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Sep. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK COMPENSATION | STOCK COMPENSATION Stock Plans On April 18, 2013, the Company’s stockholders approved the Owens Corning 2013 Stock Plan (the “2013 Stock Plan”) which replaced the 2010 Stock Plan, whose available shares were rolled into and made available under the 2013 Stock Plan. The 2013 Stock Plan authorizes grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units, bonus stock awards and performance stock awards. At September 30, 2015, the number of shares remaining available under the 2013 Stock Plan for all stock awards was 2.0 million. Stock Options The Company did not grant any stock options during the nine months ended September 30, 2015. The Company calculates a weighted-average grant-date fair value using a Black-Scholes valuation model for options granted. Compensation expense for options is measured based on the fair market value of the option on the date of grant, and is recognized on a straight-line basis over a four year vesting period. In general, the exercise price of each option awarded was equal to the market price of the Company’s common stock on the date of grant and an option’s maximum term is 10 years. During the three and nine months ended September 30, 2015 the Company recognized expense of $1 million and $3 million, respectively, related to the Company's stock options. During the three and nine months ended September 30, 2014, the Company recognized expense of $1 million, and $4 million related to the Company’s stock options, respectively. As of September 30, 2015, there was $5 million of total unrecognized compensation cost related to stock options. That cost is expected to be recognized over a weighted-average period of 1.99 years. The total aggregate intrinsic value of options outstanding as of September 30, 2015 was $23 million. The following table summarizes the Company’s stock option activity:
The following table summarizes information about the Company’s options outstanding and exercisable:
Restricted Stock Awards and Restricted Stock Units The Company has granted restricted stock awards and restricted stock units (collectively referred to as “restricted stock”) as a part of its long-term incentive plan. Compensation expense for restricted stock is measured based on the market price of the stock at date of grant and is recognized on a straight-line basis over the four-year vesting period. Stock restrictions are subject to alternate vesting plans for death, disability, approved early retirement and involuntary termination, over various periods ending in 2019. During the three and nine months ended September 30, 2015, the Company recognized expense of $5 million and $13 million, respectively, related to the Company's restricted stock. During the three and nine months ended September 30, 2014, the Company recognized expense of $4 million and $13 million, respectively, related to the Company’s restricted stock. As of September 30, 2015, there was $30 million of total unrecognized compensation cost related to restricted stock. That cost is expected to be recognized over a weighted-average period of 2.73 years. The total fair value of shares vested during the nine months ended September 30, 2015 and 2014 was $17 million and $14 million, respectively. The following table summarizes the Company’s restricted stock activity:
Performance Stock Awards and Performance Stock Units The Company has granted performance stock awards and performance stock units (collectively referred to as “PSUs”) as a part of its long-term incentive plan. All outstanding performance grants will fully settle in stock. The amount of stock ultimately distributed from the 2015 grants is contingent on meeting internal company-based metrics or an external-based stock performance metric. The amount of stock ultimately distributed from 2014 and prior grants is contingent on meeting an external based stock performance metric. In the nine months ended September 30, 2015, the Company granted both internal company-based and external-based metric PSUs. Internal based metrics The internal company-based metrics vest after a three-year period and are based on return on invested capital over a three-year period. The amount of stock distributed will vary from 0% to 300% of PSUs awarded depending on performance versus the company-based metrics. The initial fair value for all internal company-based metric PSUs assumes that the performance goals will be achieved and is based on the grant date stock price. This assumption is monitored quarterly and if it becomes probable that such goals will not be achieved or will be exceeded, compensation expense recognized will be adjusted and previous surplus compensation expense recognized will be reversed or additional expense will be recognized. The expected term represents the period from the grant date to the end of the three-year performance period. Pro-rata vesting may be utilized in the case of death or disability, and awards if earned will be paid at the end of the three-year period. External based metrics The external-based metric vests after a three-year period. Outstanding grants issued in 2015 will be based on the Company's total stockholder return relative to the performance of the S&P Building & Construction Industry Index. Outstanding grants issued prior to 2015 are based on the Company's total stockholder return relative to the performance of the companies in the S&P 500 Index. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on the relative stockholder return performance. The Company estimated the fair value of the external-based metric performance stock grants using a Monte Carlo simulation that uses various assumptions that include expected volatility of 29.2%, and a risk free interest rate of 1.1% both of which were based on an expected term of 2.90 years. Expected volatility was based on a benchmark study of our peers. The risk-free interest rate was based on zero coupon United States Treasury bills at the time of grant. The expected term represents the period from the grant date to the end of the three-year performance period. Compensation expense for external based metric PSUs is measured based on the grant date fair value and is recognized on a straight-line basis over the vesting period. Pro-rata vesting may be utilized in the case of death or disability, and awards if earned will be paid at the end of the three-year period. During the three and nine months ended September 30, 2015, the Company recognized expense of $2 million and $5 million, respectively, related to the Company's PSUs. During the three and nine months ended September 30, 2014, the Company recognized expense of $1 million and $4 million related to the Company’s PSUs, respectively. As of September 30, 2015, there was $11 million of total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of 1.80 years. The following table summarizes the Company’s PSU activity:
Employee Stock Purchase Plan On April 18, 2013, the Company’s stockholders approved the Owens Corning Employee Stock Purchase Plan (“ESPP”). The ESPP is a tax-qualified plan under Section 423 of the Internal Revenue Code. The purchase price of shares purchased under the ESPP is equal to 85% of the lower of the fair market value of shares of Owens Corning common stock at the beginning or ending of the offering period, which is a six-month period ending on May 31 and November 30 of each year. At the approval date, 2 million shares were available for purchase under the ESPP. As of September 30, 2015, 1.7 million shares remain available for purchase. During the three and nine months ended September 30, 2015 the Company recognized expense of less than $1 million and $1 million, respectively, related to the Company's ESPP. During the three and nine months ended September 30, 2014, the Company recognized expense of less than $1 million, and $1 million, respectively, related to the Company’s ESPP. As of September 30, 2015, there was less than $1 million of total unrecognized compensation cost related to the ESPP. |
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