Note 6 - Stock-based Compensation

3 Months Ended

Dec. 31, 2016

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

(6)

Stock - Based Compensation

Under our equity incentive plans, employees and directors

may

be granted stock options, restricted stock, restricted stock units and performance awards. Effective

February

17,

2015,

our shareholders approved the

2015

Equity Incentive Plan of Insteel Industries, Inc. (the

“2015

Plan”), which authorizes up to

900,000

shares of our 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

December

31,

2016,

there were

558,000

shares of our common stock available for future grants under the

2015

Plan, which is our only active equity incentive plan.

Stock

ption

awards

Under our 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:

	Three Months Ended
	December 31,		January 2,
(In thousands)	2016		2016
Compensation expense	$	96	$	83

As of

December

31,

2016,

there was

$259,000

of unrecognized compensation cost related to unvested options which is expected to be recognized over a weighted average period of

1.44

years.

The following table summarizes stock option activity:

									Contractual		Aggregate
	Options			Exercise Price Per Share					Term - Weighted		Intrinsic
	Outstanding						Weighted		Average		Value
	(in thousands)			Range			Average		(in years)		(in thousands)
Outstanding at October 1, 2016		371		$9.16	-	$34.49	$	20.81
Exercised		(22	)	13.06	-	20.50		18.74			$	368
Outstanding at December 31, 2016		349		9.16	-	34.49		20.94		7.78		5,128

Vested and anticipated to vest in the future at December 31, 2016		343						20.91		7.76		5,057

Exercisable at December 31, 2016		120						15.98		6.19		2,369

Stock option exercises include “net exercises” for 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 our 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 is as follows:

	Three Months Ended
	December 31,		January 2,
(In thousands)	2016		2016
Compensation expense	$	161	$	146

As of

December

31,

2016,

there was

$442,000

of unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of

1.79

years.

The following table summarizes RSU activity:

				Weighted
	Restricted			Average
	Stock Units			Grant Date
(Unit amounts in thousands)	Outstanding			Fair Value
Balance, October 1, 2016		145		$	22.35
Released		(2	)		23.95
Balance, December 31, 2016		143			22.32

- 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 + Details