Note 16 - Stock Based Compensation

12 Months Ended

Jun. 29, 2014

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

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

16. Stock Based Compensation

On October 23, 2013, the Company’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (“2008 LTIP”). No additional awards will be granted under the 2008 LTIP; however, prior awards outstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock, subject to certain increases in the event outstanding awards under the 2008 LTIP expire, are forfeited or otherwise terminate unexercised.

Stock options

During fiscal years 2014, 2013 and 2012, the Company granted stock options to purchase 97, 138 and 127 shares of stock, respectively, to certain key employees. The stock options vest ratably over the required three-year service period and have ten-year contractual terms. For the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012, the weighted average exercise price of the options granted was $22.31, $11.15 and $12.47 per share, respectively. The Company used the Black-Scholes model to estimate the weighted average grant date fair value of $14.66, $7.28 and $7.88 per share, respectively.

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

	For the Fiscal Years Ended
	June 29, 2014		June 30, 2013		June 24, 2012
Expected term (years)		7.4		7.5		6.3
Risk-free interest rate		2.1%		1.0%		2.0%
Volatility		65.9%		66.9%		68.2%
Dividend yield		—		—		—

The Company uses historical data to estimate the expected term and volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the options.

A summary of stock option activity for the fiscal year ended June 29, 2014 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2013		1,541		$	8.41
Granted		97		$	22.31
Exercised		(798	)	$	8.41
Forfeited		(33	)	$	13.69
Expired		(7	)	$	20.55
Outstanding at June 29, 2014		800		$	9.77		5.9	$	14,123
Vested and expected to vest as of June 29, 2014		795		$	9.73		5.9	$	14,080
Exercisable at June 29, 2014		588		$	7.55		5.1	$	11,688

At June 29, 2014, 13 non-vested options are subject to a market condition that vests the options on the date that the closing price of the Company’s common stock on the New York Stock Exchange has been at least $30 per share for thirty consecutive trading days. During fiscal year 2014, 14 options subject to a similar market condition at a threshold of $24 per share vested and were outstanding as of June 29, 2014. The weighted average exercise price of such 27 options subject to a market condition is $8.16.

At June 29, 2014, the remaining unrecognized compensation cost related to the unvested stock options was $706, which is expected to be recognized over a weighted average period of 1.9 years.

For the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012, the total intrinsic value of options exercised was $12,963, $1,937 and $40, respectively. The amount of cash received from the exercise of options was $3,136, $1,298 and $71 for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012, respectively. The tax benefit realized from stock options exercised was $4,934, $680 and $1 for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012, respectively.

Restricted stock units

During fiscal years 2014, 2013 and 2012, the Company granted 22, 32 and 64 restricted stock units (“RSUs”), respectively, 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 over a three-year period, and will be converted into an equivalent number of shares of stock (for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service. If, after the first anniversary of the grant date and prior to the final vesting date, the grantee has a separation from service without cause for any reason other than the employee’s resignation, 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 fair value of the RSUs granted during fiscal years 2014, 2013 and 2012 to be $22.08, $11.23, and $12.47 per RSU, respectively.

During fiscal years 2014, 2013 and 2012, the Company granted 25, 30 and 49 RSUs, respectively, 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 service 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 RSUs granted during fiscal years 2014, 2013 and 2012 to be $23.23, $13.57 and $9.10 per RSU, respectively.

The Company estimates the fair value of RSUs based on the market price of the Company’s common stock at the award grant date.

A summary of the RSU activity for the fiscal year ended June 29, 2014 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested			Total			Weighted Average Grant Date Fair Value
Outstanding at June 30, 2013		75		$	11.94		112			187		$	11.78
Granted		47		$	22.68		—			47		$	22.68
Vested		(71	)	$	15.96		71			—		$	15.96
Converted		—		$	—		(31	)		(31	)	$	12.06
Forfeited		(2	)	$	22.08		—			(2	)	$	22.08
Outstanding at June 29, 2014		49		$	16.11		152			201		$	14.19

At June 29, 2014, the number of RSUs vested and expected to vest was 201, with an aggregate intrinsic value of $5,522. The aggregate intrinsic value of the 152 vested RSUs at June 29, 2014 was $4,172.

The remaining unrecognized compensation cost related to the unvested RSUs at June 29, 2014 is $237, which is expected to be recognized over a weighted average period of 1.9 years.

For the fiscal years ended June 29, 2014 and June 30, 2013, the total intrinsic value of RSUs converted was $696 and $114, respectively. The tax benefit realized from the conversion of RSUs was $275 and $45 for the fiscal years ended June 29, 2014 and June 30, 2013.

Summary

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

	For the Fiscal Years Ended
	June 29, 2014		June 30, 2013		June 24, 2012
Stock options	$	1,001	$	847	$	774
RSUs		938		686		1,280
Total compensation cost	$	1,939	$	1,533	$	2,054

The total income tax benefit recognized for stock based compensation was $513, $381 and $642 for fiscal years 2014, 2013 and 2012, respectively.

As of June 29, 2014, total unrecognized compensation costs related to all unvested stock based compensation arrangements was $943. The weighted average period over which these costs are expected to be recognized is 1.9 years.

As of June 29, 2014, a summary of the number of securities remaining available for future issuance under equity compensation plans is as follows:

Authorized under the 2013 Plan	1,000
Plus: Awards expired, forfeited or otherwise terminated unexercised from the 2008 LTIP	—
Less: Service condition options granted	(5	)
Less: RSUs granted to non-employee directors	(25	)
Available for issuance under the 2013 Plan	970