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Share-Based Payments | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Share-Based Payments | Note 13 – Share-Based Payments Share-Based Payments to Employees The Company sponsors a shareholder-approved stock incentive plan (the “2020 Plan”) that 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. Holders of restricted stock and stock awards issued under the 2020 Plan are entitled to participate in dividends, payable upon the vesting of the underlying awards. As of December 31, 2022, a total of 1,441,593 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. Restricted shares awarded to associates in 2022 and 2021 vest ratably over a three-year service period and over one year for grants to members of the Board of Directors. Restricted shares awarded to associates prior to 2021 vest ratably over a four-year service period. 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 2022, 2021 and 2020:
|  |  |  |  |  |  |  |  |  |  | Weighted Average |
|  |  |  |  |  |  |  |  |  |  | Grant-Date |
|  |  |  |  |  |  | Shares |  |  | Fair Value |
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 |
Granted |  |  |  |  |  |  |  |  | 562,653 |  |  |  |  | 18.96 |
Vested |  |  |  |  |  |  |  |  | (388,403 | ) |  |  |  | 19.81 |
Forfeited |  |  |  |  |  |  |  |  | (116,361 | ) |  |  |  | 18.19 |
Outstanding and nonvested at January 1, 2022 |  |  |  |  |  |  |  |  | 1,031,837 |  |  |  |  | 17.56 |
Granted |  |  |  |  |  |  |  |  | 391,334 |  |  |  |  | 28.63 |
Vested |  |  |  |  |  |  |  |  | (470,145 | ) |  |  |  | 17.92 |
Forfeited |  |  |  |  |  |  |  |  | (89,963 | ) |  |  |  | 20.71 |
Outstanding and nonvested at December 31, 2022 |  |  |  |  |  |  |  |  | 863,063 |  |  | $ |  | 22.05 |
The total intrinsic value of shares vested was $14.3 million, $7.3 million and $5.3 million in 2022, 2021 and 2020, 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:
|  |  |  | 2022 |  |  | 2021 |  |  | 2020 |
(In thousands) |  |  |  | (52 Weeks) |  |  | (52 Weeks) |  |  | (53 Weeks) |
Restricted stock |  |  |  | $ |  | 8,308 |  |  | $ |  | 6,868 |  |  | $ |  | 6,299 |
Tax benefits |  |  |  |  |  | (4,094 | ) |  |  |  | (1,744 | ) |  |  |  | (839 | )
Stock-based compensation stock expense, net of tax |  |  |  | $ |  | 4,214 |  |  | $ |  | 5,124 |  |  | $ |  | 5,460 |
As of December 31, 2022, total unrecognized compensation cost related to non-vested restricted stock awards granted under the stock incentive plan was $8.4 million. The remaining compensation costs not yet recognized are expected to be recognized over a weighted average period of 1.8 years. The Company recognized tax deductions of $14.7 million, $7.7 million and $5.9 million related to the vesting of restricted stock in 2022, 2021 and 2020, respectively. The Company sponsored a stock bonus plan covering 300,000 shares of SpartanNash common stock. Under the provisions of this plan, certain officers and key associates could elect to receive a portion of their annual bonus in common stock rather than cash, which was 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 24 months. Compensation expense is recorded based upon the market price of the stock as of the measurement date. Under the plan, 15,778 and 3,443 shares were issued in 2021, and 2020, respectively. The stock bonus plan expired on March 31, 2021. In 2022, the Company adopted a new associate stock purchase plan ("2022 Plan"), which covers 300,000 shares of SpartanNash common stock and enables eligible associates of the Company to purchase shares at 85% of the fair market value. The Company has determined this represents compensation expense in accordance with ASC 718, Compensation – Stock Compensation. The 2022 Plan replaced a previous Company-sponsored associate stock purchase plan covering 200,000 shares of SpartanNash common stock that enabled associates of the Company to purchase shares at 95% of the fair market value. As of December 31, 2022, 194,195 shares were issued under the previous plan and 9,895 shares have been issued under the 2022 Plan. Stock Warrant On October 7, 2020, in connection with its entry into a commercial agreement with Amazon.com, Inc. (“Amazon”), the Company issued to 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 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. Warrant shares 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 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. Non-cash share-based payment expense associated with the Warrant is recognized as vesting conditions are achieved, based on the grant date fair value of the Warrant. The fair value of the Warrant 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 Warrant 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 the signing of 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, had an estimated weighted average term of 3.6 years. The following table summarizes the Warrant activity for 2022, 2021 and 2020:
|  |  |  |  |  |  |  | Warrant |
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 |
Vested |  |  |  |  |  |  |  |  | (434,984 | )
Outstanding and nonvested at January 1, 2022 |  |  |  |  |  |  |  |  | 3,914,833 |
Vested |  |  |  |  |  |  |  |  | (434,984 | )
Outstanding and nonvested at December 31, 2022 |  |  |  |  |  |  |  |  | 3,479,849 |
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:
|  |  |  | 2022 |  |  | 2021 |  |  | 2020 |
(In thousands) |  |  |  | (52 Weeks) |  |  | (52 Weeks) |  |  | (53 Weeks) |
Warrant expense |  |  |  | $ |  | 2,158 |  |  | $ |  | 1,958 |  |  | $ |  | 6,549 |
Tax benefits |  |  |  |  |  | (203 | ) |  |  |  | (152 | ) |  |  |  | (2,051 | )
Warrant expense, net of tax |  |  |  | $ |  | 1,955 |  |  | $ |  | 1,806 |  |  | $ |  | 4,498 |
As of December 31, 2022, total unrecognized cost related to non-vested warrants was $18.5 million, which may be expensed as vesting conditions are satisfied over the remaining term of the agreement, or 4.8 years. Warrants representing 1,957,423 shares are vested and exercisable. As of December 31, 2022, non-vested warrant shares had an intrinsic value of $43.5 million, and vested warrant shares had an intrinsic value of $24.5 million.

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