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SHARE-BASED AWARDS SHARE-BASED AWARDS | 9 Months Ended
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Apr. 27, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
SHARE-BASED AWARDS | SHARE-BASED AWARDS Pursuant to the Merger Agreement, dated as of July 25, 2018, as amended, each outstanding Supervalu stock option, whether vested or unvested, that was unexercised as of immediately prior to the effective time of the Merger (“SVU Option”) was converted, effective as of the effective time of the Merger, into a stock option exercisable for shares of common stock of the Company (“Replacement Option”) in accordance with the adjustment provisions of the Supervalu stock plan pursuant to which such SVU Option was granted and the Merger Agreement, with such Replacement Option generally having the same terms and conditions as the underlying SVU Option. In addition, pursuant to the Merger Agreement, each outstanding Supervalu restricted share award, restricted stock unit award, deferred share unit award and performance share unit award (“SVU Equity Award”) was converted, effective as of the effective time of the Merger, into time-vesting awards (“Replacement Award”) with a settlement value equal to the merger consideration ($32.50 per share) multiplied by the number of shares of Supervalu common stock subject to such SVU Equity Award, and generally upon the same terms of the SVU Equity Award including the applicable change in control termination protections. The Merger Agreement originally provided that the Replacement Awards were payable in cash, however, the Merger Agreement was amended on October 10, 2018, to provide that the Replacement Awards could be settled at the Company’s election, in cash and/or an equal value in shares of common stock of the Company. On October 22, 2018, the Company authorized for issuance and registered on a Registration Statement on Form S-8 filed with the SEC 5,000,000 shares of common stock for issuance in order to satisfy the Replacement Options and Replacement Awards. On March 28, 2019, the Company filed a Registration Statement on Form S-3 with the SEC, which was declared effective on April 5, 2019. During the third quarter of fiscal 2019, the Company issued 259,866 shares of common stock at an average price of $12.06 per share for $3.1 million of cash, of which $1.6 million was received subsequent to the end of the third quarter. In addition, subsequent to the end of the third quarter of fiscal 2019, the Company issued approximately 1.6 million shares of common stock at an average market price of $12.27 per share for $19.3 million of cash. Proceeds from these issuances were used to fund settlement of Replacement Award obligations. The Replacement Awards are liability classified awards as they may ultimately be settled in cash or shares at the discretion of the employee. The Replacement Awards liabilities are expensed over the service period based on the fixed value of $32.50 per share. The Company recognized total share-based compensation expense of $9.3 million and $27.8 million during the third quarter and 39-week period ended April 27, 2019, respectively, which included share-based compensation expense of $4.8 million and $9.6 million, respectively, for Supervalu Replacement Options and Awards related to the post-combination period, beginning on the acquisition date through April 27, 2019. The total income tax benefit for share-based compensation, excluding change-in-control charges, was $2.5 million and $2.5 million for the third quarters of fiscal 2019 and fiscal 2018, respectively and $7.4 million and $6.8 million for the 39-week periods ended April 27, 2019 and April 28, 2018, respectively. Share-based compensation expense does not include $32.1 million of charges for the settlement of share-based awards recorded as part of Restructuring, acquisition, and integration related expenses, described in Note 5. “Restructuring, Acquisition, and Integration Related Expenses” of which $23.7 million relates to change-in-control payments. The Company recorded share-based compensation expense of $7.9 million and $21.7 million in the third quarter and 39-week period ended April 28, 2018, respectively. Supervalu Replacement Awards generally vest in three equal installments or cliff-vest after three years from the date they were originally granted by Supervalu. The Company’s other time vesting awards are typically four equal annual installments for employees and two equal installments for non-employee directors with the first installment on the date of grant and the second installment on the six-month anniversary of the grant date. As of April 27, 2019, there was $60.9 million of total unrecognized compensation cost related to outstanding share-based compensation arrangements (including stock options, restricted stock units and performance-based restricted stock units) of which $27.7 million relates to Supervalu Replacement Awards. Unrecognized compensation cost related to Replacement Options is de minimis. The total unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.2 years. New Retirement Provision During the second quarter of fiscal 2019, after reviewing retirement provisions and practices for the treatment of equity awards at comparable companies, the Compensation Committee of the Company’s Board of Directors determined to change the terms of its long-term compensation awards to executives who might consider retiring and to better assure that their awards provided an incentive to work for the long term best interests of the Company up to their termination date, and regardless of their retirement plans. Accordingly, the Compensation Committee determined that time-based vesting restricted stock units, with the exception of Replacement Awards, will continue to vest during retirement after termination of employment on the same terms as they would if the executive had not retired, but without the requirement that they remain employed. Performance share-units will be treated similarly on retirement, but subject to actual performance at the time achievement of performance objectives is measured. In addition, an executive’s equity awards granted in the year of retirement will be prorated to reflect the service period prior to the date of retirement. Retirement vesting will only be available to employees age 59 or older who voluntarily terminate employment after at least 10 years of service to the Company. As a result of these retirement provisions, the Company recorded a share-based compensation charge of approximately $6.6 million during the second quarter of fiscal 2019.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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