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Stock-Based Compensation
 6 Months Ended
Jul. 13, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation

Note 11 – Stock-Based Compensation

Stock-Based Employee Awards

The Company sponsors shareholder-approved stock incentive plans that provide for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, dividend equivalent rights, and other stock-based and stock-related awards to directors, officers and other key associates.

Stock-based compensation expense recognized and included in “Selling, general and administrative expenses” in the condensed consolidated statements of earnings, and related tax impacts were as follows:

 

12 Weeks Ended

 

 

28 Weeks Ended

 

(In thousands)

July 13, 2024

 

 

July 15, 2023

 

 

July 13, 2024

 

 

July 15, 2023

 

Restricted stock expense

$

 

1,179

 

 

$

 

1,896

 

 

$

 

3,261

 

 

$

 

6,697

 

Restricted stock unit expense

 

 

874

 

 

 

 

—

 

 

 

 

3,664

 

 

 

 

—

 

Performance share unit (benefit) expense

 

 

(197

)

 

 

 

569

 

 

 

 

(1,349

)

 

 

 

915

 

Income tax benefit

 

 

(517

)

 

 

 

(742

)

 

 

 

(1,442

)

 

 

 

(2,909

)

Stock-based compensation expense, net of tax

$

 

1,339

 

 

$

 

1,723

 

 

$

 

4,134

 

 

$

 

4,703

 

The following table summarizes activity in the stock incentive plans for the 28 weeks ended July 13, 2024:

 

 

 

 

 

Weighted

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Weighted

 

 

Restricted

 

 

Average

 

 

Restricted

 

 

Average

 

 

Performance

 

 

Average

 

 

Stock

 

 

Grant-Date

 

 

Stock

 

 

Grant-Date

 

 

Share

 

 

Grant-Date

 

 

Awards

 

 

Fair Value

 

 

Units

 

 

Fair Value

 

 

Units

 

 

Fair Value

 

Outstanding at December 30, 2023

 

 

819,457

 

 

$

 

24.92

 

 

 

 

—

 

 

$

 

—

 

 

 

 

290,310

 

 

$

 

27.00

 

Granted

 

 

—

 

 

 

 

—

 

 

 

 

580,063

 

 

 

 

20.29

 

 

 

 

413,207

 

 

 

 

20.53

 

Vested

 

 

(460,364

)

 

 

 

23.16

 

 

 

 

(15,490

)

 

 

 

20.41

 

 

 

 

—

 

 

 

 

—

 

Cancelled/Forfeited

 

 

(12,981

)

 

 

 

26.77

 

 

 

 

(11,631

)

 

 

 

20.41

 

 

 

 

(10,294

)

 

 

 

23.39

 

Outstanding at July 13, 2024

 

 

346,112

 

 

$

 

27.19

 

 

 

 

552,942

 

 

$

 

20.28

 

 

 

 

693,223

 

 

$

 

23.20

 

The following table summarizes the unrecognized compensation cost and weighted average recognition period for awards granted under the Company's stock incentive plans as of July 13, 2024:

 

 

 

 

 

Weighted

 

Unrecognized

 

 

Average

 

Compensation

 

 

Recognition

 

Cost

 

 

Period

 

(In thousands)

 

 

(in years)

Restricted stock awards

$

 

5,476

 

 

 

1.3

Restricted stock units

 

 

7,895

 

 

 

2.4

Performance share units

 

 

7,664

 

 

 

2.4

Total

$

 

21,035

 

 

 

 

Stock Warrant

On October 7, 2020, in connection with its entry into a commercial agreement with Amazon.com, Inc. (“Amazon”), the Company issued Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon, a warrant to acquire up to an aggregate of 5,437,272 shares of the Company’s common stock (the “Warrant”), subject to certain vesting conditions. Warrant shares totaling 1,087,455 shares vested upon the signing of the commercial agreement and had a grant date fair value of $5.51 per share. Warrant shares totaling up to 4,349,817 shares may vest in connection with conditions defined by the terms of the Warrant, as Amazon makes payments to the Company in connection with the commercial supply agreement, in increments of $200 million, and had a grant date fair value of $5.33 per share. Upon vesting, shares may be acquired at an exercise price of $17.7257. The Warrant contains customary anti-dilution, down-round and change-in-control provisions. The right to purchase shares in connection with the Warrant expires on October 7, 2027.

Share-based payment expense recognized as a reduction of “Net sales” in the condensed consolidated statements of earnings, and related tax benefits were as follows:

 

12 Weeks Ended

 

 

28 Weeks Ended

 

(In thousands)

July 13, 2024

 

 

July 15, 2023

 

 

July 13, 2024

 

 

July 15, 2023

 

Warrant expense

$

 

190

 

 

$

 

353

 

 

$

 

516

 

 

$

 

960

 

Income tax benefit

 

 

(13

)

 

 

 

(31

)

 

 

 

(55

)

 

 

 

(95

)

Warrant expense, net of tax

$

 

177

 

 

$

 

322

 

 

$

 

461

 

 

$

 

865

 

 

The following table summarizes stock warrant activity for the 28 weeks ended July 13, 2024:

 

 

 

 

 

 

 

 

Warrant

 

Outstanding and nonvested at December 30, 2023

 

 

 

 

 

 

 

 

3,262,357

 

Vested

 

 

 

 

 

 

 

 

(108,746

)

Outstanding and nonvested at July 13, 2024

 

 

 

 

 

 

 

 

3,153,611

 

As of July 13, 2024, total unrecognized cost related to nonvested warrant shares was $16.4 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 3.2 years. Warrants representing 2,283,661 shares are vested and exercisable. As of July 13, 2024, nonvested warrant shares had an intrinsic value of $3.0 million, and vested warrant shares had an intrinsic value of $2.2 million.