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STOCK COMPENSATION PLANS | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
STOCK COMPENSATION PLANS | NOTE 9 - STOCK COMPENSATION PLANS At December 31, 2019, we had outstanding awards under various share-based compensation plans, which are described below. The following table summarizes the share-based compensation expense that we recorded in continuing operations:
| (In Millions, except per share amounts)
| 2019 |  | 2018 |  | 2017
Cost of goods sold and operating expenses | $ | 2.0 |  |  | $ | 1.7 |  |  | $ | 1.9 |
Selling, general and administrative expenses | 15.6 |  |  | 13.4 |  |  | 16.3 |
Reduction of operating income from continuing operations before income taxes | 17.6 |  |  | 15.1 |  |  | 18.2 |
Income tax benefit 1 | (3.7 | ) |  | — |  |  | — |
Reduction of net income from continuing operations attributable to Cliffs shareholders | $ | 13.9 |  |  | $ | 15.1 |  |  | $ | 18.2 |
Reduction of continuing operations earnings per common share attributable to Cliffs shareholders: |  |  |  |  |
Basic | $ | 0.05 |  |  | $ | 0.05 |  |  | $ | 0.06 |
Diluted | $ | 0.05 |  |  | $ | 0.05 |  |  | $ | 0.06 |
1 No income tax benefit in 2018 and 2017 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. 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
2019 |  | 12/31/2021 |  | A&R 2015 Equity Plan |  | 572,104 |  |  | 572,104 |
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 |
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 outstanding as of December 31, 2019:
Performance Share Plan Year |  | Performance Shares Granted |  | Forfeitures to Date |  | Expected to Vest |  | Grant Date |  | Grant Date Fair Value |  | Performance Period
2019 |  | 572,104 |  |  | 15,879 |  |  | 556,225 |  |  | 2/19/2019 |  | $ | 18.31 |  |  | 1/1/2019 - 12/31/2021
2018 |  | 675,599 |  |  | 35,320 |  |  | 640,279 |  |  | 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 |  |  | 63,457 |  |  | 490,268 |  |  | 2/21/2017 |  | $ | 19.69 |  |  | 1/1/2017 - 12/31/2019
The performance shares granted on February 21, 2017 were paid at 161.2% of the original grant based on the final performance evaluation versus the performance goals that were established in the grants. The performance shares granted on June 26, 2017 were paid at 200.0%. 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 restricted stock units that were granted in 2017 vested on December 31, 2019. The restricted stock units that were granted in 2019 and 2018 cliff vest in three years on December 31, 2021 and December 31, 2020, 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, 2019, 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, 2019, 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 2019, 2018 and 2017, nonemployee directors were granted a specified number of restricted shares, with a value equal to $100,000. 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 a vesting period of three years. 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 share awards granted on April 25, 2018 and all future awards are subject to a vesting period of one year. 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
2019 |  | 86,477 |  |  | 23,659 |
2018 |  | 92,718 |  |  | 17,170 |
2017 |  | 93,359 |  |  | 17,289 |
Other Information Stock option, restricted awards and performance share activity under our long-term equity plans and Directors’ Plans are as follows:
| 2019 |  | 2018 |  | 2017
| Shares |  | Shares |  | Shares
Stock options: |  |  |  |  |
Outstanding at beginning of year | 563,230 |  |  | 599,870 |  |  | 599,870 |
Exercised | — |  |  | (36,640 | ) |  | — |
Forfeited/canceled | — |  |  | — |  |  | — |
Outstanding at end of year | 563,230 |  |  | 563,230 |  |  | 599,870 |
Restricted awards: |  |  |  |  |
Outstanding and restricted at beginning of year | 4,804,248 |  |  | 4,776,483 |  |  | 5,461,783 |
Granted during the year | 682,240 |  |  | 795,487 |  |  | 1,196,731 |
Vested and issued | (3,168,195 | ) |  | (627,567 | ) |  | (1,813,315 | )
Forfeited/canceled | (60,974 | ) |  | (140,155 | ) |  | (68,716 | )
Outstanding and restricted at end of year | 2,257,319 |  |  | 4,804,248 |  |  | 4,776,483 |
Performance shares: |  |  |  |  |
Outstanding at beginning of year | 1,424,723 |  |  | 1,848,312 |  |  | 1,368,469 |
Granted during the year | 572,104 |  |  | 675,599 |  |  | 802,831 |
Vested and issued | — |  |  | (489,953 | ) |  | — |
Forfeited/canceled | (60,949 | ) |  | (609,235 | ) |  | (322,988 | )
Outstanding at end of year | 1,935,878 |  |  | 1,424,723 |  |  | 1,848,312 |
Vested or expected to vest as of December 31, 2019 1 | 4,756,427 |  |  |  |  |
Directors’ retainer and voluntary shares: |  |  |  |  |
Outstanding at beginning of year | — |  |  | — |  |  | — |
Granted during the year | 31,075 |  |  | 27,300 |  |  | 25,476 |
Vested and issued | (31,075 | ) |  | (27,300 | ) |  | (25,476 | )
Outstanding at end of year | — |  |  | — |  |  | — |
Reserved for future grants or awards at end of year: |  |  |  |  |
Employee plans | 9,931,740 |  |  |  |  |
Directors’ plans | 389,692 |  |  |  |  |
Total | 10,321,432 |  |  |  |  |
1 We assume all shares will vest until the date of vesting or forfeiture.
A summary of our outstanding share-based award activity for the year ended December 31, 2019 is as follows:
| Shares |  | Weighted Average Grant Date Fair Value
Outstanding, beginning of year | 6,792,201 |  |  | $ | 6.90 |
Granted | 1,285,419 |  |  | $ | 14.18 |
Vested and issued | (3,199,270 | ) |  | $ | 2.20 |
Forfeited/canceled | (121,923 | ) |  | $ | 12.21 |
Outstanding, end of year | 4,756,427 |  |  | $ | 11.90 |
The total compensation cost related to outstanding awards not yet recognized is $16.0 million at December 31, 2019. The weighted average remaining period for the awards outstanding at December 31, 2019 is approximately 1.2 years.

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