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. No costs were accrued at April 1, 2018 related to cash bonus awards that could potentially be awarded under the STIP during the remainder of 2018 and 2019. 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 JFC LLC and its subsidiaries (together, “GNP”) on January 6, 2017. The Company has accrued $2.2 million in costs related to the JFC LTIP at April 1, 2018. 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 $0.7 million in costs related to the MPIP at April 1, 2018.

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 of Directors 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 and restricted stock units (“RSUs”). At April 1, 2018, we have reserved approximately 4.5 million shares of common stock for future issuance under the LTIP.

The following awards were outstanding during the thirteen weeks ended April 1, 2018:

Award Type

Benefit

Plan

Awards Granted

Grant

Date

Grant Date Fair Value per Award

Vesting Condition

Vesting Date

Awards Forfeited to Date

Settlement Method

RSU

LTIP

389,424

01/19/2017

18.38

Performance / Service

^(a)

389,424

^(a)

Stock

RSU

LTIP

280,000

02/14/2018

25.59

Service

01/01/2019

—

Stock

RSU

LTIP

161,215

03/01/2018

24.93

Service

^(b)

—

Stock

RSU

LTIP

266,478

03/01/2018

24.93

Performance / Service

^(c)

—

Stock


(a)	Performance conditions associated with these awards were not satisfied. Therefore, 100% of the awards were forfeited during the thirteen-weeks ended April 1, 2018.


(b)	The restricted stock units vest in ratable tranches on December 31, 2018, December 31, 2019 and December 31, 2020. Expected compensation cost related to these units totals $4.0 million based on a closing stock price for the Company’s common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss over the remaining vesting period.

(c)

If performance conditions related to the Company's 2018 operating results are satisfied, the restricted stock units vest in ratable tranches on December 31, 2019, December 31, 2020 and December 31, 2021. Expected compensation cost related to these units totals $6.6 million based on a closing stock price for the Company's common stock of $24.93 per share on March 1, 2018. Compensation cost will be amortized to profit/loss upon satisfaction of the performance conditions over the remaining vesting period.

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



	Thirteen Weeks Ended
	April 1, 2018		March 26, 2017
	(In thousands)
Share-based compensation cost:
Cost of sales	$	52	$	149
Selling, general and administrative expense	1,221		1,311
Total	$	1,273	$	1,460

Income tax benefit	$	310	$	417

The Company’s RSU activity is included below:



	Thirteen Weeks Ended April 1, 2018				Thirteen Weeks Ended March 26, 2017
	Number		Weighted Average Grant Date Fair Value		Number		Weighted Average Grant Date Fair Value
	(In thousands, except weighted average fair values)
Outstanding at beginning of period	389		$	18.39	906		$	20.00
Granted	708		25.19		462		18.72
Vested	—		—		(486	)	17.73
Forfeited	(389	)	18.39		(251	)	25.36
Outstanding at end of period	708		$	25.19	631		$	18.68

No awards vested during the thirteen weeks ended April 1, 2018. The total fair value of awards vested during the thirteen weeks ended March 26, 2017 was $9.2 million.

At April 1, 2018, the total unrecognized compensation cost related to all nonvested awards was $17.2 million. That cost is expected to be recognized over a weighted average period of 1.76 years.

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