Note 15 - Stock-based Compensation

3 Months Ended

Sep. 27, 2015

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

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

15. 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 the quarters ended September 27, 2015 and September 28, 2014, the Company granted stock options to purchase 82 and 150 shares of common 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 quarters ended September 27, 2015 and September 28, 2014, the weighted average exercise price of the options was $32.36 and $27.38 per share, respectively. The Company used the Black-Scholes model to estimate the weighted average grant date fair value of $20.27 and $17.31 per share, respectively.

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

	For the Three Months Ended
	September 27, 2015			September 28, 2014
Expected term (years)		7.6			7.3
Risk-free interest rate		2.1	%		2.2	%
Volatility		60.5	%		62.6	%
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 quarter ended September 27, 2015 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 28, 2015		934		$	12.63
Granted		82		$	32.36
Exercised		(5	)	$	12.02
Forfeited		—		$	—
Expired		—		$	—
Outstanding at September 27, 2015		1,011		$	14.24		5.7	$	15,547
Vested and expected to vest as of September 27, 2015		1,003		$	14.13		5.7	$	15,534
Exercisable at September 27, 2015		796		$	10.38		4.8	$	15,124

As of September 27, 2015, all options subject to a market condition were vested. During fiscal year 2015, 10 options subject to a market condition vested when the closing price of the Company’s common stock on the New York Stock Exchange was at least $30 per share for thirty consecutive trading days.

At September 27, 2015, the remaining unrecognized compensation cost related to unvested stock options was $2,397, which is expected to be recognized over a weighted average period of 2.4 years.

For the quarter ended September 27, 2015, the total intrinsic value of options exercised was $107. The amount of cash received from the exercise of options was $60 and the tax benefit realized from stock options exercised was $15 for the quarter ended September 27, 2015.

Restricted stock units

The Company may issue, from time to time, restricted stock units (“RSUs”) to the Company’s non-employee directors or certain key employees. See “Note 16. Stock-Based Compensation” included in the 2015 Form 10-K for further information regarding the Company’s RSUs.  No RSUs were granted during the three months ended September 27, 2015 and September 28, 2014.

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 quarter ended September 27, 2015 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested		Total		Weighted Average Grant Date Fair Value
Outstanding at June 28, 2015		20		$	18.35		167		187	$	15.35
Granted		—		$	—		—		—	$	—
Vested		(14	)	$	16.52		14		—	$	16.52
Converted		—		$	—		—		—	$	—
Forfeited		—		$	—		—		—	$	—
Outstanding at September 27, 2015		6		$	22.08		181		187	$	15.35

At September 27, 2015, the number of RSUs vested and expected to vest was 187 with an aggregate intrinsic value of $5,513. The aggregate intrinsic value of the 181 vested RSUs at September 27, 2015 was $5,312.

Summary

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

	For the Three Months Ended
	September 27, 2015		September 28, 2014
Stock options	$	475	$	464
RSUs		20		62
Total compensation cost	$	495	$	526

The total income tax benefit recognized for stock-based compensation was $93 and $101 for the quarters ended September 27, 2015 and September 28, 2014, respectively.

As of September 27, 2015, total unrecognized compensation costs related to all unvested stock-based compensation arrangements was $2,438. The weighted average period over which these costs are expected to be recognized is 2.4 years.

As of September 27, 2015, 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	1
Less: Service-condition options granted	(237	)
Less: RSUs granted to non-employee directors	(42	)
Available for issuance under the 2013 Plan	722