Stock-Based Compensation Plans

9 Months Ended

May 10, 2015

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

Stock-Based Compensation Plans

Note 6—Stock-Based Compensation

In the second quarter of 2015, the Sixth Restated 2002 Stock Incentive Plan was amended, following shareholder approval, and is now referred to as the Seventh Restated 2002 Incentive Plan (Seventh Plan). The Seventh Plan authorized the issuance of 23,500,000 shares (13,429,000 RSUs) of common stock for future grants in addition to the shares authorized under the previous plan. 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.

As required by the Company’s Seventh Plan, in conjunction with the special cash dividend discussed in Note 5, adjustments were made to awards outstanding on the dividend record date to preserve their value following the special cash dividend, as follows: (i) the number of shares subject to outstanding RSUs was increased; and (ii) the exercise prices of outstanding stock options were reduced and the number of shares subject to such options was increased. Approximately 410,000 stock options were adjusted, and approximately 8,956,000 RSUs were adjusted. These adjustments did not result in additional share-based compensation expense, as the fair value of the outstanding awards immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. As further required by the Seventh Plan, the maximum number of shares issuable under the Seventh Plan was proportionally adjusted, which resulted in an additional 750,000 RSU shares available to be granted.

Summary of Restricted Stock Unit Activity

At May 10, 2015, 18,284,000 shares were available to be granted as RSUs and the following awards were outstanding:

• 8,737,000 time-based RSUs, which vest upon continued employment over specified periods of time;

• 254,000 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

• 281,000 performance-based RSUs to be granted to executive officers of the Company upon achievement of performance targets for fiscal 2015, 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 thirty-six weeks of 2015:

	Number of Units (in 000’s)		Weighted-Average Grant Date Fair Value
Outstanding at August 31, 2014	9,117		$	86.92
Granted	4,017		125.68
Vested and delivered	(4,088	)	87.31
Forfeited	(150	)	102.36
Special cash dividend	376		N/A
Outstanding at May 10, 2015	9,272		$	99.71

The remaining unrecognized compensation cost related to non-vested RSUs at May 10, 2015 was $738, and the weighted-average period over which this cost will be recognized is 1.8 years.

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						36 Weeks Ended
	May 10, 2015			May 11, 2014			May 10, 2015			May 11, 2014
Stock-based compensation expense before income taxes	$	65		$	66		$	301		$	251
Less recognized income tax benefit	(21		)	(22		)	(101		)	(84		)
Stock-based compensation expense, net of income taxes	$	44		$	44		$	200		$	167