Note 16 - Stock Based Compensation

12 Months Ended

Jun. 24, 2012

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

16. Stock Based Compensation

On October 29, 2008, the shareholders of the Company approved the 2008 Unifi, Inc. Long-Term Incentive Plan (“2008 LTIP”). The 2008 LTIP authorized the issuance of up to 2,000 shares of common stock pursuant to the grant or exercise of stock options, including incentive stock options, non-qualified stock options and restricted stock, but not more than 1,000 shares may be issued as restricted stock. Option awards are granted with an exercise price not less than the market price of the Company’s stock at the date of grant.  The 2008 LTIP replaced the 1999 Unifi, Inc. Long-Term Incentive Plan (“1999 LTIP”), however, prior grants outstanding under the 1999 LTIP remain subject to that plan’s provisions.

Stock options subject to service conditions

During fiscal year 2012, the Compensation Committee of the Board (“Compensation Committee”) authorized, and the Company issued, 127 stock options under the 2008 LTIP to certain key employees.  The stock options vest ratably over the required three year service period and have ten year contractual terms.  The exercise price of the options was $12.47 per share.  The Company used the Black-Scholes model to estimate the weighted average grant date fair value of $7.88 per share.

There were no options granted during fiscal year 2011.

During fiscal year 2010, the Compensation Committee authorized, and the Company issued, 567 stock options under the 2008 LTIP to certain key employees and certain members of the Board.  The stock options vest ratably over the required three year service period and have ten year contractual terms.  The exercise price of the options was $5.79 per share.  The Company used the Black-Scholes model to estimate the weighted average grant date fair value of $3.34 per share.

For options granted, the valuation models used the following assumptions:

	For the Fiscal Years Ended
	June 24, 2012			June 26, 2011		June 27, 2010
Expected term (years)		6.3			—		5.5
Interest rate		2.0	%		—		2.8	%
Volatility		68.2	%		—		63.6	%
Dividend yield		—			—		—

The Company uses historical data to estimate the expected life, volatility and estimated forfeitures.  The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

A summary of the Company’s non-vested shares related to options subject to service conditions as of June 24, 2012, and changes during the current fiscal year is as follows:

	Under the 1999 LTIP		Under the 2008 LTIP			Total Shares			Weighted Average Grant Date Fair Value
Non-vested at June 26, 2011		—		373			373		$	3.34
Granted		—		127			127		$	7.88
Vested		—		(186	)		(186	)	$	3.34
Forfeited		—		(2	)		(2	)	$	3.31
Non-vested at June 24, 2012		—		312			312		$	5.19

The following table sets forth the exercise prices, the number of options outstanding and exercisable, and the remaining contractual lives of the Company’s stock options subject to service conditions for selected price ranges as of June 24, 2012:

					Options Outstanding						Options Exercisable
Exercise Price					Number of Options Outstanding		Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (Years)		Number of Options Exercisable		Weighted Average Exercise Price
$	5.73	-	$	10.00		833	$	6.72		5.7		648	$	6.99
$	10.01	-	$	20.00		179	$	11.92		7.5		52	$	10.59
$	20.01	-	$	29.79		4	$	21.13		1.5		4	$	21.13
Totals						1,016	$	7.70		6.0		704	$	7.34

At June 24, 2012, the remaining unrecognized compensation cost related to the unvested stock options subject to service conditions was $443 which is expected to be recognized over a weighted average period of 2.0 years.

Stock options subject to market conditions

There were no options granted during fiscal years 2012, 2011 and 2010 that contained market condition vesting provisions. A summary of the Company’s non-vested shares related to options subject to market conditions as of June 24, 2012, and changes during the current fiscal year is as follows:

	Under the 1999 LTIP		Under the 2008 LTIP			Total Shares			Weighted Average Grant Date Fair Value
Non-vested at June 26, 2011		494		83			577		$	5.66
Granted		—		—			—		$	—
Vested		—		—			—		$	—
Forfeited		—		(10	)		(10	)	$	7.47
Non-vested at June 24, 2012		494		73			567		$	5.63

The stock options are subject to a market condition which vests the options on the date that the closing price of the Company’s common stock has been at least $18, $24 or $30 per share (depending on the terms of the specific award) for thirty consecutive trading days.

The following table sets forth the exercise prices, the number of options outstanding and exercisable, and the remaining contractual lives of the Company’s stock options subject to market conditions, for selected price ranges as of June 24, 2012:

					Options Outstanding						Options Exercisable
Exercise Price					Number of Options Outstanding		Weighted Average Exercise Price		Weighted Average Contractual Life Remaining (Years)		Number of Options Exercisable		Weighted Average Exercise Price
$	8.00	-	$	10.00		494	$	8.15		5.3		—	$	—
$	10.01	-	$	12.48		73	$	12.48		6.4		—	$	—
Totals						567	$	8.71		5.5		—	$	—

The remaining unrecognized compensation cost related to the stock options subject to market conditions at June 24, 2012 was nil.

The stock option activity for the fiscal year ended June 24, 2012 for all plans and all vesting conditions is as follows:

	Options Outstanding			Weighted Average Exercise Price
Shares under option at June 26, 2011		1,692		$	9.62
Granted		127		$	12.47
Exercised		(10	)	$	7.24
Expired		(214	)	$	22.78
Forfeited		(12	)	$	11.35
Shares under option at June 24, 2012		1,583		$	8.06

For the fiscal years ended June 24, 2012 and June 26, 2011, the total intrinsic value of options exercised was $40 and $155, respectively. The amount of cash received from the exercise of options was $71 and $146 for the fiscal years ended June 24, 2012 and June 26, 2011, respectively. There were no options exercised in fiscal year 2010. The tax benefit realized from stock options exercised was not material for all periods presented.

The following table presents certain required stock option information for awards granted under the 2008 LTIP and the 1999 LTIP as of and for the year ended June 24, 2012:

Number of options vested and expected to vest		1,568
Weighted average price of options vested and expected to vest	$	8.08
Intrinsic value of options vested and expected to vest	$	6,285
Weighted average remaining contractual term of options vested and expected to vest (years)		5.8
Number of options exercisable as of June 24, 2012		704
Weighted average exercise price for options currently exercisable	$	7.34
Intrinsic value of options currently exercisable	$	3,178
Weighted average remaining contractual term of options currently exercisable (years)		5.2

Restricted stock units – non-employee directors

During fiscal year 2012, the Board authorized, and the Company issued, 49 restricted stock units (“RSUs”) under the 2008 LTIP to the Company’s non-employee directors.  The RSUs became fully vested on the grant date.  The RSUs convey no rights of ownership in shares of Company stock until such RSUs have been distributed to the grantee in the form of Company stock.  The vested RSUs will be converted into an equivalent number of shares of Company common stock and distributed to the grantee following the grantee’s termination of services as a member of the Board.  The grantee may elect to defer receipt of the shares of stock in accordance with the deferral options provided under the Unifi, Inc. Director Deferred Compensation Plan.  The Company estimated the fair value of the award to be $9.10 per RSU based on the fair value of the Company’s common stock at the award grant date.

During fiscal year 2011, the Board authorized, and the Company issued, 25 RSUs under the 2008 LTIP to the Company’s non-employee directors.  The RSUs were subject to a thirteen month vesting period.  The vested RSUs will be converted into an equivalent number of shares of Company common stock and distributed to the grantee following the grantee’s termination of services as a member of the Board.  The Company estimated the fair value of the award to be $13.89 per RSU based on the fair value of the Company’s common stock at the award grant date.

A summary of the Company’s RSUs issued to non-employee directors and changes during the current fiscal year consist of the following:

	Units			Weighted Average Grant Date Fair Value
Non-vested at June 26, 2011		21		$	13.89
Granted		49		$	9.10
Vested		(70	)	$	10.56
Forfeited		—		$	—
Non-vested at June 24, 2012		—		$	—

The remaining unrecognized compensation cost related to the unvested RSUs at June 24, 2012 is nil.

Restricted stock units – key employees

During fiscal year 2012, the Compensation Committee authorized, and the Company issued, 64 RSUs from the 2008 LTIP to certain key employees.  The RSUs are subject to a vesting restriction and convey no rights of ownership in shares of Company stock until such RSUs have vested and been distributed to the grantee in the form of Company stock.  The RSUs vest ratably over a three year period.  The RSUs will be converted into an equivalent number of shares of stock on each vesting date and distributed to the grantee, or the grantee may elect to defer the receipt of the shares of stock until separation from service.  If after July 27, 2012 and prior to the final vesting date the grantee has a separation from service without cause, the remaining unvested RSUs will become fully vested and will be converted to an equivalent number of shares of stock and issued to the grantee.  The Company estimated the grant-date fair value of the award to be $12.47 per RSU based on the fair value of the Company’s stock at the award grant date.

A summary of the Company’s RSUs issued to key employees and changes during the current fiscal year consist of the following:

	Units		Weighted Average Grant Date Fair Value
Non-vested at June 26, 2011		—	$	—
Granted		64	$	12.47
Vested		—	$	—
Forfeited		—	$	—
Non-vested at June 24, 2012		64	$	12.47

The remaining unrecognized compensation cost related to the unvested RSUs at June 24, 2012 is $78, which is expected to be recognized over a weighted average period of 0.1 years.

During fiscal year 2011, the total intrinsic value of all RSU’s converted to shares of Company stock was $70.  There were no RSU’s converted during fiscal year 2012 or during fiscal year 2010.

The following table presents certain required information for RSU’s granted under the 2008 LTIP as of June 24, 2012:

Number of RSU’s expected to vest		64
Weighted average price of RSU’s expected to vest	$	—
Intrinsic value of RSUs expected to vest	$	761
Weighted average remaining contractual term of RSU’s expected to vest		—

Summary:

The total cost charged against income related to all stock based compensation arrangements was as follows:

	For the Fiscal Years Ended
	June 24, 2012		June 26, 2011		June 27, 2010
Stock options subject to service conditions	$	774	$	594	$	1,014
Stock options subject to market conditions		—		47		1,110
RSUs issued to non-employee directors		566		234		—
RSUs issued to key employees		714		—		—
Total compensation cost	$	2,054	$	875	$	2,124

The total income tax benefit recognized for stock based compensation was not material for all periods presented.

As of June 24, 2012, total unrecognized compensation costs related to all unvested stock based compensation arrangements was $521.  The weighted average period over which these costs are expected to be recognized is 1.7 years.

As of June 24, 2012, a summary of the number of securities remaining available for future issuance under equity compensation plans is as follows:

Authorized under the 2008 LTIP	2,000
Less: Market condition options granted	(93	)
Less: Service condition options granted	(694	)
Less: RSUs granted to non-employee directors	(75	)
Less: RSUs granted to key employees	(64	)
Plus: Options forfeited	27
Plus: RSUs forfeited	-
Available for issuance under the 2008 LTIP	1,101