PREFERRED STOCK

We are authorized to issue up to 5,000,000 shares of preferred stock at $0.0001 par value. At December 31, 2019, 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, 2019, approximately 1.0 million shares were available for future issuance under our current plan.



	Year ended December 31,
(In millions)	2019		2018		2017
Total stock-based compensation expense (selling, general and administrative and other operating charges, net)	$	4.1	$	3.3	$	3.6
Income tax benefit related to stock-based compensation	1.0		1.5		2.1
Impact on cash flow due to taxes paid related to net share settlement of equity awards	0.4		0.4		1.1

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, 2019, 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, 2018	127,653		$	42.09	78,430		$	45.36
Granted	139,037		26.64		151,664		26.60
Vested	(48,164	)	43.49		—
Forfeited / Canceled¹	(28,336	)	33.22		(53,062	)	46.04
Restricted stock units, outstanding at December 31, 2019	190,190		31.76		177,032		29.09
Deferred shares, outstanding at December 31, 2019	33,663		7.31		—
Total units outstanding at December 31, 2019	223,853		$	28.09	177,032		29.09

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, 2019, 2018 and 2017 was $2.1 million, $2.0 million and $1.1 million.

As of December 31, 2019, there was $3.7 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 1.8 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		2017
Volatility	The expected volatility is based upon Clearwater Paper's historical stock prices.	35	%	30	%
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	%	2.05	%
Expected life-years	The expected life is the approximate mid-point between the expected vesting time and the remaining contractual life.	6 years		6 years

A summary of the status of outstanding stock option awards as of December 31, 2019, 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, 2018	761,934		$	49.38	7.2	$	—
Granted	—		—
Forfeited	(26,686	)	42.84
Expired	(78,874	)	51.81
Outstanding options at December 31, 2019	656,374		$	49.36	6.2	$	—
Outstanding and exercisable options at December 31, 2019	511,787		$	51.16	5.8	$	—

The weighted average grant date fair value of options granted during the years 2018 and 2017 was $14.51 and $18.82. No options have been exercised over the last three years.

As of December 31, 2019, there was $1.0 million of unrecognized compensation cost related to non-vested stock options. The cost is expected to be recognized over a weighted average period of 1.0 years.

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 totaling $0.3 million for the year ended December 31, 2019. For the years ended December 31, 2018 and 2017, we recorded compensation benefit totaling $2.3 million and $2.8 million.

At December 31, 2019, the liability amounts associated with director equity-based compensation included in "Other long-term obligations" on our Consolidated Balance Sheet was $2.4 million. At December 31, 2018, the liability amounts associated with director equity-based compensation in "Other long-term obligations" and "Accounts payable and accrued liabilities" on our Consolidated Balance Sheet were $0.8 million and $1.3 million.