Note 13 – Stock-Based Compensation

The Company has a shareholder-approved 10-year stock incentive plan covering 2,500,000 shares of SpartanNash’s common stock. The SpartanNash Company Stock Incentive Plan of 2015 (the “2015 Plan”) provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, and other stock-based and stock-related awards to directors, officers and other key associates. Shares issued, as a result of stock option exercises, will be funded with the issuance of new shares. Holders of restricted stock and stock awards are entitled to participate in cash dividends and dividend equivalents. As of January 2, 2016, a total of 2,497,027 shares remained unissued under the 2015 Plan.

All outstanding unvested stock options and unvested shares of restricted stock vest immediately upon a “Change in Control,” as defined by the Plan. The Company has not issued any stock options since 2009 and all outstanding options are vested.

The following table summarizes stock option activity for the three years ended January 2, 2016:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Shares			Exercise		Contractual		Intrinsic Value
	Under Options			Price		Life Years		(in thousands)
Options outstanding at March 30, 2013		653,471		$	18.82		4.65	$	1,428
Exercised		(24,976	)		9.49				298
Cancelled/Forfeited		(41,729	)		17.71
Options outstanding and exercisable at December 28, 2013		586,766			19.30		4.01		2,965
Exercised		(88,152	)		12.68				869
Cancelled/Forfeited		(4,131	)		3.25
Options outstanding and exercisable at January 3, 2015		494,483			20.61		3.30		2,772
Exercised		(185,627	)		19.72				1,543
Cancelled/Forfeited		(63	)		11.50
Options outstanding and exercisable at January 2, 2016		308,793		$	21.15		2.46	$	773
Vested and expected to vest in the future at January 2, 2016		308,793		$	21.15

Cash received from option exercises was $3.7 million, $1.1 million and $0.3 million during fiscal years ended January 2, 2016 and January 3, 2015 and for the 39-week period ended December 28, 2013, respectively.

Restricted shares awarded to associates vest ratably over a four-year service period and over one year for grants to the Board of Directors. Awards are subject to forfeiture and certain transfer restrictions prior to vesting. All shares fully vest upon a “Change in Control,” as defined by the Plan. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the required service period. On December 17, 2013, the Board of Directors approved a modification to the outstanding restricted stock awards to provide for continued vesting upon retirement. As a result, incremental expense of $4.2 million was recognized to reflect the cumulative compensation expense recognized over the required service period of each restricted shareholder.

The following table summarizes restricted stock activity for fiscal years ended January 2, 2016 and January 3, 2015 and for the 39-week period ended December 28, 2013:

				Weighted Average
				Grant-Date
	Shares			Fair Value
Outstanding and nonvested at March 30, 2013		546,182		$	16.59
Granted		227,207			18.07
Vested		(225,600	)		16.94
Forfeited		(28,954	)		16.94
Outstanding and nonvested at December 28, 2013		518,835			23.56
Granted		317,827			22.63
Vested		(219,894	)		23.56
Forfeited		(16,115	)		23.03
Outstanding and nonvested at January 3, 2015		600,653			23.08
Granted		314,595			26.59
Vested		(265,737	)		23.19
Forfeited		(11,956	)		23.85
Outstanding and nonvested at January 2, 2016		637,555		$	24.75

The total fair value of shares vested during fiscal years ended January 2, 2016 and January 3, 2015 and for the 39-week period ended December 28, 2013 was $7.6 million, $4.7 million and $3.6 million, respectively.

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

	January 2, 2016			January 3, 2015			December 28, 2013
(In thousands)	(52 Weeks)			(53 Weeks)			(39 Weeks)
Stock options	$	—		$	—		$	14
Restricted stock		7,240			6,939			6,937
Tax benefits		(2,758	)		(2,632	)		(2,640	)
	$	4,482		$	4,307		$	4,311

As of January 2, 2016, total unrecognized compensation cost related to non-vested share-based awards granted under the stock incentive plans was $5.6 million for restricted stock. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 2.4 years for restricted stock. All compensation costs related to stock options have been recognized.

The Company recognized tax deductions of $9.5 million, $5.9 million and $4.1 million related to the exercise of stock options and the vesting of restricted stock during fiscal years ended January 2, 2016 and January 3, 2015 and for the 39-week period ended December 28, 2013, respectively.

The Company has a stock bonus plan covering 300,000 shares of SpartanNash common stock. Under the provisions of this plan, certain officers and key associates may elect to receive a portion of their annual bonus in common stock rather than cash and will be granted additional shares of common stock worth 20% of the portion of the bonus they elect to receive in stock. After the shares are issued, the holder is not able to sell or otherwise transfer the shares until the end of the holding period, which is currently 24 months. Compensation expense is recorded based upon the market price of the stock as of the measurement date. A total of 47,926 shares remained unissued under the stock bonus plan at January 2, 2016.

The Company also has an associate stock purchase plan covering 200,000 shares of SpartanNash common stock. The plan provides that associates of the Company may purchase shares at 95% of the fair market value. The associate stock purchase plan was suspended during the 39-week period ended December 28, 2013 in conjunction with the merger with Nash-Finch and cash balances were refunded to participants. The associate stock purchase plan was reinstated in April 2014. As of January 2, 2016, a total of 58,237 shares had been issued under the plan.