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Note 9 - Stock-Based Compensation | 12 Months Ended
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Oct. 03, 2015
Notes to Financial Statements |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ( 9 ) 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 October 3, 2015, 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 option awards . Under the Company’s equity incentive plans, employees and directors may be granted options to purchase shares of 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 is as follows:
|  | Year Ended |
|  | October 3, |  |  | September 27, |  |  | September 28, |
(In thousands) |  | 2015 |  |  | 2014 |  |  | 2013 |
Stock options: |  |  |  |  |  |  |  |  |  |  |  |
Compensation expense |  | $ | 1,007 |  |  | $ | 1,139 |  |  | $ | 951 |
The remaining unrecognized compensation cost related to unvested options at October 3, 2015 was $363,000, which is expected to be recognized over a weighted average period of 1.49 years. The fair value of each option award granted is estimated on the date of grant using a Monte Carlo valuation model. The weighted-average estimated fair values of stock options granted during 2015, 2014 and 2013 were $7.10, $7.00 and $7.06 per share, respectively, based on the following weighted-average assumptions:
|  | Year Ended |
|  | Octo ber 3 , |  |  | September 2 7 , |  |  | Septem ber 28 , |
|  | 201 5 |  |  | 201 4 |  |  | 201 3 |
Expected term (in years) |  |  | 5.72 |  |  |  | 5.08 |  |  |  | 6.00 |
Risk-free interest rate |  |  | 2.18 | % |  |  | 0.38 | % |  |  | 1.40 | %
Expected volatility |  |  | 37.99 | % |  |  | 39.57 | % |  |  | 47.32 | %
Expected dividend yield |  |  | 0.61 | % |  |  | 0.60 | % |  |  | 0.72 | %
The assumptions utilized in the Monte Carlo valuation model are evaluated and revised, as necessary, to reflect market conditions and actual historical experience. The risk-free interest rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of the grant. The dividend yield was calculated based on the Company’s annual dividend as of the option grant date. The expected volatility was derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the Company’s stock. The expected term for options was based on the results of a Monte Carlo simulation model, using the model’s estimated fair value as an input to the Black-Scholes-Merton model, and then solving for the expected term. The following table summarizes stock option activity:
|  |  |  |  |  | Exercise Price |  |  | Contractual |  |  | Aggregate |
|  |  |  |  |  | Per Share |  |  | Term - |  |  | Intrinsic |
|  | Options |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Weighted |  |  | Weighted |  |  | Value |
(Share amounts in thousands) |  | Outstanding |  |  | Range |  |  | Average |  |  | Average (years) |  |  | (in thousands) |
Outstanding at September 29, 2012 |  |  | 1,160 |  |  |  | $0.36 |  |  |  | - |  |  |  | $20.27 |  |  | $ | 11.09 |  |  |  |  |  |  |  |  |
Granted |  |  | 131 |  |  |  | 16.45 |  |  |  | - |  |  |  | 17.22 |  |  |  | 16.84 |  |  |  |  |  |  |  |  |
Exercised |  |  | (373 | ) |  |  | 0.36 |  |  |  | - |  |  |  | 12.43 |  |  |  | 9.27 |  |  |  |  |  |  | $ | 2,744 |
Outstanding at September 28, 2013 |  |  | 918 |  |  |  | 5.43 |  |  |  | - |  |  |  | 20.27 |  |  |  | 12.65 |  |  |  |  |  |  |  |  |
Granted |  |  | 136 |  |  |  | 19.08 |  |  |  | - |  |  |  | 20.50 |  |  |  | 19.80 |  |  |  |  |  |  |  |  |
Exercised |  |  | (183 | ) |  |  | 5.43 |  |  |  | - |  |  |  | 20.27 |  |  |  | 10.42 |  |  |  |  |  |  |  | 1,789 |
Outstanding at September 27, 2014 |  |  | 871 |  |  |  | 6.89 |  |  |  | - |  |  |  | 20.50 |  |  |  | 14.23 |  |  |  |  |  |  |  |  |
Granted |  |  | 134 |  |  |  | 18.05 |  |  |  | - |  |  |  | 21.96 |  |  |  | 19.89 |  |  |  |  |  |  |  |  |
Exercised |  |  | (27 | ) |  |  | 6.89 |  |  |  | - |  |  |  | 11.15 |  |  |  | 9.17 |  |  |  |  |  |  |  | 328 |
Forfeited |  |  | (55 | ) |  |  | 9.16 |  |  |  | - |  |  |  | 21.96 |  |  |  | 15.37 |  |  |  |  |  |  |  |  |
Outstanding at October 3, 2015 |  |  | 923 |  |  |  | 7.55 |  |  |  | - |  |  |  | 21.96 |  |  |  | 15.14 |  |  |  | 6.06 |  |  |  | 2,188 |
Vested and anticipated to vest in future at October 3, 2015 |  |  | 918 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 15.11 |  |  |  | 6.04 |  |  |  | 2,188 |
Exercisable at October 3, 2015 |  |  | 667 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 13.52 |  |  |  | 4.94 |  |  |  | 2,188 |
The 2015, 2014 and 2013 stock option exercises included “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 t s. 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 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 grants and compensation expense are as follows:
|  | Year Ended |
|  | October 3, |  |  | September 27, |  |  | September 28, |
(In thousands) |  | 2015 |  |  | 2014 |  |  | 2013 |
Restricted stock unit grants: |  |  |  |  |  |  |  |  |  |  |  |
Units |  |  | 62 |  |  |  | 64 |  |  |  | 73 |
Market value |  | $ | 1,253 |  |  | $ | 1,252 |  |  | $ | 1,225 |
Compensation expense |  |  | 1,291 |  |  |  | 1,522 |  |  |  | 1,210 |
The remaining unrecognized compensation cost related to unvested RSUs on October 3, 2015 was $590,000 which is expected to be recognized over a weighted average period of 1.62 years. The following table summarizes RSU activity:
|  |  |  |  |  | Weighted |
|  | Restricted |  |  | Average |
|  | Stock Units |  |  | Grant Date |
(Unit amounts in thousands) |  | Outstanding |  |  | Fair Value |
Balance, September 29, 2012 |  |  | 293 |  |  | $ | 10.74 |
Granted |  |  | 73 |  |  |  | 16.77 |
Forfeited |  |  | (6 | ) |  |  | 10.72 |
Released |  |  | (139 | ) |  |  | 10.00 |
Balance, September 28, 2013 |  |  | 221 |  |  |  | 13.20 |
Granted |  |  | 64 |  |  |  | 19.61 |
Released |  |  | (88 | ) |  |  | 12.33 |
Balance, September 27, 2014 |  |  | 197 |  |  |  | 15.68 |
Granted |  |  | 62 |  |  |  | 20.33 |
Forfeited |  |  | (13 | ) |  |  | 17.52 |
Released |  |  | (89 | ) |  |  | 12.86 |
Balance, October 3, 2015 |  |  | 157 |  |  |  | 18.96 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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