SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
UNIFI, INC.
- -----------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CLIFFORD FRAZIER, JR.
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange
Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state
how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 23, 1996
TO THE SHAREHOLDERS OF
UNIFI, INC.
The Annual Meeting of the Shareholders of your Company will
be held at 10:00 A.M. on Thursday, October 24, 1996, at the
Company's Yadkinville Offices at Old Highway 421, Yadkinville,
North Carolina. The Notice of the Annual Meeting and the Proxy
Statement containing detailed information about the business to
be transacted at the meeting, as well as a proxy, are enclosed.
The Annual Report relating to the Company's activities and
operations for the fiscal year ended June 30, 1996 is also
enclosed herewith.
You are cordially invited to attend the Annual Meeting of
the Shareholders in person. We would appreciate your signing and
returning your proxy in the enclosed postage-paid return envelope
so that your shares can be voted in the event you are unable to
attend the meeting. Your proxy will be returned to you if you
are present at the meeting and so request.
Sincerely,
G. ALLEN MEBANE
G. ALLEN MEBANE, IV
Chairman of the Board of Directors
<PAGE>
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 24, 1996
To The Shareholders Of Unifi, Inc.:
The Annual Meeting of the Shareholders of Unifi, Inc. will
be held at the Yadkinville Offices, Old Highway 421, Yadkinville,
North Carolina, on Thursday, October 24, 1996, at 10:00 A.M.
Eastern Daylight Savings Time, for the following purposes:
1. To elect as directors of the corporation, those
nominees listed in the accompanying Proxy Statement.
2 To approve the 1996 Incentive Stock Option Plan, as
recommended by the Board of Directors.
3. To approve the 1996 Non-Qualified Stock Option Plan, as
recommended by the Board of Directors.
4. Transacting any other business that may be properly
brought before the meeting or any adjournment or
adjournments thereof.
The Board of Directors, under the provisions of the By-Laws,
has fixed the close of business on September 16, 1996, as the
record date for determination of Shareholders entitled to notice
of and to vote at the Annual Meeting or any adjournment or
adjournments thereof. The transfer books of the Corporation will
not be closed.
YOUR VOTE IS IMPORTANT and the Board of Directors would
appreciate your signing and returning the accompanying proxy card
promptly. A proxy may be revoked by the Shareholder at any time
before it is exercised.
By Order Of The Board Of Directors
CLIFFORD FRAZIER, JR.
C. Clifford Frazier, Jr.
Secretary
Greensboro, North Carolina
September 23, 1996
<PAGE>
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
PROXY STATEMENT
SOLICITATION OF PROXIES
This solicitation of the enclosed proxy is made by the Board
of Directors (the "Board") of Unifi, Inc. (the "Company") for use
at the Annual Meeting of the Shareholders to be held Thursday,
October 24, 1996, at 10:00 A.M. Eastern Daylight Savings Time, at
the Yadkinville Offices of the Company, located on Old Highway
421, Yadkinville, North Carolina, or at any adjournment or
adjournments thereof. This statement and the form proxy will
first be mailed to the shareholders entitled to notice of the
Annual Meeting on or about September 23, 1996.
The expense of this solicitation will be borne by the
Company. Solicitations of proxies may be made in person, by mail
or other telephone, telegraph or electronic means by directors,
officers and regular employees of the Company who will not be
specifically compensated in such regard. In addition, the
Company has retained D. F. King & Company to assist in the
solicitation of proxies and will pay such firm a fee estimated
not to exceed $6,500 plus reimbursement of expenses.
Arrangements will be made with brokers, nominees and fiduciaries
to send proxies and proxy materials, at the Company's expense, to
their principals.
The Company's common stock, par value $.10 per share (common
stock) is the only type of stock the Company has. Shareholders
of record, as of the close of business on September 16, 1996,
will be entitled to notice of and to vote at the meeting or any
adjournment thereof. As of August 5, 1996, the total number of
shares of common stock outstanding and entitled to vote at the
Annual Meeting was 64,494,523 shares. Each share of the
Company's common stock entitles the holder to one vote with
respect to all matters coming before the meeting and all of such
shares vote as a single class.
All shares represented by valid proxies received pursuant to
this solicitation and not revoked before they are exercised will
be voted in the manner specified therein. If no specification is
made with respect to the matter to be acted upon, the shares
represented by the proxies will be voted in favor of Proposal No.
1, the election as directors of those nominees named in this
proxy statement; Proposal No. 2, the approval of the 1996
Incentive Stock Option Plan, a copy of which is attached to this
Proxy Statement; and Proposal No. 3, the approval of the 1996
Non-Qualified Stock Option Plan, a copy of which is attached to
this Proxy Statement. IF THE ENCLOSED FORM OF PROXY IS EXECUTED
AND RETURNED IT MAY, NEVERTHELESS, BE REVOKED AT ANY TIME BEFORE
IT IS VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY OR
BY THE SHAREHOLDER PERSONALLY ATTENDING AND VOTING HIS OR HER
SHARES AT THE MEETING.
VOTING OF SHARES
The holders of a majority of the outstanding shares entitled
to vote, present in person or represented by proxy at this
meeting, will constitute a quorum for the transaction of
business.
Each share represented is entitled to one vote on all
matters properly brought before the meeting. Please specify your
choice by marking the appropriate boxes on the enclosed proxy
card and signing it. Directors shall be elected by a plurality
of the votes cast by the shareholders at a meeting in which a
quorum was present. Therefore, shares not voted and broker
non-votes will have no affect on the election of directors.
Abstention or broker non-votes will have the same affect as a
vote against the approval of the 1996 Incentive Stock Option Plan
(Proposal No. 2) and the approval of the 1996 Non-Qualified Stock
Option Plan (Proposal No. 3), as these proposals require an
affirmative vote of a majority of the votes cast. New York law
and the Company's By-Laws require the presence of a quorum at
Annual Meetings. Votes withheld from director nominees and
abstentions are counted as present for purposes of determining a
quorum. Broker non-votes which occur when brokers do not receive
voting instructions from their customers on non-routine items,
and consequently have no direction to vote on such items, are not
counted for purposes of determining a quorum.
1
<PAGE>
INFORMATION RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of August 5,
1996, with respect to each person known or believed by the
Company to be the beneficial owner, having sole voting and/or
investment power (other than as set forth below) of more than
five percent (5%) of the Company's common stock and the Company's
directors and officers as a group.
Name and Address of More Amount and Nature Percent of
than 5% Owners Beneficially Owned Class
- ------------------------ ------------------ ----------
FMR Corp. (a) 9,020,211 13.45%
82 Devonshire Street
Boston, MA 02109
Wachovia Corporation (b) 5,699,189 8.60%
P.O. Box 3099 MC 32121
Winston-Salem, NC 27150
Invesco, PLC (c) 3,361,725 5.17%
11 Devonshire Square
London EC2M4YR England
All Directors and Executive 4,710,232 7.11%
Officers and Nominees for Directors,
as a group on August 5, 1996 (d)
- -----------------------------------
(a) As indicated in its Schedule 13G, dated January 16, 1996, by
FMR Corp, a holding company and its subsidiaries, held sole power
to dispose or to direct the disposition of 9,020,211 shares and
sole voting power with respect to 362,628 shares.
(b) As indicated in its Schedule 13G, dated February 29, 1996,
Wachovia Corporation and its wholly-owned subsidiaries
Wachovia Bank of North Carolina, N.A., Wachovia Bank of
Georgia, N.A., and Wachovia Bank of South Carolina, N.A., as
Trustees, may be deemed to beneficially own 5,699,189 shares by
virtue of having sole voting power over 1,064,870 shares,
shared voting power over 1,210,382 shares, sole dispositive power
over 5,685,169 shares, and shared dispositive power over 9,180
shares.
(c) As indicated in its Schedule 13G, dated April 8, 1996,
Invesco, PLC, the parent holding company with its
subsidiaries, held shared voting and shared dispositive power
over 3,361,725 shares.
(d) This amount includes the 1,733,078 shares of the outstanding
common stock of the Company which could be acquired through the
exercise of stock options within sixty (60) days after August 5,
1996. Additional information regarding stock options is provided
on pages 7 - 9.
Cede & Co., as of August 5, 1996, the nominee of the
Depository Trust Company, New York, New York, which provides
custodial service for various institutions such as banks and
brokerage firms, was the record holder of 51,083,063 shares of
the Company's common stock representing 79.21% of the outstanding
shares of said stock. The Company does not believe that any of
these shares were owned beneficially by Cede & Co.
The definition of "beneficial ownership" referred to herein
is that the owner listed has either the voting or investment
power, or both, alone or shared with others over the number of
shares shown, and options beneficially owned under Rule 13d-3.
ELECTION OF DIRECTORS
General Information -
The Board of Directors presently consists of nine (9)
members, divided into three classes, Class 1 with three (3)
members, Class 2 with three (3) members, and Class 3 with three
(3) members, with the term of each class staggered so that the
term of one class expires at each Annual Meeting of the
Shareholders. A director shall hold office until the Annual
Meeting for the year in which his term expires and until his
successor shall be elected and qualified, subject to his prior
death, resignation, retirement or removal from office.
William J. Armfield, IV, a Class 3 Director, resigned on
December 31, 1995, and Timotheus R. Pohl, a Class 1 Director,
resigned as of January 15, 1996. The Board of Directors amended
the By-Laws to reduce the number of directors from eleven (11) to
nine (9), with each class of directors consisting of three (3)
persons. George R. Perkins,
2
<PAGE>
a Class 3 Director, resigned on July 1, 1996, and the Board of
Directors elected J. B. Davis as a director of the Company to
serve as a Class 3 Director until the 1996 Annual Meeting of the
Shareholders.
The Board of Directors has nominated the following persons
to the respective classes designated: CLASS 2 DIRECTORS - Charles
R. Carter, Jerry W. Eller, and Kenneth G. Langone; and CLASS 3
DIRECTOR - J. B. Davis. The Class 2 Directors will serve until
the Annual Meeting in 1999 and the Class 3 Director will serve
until the Annual Meeting in 1997, or until their respective
successors are elected and qualified.
All the nominees for election are incumbents and have
consented to be named in this proxy statement and to serve, if
elected. If for any reason any of the nominees should not be a
candidate for election at the meeting, the proxy will be voted
for substitute nominees designated by the Board of Directors.
The Board does not anticipate that any of the nominees will be
unavailable. The nominees and directors continuing in office
will normally hold office until the Annual Meeting of the
shareholders in the year indicated on this and the following
pages.
Biographical information concerning each nominee and
director, his age; the year each director and nominee was first
elected to the Board of Directors; his current principal
occupation (which has continued for the last five (5) years
unless otherwise indicated); the name and principal
business of the corporation in which he is employed and all
positions and offices which he presently holds with said
corporation or the principal business of the corporation in which
his occupation is carried on; and his directorship in
publicly-held companies, other than Unifi, Inc., are set forth
below. The sole (unless otherwise indicated) and beneficial
ownership of the common stock of the Company, as defined in Rule
13d-3 promulgated under the Exchange Act, as of August 5, 1996
for each director and nominee are set forth in the table
beginning on page 4.
NOMINEES FOR ELECTION AS DIRECTORS
CLASS 2 NOMINEES TO TERMS EXPIRING 1999:
CHARLES R. CARTER, (63), Minister of the Forest Hills
Presbyterian Church, High Point, North Carolina, which position
he has held since 1967. He has been a Director of the Company
since 1982, and is a member of the Audit Committee, Compensation
Committee and Incentive Stock Option Committee.
JERRY W. ELLER, (55), Executive Vice President of Unifi,
Inc., Yadkinville, North Carolina. He has been an Executive
Officer of the Company since 1981, a Director of the Company
since 1985, and is a member of the Executive Committee.
KENNETH G. LANGONE, (60), an Investment Banker and Managing
Director of Invemed Associates, Inc., an investment banking firm,
New York, New York, since 1974. He is a Director of AutoFinance
Group, Inc., The Home Depot, Inc., Patlex Corp., GMIS Inc., Baby
Superstore, Inc., and St. Jude Medical. He has been a Director
of the Company since 1969, and is a member of the Audit
Committee, Compensation Committee (Chair) and of the Incentive
Stock Option Committee (Chair) through fiscal year ended 1996.
CLASS 3 NOMINEE TO TERM EXPIRING 1997:
J. B. DAVIS, (52), is President and Chief Executive Officer
of Klaussner Furniture Industries, Inc., Asheboro, North
Carolina. He has been an Executive Officer and Director of
Klaussner Furniture Industries, Inc. since February 1970 and was
elected as President and Chief Executive Officer in 1981. He was
elected by the Board of Directors of this Company as a director
on July 18, 1996, and is a member of the Incentive Stock Option
Committee.
CLASS 3 DIRECTORS SERVING UNTIL THE 1997 ANNUAL MEETING:
WILLIAM T. KRETZER, (50), President and Chief Executive
Officer of Unifi, Inc., Greensboro, North Carolina. He became an
employee of the Company in 1971, served in various offices until
1985 when he was elected President and Chief Executive Officer,
as well as a Director of the Company. He is a member of the
Executive Committee (Chair).
G. ALLEN MEBANE, (67), is Chairman of the Board of Directors
of Unifi, Inc., Greensboro, North Carolina. He was co-founder of
the Company in 1971, has been a member of the Board of Directors
since said date and became Chairman of the Board in 1977. He
served as President and Chief Executive Officer of the Company
from 1971
3
<PAGE>
until 1985. He is a member of the Executive Committee and an
ex-officio member of the Compensation
Committee.
CLASS 1 DIRECTORS SERVING UNTIL THE 1998 ANNUAL MEETING:
DONALD F. ORR, (53), is Chairman of Sweet Pea Capital,
Greensboro, North Carolina, an investment capital firm, which was
formed in November, 1978. He has been a Director of the Company
since 1988, and is a member of the Company's Audit Committee
(Chair), Compensation Committee, and of the Incentive Stock
Option Committee.
ROBERT A. WARD, (56), Executive Vice President of Unifi,
Inc., Greensboro, North Carolina. He has been an Executive
Officer and a Director of the Company since 1971, and is an
ex-officio member of the Audit Committee and a member of the
Executive Committee.
G. ALFRED WEBSTER, (48), Executive Vice President of Unifi,
Inc., Greensboro, North Carolina. He has been an Executive
Officer of the Company since 1985, a Director since 1986, and is
a member of the Executive Committee.
SECURITY HOLDING OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
Directors Amount and Nature of Percentage of
Beneficial Ownership(1) Ownership
- -----------------------------------------------------------------
G. Allen Mebane(3) 2,096,658 3.17
William T. Kretzer(4) 849,077 1.28
Robert A. Ward(5) 545,887 (2)
Jerry W. Eller(6) 316,106 (2)
G. Alfred Webster(7) 398,699 (2)
Charles R. Carter(8) 41,167 (2)
Kenneth G. Langone(9) 165,000 (2)
Donald F. Orr(9) 149,486 (2)
Raymond Maynard(10) 144,252 (2)
J. B. Davis 3,900 (2)
All Directors and 4,710,232 7.11
Executive Officers and Nominees for
Directors [10 persons](11)
- ------------------------------
(1) All shares are owned directly and with sole voting and
dispositive power, except as otherwise noted. Ownership is as of
August 5, 1996.
(2) Represents less than one percent (1%) of the Company's
common stock.
(3) Includes 508,190 shares that he has a right to purchase
under presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially
owned by him; and 76,125 shares owned by his wife over which he
has voting rights but disclaims any other beneficial ownership.
(4) Includes 444,668 shares that he has the right to purchase
under presently exercisable stock options granted to him by the
Company and 25,500 shares owned by members of his immediate
family, which shares may be determined to be beneficially owned
by him.
(5) Includes 167,446 shares that he has the right to purchase
under presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially
owned by him.
(6) Includes 244,063 shares that he has the right to purchase
under presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially
owned by him.
(7) Includes 214,682 shares that he has the right to purchase
under presently exercisable stock options granted to him by the
Company and 39,357 shares held in trust for the benefit of his
children, which shares may be determined to be beneficially owned
by him.
(8) Includes 19,666 shares that he has the right to purchase
under presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially owned
by him.
4
<PAGE>
(9) Includes 15,000 shares that he has the right to
purchase under presently exercisable stock options granted to him
by the Company, which shares may be determined to be beneficially
owned by him.
(10) Includes 104,363 shares that he has the right to
purchase under presently exercisable stock options granted to him
by the Company, which shares may be determined to be beneficially
owned by him.
(11) Includes 1,733,078 shares that they have the right to
purchase within sixty (60) days after August 5, 1996, under
presently exercisable stock options granted to them by the
Company, which shares may be determined to be beneficially owned
by them.
DIRECTORS' COMPENSATION
Each director who is not an employee of the Company was
paid, for serving on the Board during fiscal year ended June 30,
1996, a retainer at the rate of $14,000 per annum and an
additional $1,000 for each meeting of the Board of Directors
attended, as well as being reimbursed for reasonable expenses
incurred in attending said meetings. Directors who are employees
of the Company are paid an attendance fee of $1,000 for each
meeting of the Board attended.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has four (4) standing committees: the
Executive Committee, the Compensation Committee, the Audit
Committee, and the Incentive Stock Option Committee. The
Executive Committee (composed of Messrs. Mebane, Kretzer, Eller,
Ward, Webster and Perkins) met regularly during the year. The
Compensation Committee (composed of Messrs. Mebane, Carter,
Langone, and Orr) met twice during the year. The Audit Committee
(composed of Messrs. Carter, Orr, Langone and Ward, as an
ex-officio member) met twice during the year. The Incentive
Stock Option Committee (composed of Messrs. Langone, Carter and
Orr) met three times during the year.
The Board of Directors has no Nominating Committee however, in
relation to nominations, the Executive Committee recommends to
the Board nominees for election as directors. The Executive
Committee will consider those recommendations by shareholders
which are submitted with biographical and business experience
information to the Committee Chairman, in compliance with the
Shareholder Proposals provision, hereinafter set forth.
The Executive Committee has, except to the extent prohibited by
the Business Corporation Law of the State of New York, all the
powers of the Board in the management of the Company. All
important actions taken by the Executive Committee are required
to be reported to the Board at the meeting next succeeding such
action. The Executive Committee, as noted in the preceding
paragraph, makes recommendations of nominees for directors to the
Board.
The Compensation Committee's duties include, among other
things, the review of performance and approval of salaries and
other types of compensation for senior management of the Company,
advising senior management with respect to the range of
compensation to be paid other officers of the Company, making
recommendations to the full Board concerning benefit plans for
the Company's directors, officers and employees and grants of
stock options under the Company's 1987 Non-Qualified Stock Option
Plan.
The Audit Committee's function is to be aware of the financial
reporting procedures of the Company, review with the independent
auditors the plans and results of the audit engagement, and to
investigate when called upon and recommend such changes as deemed
desirable to the Board. The control over the financial reports
of the Company is the function of Management and the objective of
this committee is to act as liaison with the Board in a
recommendation capacity.
The Incentive Stock Option Committee administers the 1992
Incentive Stock Option Plan and will administer the 1996
Incentive Stock Option Plan if Proposal No. 2 is approved by the
shareholders. It has exclusive authority to select the persons
to whom options shall be granted, determine the number of shares
subject to each option, the time or times an option shall be
granted, the exercise price of the shares subject to option,
which shall not be less than the price per share of the Company's
common stock at the close of business on the New York Stock
Exchange on the date the option is granted, determine when
options may be exercised, and establish such other provisions in
the Option Agreement, as the committee may deem necessary or
desirable, consistent with the terms of the plan.
The Board of Directors met four (4) times during fiscal year
1996. All directors attended at least seventy-five percent (75%)
of the meetings of the Board and the Committees of the Board
during the period in which they served as a director or a
committee member.
5
<PAGE>
COMPENSATION AND OPTION COMMITTEES INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Mr. Langone is a director, controlling stockholder, and
Chairman of the Executive Committee of Salem National
Corporation. In fiscal year 1996, the Company paid Salem Leasing
Corporation, a wholly-owned subsidiary of Salem National
Corporation, $3,177,535 on leases of tractors and trailers, and
for services thereto. The terms of the Company's lease with
Salem Leasing Corporation are, in Management's opinion, no less
favorable than the Company would have been able to negotiate with
an independent third party for similar equipment and services.
Mr. Langone is Chairman of the Board of Directors and
principal shareholder of Invemed Associates, Inc., an investment
firm. During fiscal year 1996, such firm performed certain
advisory services for the Company. Mr. Mebane owns in excess of
ten percent (10%) of said firm's equity securities. The amount
paid Invemed Associates, Inc. for services rendered during the
fiscal year ended in 1996 was $60,000. In the opinion of
Management the fees that are paid to Invemed are as fair and
reasonable and as favorable to the Company as those which could
have been obtained from unrelated third parties.
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth information for fiscal years
ended June 1996, 1995 and 1994, as to compensation paid by the
Company and its subsidiaries (for the purpose of this section,
collectively referred to as "Company") to the Chief Executive
Officer ("CEO"), and the four most highly compensated executive
officers for services rendered in all capacities during the last
three (3) fiscal years.
<TABLE>
UNIFI, INC. SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
-------------------
Other Annual All Other
Name and Principal Year Salary Bonus Compensation(1) Options Comp. (2)
Position
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William T. Kretzer 1996 $750,000 $250,000 $ 53,577 20,000(3) $27,884
President/CEO 1995 $750,000 $250,000 $ 52,070 231,000 $26,650
and Director 1994 $750,000 $200,000 - 20,000 $22,377
G. Allen Mebane, IV 1996 $800,000 $250,000 $ 67,823 20,000(3) $42,157
Chairman of the 1995 $800,000 $250,000 $ 88,850 283,190 $39,040
Board & Director 1994 $800,000 $200,000 $ 84,353 0 $23,163
Jerry W. Eller 1996 $400,000 $110,000 - 15,000(3) $28,890
Ex Vice President 1995 $400,000 $100,000 - 71,145 $26,642
and Director 1994 $400,000 $ 70,000 - 10,000 $22,986
Robert A. Ward 1996 $300,000 $ 75,000 - 10,000(3) $28,059
Ex Vice President 1995 $300,000 $100,000 - 80,906 $26,296
and Director 1994 $300,000 $ 85,000 - 10,000 $23,119
Raymond W. Maynard 1996 $250,000 $125,000 - 15,000(3) $22,198
Senior Vice 1995 $250,000 $100,000 - 50,000 $21,169
President 1994 $200,000 $ 75,000 - 29,363 $18,303
- ------------------------------
<FN>
Footnotes:
(1) As permitted by the Securities and Exchange Commission's rules regarding
disclosure of executive compensation in proxy statements, this column excludes
perquisites and other personal benefits of the named executive officer if their
total cost is less than $50,000. The amounts reported under "Other Annual
Compensation" are the approximate incremental cost to the Company of their
respective personal travel expense, where applicable.
(2) The components of the amounts shown in this column consist of the
following: (i) a director's fee of $4,000 each paid to the CEO and three need
directors; (ii) payments of the Company's portion of the premiums on the
split-dollar life insurance in 1996, 1995 and 1994, respectively, amounted to:
Mr. Kretzer - $3,367, $2,940 and $1,320; Mr. Mebane - $17,640, $15,330 and
$2,106; Mr. Eller - $4,373, $2,932 and $1,929; Mr. Ward - $3,542, $2,586 and
$2,062; and Mr. Maynard - $1,681, $1,459 and $1,246 and (iii) allocation of
the Company's contribution to the Profit Sharing Plan for the CEO and other
named executive officers, in the amounts of $20,517, $19,710 and $17,057 in
1996, 1995 and 1994, respectively. No distributions were made under the Profit
Sharing Plan to any of the executive officers.
(3) Non-Qualified Stock Options - granted under the 1996 Plan which is subject
to being approved by the shareholders of the Company at the Annual Meeting on
October 24, 1996.
</TABLE>
6
<PAGE>
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has an Employment Agreement with Mr. Mebane
which provides that from July 1, 1990, through June 30, 2000,
(the "executive period") Mr. Mebane would receive a salary of
$800,000 per annum, plus such additional compensation and bonuses
as may be awarded, from time to time, by the Board of Directors
of the Company and is entitled to receive Directors' Fees; and
from July 1, 2000, until June 30, 2005, (the "consultant
period"), Mr. Mebane would receive annual compensation equal to
one-fourth (1/4) of the base compensation being paid to him
during the last year of his executive employment.
The Company has an Employment Agreement with Mr. Kretzer,
effective July 1, 1990, and ending June 30, 2000. The agreement
was amended in 1992 to increase Mr. Kretzer's salary from
$550,000 to $750,000 per annum, plus such additional compensation
and bonuses as may be awarded, from time to time, by the Board of
Directors of the Company and is entitled to receive Directors'
Fees. The other terms of the agreement were not amended.
The Company has Severance Employment Agreements with Messrs.
Mebane, Kretzer, Eller, Webster and Ward. The agreements provide
that if said executive officers' employment is terminated
involuntarily, other than by death or disability or cause, or
voluntarily, other than for good reason, after a change in
control of the Company, such executive officer may receive
certain benefits. The present value of the benefits will be 2.99
times such executive officers' average annual taxable
compensation paid during the five (5) calendar years preceding
the change in control of the Company limited to the amount
deductible by Unifi, Inc. and as may be subject to excise taxes
under the Internal Revenue Code, all as determined by the
Company's Independent Certified Public Accountants, whose
decision shall be binding upon the Company and the executive
officers. A change in control is deemed to occur if someone
acquires twenty percent (20%) or more of the outstanding voting
stock of the Company, or if there is a change in the majority of
directors under specified conditions within a two (2) year
period. The benefits under these contingent employment
agreements are, as noted, contingent and therefore not reported
under the Summary Compensation Table.
OPTIONS GRANTED
Information concerning grants of options in 1996 is
presented in the following table. The options were granted under
the 1996 Non-Qualified Stock Option Plan, subject to the approval
of the shareholders of the Company at their 1996 Annual Meeting,
at an exercise price equal to the closing price per share of the
Company's common stock on the New York Stock Exchange as of the
date of grant and can not be exercised for a period of six months
from the date of grant.
<TABLE>
OPTION GRANTS IN FISCAL YEAR 1996
<CAPTION>
Potential Realized Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation
------------------------------------- -----------------------------
% of Total Exercise
Options Options Granted or Present
Granted to Employees Base Price Expiration 5% 10% Value
Name (#) in Fiscal Year(1) ($/Share) Date ($) ($) ($)(2)
- ---- ------- ----------------- ---------- ---------- --- --- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Kretzer(3)20,000 5.5% $25.375 04/18/06 $319,200 $808,800 $222,400
Mebane(3) 20,000 5.5% $25.375 04/18/06 $319,200 $808,800 $222,400
Eller(3) 15,000 4.2% $25.375 04/18/06 $239,400 $606,600 $166,800
Ward(3) 10,000 2.8% $25.375 04/18/06 $159,600 $404,400 $111,200
Maynard(3)15,000 4.2% $25.375 04/18/06 $239,400 $606,600 $166,800
- --------------------
<FN>
Footnotes:
1) Total amount granted in FY 1996 equals 360,500 (NQSO-195,000 &
ISO-165,500).
2) The Grant Date Present Value was calculated using the Black-Scholes option
valuation model. Assumptions used in the calculation of the Black-Scholes
values are as follows: Stock price on date of grant and exercise price:
04/18/96 $25.375--- Expected Dividend Yield: 1.93% --- Risk-Free Rate: 6.87%
- --- Term: 10 Years --- Volatility: .32.
3) Non-Qualified Stock Options - granted under the 1996 Plan which is
subject to being approved by the shareholders of the Company at the Annual
Meeting on October 24, 1996.
</TABLE>
7
<PAGE>
<TABLE>
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in fiscal year 1996 of
previously granted options and the number and value of
unexercised options are shown in the following table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Value Options/SARS In-the-Money Options/SARS
on Exercise Realized at Year End at Year End (1)
---------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
(2) (2)
- ---- ------------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kretzer 0 $0 444,668 20,000 $4,771,796 $55,000
Mebane 0 $0 508,190 20,000 $1,375,508 $55,000
Eller 0 $0 244,063 15,000 $3,829,423 $41,250
Ward 0 $0 167,446 10,000 $1,799,892 $27,500
Maynard 0 $0 104,363 15,000 $ 357,913 $41,250
- -----------------
<FN>
Footnotes:
1) The fair market value of the Company's common stock at its fiscal year
end, June 30, 1996 was $28.125.
2) Non-Qualified Stock Options - granted under the 1996 Plan which is subject
to being approved by the shareholders of the Company at the Annual Meeting on
October 24, 1996. If the 1996 Plan is not approved by the shareholders, the
options for the unexercised shares will be void and unenforceable.
</TABLE>
REPORT OF THE COMPENSATION AND INCENTIVE STOCK OPTION
COMMITTEES ON EXECUTIVE COMPENSATION
This report of the Compensation Committee and the Incentive
Stock Option Committee ("Committees") of the Board of Directors
sets forth the Company's compensation policies with respect to
the executives of the Company, including the named executives for
whom specific compensation information is reported in the
accompanying summary compensation tables.
The Compensation Committee during fiscal year 1996 was composed
of three non-employee directors and one employee director of the
Company. The non-employee directors determine the compensation
of the employee directors and the full Compensation Committee
determines the compensation of other officers. The Committee's
duties include the review of performance and approval of salaries
and other types of compensation for senior management of the
Company; advising senior management with respect to the range of
compensation to be paid to other officers of the Company; and
making recommendations to the full Board concerning benefit plans
for the Company's directors, officers and employees and the
granting of stock options under the Company's 1987 Non-Qualified
Stock Option Plan.
The Incentive Stock Option Committee is composed of three
non-employee directors who determine the executives and other
personnel who will receive options, the number of shares subject
to the option, the price and other terms and conditions of the
options granted under the Company's 1992 Incentive Stock Option
Plan and the 1996 Incentive Stock Option Plan, if approved by the
shareholders at their 1996 Annual Meeting. The members of the
Incentive Stock Option Committee can not be granted options under
the Incentive Stock Option Plans.
COMPENSATION PHILOSOPHY
One of the Company's primary business objectives is to
maximize long-term shareholder returns. To achieve this
objective it is necessary to attract, retain and motivate the
highest quality management team possible that can conceptualize,
strategize and technically implement business development,
product development, manufacturing technology, and service
programs to generate long-term growth.
Establishing compensation programs generally and determining
the compensation of individual executive officers can be complex
matters involving numerous issues and a variety of data. The
Company's Committees and its Board believe that the compensation
programs should be flexible to allow judgment and discretion on
the part of the Committees rather than utilizing a formula
approach. The compensation of the executive officers, including
the
8
<PAGE>
CEO, is determined on a subjective evaluation, including said
officer's past, present and future value to the Company, the
performance of the Company contrasted with the economic
conditions of the textile market in particular, and the economy
in general. The Committees view the compensation in three
component parts; base salary, annual cash incentive compensation
(collectively, "cash compensation") and stock option grants.
BASE SALARIES
The Compensation Committee recommends to the Board of
Directors base salaries they think are fair and reasonable for
the services rendered by the respective executive officers and
necessary to keep him or her from resigning and going to work for
some other corporation. Adjustments to base salaries for
executives are recommended annually by the Committee, based on
individual performances and contributions to the Company's
success. All base salary adjustments are approved by the full
Board. Base salaries for the named executives, including the
CEO, did not increase in fiscal year 1996. Mr. Mebane's and Mr.
Kretzer's base salaries are covered by Employment Agreements.
ANNUAL CASH INCENTIVE COMPENSATION
The Company rewards executives based on each fiscal year's
results and reflects a balance between overall corporate
performance and performance of the specific areas of the Company
under the individual's control. The annual cash incentive
compensation, in the form of bonuses, are, as previously noted,
based on subjective evaluation of the respective executive.
Bonuses, if any, recommended by the Committees are subject to the
approval of the full Board.
The annual incentive compensation awarded to the named
executives in the Summary Compensation Table other than the Chief
Executive Officer averaged 32.00% of base salary compared to
31.43% of base salary in fiscal 1995. The Committees recommended
approval of the bonuses to the full Board, noting exceptional
performance by Management for the year.
STOCK OPTIONS
The Company has six stock option plans. The 1996 Incentive
Stock Option Plan, the 1996 Non-Qualified Stock Option Plan (both
of which, and any options granted thereunder, unless approved by
the shareholders of the Company at their 1996 Annual Meeting
shall be void and unenforceable), the 1992 Incentive Stock Option
Plan, the 1987 Non-Qualified Stock Option Plan under which
options can not be granted after October 21, 1997, the 1982
Incentive Stock Option Plan ("1982 Plan") and the Unifi Employee
Stock Option Plan (this Plan was acquired in the Vintage Yarns,
Inc. merger) ("USY Plan"). Options can no longer be granted
under the 1982 Plan or the USY Plan.
Incentive stock options are granted from time to time to key
management employees, as approved by the Incentive Stock Option
Committee. Options are granted with an exercise price equal to
the fair market value of the shares of the Company's common stock
on the date of grant. Non-Qualified Stock Options are granted
from time to time to directors who are not employees of the
Company (outside directors), officers and other key employees by
the Board of Directors on the recommendation of the Compensation
Committee or other committees as the Board of Directors may
designate. Non-Qualified Stock Options may be granted at such
exercise price as the Board of Directors deems appropriate
however, to date all options have been granted with an exercise
price equal to the fair market value of the shares of the
Company's common stock on the date of grant.
The optionee will receive value from the grants only if the
market value of such shares increase. Because the compensation
element of options is dependent upon increase over time in the
market value of such shares, stock options represent compensation
that is tied to the Company's long-term performance for periods
of up to ten (10) years (the period during which such option may
be exercised). Compensation in the form of stock options serves
to align the interest of the optionee directly with the interest
of the Company's shareholders.
In 1996, the stock options granted to the executive officers
as a group constituted approximately 19.90% of their total 1996
compensation package, utilizing (for illustration purposes only)
the valuation method used in the Table of Option Grants in Fiscal
Year 1996, as provided on page 7. Executive officers will
realize no value from their stock option grant unless the market
price of the shares of the Company stock rises above such price
on the date of the grant.
9
<PAGE>
1996 COMPENSATION FOR CHIEF EXECUTIVE OFFICER
Compensation paid to the Chief Executive Officer, Mr.
Kretzer, during the fiscal year was based on the same factors
generally applicable to compensation paid to other executives of
the Company. Mr. Kretzer's base salary was $750,000 (as provided
in his Employment Agreement) and his annual cash incentive
compensation (bonus) represented 33.33% of his base salary, which
was the same as fiscal 1995. The Board of Directors granted Mr.
Kretzer options for 20,000 shares at a per share exercise price
of $25.375, the closing price per share on the New York Stock
Exchange as of the date of grant, under the 1996 Non-Qualified
Stock Option Plan, contingent upon said plan being approved by
the shareholders at their 1996 Annual Meeting.
COMMITTEES' JUDGMENT
It is the judgment of the Committees that in 1996, and for
the three periods ending June 30, 1996, the Company had excellent
results and total compensation to the executives was appropriate
for such performance and to retain and motivate such executives
in the future. The foregoing report has been furnished by the
members of the following Committees:
Compensation Committee: Incentive Stock Option
Committee:
Kenneth G. Langone Kenneth G. Langone
Charles R. Carter Charles R. Carter
G. Allen Mebane Donald F. Orr
Donald F. Orr
PERFORMANCE GRAPH - SHAREHOLDER RETURN ON COMMON STOCK
Comparison of Five Year Cumulative Total Return*
NOTE: Pursuant to Reg. Section 232.304 (d) the Performance
Graph is omitted herein and represented by the following table:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG UNIFI,INC., MEDIA
GENERAL TEXTILE AND THE NEW YORK STOCK EXCHANGE MARKET VALUE INDICES
Company 1991 1992 1993 1994 1995 1996
- -----------------------------------------------------------------------------
Unifi, Inc. $100.00 $133.01 $197.31 $138.73 $144.63 $173.17
Media General
Textile Group $100.00 $146.18 $155.65 $141.75 $140.59 $154.05
New York Stock
Exchange Market
Value $100.00 $113.82 $129.08 $133.58 $159.45 $199.49
_______________________________
* Assumes $100 invested in the common stock of Unifi, Inc. and
comparison groups on June 30, 1991. Assumes reinvestment of dividends.
10
<PAGE>
PROPOSAL NO. 2-APPROVAL OF THE 1996 INCENTIVE STOCK OPTION PLAN
IN GENERAL
The Board of Directors adopted the 1996 Incentive Stock Option
Plan ("1996 Plan") in April 1996, subject to shareholder approval
at the 1996 Annual Meeting. The 1996 Plan is similar to the 1992
Incentive Stock Option Plan ("1992 Plan") which was approved by
the shareholders of the Company in 1992. As of June 30, 1996,
there were 122,183 shares of common stock available for the
granting of additional options under the 1992 Plan. The complete
text of the 1996 Plan appears as Exhibit "A" to this Proxy
Statement and the following is qualified in its entirety by
reference to such text.
The proposed 1996 Plan provides for the issue of up to
1,000,000 shares of the Company's authorized but unissued common
stock. In the event of a stock dividend, stock split,
reorganization, merger, consolidation, or other combination or
exchange of shares, the number of shares of stock available under
the 1996 Plan, in the aggregate, shall be correspondently
adjusted by the Board or its committee.
The Board of Directors desires to establish the 1996 Plan to
provide the Company and its subsidiaries with an effective means
of attracting, securing, motivating, and retaining officers and
other key personnel of the Company.
The 1996 Plan, if approved by the shareholders at their 1996
Annual Meeting, will have an effective date of April 18, 1996,
and is intended to be exempt under the provisions of Section
16b-3 of the Exchange Act.
ADMINISTRATION
The 1996 Plan shall be administered by an Incentive Stock
Option Committee ("Committee"). The Committee shall be appointed
by the Board of Directors, shall consist of not less than three
or more than five non-employee (outside) directors, none of whom
shall be eligible to receive options under the 1996 Plan and all
members of the Committee shall serve at the pleasure of the Board
of Directors.
ELIGIBILITY AND PARTICIPATION
Participants in the 1996 Plan will be selected by the
Committee from among those officers and other key employees of
the Company or its subsidiaries who are in a position to
contribute materially to the Company's continued growth and
development and to its long-term financial success. It is
anticipated that the current executive officers and other key
employees of the Company will receive options under the 1996 Plan
in such amounts and at such time as the Committee may determine.
OPTIONS
The Committee is authorized to grant incentive stock options
(within the meaning of Section 422 of the Code) or non-qualified
stock options. Subject to the terms, provisions and conditions
of the 1996 Plan, the Committee shall determine the number of
shares subject to each option, the fair market value of the
shares subject to each option as of the date of grant, the time
when each option may be exercised, provided however, that no
option can be exercised after 10 years from the date of grant,
and such other provisions of the option agreement, as the
Committee may deem necessary or desirable, consistent with the
terms of the 1996 Plan.
The option price for options granted under the 1996 Plan shall
not be less than 100% of the fair market value of the Company's
common stock or 110% of the fair market value in the event
incentive stock options are granted to an optionee who owns more
than 10% of the total combined voting power of all Classes of
shares of the Company's stock on the date the option is granted.
The fair market value shall be the closing price of the Company's
common stock on the New York Stock Exchange on the date on which
the option is granted. No option shall be exercisable prior to
the expiration of six (6) months following the date on which the
option was granted.
EXPIRATION AND TERMINATION OF OPTIONS
Each option will expire on a date determined at the time of
grant, but no later than ten (10) years from the date of grant
(incentive stock options granted to persons holding more than 10%
of the Company's common stock must be exercised no later than
five (5) years from the date of grant), will be nontransferable
by the optionee, except upon death, and exercised during the
optionee's lifetime only by the optionee.
11
<PAGE>
In the event of the optionee's death, his personal
representative or the person or persons to whom such options may
have passed under the Last Will and Testament of the optionee or
the Intestate Succession Laws, may exercise said option within
three (3) months after the death of the optionee.
In the event of optionee's disability or early retirement with
the consent of the Board of Directors, the optionee shall have
the right, within twelve (12) months from his or her severance
date, but not beyond the expiration date of such option, to
exercise such option to the extent exercisable on the severance
date. If optionee's employment is terminated for any reason
other than death, disability or early retirement with the consent
of the Board of Directors, optionee shall have no rights to
exercise any options granted to the optionee under this 1996
Plan.
INTERPRETATION OF 1996 PLAN
The Board of Directors shall interpret the 1996 Plan, make
such rules and regulations and establish such procedures for the
administration of the 1996 Plan as it deems appropriate. In the
event of any dispute or disagreement as to the interpretation of
the 1996 Plan or any rule, regulation or procedure, the decision
of the Board of Directors shall be final.
TERMINATION AND AMENDMENT
The Board of Directors or the Committee may terminate or amend
the 1996 Plan in its discretion provided that no amendment which
requires shareholder approval under the applicable New York law,
or which would cause the 1996 Plan not to continue to comply with
Rule 16b-3 of the Exchange Act, increases the aggregate number of
shares of common stock reserved for issue under the 1996 Plan
except as provided in the 1996 Plan, materially modifies the
requirements as to eligibility for participation, shall be
effective unless it is approved by the requisite vote of the
shareholders. No amendment or termination of the 1996 Plan may
adversely affect any optionee's right with respect to previously
granted options without the consent of such optionee.
PERSONS RECEIVING OPTIONS
No determination has been made as to the employees who will be
granted options or the number of shares that may be granted to
any employee if the 1996 Plan is approved by the shareholders.
It is presently contemplated however, that options will be
granted to the named executives and other key employees. The
total number of employees eligible to receive options under the
1996 Plan is estimated to be approximately seventy-five (75).
FEDERAL INCOME TAX CONSEQUENCES
The Company is informed that under present law the following
is a summary of the principal United States Federal Income Tax
consequences (federal taxes) of the issue and exercise of stock
options granted under the 1996 Plan. The summary is not intended
to be all encompassing and doesn't describe state or local tax
consequences.
An optionee will not be deemed to have received any income
subject to tax at the time an incentive stock option (within the
meaning of Section 422 of the Code) is granted, nor will the
Company be entitled to a tax deduction at that time.
If an incentive stock option is exercised by an optionee who
satisfies certain employment requirements at the time of
exercise, the optionee will not be deemed to have received any
income subject to tax at the time, although the excess of the
fair market value of the common stock so acquired on the date of
exercise over the exercise price may be an item of tax
preferences for purposes of the alternative minimum tax. Section
422 of the Code provides that if the common stock is held at
least one year after the exercise date, and two years after the
grant, the optionee will realize a long-term capital gain or loss
upon the subsequent sale, measured as a difference between the
exercise price and the sales price.
If common stock acquired upon the exercise of an incentive
stock option is sold within two years of the date of grant and
one year after exercise, a disqualifying disposition results, at
which time the optionee is deemed to have received an amount of
ordinary income equal to the lesser of: (a) the excess of the
fair market value of the stock on the date of exercise over the
exercise price; or (b) the excess of the amount realized on the
disposition of the shares over the exercise price. If the amount
received on the disqualifying disposition exceeds the fair market
value on the date of exercise, the gain on the excess of the
ordinary income portion will be treated as a capital gain. Any
loss on the disposition of stock acquired through the exercise of
incentive stock options is a capital loss.
12
<PAGE>
No income tax deduction will be allowed the Company with
respect to shares of stock purchased by an optionee through the
exercise of an incentive stock option provided there is no
disqualifying disposition, as described above. In the event of a
disqualifying disposition, the Company is entitled to a tax
deduction equal to the amount of ordinary income recognized by
the optionee.
When a non-qualified stock option is exercised, the optionee
will be deemed to have received an amount of ordinary income
equal to the excess of the fair market value of the shares of
stock purchased over the exercise price. The Company will be
allowed a tax deduction in the year the shares are exercised in
an amount equal to the ordinary income which the optionee is
deemed to have received.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT A
MEETING OF THE SHAREHOLDERS BY HOLDERS OF SHARES ENTITLED TO VOTE
IS REQUIRED FOR APPROVAL OF THE 1996 PLAN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
1996 INCENTIVE STOCK OPTION PLAN. PROXIES, UNLESS INDICATED TO
THE CONTRARY, WILL BE VOTED FOR APPROVAL OF THE 1996 PLAN.
PROPOSAL NO. 3-APPROVAL OF THE 1996 NON-QUALIFIED STOCK
OPTION PLAN
IN GENERAL
The Board of Directors adopted the 1996 Non-Qualified Stock
Option Plan ("Plan"), subject to approval by the Company's
shareholders at their 1996 Annual Meeting. The Plan is similar
to the 1987 Non-Qualified Stock Option Plan expiring on October
21, 1997, in which 9,416 shares remain for option grants.
The Board of Directors believes that the Plan will benefit the
shareholders by allowing the Company to attract and retain well
qualified individuals, who are not full-time employees of the
Company or its subsidiaries, to serve as non-employee (outside)
directors of the Company or its subsidiaries and to increase the
Company's ability to secure and retain officers and other key
employees who have the ability to enhance the value of the
Company, by offering such individuals an opportunity to acquire
or increase his or her stock interest in the Company.
The 1996 Non-Qualified Stock Option Plan, if approved by the
shareholders at their 1996 Annual Meeting, will have an effective
date of April 18, 1996, and is intended to be exempt under the
provisions of Section 16b-3 of the Exchange Act.
The following Plan Summary is not intended to be complete and
is qualified in its entirety by the complete text of the 1996
Non-Qualified Stock Option Plan that is set forth in Exhibit "B"
to this proxy statement.
SUMMARY OF 1996 NON-QUALIFIED STOCK OPTION PLAN
AVAILABLE SHARES
The aggregate number of shares of the Company's common stock
to be reserved, which may be issued upon exercise of options
granted under Plan, shall be one million (1,000,000) shares.
The aggregate number of shares is subject to capital
adjustment resulting from stock dividends, stock splits,
reorganization, merger, consolidation, or a combination of
exchange of shares. In the event any options shall, for any
reason, terminate, expire, or be surrendered without having
been exercised in full, the shares subject to said options but
not purchased thereunder shall again be available for options to
be granted under the Plan.
ADMINISTRATION
The Plan, subject to the specific provisions thereof, shall be
administered by the Board of Directors or a committee of the
Board of Directors ("Committee"), which shall consist of not less
than three nor more than five non-employee directors, each of
whom is a disinterested person as defined by Section 16b of the
Exchange Act. All members of the Committee shall serve at the
pleasure of the Board of Directors.
13
<PAGE>
ELIGIBILITY AND PARTICIPATION
The Board of Directors or Committee of the Board, if one is
appointed, may grant options to directors, both non-employee and
employee directors, officers and other employees of the Company,
upon whose judgment, initiative and efforts the Company is
largely dependent for the successful conduct of its business.
STOCK OPTIONS
Options granted under this Plan are non-qualified
(non-statutory) options and are not subject to the provisions of
Section 422 of the Code.
The Board of Directors or Committee, if one is appointed,
shall determine the individuals to whom options will be granted;
the exercise price of the common stock covered by the option,
which shall be determined at the time the option is granted,
which may be less than the fair market value of the Company's
common stock on the date of grant; the number of shares covered
by each option; set the terms, conditions and provisions of the
respective option agreements, which need not be identical,
consistent with the terms of said Plan; and take such other
actions as deemed necessary or advisable for the proper
administration of the Plan and options granted thereunder.
The Board of Directors may grant options under the Plan to
members of the Board of Directors including members of the
Committee, if one is appointed, upon approval of a majority of
the members of the Board of Directors, excluding the board
members involved.
Other than the options granted under the Plan, as reported
under 1996 Grants Under Plan on page 16 of this statement, no
determination has been made as to directors, officers or other
key employees of the Company who will be granted options under
the Plan in the future. It is presently contemplated, however,
that options will be granted from time to time. The total number
of directors, officers and other key employees eligible to
receive options under the Plan is estimated to be less than fifty
(50).
OPTION EXERCISE
Each option prior to its expiration or termination may be
exercised at any time, and from time to time, as to part or all
the shares which shall be covered. However, no option shall be
exercised prior to the expiration of six (6) months following the
date on which the option was granted and no option can be
exercised prior to shareholder approval of this Plan.
The payment of the exercise price of any option may be made:
(a) in cash; or (b) by delivering shares of common stock having a
fair market value equal to the option price or in a combination
of cash and common stock.
TRANSFERABILITY
Each option shall not be transferrable, without the consent of
the Board of Directors (including pledges or hypothecation), by
any optionee other than by Will or, if said optionee dies
intestate, under the laws of descent and distribution of the
state of the optionee's domicile at the time of death.
EXPIRATION AND TERMINATION OF OPTIONS
Each option will expire on the date determined at the time of
the grant but no later than ten (10) years from the date of
grant.
In the event an officer's or key employee's employment with
the Company is terminated for any reason other than death without
the consent of the Board, all rights of the optionee to purchase
shares pursuant to his or her option shall expire three (3)
months after the date on which the optionee's employment with the
Company is terminated. In the event of death of the optionee,
who is an officer or key employee, the unexercised portion of his
option shall be exercisable for a period of one (1) year from the
date of death of said optionee only by his personal
representative or the person or persons to whom such options may
have passed under the Will of the optionee or the intestate
succession laws of the state of the optionee's domicile at the
time of death.
Upon termination of an outside director optionees tenure in
office other than for "cause", the unexercised portion of his or
her option shall be exercisable within one (1) year after the
date his tenure as director ends or such longer period as the
Board may determine. Upon the death of an outside director
optionee, his personal representative or the person or persons to
whom such options shall have passed under the Will of the
optionee or the intestate
14
<PAGE>
succession laws may exercise the unexercised portion of said
option, for a period of one (1) year from the date of said
outside director's death.
TERMINATION AND AMENDMENTS
The Plan may be terminated or amended by the Board of
Directors, without vote of the shareholders of the Company,
provided that the Board may not, without authorization from the
shareholders, change the number of shares reserved for options
under the Plan, alter the persons eligible to participate in the
Plan, and that no amendment which requires shareholder approval
under the applicable New York laws shall be effective unless it
is approved by the requisite vote of the shareholders. No
amendment shall adversely affect any of the rights of any
optionee of any option previously granted without the consent of
the optionee.
FEDERAL INCOME TAX CONSEQUENCES
The Company is informed that under present law the following
is a summary of the principal United States Federal Income Tax
consequences (federal taxes) of the issue and exercise of stock
options granted under the Plan. The summary is not intended to
be all encompassing and, among other things, does not describe
state or local tax consequences.
When an optionee is granted an option with a per share
exercise price less than the fair market value of the Company's
common stock on the date of grant, the difference between the
exercise price and the fair market value on the date of grant
will be ordinary income to the optionee and generally will be
allowed as a deduction for federal tax purposes to the
corporation.
When an optionee is granted an option with an exercise price
being the fair market value on the date of grant, upon the
exercise of such option the difference between the exercise price
of the stock and the fair market value on the date of exercise
will be ordinary income to the optionee and generally will be
allowed as a deduction for federal income tax purposes to the
corporation.
When an optionee disposes of his shares acquired upon the
exercise of an option, the amount received in excess of the fair
market value of the shares on the date of the exercise will be
treated as a long or short term capital gain depending on the
holding period of the shares.
To the extent that an optionee pays all or part of the option
price of a non-qualified stock option by tendering shares of the
common stock of the Company owned by the optionee, the rules
described above apply except that the number of shares received
upon such exercise which is equal to the number of shares
surrendered as payment of the option price shall have the same
tax basis and tax holding period as the shares surrendered.
If the shares surrendered by the optionee in the exercise of a
non-qualified stock option had previously been acquired by reason
of the exercise of incentive stock options granted to the
optionee, the surrender of such shares is not a disqualifying
disposition of such shares, but the shares received upon exercise
of the non-qualified stock option which are equal to the
surrendered incentive stock option shares will still constitute
incentive stock option shares. The additional shares received
upon the exercise have a tax base equal to the sum of the amount
of the ordinary income recognized and have a holding period which
commences on the date of the exercise.
15
<PAGE>
1996 GRANTS UNDER PLAN
Subject to shareholder approval of the Plan, on April 18,
1996, the Board of Directors granted options under the Plan for
195,000 shares to outside directors, officers, and key employees
of the Company, including all five of the named executive
officers, as follows:
NAME AND POSITION NO. SHARES
- ----------------- ----------
Kretzer, William T. 20,000
Pres., CEO and Director
Mebane, G. Allen 20,000
Chairman of the Board
Eller, Jerry W. (1) 15,000
Executive Vice President and Director
Ward, Robert A. 10,000
Executive Vice President and Director
Maynard, Raymond W. 15,000
Senior Vice President
All Current Executive Officers,
as a group 80,000
All Current Directors who are not
Executive Officers,
as a group (2) 30,000
Each Nominee for Election as
Director:(1)(2)
Eller, Jerry W. 15,000
Carter, Charles R. 10,000
Langone, Kenneth G. 10,000
All Employees, including all
Officers who are not
Executive Officers, as
a group 85,000
______________________________
Footnotes:
(1) A nominee for election as a director.
(2) This group includes Mr. Carter and Mr. Langone, both of
whom are nominees for election of a director, but who are not
executive officers or employees of the Company.
In the event the Plan is not approved by the shareholders at
their 1996 Annual Meeting, the Plan and all options granted
thereunder shall be null, void, and unenforceable.
The per share exercise price of the options granted on April
18, 1996, is $25.375, which was the closing price of the
Company's common stock on the New York Stock Exchange on the date
of grant. Any benefits to the optionees will be based upon the
spread between the fair market value on the exercise date and
$25.375. Since it is not possible to determine whether the
shareholders of the Company will approve the Plan or when the
options will be exercised by an optionee, benefits to ultimately
be received, if any, under the 1996 Non-Qualified Stock Option
Plan are not determinable.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT A
MEETING OF THE SHAREHOLDERS BY HOLDERS OF SHARES ENTITLED TO VOTE
IS REQUIRED FOR APPROVAL OF THE PLAN.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE
1996 NON-QUALIFIED STOCK OPTION PLAN. PROXIES, UNLESS INDICATED
TO THE CONTRARY, WILL BE VOTED FOR APPROVAL OF THE PLAN.
NEW YORK STOCK EXCHANGE
Unifi, Inc.'s Common Stock now trades on the New York Stock
Exchange (NYSE) under the symbol "UFI", with the closing price of
said stock on September 10, 1996, being $27.75 per share.
16
<PAGE>
INFORMATION RELATING TO THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's Independent Certified
Public Accountants for fiscal year ended June 30, 1996, is
expected to be present at the shareholders' meeting, at which
time a representative will have an opportunity to make a
statement if he/she so desires and to answer appropriate
questions from shareholders.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934
requires the Company's directors and executive officers, and any
person who owns more than ten percent of the Company's stock, to
file with the Securities and Exchange Commission ("SEC") initial
reports of ownership and reports of changes in ownership of
common stock. Such persons are required by the SEC's regulations
to furnish the Company with copies of all Section 16(a) reports
they filed.
To the Company's knowledge, based solely on its review of
the copies of such reports furnished to the Company and written
representation that no other reports were required during fiscal
year ended June 30, 1996, all such Section 16(a) filing
requirements were met.
SHAREHOLDER PROPOSALS
Any shareholder satisfying the Securities and Exchange
Commission's requirements and wishing to submit a proposal to be
included in the 1997 proxy statement, should submit the proposal
in writing to Secretary, Unifi, Inc., 7201 West Friendly Avenue,
Greensboro, North Carolina 27410. Unifi, Inc. must receive the
proposal by May 23, 1997, in order to consider it for inclusion
in the 1997 Proxy Statement.
OTHER MATTERS
The Management of the Company is not aware of any other
matters which may be presented for action at the meeting other
than those set forth herein. However, should any other matter
requiring the vote of the shareholders arise, it is intended that
shares repre-sented by proxies in the accompanying form will be
voted by the persons named in the proxy in accordance with their
best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
CLIFFORD FRAZIER, JR.
Secretary
Greensboro, North Carolina
September 23, 1996
17
<PAGE>
EXHIBIT "A"
UNIFI, INC.
1996 INCENTIVE STOCK OPTION PLAN
ARTICLE I
1.1 NAME & PURPOSE: The name of the Plan is the "Unifi, Inc.
1996 Incentive Stock Option Plan" (the "Plan"). The Plan is for
the purposes of securing and retaining the services of key
employees for Unifi, Inc., and its subsidiaries, as that term is
defined in Section 424(f) of the 1986 Internal Revenue Code, as
amended, (the "Subsidiaries"). The Board of Directors of the
Unifi, Inc. believes the Plan will promote continuity of
management and increase incentive and personal interest in the
future of the Unifi, Inc. and its subsidiaries by those who are
primarily responsible not only for its regular operations, but
also for shaping and carrying out the long-range plans of Unifi,
Inc. and assisting in its continued growth.
The purpose will be affected through the granting of stock
options as herein provided, which options are intended to
constitute "incentive stock options" ("Options") within the
meaning of Section 422 of the 1986 Internal Revenue Code, as
amended, (the "Code").
1.2 DEFINITIONS: Wherever used in the Plan, the following
terms shall have the meaning set forth below:
(a) "Corporation" shall mean Unifi, Inc., its subsidiaries,
and any successor corporation.
(b) "Board of Directors" shall mean the Board of Directors of
the Corporation and any committee of Directors authorized by such
Board to act on its behalf with reference to the Plan.
(c) "Committee" shall mean the Incentive Stock Option
Committee. The Committee shall be appointed by the Board of
Directors, shall consist of not less than three nor more than
five outside Directors, none of whom shall be eligible to receive
Options under the Plan. All members of the Committee shall serve
at the pleasure of the Board of Directors.
(d) "Common Stock" shall mean the common stock of the
Corporation identified as such on the most recent balance sheet
of the Corporation.
(e) "Disability" shall mean a condition resulting from an
accident or illness which in the opinion of the Committee
permanently and totally prevents an optionee from carrying out
his or her duties with the Corporation.
(f) "Fair Market Value" shall be deemed to be the closing
price of the Corporation's Common Stock on the New York Stock
Exchange on the day on which the option is granted.
(g) "Severance Date" shall mean, as determined by the
Committee, the date on which an individual's employment with the
Corporation terminates. Whether any leave of absence shall
constitute termination of employment for the purpose of the Plan
shall be determined in each case by the Committee, in its sole
discretion. Whether a plant closing, moving the production of a
product from one facility to another, or layoffs of 50 or more
people shall constitute termination of employment for the purpose
of the Plan shall be determined in each of said events by the
Executive Committee of the Board of Directors, in its sole
discretion.
ARTICLE II
2.1 STOCKHOLDER APPROVAL AND EFFECTIVE DATE: The Plan will be
presented to the holders of the Corporation's Common Stock at the
next Annual Meeting which has been scheduled to be held on
October 24, 1996. If the Plan is approved by the Shareholders,
the effective date of the Plan is April 18, 1996. In the event
the Plan is not approved by the holders of the Corporation's
Common Stock, the Plan automatically terminates and any Options
granted under the Plan shall be void and of no further force or
effect. No Options granted under this Plan can be exercised
prior to the Plan being approved by the Corporation's Common
Stock shareholders.
ARTICLE III
3.1 PLAN ADMINISTRATION: The Plan is to be administered by the
Committee. The Committee is authorized to establish such rules
and regulations and to appoint such agents as it deems
appropriate for the proper administration of the Plan and to take
such steps in connection with the Plan or the benefits provided
thereunder as it deems necessary or advisable. The Committee
shall have exclusive jurisdiction to select the key employees to
whom options shall be granted, determine the number of shares
subject to each option, determine the time or times when options
will be granted, determine the option price of the shares subject
to options which shall not be less than the Fair Market Value of
the Corporation's Common Stock on the date the option is granted,
determine the time when each option may be exercised provided
however, that no options can be exercised until after the Plan
has been approved by the holders of the Corporation's Common
Stock, as provided in Section 2.1, or within less than six (6)
months from date of grant, whichever date occurs last, establish
such other provisions in the option agreement as the Committee
may deem necessary or desirable, consistent with the terms of the
Plan, and to determine all other questions relating to the
administration of the Plan.
3.2 PLAN INTERPRETATION: The Board of Directors may make such
rules and regulations and establish the procedures for the
administration of the Plan as it deems appropriate. In the event
of any dispute or disagreement as to the interpretation of the
Plan or of any rule, regulation or procedure or, as to any
question, right or obligation arising from or relating to the
Plan, the decision of the Board of Directors shall be final and
binding upon all persons. The decision of the Committee with
respect to any questions arising as to the employees selected to
receive options and the number of shares authorized in said
option, under the Plan, shall be controlling.
3.3 REGISTRATION AND LISTING ON STOCK EXCHANGE: The Board of
Directors shall determine the restrictions, if any, to be placed
on certificates issued upon the exercise of Options and whether
the stock issued under this Plan will be registered with the
Securities and Exchange Commission and listed on a stock
exchange. The decision of the Board of Directors shall be final
and binding upon all persons.
ARTICLE IV
4.1 AGGREGATE AMOUNT OF STOCK SUBJECT TO PLAN: The maximum
aggregate number of shares of the Corporation's Common Stock
which might be used pursuant to the exercise of options granted
hereunder shall be 1,000,000 shares of the Corporation's
authorized but unissued Common Stock, which shares are hereby
reserved for issue solely subject to the provisions of this Plan.
Adjustments may be made in the aggregate amount of stock which
may be issued under the Plan pursuant to the provisions of
Section 11.1. If for any reason any option granted under the
Plan shall terminate or expire or be surrendered without having
been exercised in full, the shares subject to such option but not
purchased thereunder shall again be available for options to be
granted hereunder.
ARTICLE V
5.1 OPTION AGREEMENT: Each option under this Plan shall be
evidenced by an Option Agreement which shall be signed by an
Officer for the Corporation and by the Optionee, which shall
contain such provisions that may be approved by the Committee and
shall be in accordance with the Plan but may include additional
provisions and restrictions, providing that the same are not
inconsistent with the Plan or applicable provisions of the Code.
ARTICLE VI
6.1 ELIGIBILITY: Options may be granted only to key employees,
including Officers, whether or not they are Directors of the
Corporation or one of its Subsidiaries. A Director of the
Corporation, or a Subsidiary, who is not also such an employee,
will not be eligible to receive an option. In determining the
employees to whom options may be granted, and the number of
shares to be covered by each option, subject to the limitations
as set forth in Section 8.1 of this Plan, the Committee will take
into account the duties of the respective employees, his or her
present and potential contribution to the success of the
Corporation, the anticipated number of years of effective service
remaining, and such other factors as they may deem relevant in
connection with accomplishing the purposes of the Plan. Subject
to the limitations set forth in this Plan, an eligible employee
who has been granted an option may be granted an additional
option or options if the Committee shall so determine.
ARTICLE VII
7.1 GRANT OF OPTIONS: The Committee is hereby authorized by
majority vote of its members to grant stock options within the
limitations set forth in Section 8.1, from time to time on the
Corporation's behalf to any one or more persons, who, at the time
of such grant, are full-time employees and meet the eligibility
requirements as set forth in Section 6.1 of the Plan. These are
intended to be incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, to
the maximum allowed by said Section. Options granted under the
Plan (i) must be granted within ten (10) years from April 18,
1996, subject to the provisions of Section 10.1(b) of this Plan,
and (ii) to the extent they are incentive stock options,
otherwise comply with Section 422 of the Code, as amended. More
than one option may be granted to an optionee pursuant to the
Plan.
ARTICLE VIII
8.1 LIMITATIONS: The aggregate number of shares of Common
Stock for which options may be granted to eligible employees
under this Plan at any one time is unlimited, subject to the
provisions of Section 4.1, of this Plan, provided, that if as a
result of any grant hereunder the aggregate Fair Market Value
(determined as of the time the option is granted) of the stock
with respect to which incentive stock options are exercisable for
the first time by such employee during any calendar year, under
this and all other incentive stock option plans (as defined in
Section 422 of the Code, as amended) of the Corporation, would
exceed $100,000.00, any excess amount will be treated as
non-qualified stock options.
ARTICLE IX
9.1 PURCHASE PRICE: The purchase price for a share of the
Common Stock, subject to any option granted hereunder, shall not
be less than 100% of the Fair Market Value of the Common Stock on
the date of the granting of the option. In case an option is
granted to any person then owning beneficially more than ten
percent (10%) of the voting power of all classes of the
Corporation's Common Stock, said purchase price per share of
Common Stock subject to the option shall not be less than 110% of
the Fair Market Value of the Common Stock on the date of granting
of the option.
ARTICLE X
10.1 EXERCISE OF OPTIONS:
(a) An option may be exercised at any time or from time to
time, as to any part or all the shares which shall be
covered thereby provided, however, options shall not be
exercisable prior to the expiration of six (6) months
following the date on which the option was granted, subject
to this Plan having been approved by the holders of the
Common Stock of the Corporation as provided in Section 2.1
hereof;
(b) subject to the provisions of this Plan with respect to
termination of employment under Sections 12.1, 12.2 and
12.3 herein, the period during which each option may be
exercised shall be fixed by the Committee at the time such
option is granted. In no event however, shall any option
granted to a person then owning more than ten percent (10%)
of the voting power of all classes of the Corporation's
Common Stock be exercisable by its terms after the
expiration of five (5) years from the date of grant
thereof, nor shall any other option granted under this Plan
be exercisable by its terms after the expiration of ten
(10) years from the date of the grant thereof;
(c) no shares shall be delivered pursuant to any exercise
of an option until the requirements of such laws and
regulations as may be deemed by the Committee to be
applicable to them are satisfied and until payment in full
in cash or for exchange in shares of the Corporation's
Common Stock, previously owned by the optionee, at the Fair
Market Value of said stock on the date of exercise, or such
other terms and conditions as may be determined by the
Committee. No optionee, or the legal representative,
legatee, or distributee of an optionee, shall be deemed to
be a holder of any shares subject to any option unless and
until the certificate or certificates for them have been
issued.
ARTICLE XI
11.1 CAPITAL ADJUSTMENTS AFFECTING STOCK: In the event of a
capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, or a combination or
exchange of shares, the number of shares of stock subject to this
Plan and the number of shares under option shall be adjusted
consistent with such capital adjustment. The price of any share
under option shall be adjusted so that there will be no change in
the aggregate purchase price payable under exercise of any such
option. The granting of an option pursuant to this Plan shall
not affect in any way the right or power of the Corporation to
make adjustments, reorganizations, reclassifications, or changes
of its capital or business structure or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its
business or assets.
ARTICLE XII
12.1 TERMINATION OF EMPLOYMENT: An optionee whose employment
terminates for reasons other than disability, retirement or
determined by the Board of Directors or Committee not to be a
termination of employment as provided in Section 1.1(g) of this
Plan, shall have no right to exercise any existing option granted
under this Plan.
12.2 DEATH OF OPTIONEE: In the event of the death of an
optionee, the administrator of the deceased optionee's estate,
the executor under his or her Last Will and Testament, or the
person or persons to whom such stock option shall have been
validly transferred by such executor or administrator, pursuant
to the Last Will and Testament or the Intestate Succession Laws
of the State of North Carolina, shall have the right, within
three (3) months from the date of the optionee's death, but not
beyond the expiration date of the option, to exercise such option
to the extent exercisable by the optionee at the date of his or
her death.
12.3 DISABILITY: In the event of the termination of the
optionee's employment due to disability, the optionee shall have
the right, within twelve (12) months from his or her severance
date, but not beyond the expiration date of such option, to
exercise such option to the extent exercisable on such severance
date.
ARTICLE XIII
13.1 EMPLOYMENT: The establishment of this Plan and the
granting of any options thereunder shall not be construed as
conferring on any employee or optionee any right to continued
employment, and the employment of any optionee may be terminated
without regard to the effect which such action might have upon
him or her as an optionee.
ARTICLE XIV
14.1 NON-TRANSFERABILITY: The terms of any option granted
under this Plan shall include a provision making such option
nontransferable by the optionee, except upon death, and
exercisable during the optionee's lifetime only by the optionee.
ARTICLE XV
15.1 AMENDMENT, MODIFICATIONS & TERMINATION OF THE PLAN: The
Board of Directors at any time may terminate and/or in any
respect amend and modify the Plan provided, however, that no such
action by the Board of Directors, without approval of the
Corporation's common shareholders, may: (a) increase the total
number of shares which may be made subject to options granted
under the Plan in the aggregate; (b) change the manner of
determining the option price as set forth under Section 9.1
hereof; (c) materially modify the requirements as to eligibility
for participation in the Plan; (d) extend the period in which
options may be granted or exercised, as provided in Sections 7.1
and 10.1 hereof; and (e) withdraw the administration of the Plan
from a Committee of the Board of Directors, no members of which
are eligible to receive options under the Plan.
ARTICLE XVI
16.1 OTHER TERMS: Any option granted under this Plan shall
contain such other and additional terms not inconsistent with the
terms of this Plan, which are deemed necessary or desirable by
the Committee or the Board of Directors, and such other terms
shall include those which together with the terms herein set
forth shall constitute such option as an incentive stock option
within the meaning of Section 422 of the Internal Revenue Code.
<PAGE>
EXHIBIT "B"
UNIFI, INC.
1996 NON-QUALIFIED STOCK OPTION PLAN
1. NAME OF PLAN: The name of the Plan is the "Unifi, Inc. 1996
Non-Qualified Stock Option Plan" (the "Plan").
2. PURPOSE: The purpose of this Plan is to enhance the interests
of Unifi, Inc. (Corporation), its shareholders and subsidiaries,
by increasing its ability to secure and retain officers and other
key employees upon whose judgment, initiative and effort the
Corporation is largely dependent for the successful conduct of
its business, by offering officers and key employees an
opportunity to acquire or increase such persons stock interest in
the Corporation, and to attract well qualified individuals who
are not full time employees of the Corporation or its
subsidiaries, to serve as Directors of the Corporation or its
subsidiaries ("Outside Directors").
The purpose will be affected through the granting of stock
options as herein provided, such options DO NOT QUALIFY AS
"INCENTIVE STOCK OPTIONS" WITHIN THE MEANING OF SECTION 422 OF
THE 1986 INTERNAL REVENUE CODE, AS AMENDED, (the "Code") AND ARE,
THEREFORE, NON-QUALIFIED STOCK OPTIONS.
3. EFFECTIVE DATE OF PLAN AND SHAREHOLDER APPROVAL: The
effective date of the Plan is April 18, 1996, the date of its
approval by the Board, provided however, if the Plan is not
approved by the shareholders of the Corporation, representing a
majority of the voting power at the shareholders' annual meeting
on October 24, 1996, the Plan shall terminate and any Options
granted thereunder shall be null and void, and shall have no
force or effect.
4. DEFINITIONS: Wherever used in the Plan, the following terms
shall have the meaning set forth below:
(a) "Corporation" shall mean Unifi, Inc.
(b) "Board" shall mean the Board of Directors of the
Corporation.
(c) "Committee" shall mean the standing committee of the
Board of Directors or a subcommittee of a standing committee of
the Board of Directors, if any, authorized byt the Board to
administer the Plan. If the Board delegates the authority of
administering the Plan to a Committee, it shall consist of not
less than three nor more than five non-employee Directors. All
members of the Committee shall serve at the pleasure of the
Board.
(d) "Common Stock" shall mean the common stock of the
Corporation identified as such on the most recent balance sheet
of the Corporation.
(e) "Date of Grant" shall mean the date the option is granted
under the Plan.
(f) "Option" shall mean options granted under the Plan.
(g) "Optionee" shall mean the person to whom an Option, which
has not expired, has been granted under the Plan.
(h) "Subsidiary or Subsidiaries" shall mean a sponsor-type
subsidiary corporation or companies of the Corporation as defined
in 424 of the Code.
5. ADMINISTRATION OF PLAN: (a) The Plan shall be administered
by the Board, or by a Committee appointed by the Board (the
"Committee"). If the Plan is administered by the Committee, it
shall report all actions taken by it to the Board. Options may
be granted to members of the Committee only by a majority of the
members of the Board, excluding those members of the Committee.
(b) The Board or Committee shall have full and final
authority in its discretion, subject to the provisions of the
Plan, to determine the individuals to whom and the time or times
at which Options shall be granted and the number of shares and
the purchase price of common stock covered by each Option, to
construe and interpret the Plan, to determine the terms and
provisions of the respective Option agreements which need not be
identical, including without limitations, terms covering the
payment of the Option price, and make all other determinations
and take all other actions deemed necessary or advisable for the
proper administration of the Plan. All such actions and
determinations shall be conclusive and binding for all purposes
upon all persons.
(c) In the event a Committee is authorized by the Board to
administer the Plan, it shall select one of its members as the
Chairman and shall hold its meeting at such times and places as
it deems advisable. At least one-half of its members shall
constitute a quorum and all determinations of the Committee shall
be made by a majority of its members who are present. Any
decision or determination reduced to writing and signed by a
majority of all of the members shall be fully as effective as if
made by a majority vote at a meeting duly called and held.
6. STOCK SUBJECT TO PLAN: The aggregate number of shares of the
Corporation's Common Stock to be reserved and which may be issued
upon exercise of Options granted under the Plan shall be one
million (1,000,000), subject to adjustments under the provisions
of Paragraph 7. The shares of Common Stock to be issued upon
exercise of the Option may be authorized but unissued shares or
shares issued and reacquired by the Corporation. In the event
any Option shall for any reason terminate or expire or be
surrendered without having been exercised in full, the shares
subject to such Option, but not purchased thereunder, shall again
be available for Options to be granted under the Plan.
7. CAPITAL ADJUSTMENTS AFFECTING STOCK: In the event of a
capital adjustment resulting from a stock dividend, stock split,
reorganization, merger, consolidation, or a combination or
exchange of shares, the number of shares of stock subject to this
Plan and the number of shares under Option shall be adjusted
consistent with such capital adjustment. The price of any share
under Option shall be adjusted so that there will be no change in
the aggregate purchase price payable under exercise of any such
Option. The granting of an Option pursuant to this Plan shall
not affect in any way the right or power of the Corporation to
make adjustments, reorganizations, reclassifications, or changes
of its capital or business structure or to merge, consolidate,
dissolve, liquidate, or sell or transfer all or any part of its
business or assets.
8. PARTICIPANTS: Options may be granted only to Directors,
Officers or key employees of the Corporation and/or its
subsidiaries. A participant may receive more than one grant;
provided, however, no Options may be granted to any person who,
at the time of the grant, owns more than ten percent (10%) of the
stock of the Corporation. In determining the individuals to whom
Options may be granted, the Board shall take into account the
duties of the individuals, their present and potential
contribution to the success of the Corporation, the anticipated
number of years of effective service remaining and such other
factors as it deems relevant in connection with accomplishing the
purposes of the Plan. Subject to the limitations set forth in
the Plan, Directors, Officers and key employees who have been
granted an Option under this Plan or other stock Option plans of
the Corporation may be granted an additional Option or Options
under this Plan if the Board or Committee shall so determine.
9. OPTION AGREEMENT: Each Option under this Plan shall be
evidenced by an Option Agreement which shall be signed by an
Officer for the Corporation and by the Optionee. The Option
shall contain such provisions that may be approved by the Board
or Committee and shall be in accordance with the Plan but may
include additional provisions and restrictions and all Options do
not have to be the same, providing that the terms thereof are not
inconsistent with the Plan.
10. OPTION PERIOD: Each Option granted hereunder must be granted
within ten years from the effective date of the Plan. The period
for the exercise of each Option shall be determined by the Board,
but in no instance shall such period exceed ten years from the
date of grant of the Option. No Option may be granted under the
Plan subsequent to April 17, 2006.
11. OPTION PRICE: The per share Option price of the stock
subject to each Option shall be determined by the Board or the
Committee on the date the Option is granted. The purchase price
may be less than the fair market value of the Common Stock on the
date of granting.
12. EXERCISE OF OPTIONS:
(a) An Option may be exercised at any time or from time to
time, as to any part or all the shares which shall be covered
thereby provided, however, Options shall not be exercisable prior
to the expiration of six (6) months following the date on which
the Option was granted and no Option can be exercised prior to
shareholder approval of the Plan. If the Plan is not approved by
the shareholders, all Options granted under the Plan shall become
void and be unenforceable;
(b) No shares shall be delivered pursuant to any exercise of
an Option until the requirements of such laws and regulations as
may be deemed by the Board of Directors or Committee to be
applicable to them are satisfied and until payment in full in
cash or for exchange in shares of the Corporation's Common Stock,
previously owned by the Optionee, at the Fair Market Value of
said stock on the date of exercise, or such other terms and
conditions as may be determined by the Board or Committee. No
Optionee, or the legal representative, legatee, or distributee of
an Optionee, shall be deemed to be a holder of any shares subject
to any Option unless and until the certificate or certificates
for them have been issued.
13. NON-TRANSFERABILITY OF OPTION: No Option granted under the
Plan shall be transferable without the consent of the Board
(including pledges or hypothecations) by an Optionee other than
by Will or if said Optionee dies intestate, under the laws of
descent and distribution of the state of said Optionee's domicile
at the time of his death. During the lifetime of an Optionee, the
Option shall be exercised only by said Optionee.
14. TERMINATION OF OPTIONS: The right of every Optionee to
purchase shares under his or her Option shall be subject to the
provisions of this paragraph.
(a) In relation to Options with Officers or key employees:
(i) In the event of the termination of an Officer or
employment with the Corporation of a key employee for any reason,
other than death, without the consent of the Board, all rights of
the Optionee to purchase shares pursuant to his or her Option
(including right to purchase shares which have accrued but which
have remained unexercised) shall expire three (3) months after
the date on which the Optionee's affiliation or employment with
the Corporation is terminated.
(ii) In the event of the death of an Optionee who is a key
employee, the unexpired portion of said Option shall be
exercisable within a period of one (1) year from the date of said
key employee's death only by the personal representative of the
estate of the deceased, or such other person or persons to whom
the legatee's rights under the Option shall pass by the
Optionee's Will, or if he or she dies intestate, by the laws of
descent and distribution of the state of said Optionee's domicile
at the time of death, or by the transferee of any Option
transferred with the consent of the Board (see Paragraph 13); and
to the extent the Optionee was entitled to exercise Options at
the time of death.
(b) In relation to Options with Directors:
(i) In the event an Optionee's, who is a Director, tenure
in office is terminated for "cause", as cause is defined by the
Corporation's Certificate of Incorporation, all such rights of
the Optionee to purchase shares pursuant to his or her Option
(including right to purchase shares which have accrued but which
have remained unexercised) shall forthwith cease and terminate.
(ii) In the event of termination of a Director's tenure in
office, other than for "cause", prior to full exercise of his or
her Option under the Plan, the unexpired portion of said Option
shall be exercisable within a period of one (1) year, or such
longer period as the Board may determine, from the date of such
Director's termination of tenure in office.
(iii) In the event of death of an Optionee, who is a
Director, prior to the full exercise of his or her Option the
unexpired portion of said Option shall be exercisable within a
period of one (1) year from the date of said Director's death
only by the personal representative of the estate of the
deceased, or such other person or persons to whom the legatee's
rights under the Option shall pass by the Optionee's Will, or if
he or she dies intestate, by the laws of descent and distribution
of the state of said Optionee's domicile at the time of death, or
by the transferee of any Option transferred with the consent of
the Board (see Paragraph 13); and to the extent the Optionee was
entitled to exercise Options at the time of death.
15. RIGHTS AS SHAREHOLDERS: An Optionee or a transfer of an
Option shall have no right as a Shareholder with respect to any
shares subject to such offer prior to the purchase of such shares
by exercise of the Option as provided herein and the issuance and
deliverance of such shares.
16. EMPLOYMENT: The establishment of this Plan and the
granting of any Options thereunder shall not be construed as
conferring on any employee any right to continued employment, and
the employment of any Optionee may be terminated without regard
to the effect which such action might have upon him or her as an
Optionee.
17. AMENDMENT OR TERMINATION: Unless the Plan shall theretofore
have been terminated as hereinafter provided, it shall terminate
on, and no Option shall be granted thereunder after, April 17,
2006. The Board may amend the Plan or make such modifications or
amendments thereto as it shall deem advisable, or in order to
conform to any changes in any law or regulation applicable
thereto, or terminate the Plan, provided however, the Board may
not, without further approval by the shareholders of a majority
of the outstanding shares of the Corporation having general
voting power, (a) make any changes in the maximum number of
shares reserved for issuance on Options under the Plan, other
than changes as described in Paragraph 6 hereof; (b) change the
participants eligible to be granted Options; (c) revoke or alter
the terms of any Options previously granted, without the consent
of the Optionee; (d) extend the time within which Options may be
granted under the Plan; or (e) provide for the administration of
the Plan otherwise than by the Board or a Committee of the Board.
18. GOVERNMENT REGULATIONS: The Plan and the granting and
exercising of Options hereunder shall be subject to all
applicable Federal and State laws and all rules and regulations
issued thereunder, and the Board of Directors, in its discretion,
may, subject to the provisions of Paragraph 6 hereof, make such
changes in the Plan (except such changes which by law, or as
provided in Paragraph 17, must be approved by the shareholders)
as may be required to conform the Plan to such applicable laws,
rules and regulations.
19. OTHER PROVISIONS: Options granted pursuant to the Plan
shall be evidenced by agreements in such form as the Board shall
from time to time approve.
<PAGE>
APPENDIX "A" FORM PROXY [PROXY CARD-SIDE ONE]
UNIFI, INC.
PROXY
Annual Meeting, October 24, 1996
The undersigned hereby appoints Robert A. Ward and C.
Clifford Frazier, Jr., or either of them, with full power of
substitution, as attorneys and proxies to represent and vote all
shares of Unifi, Inc. Common Stock which the undersigned is
entitled to vote at the Annual Meeting of the Shareholders to be
held at the Yadkinville Offices, located on Highway 421,
Yadkinville, North Carolina, on Thursday, October 24, 1996, at
10:00 A.M. Eastern Daylight Savings Time, and any adjournment or
adjournments thereof as follows:
(1) PROPOSAL NO. 1 - Election of Directors
To vote FOR all WITHHOLD AUTHORITY
nominees listed to vote for all
below (except as nominees listed
marked to the below
contrary below)
Nominees: Charles R. Carter, Jerry W. Eller, Kenneth G.
Langone and J. B. Davis
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name on the
space provided below.)
(2) PROPOSAL NO. 2 - Proposal to approve the 1996 Incentive
Stock Option Plan.
FOR AGAINST ABSTAIN
(3) PROPOSAL NO. 3 - Proposal to approve the 1996 Non-Qualified
Stock Option Plan.
FOR AGAINST ABSTAIN
<PAGE>
APPENDIX "A" CONTINUED [PROXY CARD-SIDE TWO]
The undersigned hereby authorizes the proxies, in their
discretion, to vote on any other business which may properly be
brought before the meeting or any adjournment thereof.<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
WILL BE VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS
AND PROPOSALS NO. 2 AND NO.3, UNLESS A CONTRARY CHOICE IS
SPECIFIED, IN WHICH CASE THE PROXY WILL BE VOTED AS SPECIFIED.
The undersigned hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders, dated September 23, 1996, and the
Proxy Statement furnished therewith.
Dated this day of , 1996.
_________________________(SEAL)
_________________________(SEAL)
NOTE: Signature should agree with
name on stock certificate as printed
hereon. Executors, administrators,
trustees and other fiduciaries
should so indicate when signing. If
the signer is a corporation, please
sign in full corporate name, by duly
authorized officer.
This Proxy is Solicited on Behalf of the Board of Directors.
Please date, sign and return this Proxy. Thank you.
