Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

PREFERRED STOCK

We are authorized to issue up to 5,000,000 shares of preferred stock at $0.0001 par value. At December 31, 2020, no shares of preferred stock have been issued.

COMMON STOCK PLANS

We have stock-based compensation plans under which stock options and restricted units are granted. At December 31, 2020, approximately 1.3 million shares were available for future issuance under our current plan.


	Year ended December 31,
(In millions)	2020		2019		2018
Total stock-based compensation expense (selling, general and administrative and other operating charges, net)	$	10.5	$	4.1	$	3.3
Income tax benefit related to stock-based compensation	2.7		1.0		1.5
Impact on cash flow due to taxes paid related to net share settlement of equity awards	0.7		0.4		0.4

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 one to three years.

Restricted Stock Units (Time and Performance Vesting)

We grant restricted awards to certain employees. The awards can either be time vested or vested based upon the attainment of certain performance metrics over a certain time period. Performance conditions generally are tied to attainment of certain financial targets such as return on invested capital, free cash flow or other similar measures. Awards granted under this plan generally have a performance or vesting period of three years from the date of grant. These awards are eligible to receive dividend equivalent shares.The market value of these grants approximates the fair value. For awards based upon the achievement of performance goals, the award could range from 0% to 200%. A summary of the status of outstanding restricted stock units as of December 31, 2020, and changes during the year, is presented below:


	Time Vested			Performance-based
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Restricted stock units, outstanding at December 31, 2019	190,190	$	31.76	177,032	$	29.09
Granted	377,822	23.46		120,382	27.67
Vested	(81,214)	35.12		—	—
Forfeited / Canceled1	(61,546)	26.41		(103,069)	29.92
Restricted stock units, outstanding at December 31, 2020	425,252	24.52		194,345	27.76
Deferred shares, outstanding at December 31, 2020	33,663	7.31		—
Total units outstanding at December 31, 2020	458,915	$	23.26	194,345	27.76

1 Forfeited / Canceled performance-based restricted stock units include both shares forfeited due to employees failure to meet requisite service period and also due to failure to meet required performance measures.

The total fair value of share awards that vested during the years ended December 31, 2020, 2019 and 2018 was $2.9 million, $2.1 million and $2.0 million.

As of December 31, 2020, there was $7 million of total unrecognized compensation cost related to outstanding restricted stock unit awards. The cost is expected to be recognized over a weighted average period of 2.0 years.

Stock Options

Prior to January 1, 2019, we granted options to certain employees. The options are granted at market price at the date of grant. Options become exercisable over one to 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 options granted using the Black-Scholes option-pricing model (dividend yield is ignored):


		2018
Volatility	The expected volatility is based upon Clearwater Paper's historical stock prices.	35	%
Risk-free interest rate	The risk-free interest rate is based on constant maturity treasury rates with maturities matching the options' expected life on the grant date.	2.74	%
Expected life-years	The expected life is the approximate mid-point between the expected vesting time and the remaining contractual life.	6 years

A summary of the status of outstanding stock option awards as of December 31, 2020, and changes during the year, is presented below:


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding options at December 31, 2019	656,374	$	49.36	6.2	$	—

Exercised	(972)	29.12
Forfeited	(23,164)	37.49
Expired	(278,792)	50.71
Outstanding options at December 31, 2020	353,446	$	49.13	5.2	$	—
Outstanding and exercisable options at December 31, 2020	325,161	$	50.16	5.0	$	—

The weighted average grant date fair value of options granted during 2018 was $14.51.

Director Awards

In connection with joining our Board of Directors, in January 2009 our outside directors at that time were granted an award of phantom common stock units, which were credited to an account established on behalf of each director and vested ratably over a three-year period with the final vesting in January 2012. Subsequent equity awards have been granted annually in May, or on a pro-rata basis as applicable, to our outside directors in the form of phantom common stock units as part of their annual compensation, which are credited to their accounts. These awards vest ratably over a one-year period. These accounts will be credited with additional phantom common stock units equal in value to dividends paid, if any, on the same amount of common stock. Upon separation from service as a director, the vested portion of the phantom common stock units held by the director in a stock unit account are converted to cash based upon the then market price of the common stock and paid to the director.

Due to its cash-settlement feature, we account for these awards as liabilities rather than equity and recognize the equity-based compensation expense or income at the end of each reporting period based on the portion of the award that is vested and the increase or decrease in the value of our common stock.

We recorded director equity-based compensation expense for the years ended December 31, 2020 and December 31, 2019 of $2.9 million and $0.3 million. For the year ended December 31, 2018, we recorded a benefit of $2.3 million.

At December 31, 2020 and 2019 the liability amounts associated with director equity-based compensation included in "Other long-term obligations" on our Consolidated Balance Sheet was $5.2 million and $2.4 million.