XML 43 R22.htm IDEA: XBRL DOCUMENT
v3.20.4

Share-Based Payments | 12 Months Ended
--- | ---
Jan. 02, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-Based Payments | Note 14 – Share-Based Payments Share-Based Payments to Employees The Company previously sponsored a shareholder-approved stock incentive plan (the “2015 Plan”) that provided 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. On May 20, 2020, the Company’s shareholders approved a new stock incentive plan (“the 2020 Plan”). The 2020 Plan provides 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, employees, or contractors of the Company, as determined by the Compensation Committee of the Board of Directors. The 2020 Plan provided for 1,635,000 newly reserved shares plus the 736,578 shares previously available for grant under the 2015 Plan. Holders of restricted stock and stock awards are entitled to participate in dividends, payable upon the vesting of the underlying awards. As of January 2, 2021, a total of 2,205,034 shares remained unissued under the 2020 Plan. All outstanding unvested shares of restricted stock vest immediately upon a “Change in Control,” as defined by the Plan. There was no stock option activity in 2020. The following table summarizes stock option activity for 2019 and 2018:
|  |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |  |
|  |  |  |  |  | Weighted |  |  | Average |  |  |  |  |  |
|  |  |  |  |  | Average |  |  | Remaining |  |  | Aggregate |
| Shares |  |  | Exercise |  |  | Contractual |  |  | Intrinsic Value |
| Under Options |  |  | Price |  |  | Life Years |  |  | (in thousands) |
Options outstanding and exercisable at December 30, 2017 |  |  | 47,928 |  |  | $ |  | 16.52 |  |  |  |  | 1.07 |  |  | $ |  | 487 |
Exercised |  |  | (20,476 | ) |  |  |  | 13.87 |  |  |  |  |  |  |  |  |  | 1,043 |
Cancelled/Expired |  |  | (14,400 | ) |  |  |  | 22.69 |  |  |  |  |  |  |  |  |  |  |
Options outstanding and exercisable at December 29, 2018 |  |  | 13,052 |  |  |  |  | 13.87 |  |  |  |  | 0.37 |  |  |  |  | 39 |
Exercised |  |  | (13,052 | ) |  |  |  | 13.87 |  |  |  |  |  |  |  |  |  | 51 |
Options outstanding and exercisable at December 28, 2019 |  |  | — |  |  | $ |  | — |  |  |  |  | — |  |  | $ |  | — |
Restricted shares awarded to associates vest ratably over a four-year service period and over one year for grants to members of the Board of Directors. Awards are subject to forfeiture and certain transfer restrictions prior to vesting. Compensation expense, representing the fair value of the stock at the measurement date of the award, is recognized over the required service period. The following table summarizes restricted stock activity for 2020, 2019 and 2018:
|  |  |  |  |  |  |  |  |  |  |  | Weighted Average |
|  |  |  |  |  |  |  |  |  |  |  | Grant-Date |
|  |  |  |  |  |  | Shares |  |  | Fair Value |
Outstanding and nonvested at December 30, 2017 |  |  |  |  |  |  |  |  | 613,744 |  |  | $ |  | 30.32 |
Granted |  |  |  |  |  |  |  |  | 482,572 |  |  |  |  | 17.00 |
Vested |  |  |  |  |  |  |  |  | (260,644 | ) |  |  |  | 28.89 |
Forfeited |  |  |  |  |  |  |  |  | (12,853 | ) |  |  |  | 23.52 |
Outstanding and nonvested at December 29, 2018 |  |  |  |  |  |  |  |  | 822,819 |  |  |  |  | 23.07 |
Granted |  |  |  |  |  |  |  |  | 488,063 |  |  |  |  | 17.84 |
Vested |  |  |  |  |  |  |  |  | (346,721 | ) |  |  |  | 23.47 |
Forfeited |  |  |  |  |  |  |  |  | (35,428 | ) |  |  |  | 20.11 |
Outstanding and nonvested at December 28, 2019 |  |  |  |  |  |  |  |  | 928,733 |  |  |  |  | 20.28 |
Granted |  |  |  |  |  |  |  |  | 521,566 |  |  |  |  | 15.96 |
Vested |  |  |  |  |  |  |  |  | (396,219 | ) |  |  |  | 21.65 |
Forfeited |  |  |  |  |  |  |  |  | (80,132 | ) |  |  |  | 16.48 |
Outstanding and nonvested at January 2, 2021 |  |  |  |  |  |  |  |  | 973,948 |  |  | $ |  | 17.72 |
The total fair value of shares vested was $5.3 million, $6.2 million and $4.8 million in 2020, 2019 and 2018, respectively. Share-based payment expense recognized and included in “Selling, general and administrative expenses” in the consolidated statements of earnings, and related tax benefits were as follows:
|  |  |  | 2020 |  |  | 2019 |  |  | 2018 |
(In thousands) |  |  |  | (53 Weeks) |  |  | (52 Weeks) |  |  | (52 Weeks) |
Restricted stock |  |  |  | $ |  | 6,299 |  |  | $ |  | 7,312 |  |  | $ |  | 7,646 |
Tax benefits |  |  |  |  |  | (839 | ) |  |  |  | (1,303 | ) |  |  |  | (2,242 | )
Stock-based compensation expense, net of tax |  |  |  | $ |  | 5,460 |  |  | $ |  | 6,009 |  |  | $ |  | 5,404 |
As of January 2, 2021, total unrecognized compensation cost related to non-vested restricted stock awards granted under the stock incentive plan was $5.7 million. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 2.5 years. The Company recognized tax deductions of $5.9 million, $7.2 million and $5.6 million related to the exercise of stock options and the vesting of restricted stock in 2020, 2019 and 2018, respectively. The Company sponsors 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, which will be issued at 120% of cash value. 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. During 2018, an additional 45,000 shares were authorized to be granted from the stock bonus plan. 3,443 shares were issued in 2019 and 8,087 shares were issued in 2020 leaving 33,470 shares remaining unissued under the stock bonus plan as of January 2, 2021. The Company also sponsors an associate stock purchase plan covering 200,000 shares of SpartanNash common stock. The plan enables associates of the Company to purchase shares at 95% of the fair market value. As of January 2, 2021, a total of 161,674 shares had been issued under the plan. Stock Warrants 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, warrants to acquire up to an aggregate of 5,437,272 shares of the Company’s common stock (the “Warrants”), subject to certain vesting conditions. Warrants equivalent to 2.5% of the Company’s outstanding and issuable shares, or 1,087,455 shares, vested upon the signing of the commercial agreement, and had a grant date fair value of $5.51 per share. Warrants equivalent to up to 10.0% of the Company’s outstanding and issuable shares, or 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 warrants contain 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. Non-cash share-based payment expense associated with the stock warrants is recognized as vesting conditions are achieved, based on the grant date fair value of the warrants. The fair value of the stock warrants was determined as of the grant date in accordance with ASC 718, Compensation – Stock Compensation, using the binomial lattice pricing model (the “lattice model”). The lattice model is based, in part, upon assumptions for which management is required to use judgment. The assumptions made for purposes of estimating fair value under the lattice model for the Warrants were as follows:
|  |  | Selected Assumption |  | Methodology
Risk free interest rate | 0.56% |  | Derived from the Constant Maturity Treasury Rate with maturity matching time to expiration of the Warrants
Volatility | 47.00% |  | Based on historical equity volatility of Company stock over a period matching the assumed warrants term
Dividend yield | 4.57% |  | Based on the historical dividends paid by the Company
The warrant shares which vested upon signing the commercial agreement have a contractual term of 7 years, whereas the warrant shares which vest upon payments made to the Company in connection with the commercial supply agreement have an estimated weighted average term of 3.6 years. The following table summarizes stock warrant activity for 2020:
|  |  |  |  |  |  |  | Warrants |
Outstanding and nonvested at December 28, 2019 |  |  |  |  |  |  |  |  | — |
Granted |  |  |  |  |  |  |  |  | 5,437,272 |
Vested |  |  |  |  |  |  |  |  | (1,087,455 | )
Outstanding and nonvested at January 2, 2021 |  |  |  |  |  |  |  |  | 4,349,817 |
Share-based payment expense recognized, included as a reduction of “Net sales” in the consolidated statements of earnings, and related tax benefits were as follows:
|  |  |  |  |  |  | 2020 |
(In thousands) |  |  |  |  |  |  | (53 Weeks) |
Warrants expense |  |  |  |  |  |  | $ |  | 6,549 |
Tax benefits |  |  |  |  |  |  |  |  | (2,051 | )
Stock-based compensation expense, net of tax |  |  |  |  |  |  | $ |  | 4,498 |
As of January 2, 2021, total unrecognized cost related to non-vested warrants was $22.6 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 6.8 years. Warrants representing 1,087,455 shares are vested and exercisable. The warrants had no intrinsic value as of January 2, 2021.

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration