Note 6 - Stock-Based Compensation

3 Months Ended

Jan. 02, 2016

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

(6) Stock-Based Compensation

Under the Company’s equity incentive plans, employees and directors may be granted stock options, restricted stock, restricted stock units and performance awards. Effective February 17, 2015, the shareholders of the Company approved the 2015 Equity Incentive Plan of Insteel Industries, Inc. (the “2015 Plan”), which authorizes up to 900,000 shares of Company common stock for future grants under the plan. The 2015 Plan, which expires on February 17, 2025, replaces the 2005 Equity Incentive Plan of Insteel Industries, Inc., which expired on February 15, 2015. As of January 2, 2016, there were 711,000 shares of Company common stock available for future grants under the 2015 Plan, which is the Company’s only active equity incentive plan.

Stock

ptions

Under the Company’s equity incentive plans, employees and directors may be granted options to purchase shares of the Company’s common stock at the fair market value on the date of the grant. Options granted under these plans generally vest over three years and expire ten years from the date of the grant. Compensation expense associated with stock options for the three-month periods ended January 2, 2016 and December 27, 2014 is as follows:

	Three Months Ended
	January 2,		December 27,
(In thousands)	2016		2014
Stock options:
Compensation expense	$	83	$	173

As of January 2, 2016, the remaining unamortized compensation cost related to unvested stock option awards was $280,000, which is expected to be recognized over a weighted average period of 1.36 years.

The following table summarizes stock option activity for the three-month period ended January 2, 2016:

									Contractual	Aggregate
	Options			Exercise Price Per Share					Term -	Intrinsic
	Outstanding						Weighted		Weighted	Value
	(in thousands)			Range			Average		Average (years)	(in thousands)
Outstanding at October 3, 2015		923		$ 7.55	-	$ 21.96	$	15.14
Exercised		(176	)	7.55	-	20.50		12.32		$	2,016
Outstanding at January 2, 2016		747		7.55	-	21.96		15.80	6.31		3,882

Vested and anticipated to vest in the future at January 2, 2016		741						15.78	6.30		3,872

Exercisable at January 2, 2016		491						13.95	5.05		3,421

Stock option exercises include “net exercises,” pursuant to which the optionee received shares of common stock equal to the intrinsic value of the options (fair market value of common stock on the date of exercise less exercise price) reduced by any applicable withholding taxes.

Restricted stock uni

Restricted stock units (“RSUs”) granted under the Company’s equity incentive plans are valued based upon the fair market value on the date of the grant and provide for a dividend equivalent payment which is included in compensation expense. The vesting period for RSUs is generally one year from the date of the grant for RSUs granted to directors and three years from the date of the grant for RSUs granted to employees. RSUs do not have voting rights. RSU compensation expense for the three-month periods ended January 2, 2016 and December 27, 2014 is as follows:

	Three Months Ended
	January 2,		December 27,
(In thousands)	2016		2014
Compensation expense	$	146	$	269

As of January 2, 2016, the remaining unrecognized compensation cost related to unvested RSUs was $444,000, which is expected to be recognized over a weighted average vesting period of 1.58 years.

The following table summarizes RSU activity during the three-month period ended January 2, 2016:

			Weighted
	Restricted		Average
	Stock Units		Grant Date
(Unit amounts in thousands)	Outstanding		Fair Value
Balance, October 3, 2015		157	$	18.96
Granted		-		-
Released		-		-
Balance, January 2, 2016		157		18.96