INCENTIVE COMPENSATION

The Company sponsors a short-term incentive plan that provides the grant of either cash or share-based bonus awards payable upon achievement of specified performance goals (the “STIP”). Full-time, salaried exempt employees of the Company and its affiliates who are selected by the administering committee are eligible to participate in the STIP. The Company has accrued $44.8 million in costs related to the STIP at December 31, 2017 related to cash bonus awards that could potentially be awarded during 2018. The Company assumed responsibility for the JFC LLC Long-Term Equity Incentive Plan dated January 1, 2014, as amended (the “JFC LTIP”) through its acquisition of GNP on January 6, 2017. The Company has accrued $3.3 million in costs related to the JFC LTIP at December 31, 2017. The Company assumed responsibility for the Moy Park Incentive Plan dated January 1, 2013, as amended (the “MPIP”) through its acquisition of Moy Park on September 8, 2017. The Company has accrued $0.6 million in costs related to the MPIP at December 31, 2017.

The Company also sponsors a performance-based, omnibus long-term incentive plan that provides for the grant of a broad range of long-term equity-based and cash-based awards to the Company’s officers and other employees, members of the Board and any consultants (the “LTIP”). The equity-based awards that may be granted under the LTIP include “incentive stock options,” within the meaning of the IRC, nonqualified stock options, stock appreciation rights, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”). At December 31, 2017, we have reserved approximately 4.8 million shares of common stock for future issuance under the LTIP.

The following awards were outstanding during 2017:



Award Type		Benefit Plan	Awards Granted	Grant Date	Grant Date Fair Value per Award^(a)		Vesting Condition	Vesting Date	Vesting Date Fair Value per Award^(a)		Estimated Forfeiture Rate		Awards Forfeited to Date		Settlement Method
RSU		LTIP	449,217	02/19/2014	$	16.70	Service	12/31/2016	$	18.99	13.49	%	86,458		Stock
RSU		LTIP	223,701	03/03/2014	17.18		Performance / Service	12/31/2017	31.06		12.34	%	53,363		Stock
RSU	(b)	LTIP	45,961	02/11/2015	25.87		Service	12/31/2017	31.06		12.34	%	10,965		Stock
RSU		LTIP	251,136	03/30/2016	25.36		Performance / Service	12/31/2019			—	%	251,136	(d)	Stock
RSU	(b)	LTIP	74,535	10/13/2016	20.93		Service	12/31/2016	18.99		13.49	%	—		Stock
RSU		LTIP	389,424	01/19/2017	18.38		Performance / Service	(e)			—	%	—		Stock
RSU	(c)	LTIP	48,586	02/13/2017	20.52		Service	12/31/2016	18.99		—	%	—		Stock
RSU	(c)	LTIP	23,469	02/13/2017	20.52		Service	12/31/2017	31.06		—	%	652		Stock


(a)	The fair value of each RSU granted or vested represents the closing price of the Company’s common stock on the respective grant date or vesting date.


(b)	On February 17, 2015, the Company paid a special cash dividend to stockholders of record as of January 30, 2015 totaling $5.77 per share. On January 27, 2015, the Compensation Committee of the Company’s Board of Directors agreed to grant Dividend Equivalent Rights (“DERs”) in the form of RSUs to reflect an additional $5.77 in value for each outstanding RSU.

(c)

On May 18, 2016, the Company paid a special cash dividend to stockholders of record as of May 10, 2015 totaling $2.75 per share. On October 27, 2016, the Compensation Committee of the Company's Board of Directors agreed to grant additional RSUs to LTIP participants that were equal to the amount of the dividend that would be awarded to them had their RSUs existing as of the dividend record date been vested. The additional RSUs that were granted to the LTIP participants are subject to the same vesting requirements as the underlying RSUs granted under the LTIP.


(d)	Performance conditions associated with these awards were not satisfied. Therefore, 100% of the awards were forfeited.


(e)	The subject RSUs will vest in ratable tranches on December 31, 2018, December 31, 2019, and December 31, 2020.

Compensation costs and the income tax benefit recognized for our share-based compensation arrangements are included below:



	2017		2016		2015
	(In thousands)
Share-based compensation cost:
Cost of goods sold	$	256	$	770	$	596
Selling, general and administrative expenses	2,763		5,332		2,379
Total	$	3,019	$	6,102	$	2,975

Income tax benefit	$	1,006	$	1,858	$	868

The Company’s RSA and RSU activity is included below:



	2017				2016				2015
	Number		Weighted Average Grant Date Fair Value		Number		Weighted Average Grant Date Fair Value		Number		Weighted Average Grant Date Fair Value
	(In thousands, except weighted average fair values)
RSAs:
Outstanding at beginning of year	—		$	—	—		$	—	30		$	8.72
Granted	—		—		—		—		—		—
Vested	—		—		—		—		—		—
Forfeited	—		—		—		—		(30	)	8.72
Outstanding at end of year	—		$	—	—		$	—	—		$	—

RSUs:
Outstanding at beginning of year	906		$	20.00	774		$	18.78	1,120		$	11.97
Granted	461		18.72		325		24.35		428		21.00
Vested	(714	)	18.09		—		—		(671	)	8.81
Forfeited	(264	)	25.33		(193	)	24.51		(103	)	18.90
Outstanding at end of year	389		$	18.39	906		$	20.00	774		$	18.78

The total fair value of awards vested in 2017 and 2015 was $16.3 million and $22.4 million, respectively. No awards vested in 2016.

At December 31, 2017, the total unrecognized compensation cost related to all nonvested awards was $7.2 million. That cost is expected to be recognized over a weighted average period of 2.13 years.

Historically, we have issued new shares to satisfy award conversions.