Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

We expense the fair value of grants of various stock-based compensation programs over the vesting period of the awards. Stock compensation expense is recorded in selling, general, and administrative expenses in the condensed consolidated statements of operations. Awards granted are recognized as compensation expense based on the grant date fair value, estimated in accordance with ASC 718, Compensation - Stock Compensation. The grant date fair value is the closing price of our stock on the grant date. Failure to satisfy the threshold service or performance conditions results in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions results 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 our stock-based compensation plans:



	Successor
	Three Months Ended March 31, 2020
Compensation expense for all stock-based compensation plans	$	2.2
Tax benefits for stock-based compensation	0.2
Fair value of vested awards	$	2.4

Our shareholders approved the Ranpak Holdings Corp. 2019 Omnibus Incentive Plan (the “2019 Plan”) at the 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 grants 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 March 31, 2020, a maximum of 4,118,055 shares may be issued under the 2019 Plan. As of March 31, 2020, 2,141,679 equity awards have been granted, 565,003 equity awards have been canceled, and 262,028 equity awards vested under the 2019 Plan, leaving 2,541,379 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. We did not have any shares outstanding under the 2019 Plan on March 31, 2019.

Restricted Stock Units—Restricted stock units represent a right to receive one share of our 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 ratable basis.



Restricted Stock Units	Shares		Weighted Average Grant Date Fair Value
Restricted at January 1, 2020	483,299		$	9.30
Granted	436,783		8.07
Vested	(242,093	)	8.36
Forfeited	(5,119	)	9.43
Outstanding at March 31, 2020	672,870		$	8.84

As of March 31, 2020, there was $5.0 million of remaining unamortized deferred compensation associated with these restricted stock units that will be expensed over the remaining service period through March 3, 2022. Expense recognized due to the vesting of these awards was $2.0 million for the three months ended March 31, 2020. The Company did not have any shares outstanding under the 2019 Plan at March 31, 2019 and therefore did not incur any amortization expense for the three months ended March 31, 2019.

Performance-Based Restricted Stock Units—Performance-based restricted stock units vest over a three-year period. However, the level of the awards to be earned is determined at the end of the initial one-year performance period, based upon attainment of

specific business performance goals during such initial one-year performance period. If certain minimum performance levels are not attained in the initial one-year performance period, the awards will be automatically forfeited before vesting. The awards are variable in that compensation could range from zero to 150% of the award agreement'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 January 1, 2020	—	$	—
Granted	641,778	8.07
Vested	—	—
Forfeited	—	—
Outstanding at March 31, 2020	641,778	$	8.07

As of March 31, 2020, there was $5.0 million of remaining unamortized deferred compensation associated with these performance-based restricted stock units that may be expensed over the remaining service period through March 3, 2022. Expense recognized related to these awards was $0.2 million for the period ended on March 31, 2020. The Company did not have any shares outstanding under the 2019 Plan at March 31, 2019 and therefore did not incur any amortization expense for the three months ended March 31, 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, and 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 January 1, 2020	—		$	—
Granted	6,903		8.15
Vested	(6,903	)	8.15
Balance at March 31, 2020	—		$	—