XML 38 R17.htm IDEA: XBRL DOCUMENT
v3.10.0.1

STOCK COMPENSATION PLANS | 12 Months Ended
--- | ---
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK COMPENSATION PLANS | NOTE 9 - STOCK COMPENSATION PLANS At December 31, 2018, we have outstanding awards under various share-based compensation plans, which are described below. The compensation cost charged against income from continuing operations for those plans was $15.1 million, $18.2 million and $13.6 million in 2018, 2017 and 2016, respectively, which primarily was recorded in Selling, general and administrative expenses in the Statements of Consolidated Operations. There was no income tax benefit recognized for the years ended December 31, 2018, 2017 and 2016, due to the full valuation allowance. Employees’ Plans The A&R 2015 Equity Plan was approved by our Board of Directors on February 21, 2017 and by our shareholders on April 25, 2017. The A&R 2015 Equity Plan increased the maximum number of shares that may be issued by 15.0 million common shares. The 2015 Equity Plan was approved by our Board of Directors on March 26, 2015 and by our shareholders on May 19, 2015. The 2015 Equity Plan replaced the 2012 Equity Plan, and allowed for a maximum of 12.9 million common shares to be issued. No additional grants were issued from the 2012 Equity Plan after the date of approval of the 2015 Equity Plan; however, all awards previously granted under the 2012 Amended Equity Plan will continue in full force and effect in accordance with the terms of outstanding awards. Following is a summary of approved grants by the Compensation Committee:
Grant Year |  | Vesting Date |  | Plan Issued Under |  | Restricted Stock Units Granted |  | Performance Shares Granted
2018 |  | 12/31/2020 |  | A&R 2015 Equity Plan |  | 685,599 |  |  | 675,599 |
2017 |  | 12/31/2019 |  | A&R 2015 Equity Plan |  | 532,358 |  |  | 249,106 |
2017 |  | 12/31/2019 |  | Amended 2015 Equity Plan |  | 553,725 |  |  | 553,725 |
2016 |  | 12/31/2018 |  | 2015 Equity Plan |  | 3,406,716 |  |  | — |
Performance Shares The outstanding performance shares vest over a period of three years and are intended to be paid out in common shares. Performance is measured on the basis of relative TSR for the period and measured against the constituents of the S&P Metals and Mining ETF Index at the beginning of the relevant performance period. The final payout for the outstanding performance period grants will vary from 0% to 200% of the original grant depending on whether and to what extent the Company achieves certain objectives and performance goals as established by the Compensation Committee. Following is a summary of our performance share award agreements currently outstanding:
Performance Share Plan Year |  | Performance Shares Granted |  | Forfeitures to Date |  | Expected to Vest |  | Grant Date |  | Grant Date Fair Value |  | Performance Period
2018 |  | 675,599 |  |  | 2,236 |  |  | 673,363 |  |  | 2/21/2018 |  | $ | 11.93 |  |  | 1/1/2018 - 12/31/2020
2017 |  | 249,106 |  |  | — |  |  | 249,106 |  |  | 6/26/2017 |  | $ | 10.74 |  |  | 5/31/2017 - 12/31/2019
2017 |  | 553,725 |  |  | 51,471 |  |  | 502,254 |  |  | 2/21/2017 |  | $ | 19.69 |  |  | 1/1/2017 - 12/31/2019
Restricted Stock Units All of the outstanding restricted stock units are subject to continued employment, are retention based, and are payable in common shares or cash in certain circumstances at a time determined by the Compensation Committee at its discretion. The outstanding restricted stock units that were granted in 2018, 2017, and 2016 cliff vest in three years on December 31, 2020, 2019 and 2018, respectively. Stock Options The 412,710 stock options that were granted during the first quarter of 2015 vested on December 31, 2017, are exercisable at a strike price of $7.70 and expire on January 12, 2025. The 250,000 stock options that were granted in the fourth quarter of 2014 vested in equal thirds on each of December 31, 2015, 2016 and 2017 and are exercisable at a strike price of $13.83 and expire on November 17, 2021. As of December 31, 2018, 563,230 stock options remain outstanding and are exercisable with a weighted average price of $10.42. Employee Stock Purchase Plan On March 26, 2015, upon recommendation by the Compensation Committee, our Board of Directors approved and adopted, subject to the approval of Cliffs' shareholders at the 2015 Annual Meeting, the Cliffs Natural Resources Inc. 2015 Employee Stock Purchase Plan. This plan was approved by our shareholders at the 2015 Annual Meeting held May 19, 2015. Ten million common shares have been reserved for issuance under this plan; however, as of December 31, 2018, this program has not been made active and no common shares have been purchased. We sought shareholder approval of this plan for the purpose of qualifying the reserved common shares for special tax treatment under Section 423 of the IRC of 1986, as amended. Nonemployee Directors Our nonemployee directors are entitled to receive restricted share awards under the Directors’ Plan. For 2018, 2017 and 2016, nonemployee directors were granted a specified number of restricted shares, with a value equal to $100,000, $100,000, and $85,000, respectively. The number of shares is based on the closing price of our common shares on the date of the Annual Meeting. The awards are subject to any deferral election and pursuant to the terms of the Directors’ Plan and an award agreement. On April 23, 2018, our Governance and Nominating Committee of the Board of Directors approved the acceleration of vesting of the restricted share awards granted to the nonemployee directors prior to April 2018, which were generally subject to three-year vesting. Effective April 30, 2018 and under the terms of the Directors' Plan, the vesting of these outstanding awards was accelerated. The Governance and Nominating Committee also approved a change to the vesting period for all future awards under the Directors' Plan. The nonemployee director restricted awards granted on April 25, 2018 and all future awards are subject to one-year vesting. For the last three years, grants of restricted and/or deferred shares have been awarded to elected or re-elected nonemployee directors as follows:
Year of Grant |  | Restricted Shares |  | Deferred Shares
2018 |  | 92,718 |  |  | 17,170 |
2017 |  | 93,359 |  |  | 17,289 |
2016 |  | 135,038 |  |  | 29,583 |
Other Information The following table summarizes the share-based compensation expense that we recorded in continuing operations:
| (In Millions, except per share amounts)
| 2018 |  | 2017 |  | 2016
Cost of goods sold and operating expenses | $ | 1.7 |  |  | $ | 1.9 |  |  | $ | 1.8 |
Selling, general and administrative expenses | 13.4 |  |  | 16.3 |  |  | 11.8 |
Reduction of operating income from continuing operations before income taxes | 15.1 |  |  | 18.2 |  |  | 13.6 |
Income tax benefit 1 | — |  |  | — |  |  | — |
Reduction of net income from continuing operations attributable to Cliffs shareholders | $ | 15.1 |  |  | $ | 18.2 |  |  | $ | 13.6 |
Reduction of continuing operations earnings per common share attributable to Cliffs shareholders: |  |  |  |  |
Basic | $ | 0.05 |  |  | $ | 0.06 |  |  | $ | 0.07 |
Diluted | $ | 0.05 |  |  | $ | 0.06 |  |  | $ | 0.07 |
1 No income tax benefit due to the full valuation allowance.
Stock option, restricted stock awards and performance share activity under our long-term equity plans and Directors’ Plans are as follows:
| 2018 |  | 2017 |  | 2016
| Shares |  | Shares |  | Shares
Stock options: |  |  |  |  |
Outstanding at beginning of year | 599,870 |  |  | 599,870 |  |  | 607,489 |
Exercised | (36,640 | ) |  | — |  |  | — |
Forfeited/canceled | — |  |  | — |  |  | (7,619 | )
Outstanding at end of year | 563,230 |  |  | 599,870 |  |  | 599,870 |
Restricted awards: |  |  |  |  |
Outstanding and restricted at beginning of year | 4,776,483 |  |  | 5,461,783 |  |  | 2,338,070 |
Granted during the year | 795,487 |  |  | 1,196,731 |  |  | 3,571,337 |
Vested and issued | (627,567 | ) |  | (1,813,315 | ) |  | (271,988 | )
Forfeited/canceled | (140,155 | ) |  | (68,716 | ) |  | (175,636 | )
Outstanding and restricted at end of year | 4,804,248 |  |  | 4,776,483 |  |  | 5,461,783 |
Performance shares: |  |  |  |  |
Outstanding at beginning of year | 1,848,312 |  |  | 1,368,469 |  |  | 1,496,489 |
Granted during the year | 675,599 |  |  | 802,831 |  |  | — |
Vested and issued | (489,953 | ) |  | — |  |  | (59,260 | )
Forfeited/canceled | (609,235 | ) |  | (322,988 | ) |  | (68,760 | )
Outstanding at end of year | 1,424,723 |  |  | 1,848,312 |  |  | 1,368,469 |
Vested or expected to vest as of December 31, 2018 1 | 6,792,201 |  |  |  |  |
Directors’ retainer and voluntary shares: |  |  |  |  |
Outstanding at beginning of year | — |  |  | — |  |  | — |
Granted during the year | 27,300 |  |  | 25,476 |  |  | — |
Vested and issued | (27,300 | ) |  | (25,476 | ) |  | — |
Outstanding at end of year | — |  |  | — |  |  | — |
Reserved for future grants or awards at end of year: |  |  |  |  |
Employee plans | 12,949,420 |  |  |  |  |
Directors’ plans | 502,378 |  |  |  |  |
Total | 13,451,798 |  |  |  |  |
1 With the adoption of ASU 2016-09, we assume all shares will vest until the date of vesting or forfeiture.
A summary of our outstanding share-based awards as of December 31, 2018 is shown below:
| Shares |  | Weighted Average Grant Date Fair Value
Outstanding, beginning of year | 7,224,665 |  |  | $ | 6.79 |
Granted | 1,498,386 |  |  | $ | 9.51 |
Vested and issued | (1,181,460 | ) |  | $ | 7.38 |
Forfeited/canceled | (749,390 | ) |  | $ | 10.22 |
Outstanding, end of year | 6,792,201 |  |  | $ | 6.90 |
The total compensation cost related to outstanding awards not yet recognized is $17.1 million at December 31, 2018. The weighted average remaining period for the awards outstanding at December 31, 2018 is approximately 1.0 year.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration