STOCKHOLDERS' EQUITY

Preferred Stock

We are authorized to issue up to 15,000,000 shares of preferred stock at $1.00 par value. At December 31, 2018, no shares of preferred stock have been issued.

Common Stock Plan

We have a stock-based compensation plan under which stock options, SSARs, restricted stock (including units) and performance shares awards are granted. At December 31, 2018, 3.0 million shares were available under the current plan for these awards.



	Year ended December 31,
Dollar amounts in millions	2018		2017		2016
Total stock-based compensation expense (costs of sales, selling, general and administrative and other operating credits and charges, net)	$	8.6	$	9.7	$	13.0
Income tax benefit related to stock-based compensation	$	3.1	$	0.8	$	3.4
Impact on cash flow due to taxes paid related to net share settlement of equity awards	$	9.3	$	5.9	$	9.2

We recognize the compensation costs on a straight-line basis over the requisite service period of the award, which is generally the vesting term of three years. Compensation costs that were capitalized to inventory were not material.

SSARs

Prior to January 1, 2018, we granted SSARs to key employees. On exercise, we generally issue these shares from treasury. The SSARs are granted at market price at the date of grant. SSARs become exercisable over three years and expire ten years after the date of grant. The following table sets out the weighted average assumptions used to estimate the fair value of the SSARs granted using the Black-Scholes option-pricing model:



	2017			2016
Expected stock price volatility	41		%	45		%
The fair values of stock-based payments were valued using the Black-Scholes valuation method with a volatility factor based on our historical stock prices.
Expected dividend yield	—		%	—		%
The Black-Scholes valuation model calls for a single expected dividend yield as an input. This is determined based upon current annual dividend as of the date of grant compared to the grant price.
Risk-free interest rate	2.1		%	1.4		%
We base the risk-free interest rate used in the Black-Scholes valuation method on U.S. Treasury issues with an equivalent term. Where the expected term of our stock-based awards do not correspond with the terms for which interest rates are quoted, we perform a straight-line interpolation to determine the rate from the available maturities.
Expected life of options (in years)	6 years			6 years
Expected life represents the period that LP’s stock-based awards are expected to be outstanding and was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as influenced by changes to the terms of its stock-based awards.
Weighted average fair value of options and SSARs granted	$	8.02		$	6.99

Restricted Shares

We grant restricted awards (shares or units) to certain key employees and directors. The awards can either be time vested or vested based upon the attainment of certain performance metrics over a certain time period. Awards granted under this plan to employees generally have a performance or vesting period of three years from the date of grant and to directors over one year. Certain of these awards are eligible to received dividend equivalent shares.The market value of these grants approximates the fair value. For awards based upon the achievement of the performance goals, the award are earned ratably from 0% to 200%.

Summary of Stock Awards Outstanding

The following table summarizes stock awards as of December 31, 2018 as well as activity during the last year.



	Stock Options / SSARS					Restricted stock					Restricted units
	Number of Awards			Weighted Average Exercise Price		Number of Awards			Weighted Average Grant Date Fair Value		Number of Awards			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2017	2,404,808			$	14.76	311,215			$	17.33	851,244			$	18.93
Granted	—			—		—			—		491,114			27.74
Exercised	(1,201,644		)	13.91		—			—		—			—
Vested	—			—		(64,747		)	17.04		(217,000		)	17.95
Forfeited	(61,478		)	17.51		(6,294		)	16.80		(168,744		)	21.59
Outstanding at December 31, 2018	1,141,686			$	15.50	240,174			$	17.43	956,614			$	23.17
Vested and expected to vest at December 31, 2018⁽¹⁾	1,084,602			$	15.50	228,165			$	17.43	908,783			$	23.17
Exercisable at December 31, 2018	870,431			$	14.83	—			—		—			$	—
Unrecognized compensation costs (in millions)	$	0.5				$	0.7				$	9.7
to be recognized over weighted average period of years	0.8					0.6					1.3

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⁽¹⁾	Expected to vest based upon historical forfeiture rate

The aggregate intrinsic value of the stock options and SSARs represented in the above table is the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of 2018 and the exercise price, multiplied by the number of in-the-money options and SSARs) that would have been received by the holders had all holders exercised their awards on December 31, 2018. This amount, $7.7 million, changes based on the market value of our stock as reported by the New York Stock Exchange.

The intrinsic value of SSARs exercised in the years ended December 31, 2018, 2017 and 2016 was $35.2 million, $26.5 million and $29.8 million. The total fair value of awards vested during the years ended December 31, 2018, 2017 and 2016, was $7.8 million, $6.7 million and $3.8 million.