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. At September 30, 2018, the Company has accrued $7.1 million 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 September 30, 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 $0.5 million in costs related to the MPIP at September 30, 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 September 30, 2018, we have reserved approximately 4.4 million shares of common stock for future issuance under the LTIP.

The following awards were outstanding during the thirty-nine weeks ended September 30, 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

410,000

02/14/2018

25.59

Service

01/01/2019

—

Stock

RSU

LTIP

161,215

03/01/2018

24.93

Service

^(b)

7,646

Stock

RSU

LTIP

266,478

03/01/2018

24.93

Performance / Service

^(c)

30,167

Stock

RSU

LTIP

11,144

05/10/2018

21.54

^(d)

—

Stock


(a)	Performance conditions associated with these awards were not satisfied. Therefore, 100% of the awards were forfeited during the thirty-nine weeks ended September 30, 2018.


(b)	These 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, these 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 before considering the impact of individual participant forfeitures 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.


(d)	These restricted stock units were granted to the four non-employees who currently serve on the Company's Board of Directors. Each participating director's units will vest upon his departure from the Company's Board of Directors. Compensation cost was recognized in profit/loss upon the grant date.

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



	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 30, 2018		September 24, 2017		September 30, 2018		September 24, 2017
	(In thousands)
Share-based compensation cost:
Cost of sales	$	124	$	32	$	293	$	219
Selling, general and administrative expense	3,502		475		8,966		2,235
Total	$	3,626	$	507	$	9,259	$	2,454

Income tax benefit	$	883	$	132	$	2,254	$	733

The Company’s RSU activity is included below:



	Thirty-Nine Weeks Ended September 30, 2018				Thirty-Nine Weeks Ended September 24, 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	849		25.20		462		18.72
Vested	—		—		(486	)	17.73
Forfeited	(427	)	18.97		(251	)	25.36
Outstanding at end of period	811		$	25.22	631		$	18.68

No awards vested during the thirty-nine weeks ended September 30, 2018. The total fair value of awards vested during the thirty-nine weeks ended September 24, 2017 was $8.6 million.

At September 30, 2018, the total unrecognized compensation cost related to all nonvested awards was $11.2 million. That cost is expected to be recognized over a weighted average period of 1.56 years.

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