Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

The Company expenses the fair value of grants of various stock-based compensation programs over the vesting period of the awards. Awards granted are recognized as compensation expense based on the grant date fair value, estimated in accordance with FASB Accounting Standards Codification (ASC) Topic 718, Compensation - Stock Compensation. The grant date fair value is the closing price of the Company's stock on the grant date. Failure to satisfy the threshold service or performance conditions will result in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions will result in a reversal of previously recognized share-based compensation expense so long as the awards are probable of vesting.

The table below summarizes certain data for the Company’s stock-based compensation plans:



	June 3, 2019 through September 30, 2019
Compensation expense for all stock based compensation plans	$	1.8
Tax (expense) benefits for stock-based compensation	0.4
Fair value of vested awards	$	2.2

The Company’s shareholders approved the Ranpak Holdings Corp. 2019 Omnibus Incentive Plan (the “2019 Plan”) at its Annual Meeting of Shareholders on February 20, 2019. The purpose of the 2019 Plan is to motivate and reward employees and other individuals to perform at their highest level and contribute significantly to the success of the Company. The 2019 Plan is an omnibus plan that may provide these incentives through grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, other cash-based awards and other stock-based awards to employees, directors, or consultants of the Company.

As of September 30, 2019, a maximum of 4,118,055 shares may be issued under the 2019 Plan. As of September 30, 2019, 955,196 equity awards have been granted, (39,410) equity awards have been canceled, and zero equity awards vested under the 2019 Plan, leaving 3,202,269 shares available for future awards under the 2019 Plan. Shares issued are new shares which have been authorized and designated for award under the 2019 Plan.

Restricted Stock Units—Restricted stock units represent a right to receive one share of the Company’s common stock that is both nontransferable and forfeitable unless and until certain conditions are satisfied. Certain restricted stock units vest ratably over a three or two-year period while others vest over a one-year period. The fair value of restricted stock units is determined on the grant date and is amortized over the vesting period on a straight-line basis.



Restricted Stock Units	Shares		Weighted Average Grant Date Fair Value
Restricted at June 3, 2019	—		$	—
Granted	388,527		9.66
Vested	—		—
Forfeited	(8,704	)	9.77
Outstanding at September 30, 2019	379,823		$	9.66

As of September 30, 2019, there was $2.4 million of remaining unamortized deferred compensation associated with these restricted stock units that will be expensed over the remaining service period through June 3, 2021. Expense recognized due to the vesting of these awards was $0.9 million from June 3, 2019 through September 30, 2019.

Performance-Based Restricted Stock Units—Performance-based restricted stock units may vest at the end of a 2.5-year performance period but the level of the awards to be earned at the end of the performance period is contingent upon attainment of specific business performance goals during an initial one-year performance period. If certain minimum performance levels are not attained, no awards will become vested. The awards are variable in that compensation could range from zero to 150% of the 2019 Plan's target contingent on the performance level attained. The fair value of performance-based restricted stock units is determined on the grant date. Compensation cost for these awards is recognized based on the probability of achievement of the performance-based conditions. The table below includes the maximum number of restricted stock units that may be earned under the 2019 Plan.



Performance-Based Restricted Stock Units	Shares		Weighted Average Grant Date Fair Value
Restricted at June 3, 2019	—		$	—
Granted	562,948		9.77
Forfeited	(30,706	)	9.77
Outstanding at September 30, 2019	532,242		$	9.77

As of September 30, 2019, there was $4.7 million of remaining unamortized deferred compensation associated with these performance-based restricted stock units that may be expensed over the remaining service period through January 1, 2022. Expense recognized due to the vesting of these awards was $0.9 million for the period ended on September 30, 2019.

Director Stock Units—Members of the Company's Board of Directors may elect to receive their quarterly retainer fees in the form of Class A common shares that are covered by an active shelf registration statement. The retainers are paid quarterly, in arrears, vest upon issuance. These shares are priced at the closing price of the last business day of the calendar quarter. The table below includes the number of shares granted and vested for Directors electing to receive retainer payments in shares for the periods below.



Director Stock Units	Shares	Weighted Average Grant Date Fair Value
Balance at June 3, 2019	—	$	—
Granted	3,720	5.04
Vested	(3,720)	5.04
Balance at September 30, 2019	—	$	—