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Stock-Based Compensation | 12 Months Ended
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Jul. 02, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 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 expired, were forfeited or otherwise terminated unexercised. The 2013 Plan expired in accordance with its terms on October 24, 2018, and the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Amended 2013 Plan”) became effective on that same day, upon approval by shareholders at UNIFI’s annual meeting of shareholders held on October 31, 2018. The Amended 2013 Plan increased the number of shares available for future issuance pursuant to awards granted under the Amended 2013 Plan to 1,250 and removed provisions no longer applicable due to the recent changes to Section 162(m) of the Internal Revenue Code of 1986, as amended. The material terms and provisions of the Amended 2013 Plan are otherwise similar to those of the 2013 Plan. On October 29, 2020, UNIFI’s shareholders approved the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan set the number of shares available for future issuance pursuant to awards granted under the 2020 Plan to 850. No additional awards can be granted under prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions. The following table provides information as of July 2, 2023 with respect to the number of securities remaining available for future issuance under the 2020 Plan:
Authorized under the 2020 Plan |  |  | 850 |
Plus: Awards expired, forfeited or otherwise terminated unexercised |  |  | 4 |
Less: Awards granted to employees |  |  | (544 | )
Less: Awards granted to non-employee directors |  |  | (114 | )
Available for issuance under the 2020 Plan |  |  | 196 |
Stock Options A summary of UNIFI’s stock options granted to key employees and valued under the Black-Scholes model is as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Quantity |  |  | — |  |  |  | — |  |  |  | 155 |
Service period (years) |  |  | — |  |  |  | — |  |  |  | 3.0 |
Weighted average exercise price |  | $ | — |  |  | $ | — |  |  | $ | 15.64 |
Weighted average grant date fair value |  | $ | — |  |  | $ | — |  |  | $ | 6.75 |
The Black-Scholes model used the following weighted average assumptions for the above awards:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Expected term (years) |  |  | — |  |  |  | — |  |  |  | 5.5 |
Risk-free interest rate |  |  | — |  |  |  | — |  |  |  | 0.4 | %
Volatility |  |  | — |  |  |  | — |  |  |  | 49.0 | %
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 2023 is as follows:
|  | Stock Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at July 3, 2022 |  |  | 982 |  |  | $ | 15.81 |  |  |  |  |  |  |
Granted |  |  | — |  |  | $ | — |  |  |  |  |  |  |
Exercised |  |  | (6 | ) |  | $ | 11.08 |  |  |  |  |  |  |
Cancelled or forfeited |  |  | (30 | ) |  | $ | 25.86 |  |  |  |  |  |  |
Expired |  |  | (5 | ) |  | $ | 11.09 |  |  |  |  |  |  |
Outstanding at July 2, 2023 |  |  | 941 |  |  | $ | 15.55 |  |  |  | 6.4 |  |  | $ | — |
Vested and expected to vest as of July 2, 2023 |  |  | 941 |  |  | $ | 15.55 |  |  |  | 6.4 |  |  | $ | — |
Exercisable at July 2, 2023 |  |  | 535 |  |  | $ | 17.92 |  |  |  | 5.9 |  |  | $ | — |
At July 2, 2023, the remaining unrecognized compensation cost related to the unvested stock options was $308, which is expected to be recognized over a weighted average period of 1.4 years. For fiscal 2023, 2022, and 2021, the total intrinsic value of stock options exercised was $15, $60, and $85, respectively. The amount of cash received from the exercise of stock options was $0, $28, and $0 for fiscal 2023, 2022, and 2021, respectively. The tax benefit realized from stock options exercised was $3, $8, and $11 for fiscal 2023, 2022, and 2021, respectively. Stock Units and Share Units During fiscal 2023, 2022, and 2021, UNIFI granted 186, 80, and 73 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. UNIFI estimated the weighted average fair value of each employee RSU granted during fiscal 2023, 2022, and 2021 to be $8.58, $23.45, and $15.65, respectively. During fiscal 2023, 2022, and 2021, UNIFI granted 61 vested share units (“VSUs”), 32 VSUs, and 37 RSUs (collectively, the “units”), respectively, to UNIFI’s non-employee directors. The units became fully vested on the grant date but convey no rights of ownership in shares of Company common stock until such units have been distributed to the grantee in the form of Company common stock. If a grantee defers his or her distribution, the units are 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. UNIFI estimated the fair value of each unit granted during fiscal 2023, 2022, and 2021 to be $9.51, $22.03, and $15.91, respectively. During fiscal 2023 and 2022, UNIFI granted 150 and 53 performance share units (“PSUs”), respectively, to certain key employees. The employee PSUs are subject to a performance-based vesting restriction and convey no rights of ownership in shares of Company common stock until such employee PSUs have vested and been distributed to the grantee in the form of Company common stock. Consistent with the vesting provisions of each PSU, between 50% and 3 00% of the PSUs become vested, if at all, on the date that the associated performance metric is achieved, and will be converted into shares of 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. The percentage of PSUs that vest is based on the metric achieved on the vesting date compared to the targeted metric defined in the award agreement. UNIFI estimated the weighted average fair value of each unit granted during fiscal 2023 to be $8.43. UNIFI estimates the fair value of RSUs, VSUs and PSUs based on the market price of UNIFI’s common stock at the award grant date. A summary of RSU, VSU and PSU activity for fiscal 2023 is as follows:
|  | Non-vested |  |  | Weighted Average Grant Date Fair Value |  |  | Vested |  |  | Total |  |  | Weighted Average Grant Date Fair Value |
Outstanding at July 3, 2022 |  |  | 234 |  |  | $ | 20.38 |  |  |  | 245 |  |  |  | 479 |  |  | $ | 21.80 |
Granted |  |  | 396 |  |  | $ | 8.67 |  |  |  | — |  |  |  | 396 |  |  | $ | 8.67 |
Vested |  |  | (145 | ) |  | $ | 14.69 |  |  |  | 145 |  |  |  | — |  |  | $ | — |
Converted |  |  | — |  |  | $ | — |  |  |  | (90 | ) |  |  | (90 | ) |  | $ | 19.31 |
Cancelled or forfeited |  |  | (5 | ) |  | $ | 21.22 |  |  |  | — |  |  |  | (5 | ) |  | $ | 21.22 |
Outstanding at July 2, 2023 |  |  | 480 |  |  | $ | 12.42 |  |  |  | 300 |  |  |  | 780 |  |  | $ | 15.42 |
As of July 2, 2023, no outstanding PSUs are expected to vest and, accordingly, the associated compensation expense was $0. At July 2, 2023, the number of RSUs and VSUs vested and expected to vest was 578, with an aggregate intrinsic value of $4,730. The aggregate intrinsic value of the 299 vested RSUs and VSUs at July 2, 2023 was $2,453. The unrecognized compensation cost related to the unvested RSUs at July 2, 2023 was $1,601, which is expected to be recognized over a weighted average period of 1.6 years. For fiscal 2023, 2022, and 2021, the total intrinsic value of RSUs and VSUs converted was $882, $1,715, and $1,216, respectively. The tax benefit realized from the conversion of RSUs was $165, $260, and $159 for fiscal 2023, 2022, and 2021, respectively. Employee Stock Purchase Plan On October 27, 2021, Unifi, Inc.’s shareholders approved the Unifi, Inc. Employee Stock Purchase Plan (the “ESPP”), under which an aggregate of 100 shares of Company common stock have been authorized and reserved for issuance pursuant to the ESPP. The ESPP permits employees to purchase common stock through payroll deductions at 85 percent of the fair market value of Company common stock on a quarterly basis. For fiscal 2023, 6 shares of common stock were purchased under the ESPP. As of July 2, 2023, 94 shares were available for purchase under the ESPP. Stock-based compensation expense associated with options granted under the ESPP is measured at the grant date based on the fair value of the award, which is equal to the purchase discount, and is recognized over the service period (generally the vesting period) on a straight-line basis. Summary The total cost related to all stock-based compensation was as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Stock options |  | $ | 575 |  |  | $ | 928 |  |  | $ | 1,047 |
RSUs and VSUs |  |  | 2,120 |  |  |  | 2,253 |  |  |  | 2,015 |
ESPP |  |  | 11 |  |  |  | — |  |  |  | — |
Total compensation cost |  | $ | 2,706 |  |  | $ | 3,181 |  |  | $ | 3,062 |
In each of fiscal 2023, 2022, and 2021, UNIFI issued 12, 5, and 4 shares of common stock for $110, $110, and $75 of expense, respectively, in connection with Board compensation. The total income tax benefit recognized for stock-based compensation was $377, $386, and $297 for fiscal 2023, 2022, and 2021, respectively. As of July 2, 2023, total unrecognized compensation costs related to all unvested stock-based compensation arrangements were $1,909. The weighted average period over which these costs are expected to be recognized is 1.5 years.

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