16. Stock-Based Compensation

On October 23, 2013, UNIFI’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 (the “2008 LTIP”). No additional awards can 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.

The following table provides information as of June 25, 2017 with respect to the number of securities remaining available for future issuance under the 2013 Plan:

Authorized under the 2013 Plan	1,000
Plus: Awards expired, forfeited or otherwise terminated unexercised from the 2008 LTIP or the 2013 Plan	343
Less: Awards granted to employees	(561	)
Less: Awards granted to non-employee directors	(101	)
Available for issuance under the 2013 Plan	681

Stock Options

During fiscal 2017, 2016 and 2015, UNIFI granted stock options to purchase 153, 82 and 150 shares of its 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 fiscal 2017, 2016 and 2015, the weighted average exercise price of the stock options granted was $28.82, $32.36 and $27.38 per share, respectively. UNIFI used the Black-Scholes model to estimate the weighted average grant date fair value of $10.13, $20.27 and $17.31 per share, respectively.

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

	For the Fiscal Year Ended
	June 25, 2017			June 26, 2016			June 28, 2015
Expected term (years)		5.0			7.6			7.3
Risk-free interest rate		1.4	%		2.1	%		2.2	%
Volatility		37.9	%		60.5	%		62.6	%
Dividend yield		—			—			—

UNIFI 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 stock options.

A summary of stock option activity for fiscal 2017 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 26, 2016		720		$	14.32
Granted		153		$	28.82
Exercised		(356	)	$	11.29
Cancelled or forfeited		(39	)	$	30.20
Expired		—		$	—
Outstanding at June 25, 2017		478		$	19.93		5.9	$	4,464
Vested and expected to vest as of June 25, 2017		476		$	19.89		5.9	$	4,463
Exercisable at June 25, 2017		287		$	13.77		3.9	$	4,397

At June 25, 2017, all stock options subject to a market condition were vested.

At June 25, 2017, the remaining unrecognized compensation cost related to the unvested stock options was $1,053, which is expected to be recognized over a weighted average period of 1.6 years.

For fiscal 2017, 2016 and 2015, the total intrinsic value of stock options exercised was $5,802, $598 and $190, respectively. The amount of cash received from the exercise of stock options was $2,787, $181 and $95 for fiscal 2017, 2016 and 2015, respectively. The tax benefit realized from stock options exercised was $1,517, $155 and $73 for fiscal 2017, 2016 and 2015, respectively.

Restricted Stock Units

During fiscal 2017 and 2016, UNIFI granted 150 and 20 restricted stock units (“RSUs”), respectively, to certain key employees. The employee RSUs are subject to a vesting restriction and convey no rights of ownership in shares of Company common stock until such employee RSUs have vested and been distributed to the grantee in the form of Company common stock. The employee RSUs vest over a three-year period, and will be converted into an equivalent number of shares of Company common 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 employee RSUs will become fully vested and will be converted into an equivalent number of shares of Company common stock and issued to the grantee. UNIFI estimated the fair value of each employee RSU granted during fiscal 2017 and 2016 to be $27.66 and $27.46, respectively.

During fiscal 2017, 2016 and 2015, UNIFI granted 31, 28 and 17 RSUs, respectively, to UNIFI’s non-employee directors. The director RSUs became fully vested on the grant date. The director RSUs convey no rights of ownership in shares of Company common stock until such director RSUs have been distributed to the grantee in the form of Company common stock. The vested director 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 Company common stock in accordance with the deferral options provided under the Unifi, Inc. Director Deferred Compensation Plan. UNIFI estimated the fair value of each director RSU granted during fiscal 2017, 2016 and 2015 to be $29.09, $28.08 and $28.58, respectively.

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

A summary of the RSU activity for fiscal 2017 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested			Total			Weighted Average Grant Date Fair Value
Outstanding at June 26, 2016		21		$	27.20		162			183		$	18.70
Granted		181		$	27.90		—			181		$	27.90
Vested		(39	)	$	28.63		39			—		$	—
Converted		—		$	—		(70	)		(70	)	$	15.47
Cancelled or forfeited		(13	)	$	27.46		—			(13	)	$	27.46
Outstanding at June 25, 2017		150		$	27.66		131			281		$	25.02

At June 25, 2017, the number of RSUs vested and expected to vest was 281, with an aggregate intrinsic value of $8,120. The aggregate intrinsic value of the 131 vested RSUs at June 25, 2017 was $3,782.

The remaining unrecognized compensation cost related to the unvested RSUs at June 25, 2017 was $3,648, which is expected to be recognized over a weighted average period of 2.1 years.

For fiscal 2017, 2016 and 2015, the total intrinsic value of RSUs converted was $2,120, $553 and $958, respectively. The tax benefit realized from the conversion of RSUs was $806, $221 and $373 for fiscal 2017, 2016 and 2015, respectively.

Summary

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

	For the Fiscal Year Ended
	June 25, 2017		June 26, 2016		June 28, 2015
Stock options	$	749	$	1,379	$	1,955
RSUs		1,432		961		676
Total compensation cost	$	2,181	$	2,340	$	2,631

The total income tax benefit recognized for stock-based compensation was $599, $592 and $623 for fiscal 2017, 2016 and 2015, respectively.

As of June 25, 2017, total unrecognized compensation costs related to all unvested stock-based compensation arrangements were $4,701. The weighted average period over which these costs are expected to be recognized is 2.0 years.