On April 18, 2019, the Company's stockholders approved the Owens Corning 2019 Stock Plan (the “2019 Stock Plan”) which replaced the 2016 Stock Plan. The 2019 Stock Plan authorizes grants of stock options, stock appreciation rights, restricted stock awards, restricted stock units, bonus stock awards, performance stock awards and performance stock units. At December 31, 2022, the number of shares remaining available under the 2019 Stock Plan for all stock awards was 2.6 million.

Stock-based compensation expense included in Marketing and administrative expenses in the accompanying Consolidated Statements of Earnings (Loss) is as follows (in millions):


	Twelve Months Ended December 31,
	2022		2021		2020
Total stock-based compensation expense	$	51	$	50	$	41
Income tax benefit recognized on stock-based compensation expense	$	11	$	14	$	14

The Company has granted stock options under its stockholder approved stock plans. 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 closing market price of the Company’s common stock on the date of grant and an option’s maximum term is 10 years. The volatility assumption was based on a benchmark study of our peers prior to 2014. Starting with the options granted in 2014, the volatility was based on the Company’s historic volatility.

The Company has not granted stock options since the year ended December 31, 2014. As of December 31, 2022, there was no unrecognized compensation cost related to stock options and the exercise prices on outstanding stock options was $37.65.


		Weighted-Average
	Number of Options	Exercise Price		Remaining Contractual Life (in years)	Intrinsic Value (in millions)
Outstanding, December 31, 2021	55,900	$	39.34	1.71	$	3

Exercised	(28,900)	40.93


Outstanding, December 31, 2022	27,000	$	37.65	1.1	$	1
Exercisable, December 31, 2022	27,000	$	37.65	1.1	$	1


	Twelve Months Ended December 31,
	2022		2021		2020
Cash received upon exercise of stock option awards	$	1	$	11	$	2
Income tax benefit received for stock option awards exercised	$	—	$	4	$	—

The Company has granted restricted stock awards and restricted stock units (collectively referred to as “RSUs”) under its stockholder approved stock plans. Compensation expense for restricted stock is measured based on the closing market price of the stock at date of grant and is recognized on a straight-line basis over the vesting period, which is typically three or four years. The Stock Plan allows alternate vesting schedules for death, disability, and retirement.

The following table shows a summary of the Company’s RSU plans:


	Number of RSUs	Weighted- Average Fair Value
Balance at January 1, 2022	1,268,993	$	62.25
Granted	393,834	90.41
Vested	(326,848)	65.87
Forfeited	(59,819)	75.41
Balance at December 31, 2022	1,276,160	$	69.16

As of December 31, 2022, there was $33 million of total unrecognized compensation cost related to RSUs. That cost is expected to be recognized over a weighted-average period of 2.36 years. The total grant date fair value of shares vested during the years ended December 31, 2022, 2021 and 2020 was $22 million, $26 million and $27 million, respectively.

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 2022, 2021 and 2020 grants is contingent on meeting internal company-based metrics or an external-based stock performance metric.

The internal company-based metrics vest after a three-year period and are based on various company-based metrics 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, disability or retirement, and awards, if earned, will be paid at the end of the three-year period.

The external-based metrics vest after a three-year period. Outstanding grants issued in or after 2018 were based on the Company's total stockholder return relative to the performance of the Dow Jones U.S. Construction & Materials Index. The amount of stock distributed will vary from 0% to 200% of PSUs awarded depending on the relative stockholder return performance. The fair value of external-based metric PSUs has been estimated at the grant date using a Monte Carlo simulation that uses various assumptions.


	Twelve Months Ended December 31,
	2022	2021	2020
Expected volatility	41.65%	42.74% — 43.67%	28.43% — 44.83%
Risk free interest rate	1.36%	0.18% — 0.24%	0.15% — 1.43%
Expected term (in years)	2.91	2.56 — 2.90	2.31 — 2.90
Grant date fair value of units granted	$122.69	$99.19 — $127.37	$68.60 — $76.58

The risk-free interest rate was based on zero coupon United States Treasury bills at the grant date. The expected term represents the period from the grant date to the end of the three-year performance period.

As of December 31, 2022, there was $19 million total unrecognized compensation cost related to PSUs. That cost is expected to be recognized over a weighted-average period of 1.64 years. The total grant date fair value of shares vested during the years ended December 31, 2022, 2021 and 2020, was $9 million, $8 million and $9 million, respectively.

The following table shows a summary of the Company's PSU plans:


	Number of PSUs	Weighted- Average Grant Date Fair Value
Balance as of January 1, 2022	309,971	$	74.78
Granted	146,784	98.94
Vested	(140,988)	63.48
Forfeited	(12,051)	80.07
Balance as of December 31, 2022	303,716	$	91.47

The Owens Corning Employee Stock Purchase Plan (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. On April 16, 2020, the Company's stockholders approved the Amended and Restated Owens Corning Employee Stock Purchase Plan which increased the number of shares available for issuance under the plan by 4.2 million shares. As of December 31, 2022, 3.5 million shares remain available for purchase.

Included in total stock-based compensation expense is $6 million, $6 million and $6 million of expense related to the Company's ESPP for the years ended December 31, 2022, 2021 and 2020, respectively. As of December 31, 2022, the Company had $3 million of total unrecognized compensation costs related to the ESPP. Under the outstanding ESPP as of February 14, 2023, employees have contributed $5 million to purchase shares for the current purchase period ending May 31, 2023.


	Twelve Months Ended December 31,
	2022		2021		2020
Total shares purchased by employees	293,364		289,945		366,442
Average purchase price	$	74.19	$	66.68	$	45.17