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EXHIBIT 99.1
1999 UNIFI, INC.
LONG-TERM INCENTIVE PLAN
SECTION I
GENERAL
1.1 PURPOSE. The 1999 Unifi, Inc. Long-term Incentive Plan (the "Plan") has
been established by Unifi, Inc. and its related subsidiary companies (the
"Company") to: (i) attract and retain persons eligible to participate in
the Plan; (ii) motivate Participants, by means of appropriate incentives,
to achieve long-range goals; (iii) provide incentive compensation
opportunities that are competitive with those of other similar companies;
and (iv) further identify Participants' interests with those of the
Company's other shareholders through compensation that is based on the
Company's common stock; and thereby promote the long-term financial
interest of the Company, including the growth in value of the Company's
equity and enhancement of long-term shareholder return.
1.2 PARTICIPATION. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among
the Eligible Individuals, those persons who will be granted one or more
Awards under the Plan, and thereby become "Participants" in the Plan. In
the discretion of the Committee, a Participant may be granted any Award
permitted under the provisions of the Plan, and more than one Award may
be granted to a Participant. Awards may be granted as alternatives to or
replacement of Awards outstanding under the Plan, or any other plan or
arrangement of the Company (including a plan or arrangement of a business
or entity, all or a portion of which is acquired by the Company ).
1.3 OPERATION, ADMINISTRATION, AND DEFINITIONS. The operation and
administration of the Plan, including the Awards made under the Plan,
shall be subject to the provisions of Section IV (relating to operation
and administration). Capitalized terms in the Plan shall be defined as
set forth in the Plan (including the definition provisions of Section VII
of the Plan).
SECTION II
OPTIONS
2.1 DEFINITIONS. The grant of an "Option" entitles the Participant to
purchase shares of Stock at an Exercise Price established by the
Committee. Options granted under this Section II may be either Incentive
Stock Options or Non-Qualified Stock Options, as determined in the
discretion of the Committee. An "Incentive Stock Option" is an Option
that is intended to satisfy the requirements applicable to an "incentive
stock option" described in Section 422(b) of the Code. A "Non-Qualified
Option" is an Option that is not intended to be an "incentive stock
option" as that term is described in Section 422(b) of the Code.
2.2 EXERCISE PRICE. The "Exercise Price" of each Option granted under this
Section II shall be established by the Committee or shall be determined
by a method established by the Committee at the time the Option is
granted; except that the Exercise Price shall not be less than 100
percent of the Fair Market Value of a share of Stock as of the Pricing
Date. For purposes of the preceding sentence, the "Pricing Date" shall be
the date on which the Option is granted, except that the Committee may
provide that: (i) the Pricing Date is the date on which the recipient is
hired or promoted (or similar event), if the grant of the Option occurs
not more than 90 days after the date of such hiring, promotion or other
event; and
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(ii) if an Option is granted in tandem with, or in substitution for, an
outstanding Award, the Pricing Date is the date of grant of such
outstanding Award.
2.3 $100,000 LIMITATION. To the extent that the aggregate fair market value
of Stock with respect to which Incentive Stock Options are exercisable
for the first time by the Participant during any fiscal year (under all
plans of the Company) exceeds $100,000, such options shall be treated as
Non-Qualified Stock Options, to the extent required by Section 422 of the
Code.
2.4 EXERCISE. An Option shall be exercisable in accordance with such terms
and conditions and during such periods as may be established by the
Committee provided, however, incentive stock options must be exercised
within 10 years of the date of grant or are forfeited to the extent
required by Section 422 of the Code.
2.5 PAYMENT OF OPTION EXERCISE PRICE. The payment of the Exercise Price of an
Option granted under this Section II shall be subject to the following:
A. Subject to the following provisions of this subsection 2.5, th
full Exercise Price for shares of Stock purchased upon the
exercise of any Option shall be paid at the time of such exercise
(except that, in the case of an exercise arrangement approved by
the Committee and described in paragraph 2.5(c), payment may be
made as soon as practicable after the exercise).
B. The Exercise Price shall be payable in cash or by tendering shares
of Stock (by either actual delivery of shares or by attestation,
with such shares valued at Fair Market Value as of the day of
exercise), or in any combination thereof, as determined by the
Committee.
C. The Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by authorizing a
third party to sell shares of Stock (or a sufficient portion of
the shares) acquired upon exercise of the Option and remit to the
Company a sufficient portion of the sale proceeds to pay the
entire Exercise Price and any tax withholding resulting from such
exercise.
2.6 SETTLEMENT OF AWARD. The Committee, in its discretion, may impose such
conditions, restrictions and contingencies with respect to shares of
Stock acquired pursuant to the exercise of an Option as the Committee
determines to be desirable.
2.7 RELOAD OPTIONS. At the discretion of the Committee, Options granted under
the Plan may include a so-called "reload" feature pursuant to which a
Participant exercising an Option by the delivery of a number of shares of
Stock in accordance with paragraph 2.5(b) hereof would automatically be
granted an additional Option (with an exercise price equal to the Fair
Market Value of the Stock on the date the additional Option is granted
and with the same expiration date as the original Option being exercised,
and with such other terms as the Committee may provide) to purchase that
number of shares of Stock equal to the number delivered to exercise the
original Option.
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SECTION III
OTHER STOCK AWARDS
3.1 DEFINITION. A Stock Award is a grant of shares of Stock or of a right to
receive shares of Stock (or their cash equivalent or a combination of
both) in the future.
3.2 RESTRICTIONS ON STOCK AWARDS. .The Committee may impose such restrictions
on any Stock Awards (including shares of restricted stock) granted under
the Plan as it may deem advisable, including, without limitation,
continuous service requirements and/or achievement of performance goals.
The provisions of restricted stock awards (including any applicable
Performance Goals) need not be the same with respect to each participant.
During the restriction period, the Committee may require that the stock
certificates evidencing such restricted shares be held by the Company.
Restricted stock may not be sold, assigned, transferred, pledged or
otherwise encumbered. Other than these restrictions on transfer and any
other restrictions the Committee may impose, the participant will have
all the rights of a holder of stock holding the class or series of stock
that is the subject of the restricted stock award.
Performance-Based Awards, certain benefits granted under the Plan, are
subject to attainment of certain performance goals. The performance goals
are determined and established annually by the Committee in its sole
discretion, and shall be based on business criteria that applies to the
Company as a whole, such as earnings per share, net income, return on
assets, or return on equity. At the time of establishing a performance
goal, the Committee shall specify the manner in which the performance
goal shall be calculated. In so doing, the Committee may exclude the
impact of certain specified events from the calculation of the
performance goal. Such performance goals also may be based on the
attainment of specified levels of performance of the Company or one or
more Affiliates under one or more of the measures described above
relative to the performance of other corporations. Performance goals
based on the foregoing factors are hereinafter referred to as
"Performance Goals". With respect to Covered Employees, all Performance
Goals must be objective performance goals satisfying the requirements for
"performance based compensation" within the meaning of Section 162(m)(4)
of the Code, and shall be set by the Committee within the time prescribed
by Section 162(m) and related regulations.
In the event the employment of a Participant is terminated because of
normal retirement, disability or death, any remaining period of
restriction applicable to a Stock Award shall automatically terminate.
Unless the Committee determines otherwise, in the event that such
employment is terminated for any other reason during the period of
restriction, then any shares still subject to restrictions at the date of
such termination of employment shall automatically be forfeited and
returned to the Company.
SECTION IV
OPERATION AND ADMINISTRATION
4.1 EFFECTIVE DATE. Subject to the approval of the shareholders, the Plan
shall be effective as of July 1, 1999 (the "Effective Date").
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4.2 SHARES SUBJECT TO PLAN.
A. (i) Subject to the following provisions of this subsection 4.2,
the maximum number of shares of Stock that may be delivered to
Participants and their beneficiaries under the Plan shall be equal
to the sum of 6,000,000 shares of Stock.
(ii) Any shares of Stock granted under the Plan that are forfeited
because of the failure to meet an Award contingency or condition
shall again be available for delivery pursuant to new Awards
granted under the Plan. To the extent any shares of Stock covered
by an Award are not delivered to a Participant or beneficiary
because the Award is forfeited or canceled, or the shares of Stock
are not delivered because the Award is settled in cash, such
shares shall not be deemed to have been delivered for purposes of
determining the maximum number of shares of Stock available for
delivery under the Plan.
(iii) If the Exercise Price of any stock option granted under the
Plan or any Prior Plan is satisfied by tendering shares of Stock
to the Company (by either actual delivery or by attestation), only
the number of shares of Stock issued net of the shares of Stock
tendered shall be deemed delivered for purposes of determining the
maximum number of shares of Stock available for delivery under the
Plan.
(iv) Shares of Stock delivered under the Plan in settlement,
assumption or substitution of outstanding Awards (or obligations
to grant future Awards) under the plans or arrangements of another
entity shall not reduce the maximum number of shares of Stock
available for delivery under the Plan, to the extent that such
settlement, assumption or substitution as a result of the Company
acquiring another entity (or an interest in another entity).
B. Subject to paragraph 4.2C, the following additional maximums are
imposed under the Plan.
(i) The maximum number of shares of Stock that may be issued by
Options intended to be Incentive Stock Options shall be 6,000,000
shares.
(ii) The maximum number of shares of Stock that may be issued in
conjunction with Awards granted pursuant to Section III (relating
to Stock Awards) shall be 3,000,000 shares.
(iii) The maximum number of shares that may be covered by Awards
granted to any one individual pursuant to Section II (relating to
Options) shall be 1,500,000 shares during any three consecutive
fiscal years.
C. In the event of a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split,
extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, split-up, spin-off, combination or exchange
of shares), the Committee may adjust Awards to preserve the
benefits or potential benefits of the Awards. Action by the
Committee may include adjustment of: (i) the number and kind of
shares which may be delivered under the Plan; (ii) the number and
kind of shares subject to outstanding Awards; and (iii) the
Exercise Price of outstanding Options; as well as any other
adjustments that the Committee determines to be equitable.
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4.3 LIMIT ON DISTRIBUTION. If the Stock is at the time listed or admitted to
trading on any stock exchange or over-the-counter market, distribution of
shares of stock or other amounts under the Plan shall be subject to the
following:
A. Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any shares of Stock under the Plan or
make any other distribution of benefits under the Plan unless such
delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities
Act of 1933), and the applicable requirements of any securities
exchange or similar entity.
B. To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the
issuance may be effected on a non-certificate basis, to the extent
not prohibited by applicable law or the applicable rules of any
stock exchange.
4.4 TAX WITHHOLDING. Whenever the Company proposes or is required to
distribute Stock under the Plan, the Company may require the recipient to
remit to the Company an amount sufficient to satisfy any Federal, state
and local tax withholding requirements prior to the delivery of any
certificate for such shares or, in the discretion of the Committee, the
Company may withhold from the shares to be delivered shares sufficient to
satisfy the minimum tax withholding requirements. Whenever under the Plan
payments are to be made in cash, such payments may be net of an amount
sufficient to satisfy any Federal, state and local minimum tax
withholding requirements.
4.5 PAYMENT SHARES. Subject to the overall limitation on the number of shares
of Stock that may be delivered under the Plan, the Committee may use
available shares of Stock as the form of payment for compensation,
including integration with annual bonus plans and matching share for
share the portion of annual bonuses paid in stock, grants or rights
earned or due under any other compensation plans or arrangements of the
Company, including the plans and arrangements of the Company acquiring
another entity (or an interest in another entity).
4.6 DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award may provide the Participant
with the right to receive dividends or dividend equivalent payments with
respect to Stock which may be either paid currently or credited to an
account for the Participant, and may be settled in cash or Stock as
determined by the Committee. Any such settlements, and any such crediting
of dividends or dividend equivalents or reinvestment in shares of Stock,
may be subject to such conditions, restrictions and contingencies as the
Committee shall establish, including the reinvestment of such credited
amounts in Stock equivalents.
4.7 PAYMENTS. Any Award settlement, including payment deferrals, may be
subject to such conditions, restrictions and contingencies, as the
Committee shall determine. The Committee may permit or require the
deferral of any Award payment, subject to such rules and procedures as it
may establish, which may include provisions for
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the payment or crediting of interest, or dividend equivalents,
including converting such credits into deferred Stock equivalents.
4.8 TRANSFERABILITY. Awards under the Plan are not transferable other than as
designated by the Participant by will or by the laws of descent and
distribution, and during the Participant's life, may be exercised only by
the Participant.
4.9 ACCELERATION. Subject to the provisions of paragraph 4.2C, and except
otherwise provided in the Plan or the Agreement reflecting the applicable
Award, upon the occurrence of a Change in Control:
(a) All outstanding Options shall become fully exercisable.
(b) All Stock Awards shall become fully vested.
4.10 FORM AND TIME OF ELECTIONS. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted
modification, or revocation thereof, shall be in writing filed with the
Committee at such times, in such form, and subject to such restrictions
and limitations, not inconsistent with the terms of the Plan, as the
Committee shall require.
4.11 AGREEMENT WITH COMPANY. At the time of an Award to a Participant under
the Plan, the Committee may require a Participant to enter into an
agreement with the Company (the "Agreement") in a form specified by the
Committee, agreeing to the terms and conditions of the Plan and to such
additional terms and conditions, not inconsistent with the Plan, as the
Committee may, in its sole discretion, prescribe.
4.12 LIMITATION OF IMPLIED RIGHTS.
A. Neither a Participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or
property of the Company whatsoever, including, without limitation,
any specific funds, assets, or other property which the Company,
in its sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a
contractual right to the stock or amounts, if any, payable under
the Plan, unsecured by any assets of the Company. Nothing
contained in the Plan shall constitute a guarantee that the assets
of such Company shall be sufficient to pay any benefits to any
person.
B. The Plan does not constitute a contract of employment, and
selection as a Participant will not give any employee the right to
be retained in the employ of the Company, nor any right or claim
to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no Award under the Plan shall
confer upon the holder thereof any right as a shareholder of the
Company prior to the date on which the individual fulfills all
conditions for receipt of such rights.
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4.13 EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information that the person
acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
4.14 ACTION BY COMPANY OR RELATED COMPANY. Any action required or permitted to
be taken by the Company shall be by resolution of its board of directors,
or by action of one or more members of the board (including a committee
of the board) who are duly authorized to act for the board, or (except to
the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of the company.
4.15 GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural
and the plural shall include the singular.
4.16 GOVERNING LAW. This Plan shall be governed by North Carolina law except
to the extent such law is preempted by federal law.
SECTION V
COMMITTEE
5.1 ADMINISTRATION. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the
"Committee") in accordance with this Section V.
5.2 SELECTION OF COMMITTEE. The Committee shall be the Compensation Committee
and shall be selected by the Board and consist of two or more Outside
Directors of the Board.
5.3 POWERS OF COMMITTEE. The authority to manage and control the operation
and administration of the Plan shall be vested in the Committee, subject
to the following:
A. Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible
Individuals those persons who shall receive Awards, to determine
the time or times of receipt, to determine the types of Awards and
the number of shares covered by the Awards, to establish the
terms, conditions, performance criteria, restrictions, and other
provisions of such Awards, and (subject to the restrictions
imposed by Section VI) to cancel or suspend Awards. In making such
Award determinations, the Committee may take into account the
nature of services rendered by the individual, the individual's
present and potential contribution to the Company's success and
such other factors as the Committee deems to relevant.
B. Subject to the provisions of the Plan, the Committee will have the
authority and discretion to determine the extent to which Awards
under the Plan will be structured to conform to the requirements
applicable to performance-based compensation as described in Code
ss.162(m), and to take such action, establish
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such procedures, and impose such restrictions at the time such
Awards are granted as the Committee determines to be necessary or
appropriate to conform to such requirements.
C. The Committee will have the authority and discretion to establish
terms and conditions of Awards as the Committee determines to be
necessary or appropriate to conform to applicable requirements or
practices of jurisdictions outside of the United States.
D. The Committee will have the authority and discretion to interpret
the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and
provisions of any agreements made pursuant to the Plan, and to
make all other determinations that may be necessary or advisable
for the administration of the Plan.
E. Any interpretation of the Plan by the Committee and any decision
made by it under the Plan is final and binding.
F. Except as otherwise expressly provided in the Plan, where the
Committee is authorized to make a determination with respect to
any Award, such determination shall be made at the time the Award
is made, except that the Committee may reserve the authority to
have such determination made by the Committee in the future (but
only if such reservation is made at the time the Award is granted
and is expressly stated in the Agreement reflecting the Award).
G. In controlling and managing the operation and administration of
the Plan, the Committee shall act by majority of its then members,
by meeting or by writing filed without a meeting. The Committee
shall maintain and keep adequate records concerning the Plan and
concerning its proceedings and acts in such form and detail as the
Committee may decide.
H. The Committee/Company may make loans to a Participant in
connection with Awards subject to the following terms and
conditions and such other terms and conditions not inconsistent
with the Plan as the Committee shall impose from time to time,
including without limitation the rate of interest, if any, and
whether such loan shall be recourse or non-recourse. No loan made
under the Plan shall exceed the sum of (i) the aggregate price
payable with respect to the Award in relation to which the loan is
made, plus (ii) the amount of the reasonably estimated combined
amounts of federal and state income taxes payable by the
Participant.
5.4 DELEGATION BY COMMITTEE. Except to the extent prohibited by applicable
law or the applicable rules of a stock exchange, the Committee may
allocate all or any portion of its responsibilities and powers to any one
or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any
such allocation or delegation may be revoked by the Committee at any
time.
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5.5 INFORMATION TO BE FURNISHED TO COMMITTEE. The Company shall furnish the
Committee with such data and information as may be required for it to
discharge its duties. The records of the Company as to an employee's or
Participant's employment (or other provision of services), termination of
employment (or cessation of the provision of services), leave of absence,
reemployment and compensation shall be conclusive on all persons unless
determined to be incorrect. Participants and other persons entitled to
benefits under the Plan must furnish the Committee such evidence, data or
information, as the Committee considers desirable to carry out the terms
of the Plan.
SECTION VI
AMENDMENT AND TERMINATION
This Plan shall terminate ten years from the Effective Date (the
"Termination Date"). The Board may, at any time, prior to the Termination Date
amend or terminate the Plan, provided that, subject to subsection 4.2C, no
amendment or termination may, in the absence of written consent to the change by
the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board.
SECTION VII
DEFINED TERMS
For purposes of the Plan, the terms listed below shall be defined as follows:
A. AWARD. The term "Award" shall mean any award or benefit granted to
any Participant under the Plan, including, without limitation, the
grant of Options and Stock Awards.
B. BOARD. The term "Board" shall mean the Board of Directors of the
Company.
C. CHANGE IN CONTROL. Change in control shall be deemed to have
occurred if: i) there shall be consummated (x) any consolidation
or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of
the Company's common stock would be converted to cash, securities
or other property, other than a merger of the Company in which the
holders of the Company's stock immediately prior to the merger
have the same proportionate ownership of common stock of the
surviving corporation immediately
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after the merger, or (y) any sale, lease, exchange or other
transfer other than to a subsidiary (in one transaction or a
series of transactions) of all, or substantially all, of the
assets of the Company; or ii) the shareholders of the Company
approved any plan or proposal for the liquidation or dissolution
of the Company; iii) any person (as such term is used in Sections
13 (d) and 14 (d) (2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner
(within the Rule 13d-3 under the Exchange Act)of twenty percent
(20%) or more of the Company's outstanding common stock; or iv)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board of Directors
shall cease for any reason to constitute a majority thereof unless
the election, or the nomination for election by the Company's
shareholders, of each new Director was approved by a vote of at
least two-thirds of the Directors then still in office who were
Directors at the beginning of the period.
D. CODE. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include
reference to any successor provisions of the Code.
E. ELIGIBLE INDIVIDUAL. For purposes of the Plan, the term "Eligible
Individual" shall mean any employee of the Company, and any
director, consultant or other person providing key services to the
Company.
F. FAIR MARKET VALUE. For purposes of determining the "Fair Market
Value" of a share of Stock, the following rules shall apply:
(i) If the Stock is at the time listed or admitted to trading on
any stock exchange, then the "Fair Market Value" shall be the mean
between the lowest and highest reported sale prices of the Stock
on the date in question on the principal exchange on which the
Stock is then listed or admitted to trading. If no reported sale
of Stock takes place on the date in question on the principal
exchange, then the mean between the lowest and highest reported
sale prices of the Stock on the closest date prior to the date in
question on the principal exchange shall be determinative of "Fair
Market Value."
(ii)If the Stock is not at the time listed or admitted to trading
on a stock exchange, the "Fair Market Value" shall be the mean
between the lowest and highest reported sale prices of the Stock
on the date in question in the over-the-counter market, as such
prices are reported in a publication of general circulation
selected by the Committee and regularly reporting the market price
of Stock in such market.
(iii) If the Stock is not listed or admitted to trading on any
stock exchange or traded in the over-the-counter market, the "Fair
Market Value" shall be as determined in good faith by the
Committee.
G. OUTSIDE DIRECTOR. The term "Outside Director" means a member of
the Board who satisfies the requirements for an outside director
as provided in Code ss.162(m) and non-employee director as
provided in ss.16(b) of the Securities Exchange Act of 1934.
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H. STOCK. The term "Stock" shall mean shares of common stock of the
Company. No fractional shares of the Company's common stock will
be issued under the 1999 Long-Term Incentive Plan.
I. COMMISSION. The term "Commission" means the Securities and
Exchange Commission or any successor agency.
J. RULE 16b-3. The term "Rule 16b-3" means Rule 16b-3, as promulgated
by the Commission under Rule 16b of the Exchange Act, as amended
from time to time.
K. SECTION 162(m). The term "Section 162(m)" means Section 162(m) of
the Code, as amended from time to time.
