STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

NOTE 17. 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,
	2021		2020		2019
	($ in millions)
Stock-based compensation	$	28.4	$	17.5	$	9.4
Mark-to-market adjustments	24.7		4.8		(1.8)
Total expense	$	53.1	$	22.3	$	7.6

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 2021, 2020 and 2019, 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, 2021	9,127,375	$13.14-32.94	$	23.06	5,671,371	$	24.57
Granted	1,154,700	28.99-58.59	30.63
Exercised	(3,378,783)	13.14-32.94	21.42
Canceled	(923,056)	13.14-32.94	20.28
Outstanding at December 31, 2021	5,980,236	13.14-58.59	$	25.88	3,736,639	$	26.60

At December 31, 2021, the average exercise period for all outstanding and exercisable options was 79 months and 66 months, respectively. At December 31, 2021, the aggregate intrinsic value (the difference between the exercise price and market value) for outstanding options was $189.6 million, which includes exercisable options of $115.7 million. The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $73.1 million, $0.6 million and $1.3 million, respectively.

The total unrecognized compensation cost related to unvested stock options at December 31, 2021 was $9.9 million and was expected to be recognized over a weighted-average period of 1.2 years.

The following table provides certain information with respect to stock options exercisable at December 31, 2021:


Range of Exercise Prices	Options Exercisable	Weighted-Average Exercise Price		Options Outstanding	Weighted-Average Exercise Price
Under $22.00	665,236	$	15.23	1,598,246	$	16.46
$22.00 - $28.00	1,353,803	26.54		1,600,790	26.49
Over $28.00	1,717,600	31.06		2,781,200	30.95
	3,736,639			5,980,236

At December 31, 2021, 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	13,000	—
2003 long term incentive plan	74,366	—
2006 long term incentive plan	44,362	—
2009 long term incentive plan	237,117	—
2014 long term incentive plan	750,556	—
2016 long term incentive plan	1,549,833	—
2018 long term incentive plan	9,389,001	4,790,339
2021 long term incentive plan	2,750,000	2,750,000
Total under stock option plans	14,808,235	7,540,339


	Number of Shares
Stock Purchase Plans	Reserved for Issuance	Available for Grant or Purchase
1997 stock plan for non-employee directors	387,368	144,143

(1)All available to be issued as stock options, but includes a sub-limit for all types of stock awards of 2,952,130 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, 2021, 243,225 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. Granted shares reflects changes in assumptions associated with the expected achievement of the aforementioned criteria. 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, 2021	393,205	$	24.84	345,430	$	21.37
Granted	399,669	24.25		364,287	24.15
Paid/Issued	(25,605)	24.84		(19,267)	32.94
Converted from shares to cash	135,237	21.45		(135,237)	21.45
Canceled	(119,232)	26.69		(118,456)	19.18
Outstanding at December 31, 2021	783,274	$	57.57	436,757	$	23.75
Total vested at December 31, 2021	592,914	$	57.57	259,010	$	22.81

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, 2021	176,250	$	24.84
Granted	399,669	24.25
Vested	(266,327)	57.57
Canceled	(119,232)	26.69
Unvested at December 31, 2021	190,360	$	57.57

At December 31, 2021, the liability recorded for performance shares to be settled in cash totaled $34.1 million. The total unrecognized compensation cost related to unvested performance shares at December 31, 2021 was $15.4 million and was expected to be recognized over a weighted-average period of 1.7 years.