compensation expense was allocated to the operating segments for the portion related to employees whose compensation would be included in cost of goods sold with the remainder recognized in corporate/other. There were no significant capitalized stock-based compensation costs. Stock-based compensation granted includes stock options, performance stock awards, restricted stock awards and deferred directors’ compensation. Stock-based compensation expense was as follows:



	Years ended December 31,
	2019			2018			2017
	($ in millions)
Stock-based compensation	$	9.4		$	19.3		$	19.1
Mark-to-market adjustments	(1.8		)	(10.7		)	4.5
Total expense	$	7.6		$	8.6		$	23.6

Stock Plans

Under the stock option and long-term incentive plans, options may be granted to purchase shares of our common stock at an exercise price not less than fair market value at the date of grant, and are exercisable for a period not exceeding ten years from that date. Stock options, restricted stock and performance shares typically vest over three years. We issue shares to settle stock options, restricted stock and share-based performance awards. In 2019, 2018 and 2017, long-term incentive awards included stock options, performance share awards and restricted stock. The stock option exercise price was set at the fair market value of common stock on the date of the grant, and the options have a ten-year term.

Stock option transactions were as follows:



						Exercisable
	Shares		Option Price	Weighted-Average Option Price		Options	Weighted-Average Exercise Price
Outstanding at January 1, 2019	5,864,216		$13.14-32.94	$	24.40	3,571,732	$	22.27
Granted	1,578,200		26.26-26.26	26.26
Exercised	(135,731	)	13.14-15.68	14.10
Canceled	(96,134	)	13.14-32.94	28.19
Outstanding at December 31, 2019	7,210,551		$13.14-32.94	$	24.95	4,648,574	$	23.07

At December 31, 2019, the average exercise period for all outstanding and exercisable options was 77 months and 63 months, respectively. At December 31, 2019, the aggregate intrinsic value (the difference between the exercise price and market value) for outstanding options was $5.0 million and exercisable options was $5.0 million. The total intrinsic value of options exercised during the years ended December 31, 2019, 2018 and 2017 was $1.3 million, $2.9 million and $26.5 million, respectively.

The total unrecognized compensation cost related to unvested stock options at December 31, 2019 was $9.9 million and was expected to be recognized over a weighted-average period of 1.3 years.

The following table provides certain information with respect to stock options exercisable at December 31, 2019:



Range of Exercise Prices	Options Exercisable	Weighted-Average Exercise Price		Options Outstanding	Weighted-Average Exercise Price
Under $20.00	1,440,150	$	13.87	1,440,150	$	13.87
$20.00 - $26.00	1,288,236	23.77		1,288,236	23.77
Over $26.00	1,920,188	29.49		4,482,165	28.85
	4,648,574			7,210,551

At December 31, 2019, common shares reserved for issuance and available for grant or purchase under the following plans consisted of:



	Number of Shares
Stock Option Plans	Reserved for Issuance	Available for Grant or Purchase⁽¹⁾
2000 long term incentive plan	42,130	—
2003 long term incentive plan	187,184	—
2006 long term incentive plan	164,138	—
2009 long term incentive plan	1,701,404	—
2014 long term incentive plan	1,821,795	—
2016 long term incentive plan	2,285,000	—
2018 long term incentive plan	9,583,249	7,646,099
Total under stock option plans	15,784,900	7,646,099



	Number of Shares
Stock Purchase Plans	Reserved for Issuance	Available for Grant or Purchase
1997 stock plan for non-employee directors	483,860	302,796


(1)	All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 1,589,950 shares.

Under the stock purchase plans, our non-employee directors may defer certain elements of their compensation into shares of our common stock based on fair market value of the shares at the time of deferral. Non-employee directors annually receive stock grants as a portion of their director compensation. Of the shares reserved under the stock purchase plans at December 31, 2019, 181,064 shares were committed.

Performance share awards are denominated in shares of our stock and are paid half in cash and half in stock. Payouts for performance share awards are based on two criteria: (1) 50% of the award is based on Olin’s total shareholder returns over the applicable three-year performance cycle in relation to the total shareholder return over the same period among a portfolio of public companies which are selected in concert with outside compensation consultants and (2) 50% of the award is based on Olin’s net income over the applicable three-year performance cycle in relation to the net income goal for such period as set by the compensation committee of Olin’s board of directors. The expense associated with performance shares is recorded based on our estimate of our performance relative to the respective target. If an employee leaves the company before the end of the performance cycle, the performance shares may be prorated based on the number of months of the performance cycle worked and are settled in cash instead of half in cash and half in stock when the three-year performance cycle is completed. Performance share transactions were as follows:



	To Settle in Cash				To Settle in Shares
	Shares		Weighted-Average Fair Value per Share		Shares		Weighted-Average Fair Value per Share
Outstanding at January 1, 2019	670,303		$	19.89	490,700		$	21.58
Granted	149,950		26.26		149,950		26.26
Paid/Issued	(193,408	)	19.89		(128,275	)	13.14
Converted from shares to cash	2,296		29.94		(2,296	)	29.94
Canceled	(311,431	)	19.13		(206,004	)	19.15
Outstanding at December 31, 2019	317,710		$	17.18	304,075		$	28.91
Total vested at December 31, 2019	192,143		$	17.18	177,558		$	29.77

The summary of the status of our unvested performance shares to be settled in cash were as follows:



	Shares		Weighted-Average Fair Value per Share
Unvested at January 1, 2019	105,617		$	19.89
Granted	149,950		26.26
Vested	(127,776	)	17.18
Canceled	(2,224	)	24.35
Unvested at December 31, 2019	125,567		$	17.18

At December 31, 2019, the liability recorded for performance shares to be settled in cash totaled $3.3 million. The total unrecognized compensation cost related to unvested performance shares at December 31, 2019 was $5.6 million and was expected to be recognized over a weighted-average period of 1.2 years.