Stock-Based Compensation Plans

6 Months Ended

Feb. 16, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Plans

Note 6—Stock-Based Compensation Plans

In the second quarter of fiscal 2012, the Fifth Restated 2002 Stock Incentive Plan was amended following shareholder approval and is now referred to as the Sixth Restated 2002 Stock Incentive Plan (Sixth Plan). The Sixth Plan initially authorized the issuance of 16,000,000 shares (9,143,000 RSUs) of common stock for future grants in addition to shares authorized under the previous plan. Each RSU is counted as 1.75 shares toward the limit of shares available. The Company issues new shares of common stock upon exercise of stock options and upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares equal to the minimum statutory withholding taxes.

Summary of Restricted Stock Unit Activity

At February 16, 2014, 7,857,000 shares were available to be granted as RSUs and the following awards were outstanding:

• 8,648,000 time-based RSUs that vest upon continued employment over specified periods of time;

• 343,000 performance-based RSUs granted to certain executive officers of the Company for which the performance targets have been met. Further restrictions lapse upon achievement of continued employment over specified periods of time; and

• 269,000 performance-based RSUs to be granted to executive officers of the Company upon achievement of performance targets for fiscal 2014, as determined by the Compensation Committee of the Board of Directors after the end of the fiscal year. These awards are included in the table below and the Company recognized compensation expense for these awards as it is currently deemed probable that the targets will be achieved.

The following table summarizes RSU transactions during the first half of 2014:

	Number of Units (in 000’s)		Weighted-Average Grant Date Fair Value
Outstanding at September 1, 2013	10,081		$	72.52
Granted	3,456		113.64
Vested and delivered	(4,138	)	71.41
Forfeited	(139	)	80.65
Outstanding at February 16, 2014	9,260		$	86.79

The remaining unrecognized compensation cost related to non-vested RSUs at February 16, 2014 was $702, and the weighted-average period of time over which this cost will be recognized is 1.8 years.

Summary of Stock Option Activity

All outstanding stock options were fully vested and exercisable at February 16, 2014, and September 1, 2013. The following table summarizes stock option transactions:

	Number Of Options (in 000’s)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
Outstanding at September 1, 2013	1,947		$	39.70
Exercised	(295	)	36.56
Outstanding at February 16, 2014	1,652		$	40.26	1.02	$	125

 _______________

(1) The difference between the exercise price and the market value of common stock at February 16, 2014.

The tax benefits realized, derived from the compensation deductions resulting from the option exercises, and intrinsic value related to total stock options exercised are provided in the following table:

	24 Weeks Ended
	February 16, 2014		February 17, 2013
Actual tax benefit realized for stock options exercised	$	9	$	23
Intrinsic value of stock options exercised(1)	$	24	$	64

_______________

(1) The difference between the exercise price and the market value of common stock measured at each exercise date.

Summary of Stock-Based Compensation

The following table summarizes stock-based compensation expense and the related tax benefits under the Company’s plans:

	12 Weeks Ended						24 Weeks Ended
	February 16, 2014			February 17, 2013			February 16, 2014			February 17, 2013
Stock-based compensation expense before income taxes	$	73		$	66		$	185		$	159
Less recognized income tax benefit	(24		)	(22		)	(62		)	(53		)
Stock-based compensation expense, net of income taxes	$	49		$	44		$	123		$	106