SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE DEF 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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
Nations Government Income Term Trust 2003, Inc.
--------------------------------------------------------------------------------
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) 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: N/A
--------
2) Aggregate number of securities to which transaction applies: N/A
---------
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: N/A
-----
5) Total fee paid: N/A
-----
( ) 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: N/A
-----
2) Form, Schedule, or Registration Statement No.: N/A
-----
3) Filing Party: N/A
-----
4) Date Filed: N/A
-----
<PAGE>
(Unifi logo appears here)
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 26, 2000
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 26, 2000, at the Company's Plant T-5 facility
located at 1641 Shacktown Road, in 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 form of proxy,
are enclosed.
Detailed information relating to the Company's activities and operating
performance is contained in our 2000 Annual Report on Form 10-K, which is also
enclosed.
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,
/s/ G. Allen Mebane, IV
G. ALLEN MEBANE, IV
Chairman of the Board of Directors
<PAGE>
(Unifi logo appears here)
7201 West Friendly Avenue
Greensboro, North Carolina 27410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 26, 2000
TO THE SHAREHOLDERS OF UNIFI, INC.:
The Annual Meeting of the Shareholders of Unifi, Inc. will be held at the
corporation's Plant T-5 facility at 1641 Shacktown Road, in Yadkinville, North
Carolina, on Thursday, October 26, 2000, 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 transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors, under the provisions of the Bylaws, has fixed the
close of business on September 18, 2000, 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:
/s/ Clifford Frazier, Jr.
CLIFFORD FRAZIER, JR.
Secretary
Greensboro, North Carolina
September 26, 2000
<PAGE>
(Unifi logo appears here)
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 26, 2000, at 10:00 A.M. Eastern
Daylight Savings Time, at the Company's Plant T-5 facility located on 1641
Shacktown Road in 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
26, 2000.
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 of the Company. Shareholders of record, as of the close of
business on September 18, 2000, will be entitled to notice of and to vote at
the meeting or any adjournment thereof. On August 24, 2000, the Company had
outstanding approximately 54,526,659 shares of its common stock. 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. 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. 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.
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.
1
<PAGE>
INFORMATION RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of August 24, 2000 (unless
otherwise set forth in the footnotes), 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.
<TABLE>
<CAPTION>
Name and Address of More Amount and Nature Percent of
than 5% Owners Beneficially Owned Class
------------------------------------------- -------------------- -----------
<S> <C> <C>
FMR Corp. (a) 4,178,100 7.06%
82 Devonshire Street
Boston, MA 02109
Wachovia Corporation (b) 3,587,363 6.06%
100 North Main Street
Winston-Salem, NC 27104
AXA and Equitable Companies Incorporated, 5,730,300 9.70%
and their respective subsidiaries,
1290 Avenue of the Americas
New York, NY 10104(c)
All Directors and Executive 4,804,368 8.85%
Officers and Nominees for Directors,
as a group on August 24, 2000 (d)
</TABLE>
----------
(a) As indicated in its Schedule 13G, dated February 14, 2000, by FMR Corp, a
holding company and its subsidiaries, may be deemed to beneficially own
4,178,100 shares by virtue of having sole voting power over 299,800 shares
and sole power to dispose or to direct the disposition of 4,178,100 shares.
(b) As indicated in its Schedule 13G, dated February 14, 2000, Wachovia
Corporation and its wholly-owned subsidiary Wachovia Bank, N.A., as
Trustee, may be deemed to beneficially own 3,587,363 shares by virtue of
having sole voting power over 2,435,607 shares, shared voting power over
1,090,219 shares, sole dispositive power over 2,789,031 shares, and shared
dispositive power over 794,582 shares.
(c) As indicated in its Schedule 13G, dated March 31, 2000, AXA, a holding
company and its subsidiaries, and Equitable Companies Incorporated, a
holding company and its subsidiaries, under a joint filing agreement, held
sole voting power over 3,565,900 shares, shared voting power over 2,100,000
shares, sole dispositive power over 5,729,700 shares, and shared
dispositive power over 600 shares.
(d) This amount includes the 1,386,222 shares of the common stock of the
Company which could be acquired through the exercise of stock options
within sixty (60) days after June 25, 2000, and restricted shares, which
have voting rights, issued during the last fiscal year. Additional
information regarding stock options is provided on pages 8-12.
Cede & Co. , as of August 24, 2000, 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
49,727,394 shares of the Company's common stock representing 91.20% 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 11 members. The directors are
divided into three classes; Class 1 consists of four (4) directors; Class 2
consisting of three (3) directors; and Class 3 consisting of four (4)
directors. The term of each class is 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.
2
<PAGE>
The term of office of the current directors serving as Class 3 directors
will expire at this annual meeting and, except as otherwise indicated below,
the term of office for the current directors serving in Class 1 and Class 2
will expire at the 2001 and 2002 Annual Meetings of the Shareholders,
respectively, until their successors are elected and qualified.
All the nominees for election are presently serving 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 time of 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.
Listed below are the names of the four nominees to serve as Class 3
directors, and the seven incumbent directors who will be continuing in office
following this meeting, together with: 1) their ages; 2) their principle
occupation during the past five years; 3) any other directorships they hold
with companies having securities registered under the Securities and Exchange
Act of 1934 (the "1934 Act"); 4) the years during which their consecutive terms
as directors of the Company first commenced; 5) the number of beneficially
owned shares of common stock of the Company for each director and nominee,
being set forth on the table beginning on page 5.
NOMINEES FOR ELECTION AS DIRECTORS
Class 3 Directors -- Nominees for Election to Terms Expiring the 2003 Annual
Meeting:
G. ALLEN MEBANE, (70), 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 until 1985 and in January 1999 was again elected as Chief
Executive Officer and served until January 26, 2000. He is a member of the
Company's Executive Committee (Chair). He has announced that he will retire as
Chairman of the Board of Directors effective at the end of the October 26, 2000
Annual Meeting of the Board of Directors.
BRIAN R. PARKE, (52), President and Chief Executive Officer of Unifi,
Inc., Greensboro, North Carolina. He became an employee of the Company in 1984,
served as President of Unifi Textured Yarns Europe (UTYE) in Ireland from
October 1997 until January 20, 1999, when he moved to the U.S. and became
President and Chief Operating Officer of the Company. He was elected a director
of the Company by the Board of Directors on July 22, 1999, and by the
shareholders on October 21, 1999, and was elected President and Chief Executive
Officer in January 2000. He is a member of the Company's Executive Committee.
J.B. DAVIS (56), 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 has been a Director of the Company since 1996, and is a member of the
Company's Executive Committee and Corporate Governance Committee.
R. WILEY BOURNE, JR. (63), Retired Vice-Chairman and Executive Vice
President of Eastman Chemical Company, Kingsport, Tennessee. He serves on the
boards of the East Tennessee State University Foundation and School of
Medicine, the Sloan School of the Massachusetts Institute of Technology, and
Tennessee Wesleyan College. He has been a Director of the Company since 1997,
and is a member of the Company's Corporate Governance Committee and the Audit
Committee (Chair).
DIRECTORS REMAINING IN OFFICE
Class 1 Directors -- Terms Expiring in 2001:
DONALD F. ORR, (56), is chairman of Sweet Pea Capital, Greensboro, North
Carolina, an investment capital firm, which was formed in November, 1978. He is
a Vice Chairman of the Moses H. Cone Health System, Chairman of the Advisory
Board of the Duke Eye Institute, and a Director of the U.S. Trust Company of
North Carolina and Arrow Paper Products Company. He has been a Director of the
Company since 1988, and is a member of the Company's Executive Committee, Audit
Committee, and Compensation Committee (Chair). Mr. Orr has been elected by the
Board of Directors to become Chairman of the Board effective as of the end of
the October 26, 2000 Annual Meeting of the Board of Directors.
3
<PAGE>
ROBERT A. WARD, (58), Unifi, Inc., Greensboro, North Carolina. He is a
Director of Mid Carolina Bank. He was an Executive Officer of the Company from
1971 to 1996, has served on various committees of the Board, has been a
Director of the Company since 1971 and is an ex-officio member of the Company's
Audit Committee.
G. ALFRED WEBSTER, (52), 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 Company's Executive
Committee.
SIR RICHARD GREENBURY, (63), has been an officer and director of Marks and
Spencer Plc, London, England, a global retail firm, since 1986 and Chief
Executive Officer of said company since April 1991. He has been a Non-Executive
Director of Lloyds Bank Plc from 1992 through 1997, is a Non-Executive Director
of Zeneca Plc from 1993, and was elected a director of the Company by the Board
of Directors on July 22, 1999 and by the shareholders on October 21, 1999, and
is a member of the Company's Corporate Governance Committee.
Class 2 Directors -- Terms Expiring in 2002
CHARLES R. CARTER, (68), Retired Minister of the Forest Hills Presbyterian
Church, High Point, North Carolina, which position he held from 1967 to 1997.
He has been a Director of the Company since 1982, and is a member of the
Company's Compensation Committee, Audit Committee and Corporate Governance
Committee (Chair).
JERRY W. ELLER, (60), Retired Executive Vice President of Unifi, Inc.,
Yadkinville, North Carolina. He was an Executive Officer of the Company from
1981 until his retirement on July 1, 2000, and has been a Director of the
Company since 1985, and is a member of the Company's Executive Committee.
KENNETH G. LANGONE, (65), an Investment Banker, President and Chief
Executive Officer of Invemed Associates, Inc., an investment banking firm, New
York, New York, since 1974. He is a Director of GE, DBT Online, Inc., The Home
Depot, Inc., and TRICON Global Restaurants. He has been a Director of the
Company since 1969, and is a member of the Company's Compensation Committee.
4
<PAGE>
SECURITY HOLDING OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Amount and Nature of Percentage of
Directors Beneficial Ownership (1) Ownership
------------------------------------------------------ -------------------------- --------------
<S> <C> <C>
Kenneth G. Langone (2) 2,195,000 4.04%
G. Allen Mebane (3) 1,002,972 1.85%
Brian R. Parke (5) 147,699 (4)
Jerry W. Eller (6) 527,143 (4)
G. Alfred Webster (7) 282,081 (4)
Charles R. Carter (8) 52,167 (4)
Donald F. Orr (9) 183,030 (4)
Robert A. Ward (10) 199,583 (4)
R. Wiley Bourne, Jr. (11) 17,986 (4)
J. B. Davis (12) 36,666 (4)
Sir Richard Greenbury -- --
Willis C. Moore, III (13) 82,747 (4)
Stewart Q. Little (14) 77,294 (4)
All Directors and Executive Officers and Nominees
for Directors [13 persons] (15) 4,804,368 8.85%
</TABLE>
----------
(1) All shares are owned directly and with sole voting and dispositive power,
except as otherwise noted. Ownership is as of August 24, 2000 and excludes
restricted stock awards granted after the end of the Company's fiscal
year.
(2) Includes 6,666 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, 135,000 shares
owned by Invemed Associates, Inc., in which Mr. Langone owns 81%, and
1,885,000 shares owned by Invemed Catalyst Fund, LLP managed by Invemed
Catalyst General Partnership, LLC, of which Mr. Langone has voting power,
which shares may be determined to be beneficially owned by him.
(3) Includes 561,523 shares that he has a right to purchase under presently
exercisable stock options granted to him by the Company, 76,125 shares
owned by his wife over which he has voting rights but disclaims any other
beneficial ownership, which shares may be determined to be beneficially
owned by him, and 7,500 shares of restricted stock with voting rights.
(4) Represents less than one percent (1%) of the Company's common stock.
(5) Includes 139,999 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, 100 shares owned
by his wife and 100 shares owned by his minor child/children living with
him, which shares may be determined to be beneficially owned by him, and
7,500 shares of restricted stock with voting rights.
(6) Includes 141,145 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, and 5,000 shares of
restricted stock with voting rights.
(7) Includes 141,829 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, 39,339 shares
held in trust for the benefit of his children, which shares may be
determined to be beneficially owned by him, and 5,000 shares of restricted
stock with voting rights.
(8) Includes 31,666 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.
(9) Includes 31,666 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, and 3,950 shares owned by
the Orr Family Trust over which he has voting power, which shares may be
determined to be beneficially owned by him.
(10) Includes 122,572 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 77,011 shares
owned jointly with his wife, which shares may be determined to be
beneficially owned by him.
5
<PAGE>
(11) Includes 16,666 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 1,320 shares
owned by his wife over which he has voting rights, which shares may be
determined to be beneficially owned by him.
(12) Includes 16,666 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 20,000 shares
held by North Carolina Trust Company over which he has sole voting and
dispositive power, which shares may be determined to be beneficially owned
by him.
(13) Includes 73,747 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, and 5,000 shares of
restricted stock with voting rights.
(14) Includes 67,077 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, and 5,000 shares of
restricted stock with voting rights.
(15) Includes 1,386,222 shares that they have the right to purchase within
sixty (60) days after June 25, 2000, under presently exercisable stock
options granted to them by the Company, which shares may be determined to
be beneficially owned by them, and restricted shares, which have voting
rights, issued during the last fiscal year.
DIRECTORS' COMPENSATION
Each director who is not an employee of the Company was paid, for serving
on the Board during fiscal year ended June 25, 2000, a retainer at the rate of
$24,000 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 Corporate
Governance Committee. The Executive Committee (composed of Messrs. Mebane,
Parke, Eller, Webster, Orr and Davis) met regularly during the year. The
Compensation Committee (composed of Messrs. Carter, Langone, and Orr) met four
times during the year. The Audit Committee (composed of Messrs. Carter, Orr,
Bourne, and Ward as an ex-officio member) met four times during the year. The
Corporate Governance Committee (composed of Messrs. Carter, Bourne, Davis, and
Sir Greenbury) met three times during the year.
The Board of Directors has no Nominating Committee; however, in relation
to nominations, the Corporate Governance Committee recommends to the Board
nominees for election as directors. The Corporate Governance 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 Compensation Committee's duties include, reviewing and recommending
compensation of principal officers, salary policy, benefit programs, future
objectives and goals of the Company, and recommending and approving the
granting of options to eligible persons under the Company's incentive and
non-qualified stock option plans.
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 Corporate Governance Committee's duties include, considering
candidates for the board recommended by shareholders, recommending candidates
for membership on the board and board committees, overseeing matters of
corporate governance, including board performance, reviews and recommending
compensation of non-employee directors.
6
<PAGE>
The Board of Directors met five (5) times during fiscal year 2000. 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.
COMPENSATION COMMITTEE 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 2000, the
Company paid Salem Leasing Corporation, a wholly-owned subsidiary of Salem
National Corporation, $3,687,770 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, principal shareholder,
President and Chief Executive Officer of Invemed Associates, Inc., an
investment firm. During fiscal year 2000, such firm performed certain advisory
services for the Company and acted as broker on the repurchase of the Company's
shares on the NYSE. Mr. Mebane owns in excess of ten percent (10%) of said
firm's equity securities. The fees of $60,000 and commissions of $178,492 paid
Invemed Associates, Inc. during the fiscal year ended in 2000 were, in the
opinion of Management, fair and reasonable and as favorable to the Company as
could have been obtained from unrelated third parties.
Mr. Eller's son, C.W. Eller, is a controlling stockholder in Advantage
Machinery Services, Inc. In fiscal year 2000, the Company paid Advantage
Machinery Services, Inc. $2,058,072 for services rendered in moving machinery,
erecting said machinery, and for contract labor. In the opinion of Management,
the amount paid Advantage Machinery Services, Inc. for the work performed is
fair and reasonable and as favorable to the Company as could have been obtained
from unrelated third parties.
The Company, in relation to Mr. Parke's move from Ireland to the United
States to become the President and Chief Operating Officer of the Company,
agreed to loan Mr. Parke, with the approval of the Board of Directors,
sufficient funds for acquiring a home, making repairs and improvements thereto
and other expenses relating to the move of he and his family to the U.S. The
loan amounted to $1,160,741, of which $749,203 was used to purchase the
property known as 1510 Edgedale Road, Greensboro, North Carolina, and is
evidenced by Mr. and Mrs. Parke's Promissory Note to the Company for said
amount, bearing interest at 6% per annum, payable annually beginning December
31, 1999, with the unpaid principal amount of said Note and all accrued and
unpaid interest being due and payable in full on May 1, 2002, and secured by a
first deed of trust on said property.
The Company made a loan to Mr. Parke in connection with the restricted
stock award granted to him under the 1999 Unifi, Inc. Long-Term Incentive Plan,
in the principal amount of $37,750.80, with interest at the rate of 6.08% per
annum, for payment of income taxes relating to said award. The loan is
evidenced by a Promissory Note in the principal amount and is payable as
follows: (a) interest only at the aforementioned rate is payable for the first
four (4) years. The first payment of interest is due and payable on December
30, 2000, with annual payments of interest due and payable thereafter on
December 30, 2001, 2002 and 2003; and (b) the principal of said loan plus all
accrued interest at the aforementioned rate shall be due and payable on
December 30, 2004.
The Company made a personal loan on October 22, 1999 to Mr. Stewart Q.
Little, a Senior Vice President of the Company, in the amount of $75,000. The
loan is evidenced by a Promissory Note in the principal amount of $75,000 with
interest at the rate of 6.5% per annum and is secured by the pledge of 5,000
shares of Unifi, Inc. Common Stock. The loan is payable as follows: (a)
interest only at the aforementioned rate shall be due and payable on October
22, 2000, October 22, 2001 and October 22, 2002; and (b) the principal and
interest of said loan at the aforementioned rate shall be payable in thirty-six
(36) monthly installments of $2,298.68 each beginning on November 22, 2002.
The Company made a loan to Mr. Little in connection with the restricted
stock award granted to him under the 1999 Unifi, Inc. Long-Term Incentive Plan,
in the principal amount of $25,171.88, with interest at the rate of 6.08% per
annum, for payment of income taxes relating to said award. The loan is
evidenced by a Promissory Note in the principal amount and is payable as
follows: (a) interest only at the aforementioned rate is payable for the first
four (4) years. The first payment of interest is due and payable on December
30, 2000, with annual payments of interest due and payable thereafter on
December 30, 2001, 2002 and 2003; and (b) the principal of said loan plus all
accrued interest at the aforementioned rate shall be due and payable on
December 30, 2004.
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
This report of the Compensation Committee ("Committee") 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 2000 was composed of
non-employee directors. The Committee determines the compensation of the
employee directors as well as other executive officers of the Company. It's
duties also 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,
the granting of restricted stock and stock options under the 1999 Unifi, Inc.
Long-Term Incentive Plan and recommending benefit programs and future
objectives and goals of the Company.
In General
The primary goal of the Compensation Committee in setting executive
compensation is: (i) to ensure that the Company's compensation program for
executive officers attracts and retains qualified, talented, and highly
motivated personnel, links executive compensation to corporate and individual
performance, and is administered in an equitable manner; and (ii) to align the
interest of the executives with those of our shareholders and also with the
Company's performance.
The annual and long-term incentive portions of the executive's
compensation are intended to achieve the committee's goal of aligning the
executive's interest with those of our shareholders and with Company
performance. These portions of an executive's compensation are placed at risk
and are linked to the accomplishment of specific results that are designated to
benefit our shareholders and the Company, both in the long and short term. As a
result, during years of excellent performance, the executives are provided the
opportunity to earn a higher competitive level of compensation and, conversely,
in years of below average performance, their compensation may be below
competitive levels.
The Committee has considered the impact of Section 162(m) of the Code on
the Company's executive compensation program. Section 162(m) denies a public
company a deduction, except in limited circumstances, for compensation paid to
"covered employees," i.e., those employees named in the "Summary Compensation
Table" below, to the extent such compensation exceeds $1,000,000. Based on its
review of the likely impact of Section 162(m), the Committee may in the future
recommend changes to the Company's benefit plans in order to qualify
compensation paid to covered employees for such exception.
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 to retain his or her services. The Committee
evaluates the base salary of each of the executive officers on an annual basis,
or more frequently if appropriate, and recommends to the entire Board any
changes in such base salary levels. In making such evaluations and
recommendations, the Committee considers the historical practices of the
Company, the officer's leadership and advancement of the Company's long term
strategy, plans and objectives, individual performance and contribution to the
Company's success and salary levels of other executives holding similar
positions in certain other textile companies. Base salary adjustments are
approved by the full Board. Mr. Mebane's and Mr. Eller's base salaries are
covered by Employment Agreements.
Annual Incentive Compensation
The Committee designed the annual bonus component of incentive
compensation to align officer pay with the annual performance of the Company,
based on corporate earnings per share objectives. Bonuses, if any, recommended
by the Committee are subject to the approval of the full Board. No bonuses were
awarded to the named executive officers during the last fiscal year.
Outstanding Stock Options
The Company had six stock option plans (excluding the 1999 Unifi, Inc.
Long-Term Incentive Plan), to wit: the 1996 Incentive Stock Option Plan; the
1996 Non-Qualified Stock Option Plan; the 1992 Incentive Stock Option Plan;
8
<PAGE>
the 1987 Non-Qualified Stock Option Plan; the 1982 Incentive Stock Option Plan;
the Unifi Employee Stock option Plan (this Plan was acquired in the Vintage
Yarns, Inc. merger). No additional options will be granted under any of the
aforesaid six option plans however, all outstanding option grants remain in
full force and effect.
Long Term Awards
The 1999 Unifi, Inc. Long-Term Incentive Plan ("1999 Plan") was approved
by the shareholders at their 1999 Annual Meeting. The Plan provides for the
grant of any or all of the following types of awards: stock grants as either
incentive stock options ("ISO's") or non-qualified stock options ("NQSO's"),
restricted stock awards and performance based awards.
Stock Options -- Original stock grants under the 1999 Plan specified that
the exercise price of one-third of the granted shares shall be the fair market
value of said stock on the date of grant, one-third of the granted shares shall
be exercisable at the fair market value of said stock on the date of grant plus
6%, and the remaining one-third of the granted shares shall be exercisable at
the fair market value of said stock on the date of grant plus 12%. The grants
shall become exercisable 20% on the first year anniversary and 20% on the
second, third, and fourth years' anniversary, respectively, and the remaining
20% of granted shares on the fifth year anniversary, and unless otherwise
provided, may be exercised until the earlier of ten (10) years from the date of
grant or, as to the number of shares then exercisable, upon termination of
employment of the participant other than by death, disability, retirement, or
change of control, when all options vest.
Restricted Stock -- Restricted stock awards for 129,500 shares were
granted under the 1999 Unifi, Inc. Long-Term Incentive Plan ("1999 Plan") to
employees, including the executive officers, during the last fiscal year. The
shares of restricted stock may not be sold, assigned, transferred, pledged, or
otherwise encumbered until the expiration of each "Restricted Period". The
Restricted Period begins on the date of grant and the shares are vested and
released from restriction as follows: 20% on the first anniversary of the grant
date and 20% on the second, third, fourth and fifth years' anniversary dates,
respectively. If termination of employment does not occur during a Restricted
Period, then at the end of such Restricted Period 20% of the shares of
restricted stock shall vest and be free of all restriction, subject to the
rules and regulations of the Securities and Exchange Commission. Termination of
employment with the Company for any reason other than death, disability or
retirement after age 57, with the approval of the Committee, or a change in
control of the Company, prior to the end of a Restricted Period, shall cause
forfeiture of the remaining restricted stock as of the date of such
termination.
2000 Compensation for Chief Executive Officer
Mr. Mebane, the Chairman of the Board and Chief Executive Officer ("CEO"),
resigned as CEO effective January 26, 2000, and Mr. Parke became President and
CEO of the Company.
Mr. Mebane's base salary was $800,000, as provided in his Employment
Agreement. All other compensation paid to him during the past fiscal year was
based upon the same factors generally applicable to compensation paid to other
executives of the Company. He did not receive any cash bonus compensation in
the fiscal year.
Compensation paid to Mr. Parke as CEO during the fiscal year was based on
the same factors generally applicable to compensation paid to other executives
of the Company. In January 2000, Mr. Parke was elected President and Chief
Executive Officer and in April 2000 the Board of Directors increased his base
salary from $500,000 to $750,000 per annum, effective May 1, 2000. He did not
receive any cash bonus compensation in the fiscal year.
Committee's Judgment
It is the judgment of the Committee that in 2000, and for the three fiscal
years ending June 25, 2000, the total compensation to the executives was
appropriate for the performance of the Company and to retain and motivate such
executives in the future. The foregoing report has been furnished by the
members of the following Committee:
Compensation Committee:
Donald F. Orr
Charles R. Carter
Kenneth G. Langone
9
<PAGE>
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth information for fiscal years ended June
2000, 1999 and 1998, 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"); Mr. Mebane was CEO from June
28, 1999 through January 26, 2000, at which time Mr. Parke became CEO, which
position he continues to hold; and the other four most highly compensated
executive officers for services rendered in all capacities during the last
three (3) fiscal years.
UNIFI, INC. Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
-----------------------
Other Annual
Name and Principal Position Year Salary Bonus Compensation (1)
----------------------------- ------ ----------- ----------- ------------------
<S> <C> <C> <C> <C>
G. Allen Mebane, IV 2000 $800,000 $ -- $ 44,753
Chairman of the Board, 1999 $800,000 $ -- $ 67,561
CEO and Director 1998 $800,000 $100,000 $140,376
Brian R. Parke 2000 $541,670 $ -- $ 18,310
President/COO/CEO 1999 $341,297 $100,000 $ --
and Director 1998 $201,223 $ 90,000 $ --
Jerry W. Eller 2000 $420,000 $ -- $ 15,048
Executive Vice Pres. 1999 $420,000 $160,000 $ 15,230
and Director 1998 $400,000 $160,000 $ 14,621
Willis C. Moore, III 2000 $310,000 $ -- $ 20,266
Chief Financial Officer 1999 $310,000 $155,000 $ 19,969
and Sen. Vice President 1998 $300,000 $155,000 $ 21,917
G. Alfred Webster 2000 $260,000 $ -- $ 16,093
Executive Vice Pres. 1999 $260,000 $145,000 $ 16,772
and Director 1998 $250,000 $135,000 $ --
Stewart Q. Little 2000 $225,000 $ -- $ 21,680
Senior Vice President 1999 $225,000 $127,000 $ 19,242
1998 $220,000 $127,000 $ 25,938
<CAPTION>
Options
------------------------------------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Position Awards ($)(2) Options/SARs (#) Compensation ($)(3)
----------------------------- --------------- ----------------- --------------------
<S> <C> <C> <C>
G. Allen Mebane, IV $ 83,906 429,051(4) $ 55,387
Chairman of the Board, $ -- 20,000(5) $ 38,244
CEO and Director $ -- -- $ 43,031
Brian R. Parke $ 83,906 268,159(4) $ 24,415
President/COO/CEO $ -- 65,000(6) $ 35,514
and Director $ -- -- $ 11,917
Jerry W. Eller $ 55,938 112,626(4) $ 27,188
Executive Vice Pres. $ -- 15,000(7) $ 25,574
and Director $ -- -- $ 30,206
Willis C. Moore, III $ 55,938 83,131(4) $ 17,866
Chief Financial Officer $ -- 25,000(5) $ 17,134
and Sen. Vice President $ -- -- $ 21,642
G. Alfred Webster $ 55,938 69,722(4) $ 24,376
Executive Vice Pres. $ -- 15,000(5) $ 22,794
and Director $ -- -- $ 27,014
Stewart Q. Little $ 55,938 60,336(4) $ 18,176
Senior Vice President $ -- 15,000(5) $ 16,890
$ -- -- $ 21,759
</TABLE>
----------
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) Amounts in this column reflect the aggregate market value of shares of
restricted stock awarded under the Company's 1999 Long-Term Incentive Plan
("Plan") based on $11.1875 per share which was the closing price of the
Company's common stock on October 21, 1999, the date the award was made.
The number of restricted shares awarded under the Plan in fiscal 2000 were
as follows: to Messrs. Mebane and Parke -- 7,500 shares respectively; and
to Messrs. Eller, Webster, Moore and Little -- 5,000 shares respectively;
with the shares being released from restriction over a 5 year period -- 20%
being released on the first anniversary of the grant date and 20% being
released on the second, third, fourth and fifth years' anniversary dates,
respectively, or upon termination due to death, disability, retirement
after age 57, with the approval of the Compensation Committee, or upon a
change in control. The market value does not reflect that the shares are
restricted. The number and aggregate market value of the non-vested
restricted shares of common stock as of June 25, 2000 for the six named
executives are: 7,500 shares -- $94,571 for Mr. Mebane; 7,500 shares --
$94,571 for Mr. Parke; 5,000 shares -- $63,047 for Mr. Eller; 5,000 shares
-- $63,047 for Mr. Webster; 5,000 shares -- $63,047 for Mr. Moore; and
5,000 shares -- $63,047 for Mr. Little. Dividends, to the extent declared
and paid by the Company in the future, are payable to these individuals on
shares of restricted stock owned by them. Additional information relating
to the restricted stock awards granted is set forth on page 9.
10
<PAGE>
(3) The components of the amounts shown in this column consists of the
following: (i) a director's fee of $5,000 each paid to Messrs. Mebane,
Parke, and Webster, and a director's fee of $4,000 paid to Mr. Eller; (ii)
payments of the Company's portion of the premiums on the split-dollar life
and other life insurance in 2000, 1999, and 1998, respectively, amounted to:
Mr. Mebane -- $33,096, $17,640 and $17,640; Mr. Parke -- $2,327, $8,718 and
$7,446; Mr. Eller -- $5,897, $4,970 and $4,815; Mr. Moore -- $1,242, $1,210
and $1,129; Mr. Webster -- $2,259, $2,190 and $1,623; and Mr. Little --
$1,001, $957 and $682; (iii) beneficial income to Mr. Parke from loan
forgiveness in 2000, 1999 and 1998 of $0, $10,675 and $4,471, respectively;
and (iv) allocation of the Company's contribution to the Profit Sharing Plan
in 2000, 1999 and 1998, respectively to: Mr. Mebane -- $17,291, $16,604 and
$21,391; Mr. Parke -- $17,088, $16,121 and $0; Mr. Eller -- $17,291, $16,604
and $21,391; Mr. Moore -- $16,624, $15,924 and $20,513; Mr. Webster --
$17,117, $16,604 and $21,391; and Mr. Little -- $17,175, $15,933 and
$21,077. No distributions were made under the Profit Sharing Plan to any of
the executive officers.
(4) Amounts in this column reflect the number of stock options granted each
year to the listed individuals. The shareholders approved the 1999 Unifi,
Inc. Long-Term Incentive Plan in October 1999 and options were granted for
the first time under said Plan in October 1999. The options vest 20% on the
first anniversary of the grant date, with 20% of said options vesting on the
second, third, and fourth years' anniversary dates, respectively, and the
balance of said options vesting on the fifth year's anniversary date.
Further information relating to the stock options granted is set forth on
page 9.
(5) Options granted under the 1996 Incentive Stock Option Plan which vest in
three approximately equal increments.
(6) Includes 15,000 options granted under the 1996 Incentive Stock Option Plan
which vest in three approximately equal increments and 50,000 options
granted under the 1996 Non-Qualified Stock Option Plan which are fully
vested.
(7) Options granted under the 1996 Non-Qualified Stock Option Plan which are
fully vested.
OPTION GRANTS IN FISCAL YEAR 2000 (1)
[Graph appears here with the following values.]
<TABLE>
<CAPTION>
Potential Realized Value
at Assumed Annual Rates of Stock
Individual Grants Price Appreciation
----------------------------------------- ---------------------------------------
% of Total
Options Options Granted Exercise or Present
Granted to Employees Base Price Expiration Value
Name (#) in Fiscal Year ($/Share) Date 5% ($) 10% ($) ($)(2)
--------- --------- ----------------- ------------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mebane 143,017 7.2% $ 11.1875 10/21/09 $993,682 $2,537,408 $1,094,652
143,017 7.2% $ 11.8587 10/21/09 $910,732 $2,454,172 $1,079,778
143,017 7.2% $ 12.5300 10/21/09 $826,924 $2,370,936 $1,064,905
Parke 89,387 4.5% $ 11.1875 10/21/09 $621,061 $1,585,904 $ 684,168
89,386 4.5% $ 11.8587 10/21/09 $569,210 $1,533,864 $ 674,864
89,386 4.5% $ 12.5300 10/21/09 $516,830 $1,481,841 $ 665,568
Eller 37,542 1.9% $ 11.1875 10/21/09 $260,842 $ 666,070 $ 287,346
37,542 1.9% $ 11.8587 10/21/09 $239,067 $ 644,221 $ 283,442
37,542 1.9% $ 12.5300 10/21/09 $217,068 $ 622,371 $ 279,538
Moore 27,711 1.4% $ 11.1875 10/21/09 $192,536 $ 491,649 $ 212,100
27,710 1.4% $ 11.8587 10/21/09 $176,457 $ 475,504 $ 209,211
27,710 1.4% $ 12.5300 10/21/09 $160,219 $ 459,376 $ 206,329
Webster 23,241 1.2% $ 11.1875 10/21/09 $161,478 $ 412,342 $ 177,887
23,241 1.2% $ 11.8587 10/21/09 $147,999 $ 398,816 $ 175,470
23,241 1.2% $ 12.5300 10/21/09 $134,374 $ 385,273 $ 173,045
Little 20,112 1.0% $ 11.1875 10/21/09 $139,738 $ 356,827 $ 153,937
20,112 1.0% $ 11.8587 10/21/09 $128,073 $ 345,122 $ 151,846
20,112 1.0% $ 12.5300 10/21/09 $116,288 $ 333,417 $ 149,754
</TABLE>
----------
Footnotes:
1) Total amount granted in FY 2000 equals 1,975,570. These options were
granted under the 1999 Unifi, Inc. Long-Term Incentive Plan and are
intended to constitute incentive stock options as that term is used in Code
ss.422. If,
11
<PAGE>
as a result of options granted to the named individual under this Plan and
all plans of the Company, the aggregate fair market value (FMV) of said
stock (determined as of the time the option is granted), with respect to
which incentive stock options are exercisable for the first time by the
participant during any fiscal year under this Plan, would exceed $100,000,
any excess amount will be treated as non-qualified stock options. The first
one-third of the options granted were at an exercise price equal to the FMV
of the stock on the grant date which was $11.1875, with the exercise price
of the second one-third of the options being increased by 6% and the final
one-third of the options being increased by 12%.
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:
Option Exercise and Stock prices on ISO's and NQSO's is: $11.1875 for the
first one-third of the options, $11.8587 for the second one-third of said
options, and $12.5300 for the remaining one-third of said options.
Expected Dividend Yield: 0% -- Risk-Free Rate: 6.0% -- Term: 10 Years --
Volatility: 49.5%
The actual value of the options will depend on the market value of the
Company's common stock when the options are exercised.
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in fiscal year 2000 of previously
granted options and the number and value of unexercised options are shown in
the following table.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option/SAR
Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs In-the-Money Options/SARs
Shares Acquired Value at Year End(1)(2) at Year End(3)
on Exercise Realized ----------------------------- -------------------------------
Name (#) ($)(4) Exercisable Unexercisable Exercisable Unexercisable(2)
---------- ----------------- --------- ------------- --------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Mebane 0 $ 0 561,523 435,718 $ 0 $322,067
Parke 0 $ 0 139,999 273,160 $ 0 $201,294
Eller 0 $ 0 141,145 112,626 $ 0 $ 84,543
Moore 0 $ 0 73,747 91,465 $ 0 $ 62,403
Webster 0 $ 0 141,829 74,723 $ 0 $ 52,337
Little 0 $ 0 67,077 65,337 $ 0 $ 45,291
</TABLE>
----------
Footnotes:
1) Stock options granted under the 1996 Incentive Stock Option Plan on
10/22/98 are subject to a three year vesting schedule. One-third were
vested at the time of grant, one-third were vested and became exercisable
on 10/22/99 and the final one-third will vest and be exercisable on
10/22/00.
2) Stock options granted under the 1999 Unifi, Inc. Long-Term Incentive Plan
on 10/21/99 are exercisable as follows: one-fifth on October 21, 2000,
one-fifth on October 21, 2001, one-fifth on October 21, 2002, one-fifth on
October 21, 2003 and one-fifth on October 21, 2004.
3) The fair market value of the Company's common stock fiscal year-end, June
25, 2000, was $12.6094. An option is "in-the-money" if the market value of
the common stock exceeds the exercise price.
4) Value represents fair market value at exercise minus the exercise price.
EMPLOYMENT AND TERMINATION AGREEMENTS
Employment Agreement with Mr. Mebane
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 of the base compensation being
paid to him during the last year of his executive employment.
12
<PAGE>
Employment Agreement with Mr. Eller
The Company entered into an Agreement with Mr. Eller under which Mr.
Eller's employment would continue for a two-year period commencing on February
1, 1999 and terminating on January 31, 2001 ("Termination Date"). The
Termination Date could be accelerated by mutual consent. During his continued
employment, he would: (a) receive the same base salary he was receiving on the
date of his Agreement, subject to change by the Board of Directors, plus such
additional compensation and bonuses as may be awarded to him from time to time;
(b) have the same rights and privileges to participate in any retirement,
profit sharing, insurance plans and other benefits provided for other executive
officers and key employees; and (c) receive, for his unexercised incentive
stock options granted from time to time, new non-qualified stock options,
immediately exercisable, for the same number of shares, at the same exercise
price, and with the same expiration date as provided in the terminated
incentive stock options. Upon his retirement, the Company will: (a) pay to him
within ten (10) days the sum of $126,000; (b) pay to him $1,160,000 in 36 equal
monthly installments, beginning February 1, 2001; (c) provide Mr. Eller and his
family, until he obtains the age of 65, on conditions set forth in said
Agreement, the following: (i) medical and dental insurance as provided to
executive officers covered by the terms of the Company's Employee Welfare
Benefit Plan; and (ii) continue to pay the premiums on the life insurance
policies covering Mr. Eller, currently owned by the Company under the split
dollar arrangement.
Severance Employment Agreements with Messrs. Mebane, Parke, Moore, and Little
The Company has Severance Employment Agreements with Messrs. Mebane,
Parke, Moore, and Little. The agreements provide that if said 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 officer may receive certain benefits. The present value of
the benefits will be 2.99 times such 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 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.
13
<PAGE>
PERFORMANCE GRAPH -- SHAREHOLDER RETURN ON COMMON STOCK
Comparison of 5 Year Cumulative Total Return* Among
Unifi, Inc., The NYSE Composite Index, and a Peer Group
[Graph appears here with the following values.]
Comparison of Five Year Cumulative Total Return* Among Unifi, Inc.,
New York Stock Exchange Composite Index and a Peer Group
<TABLE>
<CAPTION>
Company June 1995 June 1996 June 1997 June 1998 June 1999 June 2000
---------------- ----------- ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Unifi, Inc. $ 100.00 $ 114.37 $ 152.17 $ 143.39 $ 77.45 $ 52.59
NYSE Composite $ 100.00 $ 123.08 $ 158.46 $ 198.30 $ 222.08 $ 220.30
Peer Group $ 100.00 $ 105.94 $ 118.99 $ 143.07 $ 109.63 $ 69.02
</TABLE>
----------
* $100 invested on June 25, 1995 in stock or on June 30, 1995 in index --
including reinvestment of dividends.
NEW YORK STOCK EXCHANGE
Unifi, Inc.'s Common Stock trades on the New York Stock Exchange (NYSE)
under the symbol "UFI", with the closing price of said stock on September 18,
2000, being $11.09375 per share.
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 25, 2000, 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, as amended,
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.
14
<PAGE>
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, all such Section 16(a) filing requirements have been
made during fiscal year ended June 25, 2000.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the Company's 2000
Annual Meeting of the Shareholders pursuant to Rule 14a-8 promulgated under the
Securities and Exchange Act of 1934, as amended, and wish to have included in
the Company's proxy materials must be received by the Company no later than May
25, 2001. If a proponent fails to notify the Company by August 11, 2000 of a
non-Rule 14a-8 shareholder proposal which it intends to submit at the Company's
2000 Annual Meeting of the Shareholders, the proxy solicited by the Board of
Directors with respect to such meeting may grant discretionary authority to the
proxies named therein to vote with respect to such matter.
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 represented 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
/s/ Clifford Frazier, Jr.
CLIFFORD FRAZIER, JR.
Secretary
Greensboro, North Carolina
September 26, 2000
15
<PAGE>
UNIFI, INC.
ANNUAL MEETING, OCTOBER 26, 2000
PLEASE DATE, SIGN AND DETACH THE PROXY CARD BELOW, AND
RETURN IN THE ENCLOSED BUSINESS REPLY ENVELOPE TO:
UNIFI, INC.
C/O FIRST UNION NATIONAL BANK
PROXY TABULATION
P.O. BOX 217950
CHARLOTTE, NC 28254-3556
(arrow) FOLD AND DETACH HERE (arrow)
-----------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS 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 26, 2000, and the Proxy Statement
furnished therewith.
Dated this day of , 2000.
--- ------------
_____________________________(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.
<PAGE>
(arrow) FOLD AND DETACH HERE (arrow)
-----------------------------------------------------------------------------
The undersigned hereby appoints Willis C. Moore, III 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 corporation's Plant T-5 facility at 1641
Shacktown Road, in Yadkinville, North Carolina, on Thursday, October 26,
2000, at 10:00 A.M. Eastern Daylight Savings Time, and any adjournment or
adjournments thereof as follows:
<TABLE>
<CAPTION>
<S> <C>
PROPOSAL NO. 1 -- Election of Directors
[ ] To vote FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below
</TABLE>
Nominees: G. Allen Mebane, IV, Brian R. Parke, J.B. Davis and R. Wiley
Bourne, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
-------------------------------------------------------------------------
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 to the extent authorized by Rule 14a-4(c)
promulgated by the Securities and Exchange Commission.
