Share-Based Compensation Plans

The Company provides compensation benefits to employees under the OMNOVA Solutions 2017 Equity Incentive Plan (the “Plan”), which was approved by shareholders on March 22, 2017. The Plan permits the Company to grant to officers, key employees and non-employee directors of the Company, incentives directly linked to the price of OMNOVA Solutions’ common shares. The Plan authorizes the issuance of Company common shares in the aggregate for (a) awards of options rights to purchase Company common shares, (b) performance shares and performance units, (c) restricted shares, (d) restricted share units, or (e) appreciation rights. Shares granted under the Plan may be either newly issued shares or treasury shares or both. As of November 30, 2018, approximately 1.9 million Company common shares remained available for grants under the Plan. All options granted under the Plan are granted at exercise prices equal to the market value of the Company’s common shares on the date of grant. Additionally, the Plan provides that the term of any option granted under the Plan may not exceed 10 years. Prior to March 22, 2017, the Company granted equity compensation under the OMNOVA Solutions Third Amended and Restated 1999 Equity and Performance Incentive Plan, which had substantially similar features.

During the year ended November 30, 2018, the Company granted Performance Share Units ("PSU's") to its executive officers. The PSU's provide recipients the right to receive the Company's common shares if specified performance goals, including a performance goal relative to peers, are met over a three fiscal year measurement period. Each grantee receives a target grant of PSU's, but may earn between 0% and 200% (or in the case of the Company's Chief Executive Officer, between 0% and 160%) of the target grant depending on the Company's performance against the stated performance goals. The estimated fair value of performance share units granted is based on the closing market price of the Company’s common shares on the date of issuance and recorded based on achievement of target performance metrics.

Share-based compensation is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting period). The fair value of Restricted Share Awards ("RSA's") and Restricted Share Units ("RSU's") is determined based on the closing market price of the Company’s common shares at the date of grant. RSU's entitle the holder to receive one ordinary share for each RSU at vesting, generally over a three year period from the date of grant. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company.

In accordance with the adoption of ASU 2016-09, the Company recognized a cumulative effect adjustment to retained earnings of $2.9 million in the Consolidated Financial Statements as of December 1, 2016 related to the recognition of deferred tax assets attributable to previously issued restricted stock and options.

For RSA and RSU grants, which consist of the Company’s common shares, the fair value is equal to the market price of the Company’s shares on the date of grant. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company.

A summary of the Company’s restricted share and restricted share units activity and related information for the years ended November 30, 2018, 2017, and 2016 are as follows:



	2018				2017				2016
	Share Awards & Units		Weighted Average Grant Date Fair Value		Share Awards & Units		Weighted Average Grant Date Fair Value		Share Awards & Units		Weighted Average Grant Date Fair Value
Non-vested at beginning of year	567,600		$	7.08	1,008,150		$	7.23	872,200		$	8.13
Granted	353,100		10.46		209,650		8.31		416,500		5.44
Vested	(198,350	)	7.31		(615,450	)	7.46		(258,900	)	7.91
Forfeited	(32,502	)	7.34		(34,750	)	7.25		(21,650	)	8.26
Non-vested at end of year	689,848		8.81		567,600		7.08		1,008,150		7.23

Compensation expense for all share-based payments included in general and administrative expense was $2.8 million, $1.9 million, and $2.5 million during 2018, 2017, and 2016, respectively.

As of November 30, 2018, there was $3.6 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements to be amortized over a weighted average remaining period of 2.0 years.

The Company also provides employees the opportunity to purchase Company common shares through payroll deductions under the OMNOVA Solutions Employee Share Purchase Plan (the "ESPP"). Under the ESPP, eligible employees receive a 15% discount from the trading value of common shares purchased. The purchase price for common shares purchased from the Company will be 85% of the closing price of the common shares on the New York Stock Exchange ("NYSE") on the investment date. Participants may contribute funds to the ESPP, not to exceed twenty-five thousand dollars in any calendar year. If a participant terminates his or her employment with the Company or its subsidiaries, the participant's participation will immediately terminate and the participant's account will be converted to a regular brokerage account. As of November 30, 2018 the amount of shares held by eligible participants through the ESPP was not material.