Note 6—Stock-Based Compensation

On January 24, 2019, our shareholders approved the adoption of the 2019 Incentive Plan, which replaced the Seventh Restated 2002 Stock Incentive Plan (Seventh Plan). The 2019 Incentive Plan authorized the issuance of 17,500,000 shares (10,000,000 RSUs) of common stock for future grants, plus the remaining shares that were available for grant under the Seventh Plan on January 24, 2019 and future forfeited shares from grants under the Seventh Plan up to a maximum aggregate of 27,800,000 shares (15,885,000 RSUs). The Company issues new shares of common stock upon vesting of RSUs. Shares for vested RSUs are generally delivered to participants annually, net of shares withheld for taxes.

Summary of Restricted Stock Unit Activity

At May 12, 2019, 15,649,000 shares were available to be granted as RSUs and the following awards were outstanding:


•	6,307,000 time-based RSUs that vest upon continued employment over specified periods of time;


•	78,000 performance-based RSUs, granted to executive officers of the Company, for which the performance targets have been met. The awards vest upon continued employment over specified periods of time; and

•

150,000 performance-based RSUs, granted to executive officers of the Company, subject to achievement of performance targets for fiscal 2019, 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 2019:



	Number of Units (in 000’s)		Weighted-Average Grant Date Fair Value
Outstanding at September 2, 2018	7,578		$	140.85
Granted	2,792		224.00
Vested and delivered	(3,707	)	155.64
Forfeited	(128	)	163.68
Outstanding at May 12, 2019	6,535		$	167.55

The remaining unrecognized compensation cost related to non-vested RSUs at May 12, 2019, was $817, and the weighted-average period over which this cost will be recognized is 1.7 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 12, 2019			May 13, 2018			May 12, 2019			May 13, 2018
Stock-based compensation expense before income taxes	$	93		$	85		$	482		$	431
Less recognized income tax benefit	(20		)	(19		)	(104		)	(98		)
Stock-based compensation expense, net of income taxes	$	73		$	66		$	378		$	333