def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
UNIFI, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ |
|
No fee required. |
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction applies: |
|
|
|
|
|
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
|
|
|
|
|
(3) |
|
Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined): |
|
|
|
|
|
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
|
|
|
|
|
(5) |
|
Total fee paid: |
|
|
|
|
|
o |
|
Fee paid previously with preliminary materials. |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of its filing. |
|
(1) |
|
Amount Previously Paid: |
|
|
|
|
|
|
(2) |
|
Form, Schedule or Registration Statement No.: |
|
|
|
|
|
|
(3) |
|
Filing Party: |
|
|
|
|
|
|
(4) |
|
Date Filed: |
|
|
|
|
|
PROVIDING
INNOVATIVE FIBERS AND COMPETITIVE
SOLUTIONS®
7201 West
Friendly Avenue
Greensboro, North Carolina 27410
September 16, 2010
To The Shareholders Of
Unifi, Inc.
The Annual Meeting of Shareholders of your Company will be held
at 9:00 A.M. Eastern Daylight Savings Time on
Wednesday, October 27, 2010, at the Companys
corporate headquarters at 7201 West Friendly Avenue,
Greensboro, North Carolina.
We are providing access to our proxy materials over the
Internet. On or about September 16, 2010 we will mail a
Notice of Internet Availability of Proxy Materials (the
Notice) to our Shareholders of record and beneficial
owners at the close of business on September 7, 2010. On
the date of mailing of the Notice, all Shareholders and
beneficial owners will have the ability to access all of the
proxy materials on a web site referred to in the Notice. These
proxy materials will be available free of charge.
Detailed information relating to the Companys activities
and operating performance is contained in its Annual Report on
Form 10-K
for the fiscal year ended June 27, 2010, which is available
over the Internet as described in the Notice.
You are cordially invited to attend the Annual Meeting of
Shareholders in person. Even if you choose to attend in person,
you are encouraged to review the proxy materials and vote your
shares in advance of the meeting by Internet. The Notice will
contain instructions to allow you to request copies of the proxy
materials to be sent to you by mail. Any proxy materials sent to
you will include a proxy card that will provide you with a
telephone number you may call to cast your vote, or you may
complete, sign and return the proxy card by mail. Your vote is
extremely important and we appreciate your taking the time to
vote promptly.
Sincerely,
William L. Jasper
President and Chief Executive Officer
PROVIDING
INNOVATIVE FIBERS AND COMPETITIVE
SOLUTIONS®
7201 West Friendly Avenue
Greensboro, North Carolina 27410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 27, 2010
To The Shareholders of
Unifi, Inc.
The Annual Meeting of Shareholders of Unifi, Inc. (the
Company) will be held at the Companys
corporate headquarters at 7201 West Friendly Avenue,
Greensboro, North Carolina, on Wednesday, October 27, 2010
at 9:00 A.M. Eastern Daylight Savings Time, for the
following purposes:
|
|
1.
|
To elect nine (9) directors to serve until the next Annual
Meeting of Shareholders or until their respective successors are
duly elected and qualified.
|
|
2.
|
To approve an amendment to the Companys Restated
Certificate of Incorporation to effect a reverse stock split of
the Companys common stock at a reverse stock split ratio
of 1-for-3.
|
|
3.
|
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
Companys By-Laws, has fixed the close of business on
September 7, 2010, as the record date for determination of
Shareholders entitled to notice of and to vote at the Annual
Meeting of Shareholders or any adjournment or adjournments
thereof. The transfer books of the Company will not be closed.
YOUR VOTE IS IMPORTANT. We appreciate your taking the
time to vote promptly. After reading the Proxy Statement, please
vote at your earliest convenience by Internet, or request that
proxy materials be sent to you by mail. If you request the proxy
materials by mail, included therewith will be a proxy card with
a telephone number you may call to cast your vote, or you may
complete, sign and return the proxy card by mail.
YOUR SHARES CANNOT BE VOTED UNLESS YOU EITHER VOTE
(I) BY INTERNET, (II) REQUEST PROXY MATERIALS BE SENT
TO YOU THAT WILL INCLUDE A PROXY CARD WITH A TELEPHONE NUMBER
YOU MAY CALL TO CAST YOUR VOTE, OR YOU MAY COMPLETE, SIGN AND
RETURN THE PROXY CARD BY MAIL, OR (III) ATTEND THE ANNUAL
MEETING AND VOTE IN PERSON.
By Order Of The Board of
Directors:
Charles F. McCoy
Vice President, Secretary, General Counsel
and Chief Risk Officer
Greensboro, North Carolina
September 16, 2010
TABLE OF CONTENTS
PROVIDING
INNOVATIVE FIBERS AND COMPETITIVE
SOLUTIONS®
7201 West
Friendly Avenue
Greensboro, North Carolina 27410
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
Shareholders to be held on Wednesday, October 27, 2010, at
9:00 A.M. Eastern Daylight Savings Time, at the
Companys corporate headquarters located at 7201 West
Friendly Avenue, Greensboro, North Carolina, or at any
adjournment or adjournments thereof (the Annual
Meeting).
In accordance with rules and regulations adopted by the
Securities and Exchange Commission (the SEC),
instead of mailing a printed copy of our proxy materials to each
Shareholder of record, the Company is now furnishing proxy
materials on the Internet. If you received a Notice of Internet
Availability of Proxy Materials (the Notice) by
mail, you will not receive a printed copy of the proxy materials
other than as described herein. Instead, the Notice will
instruct you as to how you may access and review all of the
important information contained in the proxy materials. The
Notice also instructs you as to how you may submit your proxy
over the Internet. If you received a Notice by mail and would
like to receive a printed copy of our proxy materials or vote by
telephone, you should follow the instructions for requesting
proxy materials included in the Notice.
It is anticipated that the Notice will be sent to Shareholders
on or about September 16, 2010. The Proxy Statement and the
form of proxy relating to the Annual Meeting will be made
available to Shareholders on the date that the Notice is first
sent.
The proxy may be revoked in writing by the person giving it at
any time before it is exercised either by notice to the
Secretary or by submitting a proxy having a later date, or it
may be revoked by such person by appearing at the Annual Meeting
and electing to vote in person. 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 (i) in favor of electing as directors of the Company
the nine (9) nominees for director named in this Proxy
Statement, (ii) in favor of the proposal to amend the
Companys Restated Certificate of Incorporation to effect
the reverse stock split, and (iii) in the discretion of the
proxy holder on any other matters presented at the Annual
Meeting.
The expense of this solicitation will be borne by the Company.
Solicitations of proxies may be made in person, by mail or by
telephone, telegraph or electronic means by directors, officers
and regular employees of the Company who will not be specially
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 $9,500 plus reimbursement of expenses.
Arrangements will be made with brokers, nominees and fiduciaries
to send proxies and proxy materials, at the Companys
expense, to their principals.
The Companys common stock (the Common Stock),
par value $.10 per share, is the only class of stock of the
Company. Only Shareholders of record as of the close of business
on September 7, 2010 (the Record Date), will be
entitled to notice of and to vote at the Annual Meeting or any
adjournment thereof. As of the Record Date, the Company had
outstanding 60,172,300 shares of its Common Stock. Each
share of the Common Stock entitles the holder to one vote with
respect to each matter coming before the Annual Meeting and all
such shares vote as a single class.
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 Companys By-Laws require the presence of
a quorum at annual meetings of Shareholders. At the Annual
Meeting, abstentions and broker non-votes, if any,
are counted as present for purposes of determining a quorum.
1
Under the rules of the New York Stock Exchange, Inc.
(NYSE), a bank, broker or other nominee holding the
Companys shares in street name for a
beneficial owner has discretion (but is not required) to vote
the clients shares with respect to routine
matters if the client does not provide voting instructions. The
broker or other nominee, however, is not permitted to vote the
clients shares with respect to non-routine
matters without voting instructions. A broker
non-vote occurs when the broker or other nominee does not
vote on a particular proposal because that broker or other
nominee does not have discretionary voting power for that
particular item and has not received instructions from the
beneficial owner.
The proposal to elect directors is considered a non-routine
matter under the NYSE rules, which means that your broker or
other nominee may not use its discretion to vote your shares
held in street name on this matter without your express voting
instructions. The Company believes that the proposal to amend
the Companys Restated Certificate of Incorporation to
effect the reverse stock split will be treated as a routine
matter under the NYSE rules, which means that your broker or
other nominee will have discretionary authority to vote your
shares held in street name on this matter. Accordingly, if you
do not instruct your broker or nominee to vote your shares, the
broker or other nominee may either: (i) vote your shares on
routine matters and cast a broker non-vote on
non-routine matters, or (ii) leave your shares unvoted
altogether.
Each share represented is entitled to one vote on all matters
properly brought before the Annual Meeting. Directors will be
elected by a plurality of the votes cast by the Shareholders at
a meeting in which a quorum is present. Therefore, abstentions,
shares not voted and broker non-votes, if any, will have no
effect on the election of directors. The approval of the
proposal to amend the Companys Restated Certificate of
Incorporation to effect the reverse stock split requires the
affirmative vote of a majority of the outstanding shares of
Common Stock. Abstentions, shares not voted and broker
non-votes, if any, are not affirmative votes and therefore will
have the same effect as a vote against this proposal.
INFORMATION
RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of
September 1, 2010, with respect to each person known or
believed by the Company to be the beneficial owner of more than
five percent (5%) of the Common Stock. The nature of beneficial
ownership of the shares indicated is set forth in the notes
following the table.
|
|
|
|
|
|
|
|
|
Name and Address of
|
|
Amount and Nature
|
|
|
Percent of
|
|
Beneficial Owner
|
|
Beneficially Owned(1)
|
|
|
Class
|
|
|
William M. Sams(2)
|
|
|
5,701,000
|
|
|
|
9.47
|
%
|
750 North St. Paul, Suite 1650
|
|
|
|
|
|
|
|
|
Dallas, TX 75201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen Wener(3)
|
|
|
5,473,948
|
|
|
|
9.10
|
%
|
53 East 34th Street
|
|
|
|
|
|
|
|
|
Patterson, NJ 07514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP(4)
|
|
|
5,230,814
|
|
|
|
8.69
|
%
|
1299 Ocean Avenue
|
|
|
|
|
|
|
|
|
Santa Monica, CA 90401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dillon Yarn Corporation(5)
|
|
|
5,191,128
|
|
|
|
8.63
|
%
|
55 East 34th Street
|
|
|
|
|
|
|
|
|
Patterson, NJ 07514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Inc.(6)
|
|
|
5,085,582
|
|
|
|
8.45
|
%
|
40 East 52nd Street
|
|
|
|
|
|
|
|
|
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Beneficial Ownership, for purposes of the table, is
determined according to the meaning of applicable securities
regulations and based on a review of reports filed with the SEC
pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended (the Exchange Act). |
|
(2) |
|
As indicated in a Form 4, filed on December 1, 2009,
Mr. Sams beneficial ownership includes
1,181,000 shares owned by Marlin Sams Fund L.P., of
which Mr. Sams has shared voting and investment power and
of which |
2
|
|
|
|
|
Mr. Sams disclaims ownership. The table also reflects
10,000 shares that Mr. Sams would have the right to
purchase pursuant to stock options that could become exercisable
within 60 days of September 1, 2010, provided that the
closing price of the Companys Common Stock as listed on
the NYSE shall be at least $8.00 per share for 30 consecutive
days, and 10,000 shares that Mr. Sams would have the
right to purchase pursuant to stock options that could become
exercisable within 60 days of September 1, 2010,
provided that the closing price of the Companys Common
Stock as listed on the NYSE shall be at least $10.00 per share
for 30 consecutive days, as to which he would have sole voting
and investment power upon acquisition. |
|
(3) |
|
As indicated in a Form 5, filed on June 29, 2010,
Mr. Weners beneficial ownership includes
5,191,128 shares owned by Dillon, of which Mr. Wener
has shared voting and investment power and of which
Mr. Wener disclaims beneficial ownership. The table also
reflects 10,000 shares that Mr. Wener would have the
right to purchase pursuant to stock options that could become
exercisable within 60 days of September 1, 2010,
provided that the closing price of the Companys Common
Stock as listed on the NYSE shall be at least $8.00 per share
for 30 consecutive days, and 10,000 shares that
Mr. Wener would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $10.00 per share for 30 consecutive days, as to which
he would have sole voting and investment power upon acquisition. |
|
(4) |
|
As indicated in its Schedule 13G/A, filed on
February 8, 2010, Dimensional Fund Advisors LP, an
investment adviser registered under Section 203 of the
Investment Advisers Act of 1940, may be deemed to beneficially
own 5,230,814 shares by virtue of having sole voting and
investment power over such shares. |
|
(5) |
|
As indicated in its Schedule 13D/A, filed on June 29,
2010, Dillon Yarn Corporation (Dillon) beneficially
owned 5,191,298 shares by virtue of having sole voting and
investment power over such shares. |
|
(6) |
|
As indicated in its Schedule 13G/A, filed on
January 29, 2010, BlackRock, Inc., may be deemed to
beneficially own 5,085,582 shares by virtue of having sole
voting and investment power over such shares. |
PROPOSAL 1:
ELECTION OF DIRECTORS
General
Information
The Board presently is fixed at eleven (11) members;
however by resolution the number of directors will be reduced to
nine (9) at the opening of the Annual Meeting. All the
nominees for election are presently serving as directors and
have consented to be named in this Proxy Statement and to serve,
if elected. Mr. Michael Sileck and Mr. Chiu Cheng
Anthony Loo have informed the Board that they will not stand for
re-election due to reasons other than a disagreement with the
Registrant on any matter relating to the Registrants
operations, policies or practices. Although the Board expects
that each of the nominees will be available for election, in the
event a vacancy in the slate of nominees is occasioned by death
or other unexpected occurrence, it is intended that shares
represented by proxies in the accompanying form will be voted
for the election of a substitute nominee selected by the person
named in the proxy.
Set forth below is the name of each of the nine
(9) nominees for election to the Board, together with his
age, current principal occupation (which has continued for at
least the past five years unless otherwise indicated), the name
and principal business of the company by which he is employed,
if applicable, the period or periods during which he has served
as director, all positions and offices that he holds with the
Company, his directorships in other companies with a class of
securities registered pursuant to Section 12 of the
Exchange Act or subject to the requirements of
Section 15(d) of the Exchange Act or companies registered
as an investment company under the Investment Company Act of
1940 and the specific experience, qualifications, attributes or
skills that led to the conclusion that such person should serve
as a director of the Company.
3
NOMINEES
FOR ELECTION AS DIRECTORS
WILLIAM J. ARMFIELD, IV (75)
Mr. Armfield has been the President of Spotswood
Capital, LLC, Greensboro, North Carolina, a private investment
company, since 1995. Mr. Armfield was a director and
President of Macfield, Inc., a textile company in North
Carolina, from 1970 until August 1991, when Macfield, Inc.
merged with and into Unifi, Inc. Mr. Armfield was the Vice
Chairman and a director of the Company from 1991 to December
1995. Mr. Armfield again became a director of the Company
in 2001, and is a member of the Companys Audit Committee
(Chair), Corporate Governance and Nominating Committee and
Compensation Committee. Mr. Armfield serves as the Audit
Committee financial expert. Mr. Armfield brings executive
decision making skills, operating and management experience,
expertise in finance, business development and direct textile
industry business acumen to the Company as a result of his
professional experiences. These experiences provide the Board
with, among other things, financial and strategic planning
expertise important to the oversight of the Companys
financial reporting and business strategy implementation.
R. ROGER BERRIER, JR. (41)
Mr. Berrier has been the Executive Vice President of
Sales, Marketing and Asian Operations of the Company since
September 2007. Prior to September 2007, he had been the
Vice President of Commercial Operations from April 2006 to
September 2007 and the Commercial Operations Manager responsible
for corporate product development, marketing and brand sales
management from April 2004 to April 2006. Mr. Berrier
joined the Company in 1991 and has held various management
positions within operations, including international operations,
machinery technology, research & development and
quality control. He has been a director since September 2007 and
is a member of the Companys Executive Committee.
Mr. Berrier brings executive decision making skills,
operating and management experience, expertise in sales,
marketing and branding, business development and direct textile
industry business acumen to the Company as a result of his
professional experiences. These experiences and
Mr. Berriers on-going interaction with the
Companys customers and suppliers provide the Board with,
among other things, industry expertise important to the
Companys businesses, as well as a detailed understanding
of the Companys business and operations and the economic
environment in which it operates.
ARCHIBALD COX, JR. (70)
Mr. Cox has been the Chairman of Barclays Americas since
May 2008. Mr. Cox is the Chairman of Sextant
Group, Inc. Mr. Cox was a director of Hutchinson Technology
Incorporated from May 1996 to September 2009, was the Chairman
of Manequench, Inc., a manufacturer of magnetic material, from
September 2005 to September 2006 and was the President and Chief
Executive Officer of Magnequench, Inc., from October 1995 to
August 2005. He was Chairman of Neo Material Technologies Inc.,
a manufacturer of rare earth, zirconium and magnetic materials,
from September 2005 to September 2006. Mr. Cox has been a
director of the Company since February 2008. Mr. Cox brings
executive decision making skills, operating and management
experience, expertise in finance, business development and
general business acumen to the Company as a result of his
professional experiences. These experiences provide the Board
with, among other things, financial and strategic planning
expertise important to the oversight of the Companys
financial reporting and business strategy implementation.
WILLIAM L. JASPER (57)
Mr. Jasper has been the Companys President and
Chief Executive Officer since September 2007. Prior to
September 2007 he was the Vice President of Sales from April
2006 to September 2007. Prior to April 2006, Mr. Jasper was
the General Manager of the Polyester segment, having
responsibility for all natural polyester businesses. He joined
the Company with the purchase of the Kinston polyester POY
assets from INVISTA in September 2004. Prior to joining the
Company, he was the Director of INVISTAs
Dacron®
polyester filament business. Before working at INVISTA,
Mr. Jasper had held various management positions in
operations, technology, sales and business for E.I. du Pont de
Nemours and Co. since 1980. He has been a director since
September 2007 and is a member of the Companys Executive
Committee. Mr. Jasper brings executive decision making
skills, operating and management experience, expertise in
manufacturing operations, sales, business development and direct
textile industry business acumen to the Company as a result of
his professional experiences. These experiences and
Mr. Jaspers on-going interaction with the
Companys customers and suppliers provide the Board with,
among other things, industry expertise important to the
Companys businesses, as well as a detailed understanding
of the Companys business and operations and the economic
environment in which it operates.
KENNETH G. LANGONE (75)
Mr. Langone has been the President and Chief Executive
Officer of Invemed Associates, LLC, an investment banking firm,
New York, New York, since 1974. Mr. Langone is also a
director of YUM! Brands, Inc. and serves as a director, Chairman
of the Board and as the Interim President and Chief Executive
Officer of Geeknet, Inc. Mr. Langone was a founder of the
Home Depot, Inc. and served as a director from 1978 to 2008. He
4
also served as a director of ChoicePoint, Inc. from 2002 to 2008
and of General Electric Co. from 1999 to 2005. Mr. Langone
has been a director of the Company since 1969, and is a member
of the Companys Corporate Governance and Nominating
Committee (Chair). Mr. Langone brings operating and
management experience, including as chief executive officer of a
financial services business, expertise in finance, strategic
planning and business development and public company
directorship and committee experience to the Company as a result
of his professional experiences. These experiences provide the
Board with, among other things, financial and strategic planning
expertise important to the oversight of the Companys
financial reporting and business strategy implementation.
GEORGE R. PERKINS, JR. (70)
Mr. Perkins is the retired Chairman of the Board and the
former Chief Executive Officer of Frontier Spinning Mills, Inc.,
a company that he founded in 1996 and served in these roles
until 2009. Prior to founding Frontier, Mr. Perkins
served from 1993 to 1996 as President of the spun yarns division
of the Company and was a member of the Board. Mr. Perkins
has served as a director of First BanCorp since 2006. He has
currently been a director of the Company since August 2007, and
is a member of the Companys Compensation Committee.
Mr. Perkins brings executive decision making skills,
operating and management experience, business development and
general business acumen to the Company as a result of his
professional experiences. These experiences provide the Board
with, among other things, industry expertise important to the
oversight of the Companys businesses.
WILLIAM M. SAMS (72) Mr. Sams
was the President and Chief Investment Officer of FPA Paramount
Fund, Inc., as well as the Executive Vice President of both
First Pacific Advisors, Inc. and FPA Perennial Fund, Inc. from
1981 until he retired in 2000. Mr. Sams has served as a
director of Americas Car-Mart, Inc., since March 2005. He
has been a director of the Company and has served as the
independent Lead Director of the Board since April
2007, and is a member of the Companys Corporate Governance
and Nominating Committee, Audit Committee and Compensation
Committee (Chair). Mr. Sams brings executive decision making
skills, expertise in finance, public company directorship and
committee experience and business development acumen to the
Company as a result of his professional experiences. These
experiences provide the Board with, among other things,
financial and strategic planning expertise important to the
oversight of the Companys financial reporting and business
strategy implementation.
G. ALFRED WEBSTER (62)
Mr. Webster was an Executive Vice President of the
Company, and had been an officer of the Company from 1979
through his retirement in 2003, and a director from 1986 until
October 2004. Mr. Webster is a director of New Bridge
Bank Corporation (formerly Lexington State Bank).
Mr. Webster again became a director of the Company in
August 2007, and is a member of the Companys Corporate
Governance and Nominating Committee, Audit Committee and
Executive Committee (Chair). Mr. Webster brings executive
decision making skills, operating and management experience,
experience in public company directorship and committee
experience, business development and direct textile industry
business acumen to the Company as a result of his professional
experiences. These experiences provide the Board with, among
other things, industry expertise important to the oversight of
the Companys businesses.
STEPHEN WENER (67) Mr. Wener
has served as the President and Chief Executive Officer of
Dillon Yarn Corporation since 1980. The polyester and nylon
texturing operations of Dillon were purchased by the Company on
January 1, 2007. He has also been Executive Vice President
of American Drawtech Company, Inc. since 1992. He has been a
director of the Company since May 2007 and served as acting
Chief Executive Officer of the Company from August 1, 2007
through September 26, 2007. Since August 1, 2007,
Mr. Wener has served as the Chairman of the Board of
Directors and is a member of the Companys Executive
Committee. Mr. Wener brings executive decision making
skills, operating and management experience, expertise in
finance, business development and direct textile industry
business acumen to the Company as a result of his professional
experiences. These experiences provide the Board with, among
other things, industry expertise important to the oversight of
the Companys businesses.
No director has a family relationship as close as first cousin
with any other director, nominee for director or executive
officer of the Company.
The Board recommends that the Shareholders vote to elect
all of the nominees as directors.
5
PROPOSAL 2:
AMENDMENT OF RESTATED CERTIFICATE
OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT
The Board has unanimously adopted and is submitting for
Shareholder approval an amendment (the Amendment) to
the Companys Restated Certificate of Incorporation to
effect a reverse stock split at a reverse stock split ratio of
1-for-3,
meaning every three shares of Common Stock currently outstanding
would automatically be converted, as of the Effective Time
described below, into one share of Common Stock. The Board
believes it is in the best interests of the Company and its
Shareholders to grant such approval. If the Shareholders approve
the Amendment, the Board will have the absolute right, without
further action by the Shareholders, to decide whether to proceed
with the reverse stock split. The reverse stock split will only
be effected after the Board (or a duly authorized Committee of
the Board) authorizes the filing of a Certificate of Amendment
to the Companys Restated Certificate of Incorporation with
the Secretary of State of the State of New York and upon the
filing and effectiveness of such Amendment (the Effective
Time). The form of the proposed Amendment is attached to
this Proxy Statement as Appendix A.
If the Shareholders approve the Amendment, the Board, in its
discretion, may elect, at any time prior to next years
annual meeting of Shareholders, to effect the reverse stock
split, or the Board may determine in its discretion not to
proceed with the reverse stock split.
Reasons
for the Reverse Stock Split
The Board believes that the Shareholders should approve the
Amendment providing for the reverse stock split for the
following reasons:
|
|
|
|
|
Increase in Eligible Investors. The Board
believes that a reverse stock split would increase the price of
the Common Stock. Therefore, the Board believes that a reverse
stock split would allow investment by a broader range of
institutions and other investors in the Common Stock, such as
funds that are prohibited from buying stocks whose price is
below a certain threshold, potentially increasing trading volume
and liquidity.
|
|
|
|
Increased Broker Interest. The Board believes
that the intended increase in the stock price as a result of a
reverse stock split would help increase broker interest in the
Common Stock. Because of the trading volatility often associated
with lower-priced stocks, many brokerage houses and
institutional investors have adopted internal policies and
practices that either prohibit or discourage them from investing
in such stocks or recommending them to their customers. Some of
those policies and practices may also function to make the
processing of trades in lower-priced stocks economically
unattractive to brokers. Additionally, because brokers
commissions on transactions in lower-priced stocks generally
represent a higher percentage of the stock price than
commissions on higher-priced stocks, the current average price
per share of the Common Stock can result in individual
Shareholders paying transaction costs representing a higher
percentage of their total share value than would be the case if
the stock price were substantially higher.
|
|
|
|
Decreased Stock Price Volatility. The Board
believes that the intended increase in the stock price as a
result of a reverse stock split could decrease price volatility,
as currently small changes in the price of the Common Stock
result in relatively large percentage changes in the stock price.
|
Certain
Risks Associated with the Reverse Stock Split
|
|
|
|
|
The reverse stock split may not increase the price of the
Common Stock. Although the Board expects that a
reverse stock split will result in an increase in the price of
the Common Stock, the effect of a reverse stock split cannot be
predicted with certainty. Other factors, such as the
Companys financial results, market conditions and the
market perception of the Companys business may adversely
affect the stock price. As a result, there can be no assurance
that the reverse stock split, if completed, will result in the
intended benefits described above, that the stock price will
increase following the reverse stock split or that the stock
price will not decrease in the future.
|
|
|
|
The reverse stock split may decrease the trading market for
the Common Stock. Because the reverse stock split
will reduce the number of shares of Common Stock available in
the public market, the trading market for the Common Stock may
be harmed, particularly if the stock price does not increase as
a result of the reverse stock split.
|
6
|
|
|
|
|
The reverse stock split may leave certain Shareholders with
odd lots. The reverse stock split may
result in some Shareholders owning odd lots of fewer
than 100 shares of the Common Stock. Odd lot shares may be
more difficult to sell, and brokerage commissions and other
costs of transactions in odd lots are generally somewhat higher
than the costs of transactions in round lots of even
multiples of 100 shares.
|
Effects
of the Reverse Stock Split
General. If the reverse stock split is
approved and implemented, the principal effects will be to
decrease the number of outstanding shares of the Common Stock
based on the reverse stock split ratio of
1-for-3. As
of September 1, 2010, 60,172,300 shares of Common
Stock were issued and outstanding. Based on this number of
shares issued and outstanding, the Company would have
20,057,433 shares outstanding immediately following the
completion of the reverse stock split (without giving effect to
the treatment of fractional shares discussed below, which will
reduce slightly the number of outstanding shares).
The reverse stock split will not affect the registration of the
Common Stock under the Exchange Act or the listing of the Common
Stock on the NYSE. Following the reverse stock split, the Common
Stock will continue to be listed on the NYSE under the symbol
UFI, although it will be considered a new listing
with a new CUSIP number.
Proportionate voting rights and other rights of the holders of
the Common Stock will not be affected by the reverse stock
split, other than as a result of the treatment of fractional
shares as described below. Except for Shareholders who are
cashed out as a result of holding fractional shares discussed
below, the number of Shareholders of record will not be affected
by the reverse stock split and each Shareholder will hold the
same percentage of Common Stock immediately following the
reverse stock split as such Shareholder held immediately prior
to the reverse stock split.
Effectiveness of Reverse Stock Split. The
reverse stock split, if approved by Shareholders, would become
effective upon the filing of a Certificate of Amendment to the
Companys Restated Certificate of Incorporation with the
Secretary of State of the State of New York. It is expected that
this filing will take place promptly following the Annual
Meeting, assuming the Shareholders approve the Amendment.
However, the exact timing of the filing of the Certificate of
Amendment will be determined by the Board based on its
evaluation as to when such action will be the most advantageous
to the Company and its Shareholders. If the Board fails to
implement the reverse stock split by next years Annual
Meeting of Shareholders, Shareholder approval would be required
again prior to implementing any reverse stock split. In
addition, the Board reserves the right, notwithstanding
Shareholder approval and without further action by the
Shareholders, to elect not to proceed with the reverse stock
split if, at any time prior to filing the Certificate of
Amendment, the Board, in its sole discretion, determines that it
is no longer in the Companys best interests and the best
interests of its Shareholders to proceed with the reverse stock
split.
Effect on the Companys Stock Plans. As
of June 27, 2010, approximately 5,197,388 shares were
issuable upon the exercise of outstanding stock options and upon
the vesting of outstanding restricted stock units, and
approximately 4,050,000 additional shares were reserved and
available for issuance pursuant to future awards under the
Companys stock incentive plans. Under these plans, if the
reverse stock split is effected, the number of shares reserved
and remaining available for issuance and the number, exercise
price or other similar financial terms of shares subject to
outstanding awards will be proportionately adjusted based on the
reverse stock split ratio of
1-for-3. As
a result, using the above data as of June 27, 2010, the
number of shares issuable upon exercise or vesting of
outstanding awards would be adjusted from 5,197,388 to 1,732,462
(without giving effect to the treatment of fractional shares,
which will reduce slightly the number of shares so issuable) and
the 4,050,000 shares that were available for future
issuance under the stock plans would be adjusted to
1,350,000 shares (subject to increase as and when awards
made under the stock plans expire or are forfeited and are
returned in accordance with the terms of the plans). For
individual holders, the number of shares subject to outstanding
awards would be reduced by a factor of 3 and, in the case of
outstanding stock options, the exercise price per share would be
increased by a multiple of 3, such that upon an exercise, the
aggregate exercise price payable by the optionee to the Company
would remain the same. For example, an outstanding stock option
for 3,000 shares of Common Stock, exercisable at $1.00 per
share, would be adjusted as a result of a
1-for-3
reverse stock split ratio into an option exercisable for
1,000 shares of Common Stock at an exercise price of $3.00
per share.
Effect on Authorized but Unissued Shares of Common
Stock. Currently, the Company is authorized in
its Restated Certificate of Incorporation to issue up to a total
of 500,000,000 shares of Common Stock. The total number of
authorized shares of Common Stock will not change as a result of
the reverse stock split.
7
As of September 1, 2010, the Company had
60,172,300 shares of Common Stock issued and outstanding,
9,247,388 shares of Common Stock reserved for issuance
pursuant to the Companys stock plans, and
430,580,312 shares authorized and available for issuance
for other corporate purposes. As described above, the reverse
stock split would have the effect of reducing the number of
issued and outstanding shares of Common Stock and the number of
shares of Common Stock reserved for issuance pursuant to the
Companys stock plans. Therefore, because the total number
of authorized shares of Common Stock will not change as a result
of the reverse stock split, upon the effectiveness of the
reverse stock split, the number of authorized shares of Common
Stock that are not issued and outstanding or reserved for
issuance would increase, and there would be approximately
46.3 million additional authorized but unissued shares of
the Companys Common Stock available for future issuance
(without giving effect to the treatment of fractional shares
discussed below). All authorized but unissued shares that are
not reserved for issuance would remain available for issuance by
the Board for general corporate purposes at any time, at its
discretion, without Shareholder approval. If the Board were to
authorize the issuance of any such shares, such issuances could
dilute the ownership interests of holders of Common Stock. The
Board has no current plans to issue any of the additional
authorized but unissued shares that would result if the reverse
stock split were effected.
Potential Anti-Takeover Effect. The increased
proportion of authorized but unissued shares to issued shares
could, under certain circumstances, have an anti-takeover
effect. For example, the issuance of a large block of the Common
Stock could dilute the stock ownership of a person seeking to
effect a change in the composition of the Board or contemplating
a tender offer or other transaction for the combination of the
Company with another company. However, the Amendment providing
for the reverse stock split is not being proposed in response to
any effort of which the Company is aware to accumulate shares of
Common Stock or obtain control of the Company, nor is it part of
a plan by management to recommend to the Board and Shareholders
a series of amendments to the Companys Restated
Certificate of Incorporation. Other than the Amendment for the
reverse stock split, the Board does not currently contemplate
recommending the adoption of any other amendments to the
Companys Restated Certificate of Incorporation that could
be construed to reduce or interfere with the ability of third
parties to take over or change the control of the Company.
Fractional Shares. The Company does not
currently intend to issue scrips or fractional shares in
connection with the reverse stock split. Shareholders who would
otherwise hold fractional shares because the number of shares of
Common Stock they hold before the reverse stock split is not
evenly divisible by the reverse stock split ratio will be
entitled to receive cash (without interest) in lieu of such
fractional shares in an amount equal to the closing price of the
Common Stock as reported on the NYSE on the trading day
immediately preceding the Effective Time, as adjusted by the
reverse stock split ratio, multiplied by the applicable fraction
of a share, for such fractional share of Common Stock they would
otherwise be entitled to at the Effective Time. Shareholders who
hold their shares electronically in book-entry form will receive
such cash payment as soon as practicable following the Effective
Time, as described in Effect on Registered Book-Entry
Holders below. Shareholders who hold their shares in
certificate form will receive such cash payment in lieu of
fractional shares following the surrender of their pre-split
certificates for post-split certificates, as described in
Effect on holders of Registered Certificated Shares
below. The Company will either deposit sufficient cash with the
Companys transfer agent or set aside sufficient cash for
the purchase of the above referenced fractional interests. The
ownership of a fractional share interest will not give the
holder any voting, dividend or other rights, except the right to
receive the above-described cash payment.
Shareholders should be aware that, under the escheat laws of
various jurisdictions, sums due for fractional interests that
are not timely claimed after the Effective Time may be required
to be paid to the designated agent for each such jurisdiction,
unless correspondence has been received by the Company or the
transfer agent concerning ownership of such funds within the
time permitted in such jurisdiction. Thereafter, if applicable,
Shareholders otherwise entitled to receive such funds, but who
do not receive them, will have to seek to obtain such funds
directly from the state to which they were paid.
Effect on Par Value. The proposed Amendment
providing for the reverse stock split will not affect the par
value of the Common Stock, which will remain at $.10 per share.
Reduction In Stated Capital. As a result of
the reverse stock split, at the Effective Time, the stated
capital on the Companys balance sheet attributable to the
Common Stock, which consists of the par value per share of the
Common Stock multiplied by the aggregate number of shares of the
Common Stock issued and outstanding, will be reduced in
proportion to the reverse stock split ratio. Correspondingly,
the Companys additional paid-in capital account, which
consists of the difference between the Companys stated
capital and the aggregate amount paid to the Company upon
8
issuance of all currently outstanding shares of the Common
Stock, will be credited with the amount by which the stated
capital is reduced. The Companys Shareholders
equity, in the aggregate, will remain unchanged.
No Going Private Transaction. Notwithstanding
the decrease in the number of outstanding shares following the
proposed reverse stock split, such transaction is not, nor is it
a first step in, a going private transaction within
the meaning of
Rule 13e-3
of the Exchange Act.
No Dissenters Rights. The New York
Business Corporation Law does not provide dissenters
rights of appraisal to the Shareholders in connection with the
reverse stock split transaction.
Effect on Registered and Beneficial
Holders. If the reverse stock split is effected,
the Company intends to treat beneficial holders (i.e.,
Shareholders who hold their shares in street name
through a bank, broker or other nominee) in the same manner as
registered Shareholders whose shares are registered in their
names. Banks, brokers or other nominees will be instructed to
effect the reverse stock split for their beneficial holders
holding shares in street name. However, these banks,
brokers or other nominees may have their own procedures for
processing the reverse stock split. Shareholders who hold shares
with a bank, broker or other nominee are encouraged to contact
their bank, broker or other nominee.
Effect on Registered Book-Entry Holders. Some
of the Companys registered Shareholders may hold some or
all of their shares electronically in book-entry form under the
direct registration system for securities. These Shareholders do
not have stock certificates evidencing their ownership of the
Companys Common Stock. Instead, they are provided with a
statement reflecting the number of shares registered in their
accounts. If you hold shares in book-entry form, you do not need
to take any action following the Effective Time in order for
your shares to be adjusted to reflect the reverse stock split or
to receive your cash payment in lieu of any fractional share
interest, if applicable. If you are entitled to post-split
shares, a transaction statement will automatically be sent to
your address of record indicating the number of shares you hold
following the Effective Time. If you are entitled to a payment
in lieu of any fractional share interest, a check will be mailed
to you at your registered address as soon as practicable after
the Effective Time. By signing and cashing this check, you will
warrant that you owned the shares for which you received a cash
payment.
Effect on Holders of Registered Certificated
Shares. Some registered Shareholders may hold
their shares of Common Stock in certificate form or a
combination of certificate and book-entry form. If any of your
shares are held in certificate form, you will receive a
transmittal letter from the Companys transfer agent as
soon as practicable after the Effective Time of the reverse
stock split. The transmittal letter will contain instructions on
how to surrender your certificate(s) representing your pre-split
shares to the transfer agent. Upon receipt of your properly
completed and executed letter of transmittal and your stock
certificate(s), you will be issued the appropriate number of
post-split shares. These shares will be issued electronically in
book-entry form under the direct registration system. This means
that, instead of receiving a new stock certificate, you will
receive a direct registration statement that indicates the
number of post-split shares you own in book-entry form. At any
time after receipt of your direct registration statement, you
may request a stock certificate representing your post-split
ownership interest. If you are entitled to a payment in lieu of
any fractional share interest, payment will be made as described
above under Fractional Shares. No service charge
will be payable by Shareholders in connection with the exchange
of certificates or the issuance of cash for fractional
interests, all of which costs will be borne and paid by the
Company.
No new shares in book-entry form will be issued and no
payment in lieu of any fractional share interest will be made to
you until you surrender your outstanding certificate(s),
together with the properly completed and executed letter of
transmittal, to the transfer agent.
YOU SHOULD NOT SEND YOUR CERTIFICATES NOW. YOU
SHOULD SEND THEM ONLY AFTER YOU RECEIVE THE LETTER OF
TRANSMITTAL FROM THE TRANSFER AGENT.
Certain Federal Income Tax Consequences of the Reverse Stock
Split. The following is a general summary of
certain U.S. federal income tax consequences of the reverse
stock split that may be relevant to Shareholders. This summary
is based upon the provisions of the Internal Revenue Code of
1986, as amended (the Internal Revenue Code),
Treasury regulations promulgated thereunder, published
administrative rulings and judicial decisions as of the date
hereof, all of which may change, possibly with retroactive
effect, resulting in U.S. federal income tax consequences
that may differ from those discussed below. This summary does
not purport to be complete and does not address all aspects of
federal income taxation that may be relevant to Shareholders in
light of their particular circumstances or to Shareholders that
may be subject to special tax rules, including, without
limitation: (i) Shareholders subject to the alternative
minimum tax; (ii) banks, insurance companies, or other
financial institutions; (iii) tax-exempt
9
organizations; (iv) dealers in securities or commodities;
(v) regulated investment companies or real estate
investment trusts; (vi) partnerships (or other flow-through
entities for U.S. federal income tax purposes and their
partners or members); (vii) traders in securities that
elect to use a
mark-to-market
method of accounting for their securities holdings;
(viii) foreign Shareholders or U.S. Shareholders whose
functional currency is not the U.S. dollar;
(ix) persons holding the Common Stock as a position in a
hedging transaction, straddle, conversion
transaction or other risk reduction transaction;
(x) persons who acquire shares of the Common Stock in
connection with employment or other performance of services;
(xi) dealers and other Shareholders that do not own their
shares of Common Stock as capital assets; or
(xii) U.S. expatriates. In addition, this summary does
not address the tax consequences arising under the laws of any
foreign, state or local jurisdiction and U.S. federal tax
consequences other than federal income taxation. If a
partnership (including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes) holds
shares of the Common Stock, the tax treatment of a partner in
the partnership generally will depend upon the status of the
partner and the activities of the partnership.
The Company has not sought, and will not seek, an opinion of
counsel or a ruling from the Internal Revenue Service
(IRS) regarding the U.S. income tax
consequences of the reverse stock split and there can be no
assurance the IRS will not challenge the statements and
conclusions set forth below or that a court would not sustain
any such challenge. EACH SHAREHOLDER SHOULD CONSULT SUCH
SHAREHOLDERS TAX ADVISOR WITH RESPECT TO THE PARTICULAR
TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH SHAREHOLDER.
The reverse stock split should constitute a
recapitalization for U.S. federal income tax
purposes. As a result, a Shareholder generally should not
recognize gain or loss upon the reverse stock split, except with
respect to cash received in lieu of a fractional share of the
Common Stock, as discussed below. A Shareholders aggregate
tax basis in the shares of the Common Stock received pursuant to
the reverse stock split should equal the aggregate tax basis of
the shares of the Common Stock surrendered (excluding any
portion of such basis that is allocated to any fractional share
of the Common Stock), and such Shareholders holding period
(i.e., acquired date) in the shares of the Common Stock
received should include the holding period in the shares of the
Common Stock surrendered. Treasury regulations promulgated under
the Internal Revenue Code provide detailed rules for allocating
the tax basis and holding period of the shares of the Common
Stock surrendered to the shares of the Common Stock received
pursuant to the reverse stock split. If you acquired your shares
of Common Stock on different dates and at different prices, you
should consult your tax advisors regarding the allocation of the
tax basis and holding period of such shares.
A Shareholder who receives cash in lieu of a fractional share of
the Common Stock pursuant to the reverse stock split generally
should recognize capital gain or loss in an amount equal to the
difference between the amount of cash received and the
holders tax basis in the shares of the Common Stock
surrendered that is allocated to such fractional share of the
Common Stock. Such capital gain or loss should be long-term
capital gain or loss if the holders holding period for the
Common Stock surrendered exceeded one year at the Effective Time.
Unifi will not recognize any gain or loss as a result of the
reverse stock split.
Information returns generally will be required to be filed with
the IRS with respect to the receipt of cash in lieu of a
fractional share of the Common Stock pursuant to the reverse
stock split. In addition, Shareholders may be subject to a
backup withholding tax (at the current applicable rate of 28%)
on the payment of such cash if they do not provide their
taxpayer identification numbers in the manner required or
otherwise fail to comply with applicable backup withholding tax
rules. Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules may be refunded or
allowed as a credit against the Shareholders federal
income tax liability, if any, provided the required information
is timely furnished to the IRS.
The Board recommends that the Shareholders vote to approve
the Amendment to the Companys Restated Certificate of
Incorporation to allow a reverse stock split at a reverse stock
split ratio of
1-for-3.
10
REPORT OF
THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee
describing the compensation policies applicable to the
Companys executive officers during the fiscal year ended
June 27, 2010. The current members of the Compensation
Committee are William M. Sams, who is the Committee Chair,
William J. Armfield, IV, Chiu Cheng Anthony Loo and George R.
Perkins, Jr. All of the members of the Compensation
Committee are independent.
Compensation
Discussion and Analysis
The Compensation Committee has reviewed and discussed the
Companys Compensation Discussion and Analysis with
management. Based on this review and discussion, the
Compensation Committee recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in the
Companys Proxy Statement on Schedule 14A for its 2010
Annual Meeting, which is incorporated by reference in the
Companys Annual Report on
Form 10-K
for the fiscal year ended June 27, 2010, each as filed with
the SEC.
Submitted by the Compensation Committee of the Board:
William M. Sams, Chairman
William J. Armfield, IV
Chiu Cheng Anthony Loo
George R. Perkins, Jr.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Philosophy, Principles and Policies
The Companys executive compensation program is designed to
attract executives with the requisite skills necessary to
support our strategic objectives, to reward executives for the
achievement of near-term and long-term goals, and to retain
executives by aligning their compensation with the longer-term
creation of Shareholder value through the development of a
sustainable business with consistent performance. The
Compensation Committee has developed an executive compensation
policy that is primarily based upon the practice of
pay-for-performance.
Therefore, the focus of the Compensation Committee and the
Companys executive compensation program is to ensure that
an appropriate relationship exists between executive pay and the
creation of Shareholder value, while at the same time enabling
the Company to attract, retain, reward and motivate high caliber
employees. The Compensation Committee monitors the results of
its executive compensation policy to ensure that compensation
payable to executive officers creates proper incentives to
enhance Shareholder value, rewards superior performance, and is
justified by returns available to Shareholders.
In establishing compensation for the named executive officers
(the NEOs) the following are the Compensation
Committees objectives:
|
|
|
|
|
All components of executive compensation should be set so that
the Company can continue to attract, retain, reward and motivate
talented and experienced executives;
|
|
|
|
Ensure executive compensation is aligned with the Companys
corporate strategies, business objectives and the long-term
interests of the Shareholders;
|
|
|
|
Increase the incentive to achieve key strategic and financial
performance measures by linking incentive award opportunities to
the achievement of performance goals in these areas; and
|
|
|
|
Enhance the NEOs incentive to increase the Companys
long-term value, as well as promote retention of key personnel,
by providing a portion of total compensation opportunities for
senior management in the form of direct ownership in the Company
through stock ownership.
|
The Compensation Committee reviews all components of the
NEOs compensation. The Compensation Committee also
monitors the compensation levels in general for all other senior
level employees of the Company. In addition, the Compensation
Committee has the discretion to hire compensation and benefits
consultants to assist in developing and reviewing overall
executive compensation strategies.
11
Overview
of Compensation Components
The Compensation Committee views executive compensation in four
component parts: base salary, annual incentive compensation,
long-term incentive compensation and other personal benefits. A
brief description of each of these components is provided below,
together with a summary of its objectives:
|
|
|
|
|
Compensation Element
|
|
Description
|
|
Objective
|
|
Base Salary
|
|
Fixed compensation that is reviewed annually based on
performance.
|
|
To provide a base level of compensation that fairly
accounts for the job and scope of the role being performed.
|
|
|
|
|
To attract, retain, reward and motivate qualified
and experienced executives.
|
Annual Incentive Compensation
|
|
Variable compensation earned based on performance against
pre-established annual goals.
|
|
To provide incentives for achieving critical annual
operating goals which ultimately contribute to long-term return
to Shareholders.
|
Long-Term Incentive Compensation
|
|
Variable compensation which is comprised of equity in the
Company and participation in a Supplemental Key Employee
Retirement Plan. The equity portion of the compensation is at
risk because its value will vary with the value of the Common
Stock. The Supplemental Key Employee Retirement Plan provides
additional retirement income beyond what is provided in the
Companys standard retirement plan through a pre-set,
annual contribution based on base salary.
|
|
To align the economic interests of the executives with the Shareholders by rewarding executives for stock price improvement.
To promote retention (through vesting schedules).
|
Other Benefits and Perquisites
|
|
Broad-based benefits provided to all the Companys
employees (e.g., health and group term life insurance), a
retirement savings plan, and certain perquisites, including club
memberships, spousal travel and a car allowance.
|
|
To provide a competitive total compensation package
to attract and retain key executives.
|
The annual and long-term incentive portions of the
executives compensation are intended to achieve the
Compensation Committees goal of aligning the
executives interests with those of the Shareholders and
with Company performance. These portions of an executives
compensation are placed at risk and are linked to the
accomplishment of specific results that are designed to benefit
the 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 level
of compensation and, conversely, in years of below average
performance, their compensation will be limited to their base
compensation levels. Finally, the annual and long-term incentive
portions of the executives compensation are designed to
achieve the Compensation Committees goal of attracting and
retaining high caliber, experienced executives, through vesting
schedules and deferred benefits. The Compensation Committee
believes that these elements of compensation, when combined, are
effective, and will continue to be effective, in achieving the
overall objectives of the Companys executive compensation
program.
Operation
of the Compensation Committee
As described elsewhere in this Proxy Statement, the Compensation
Committee is responsible for the administration and overall
structure of the Companys executive compensation program.
The Compensation Committee was composed of four independent
directors during fiscal 2010, in accordance with the
independence requirements of the
12
NYSE Corporate Governance Standards. The Compensation Committee
reviews and approves corporate goals and objectives relevant to
the compensation of each NEO, evaluates each NEOs
performance in light of these goals and objectives with input
from the Companys Chief Executive Officer
(CEO) and Chairman of the Board, and sets each
NEOs compensation level based on this evaluation and
consultation. The Compensation Committee also advises senior
management with respect to the range of compensation to be paid
to other employees of the Company, administers and makes
recommendations to the Board concerning benefit plans for the
Companys directors, officers and employees and recommends
benefit programs and future objectives and goals for the
Company. For more information on the operation of the
Compensation Committee, please refer to Committees of the
Board of Directors below.
For fiscal 2010 the Compensation Committee did not seek
assistance from a compensation consultant, and instead relied on
compensation information from the prior year. The Compensation
Committee continued to consider factors including the historical
practices of the Company, the officers leadership and
advancement of the Companys long-term strategy, plans and
objectives, individual performance and contribution to the
Companys success, budget guidelines and assessment of the
Companys financial condition. Additionally, the
Compensation Committee considered the Companys operating
results and adjusted EBITDA (described below), increases in the
salaries for the NEOs in fiscal 2009, the discretionary bonuses
paid to salaried employees for fiscal 2008, the decline in the
Companys stock price during fiscal 2009, and the current
economic climate and the need for the Company to preserve cash.
Based on these factors the Compensation Committee set executive
compensation for fiscal 2010.
Elements
of Compensation
Base
Salaries
NEOs base salaries are determined based on the historical
practices of the Company, the officers leadership and
advancement of the Companys long-term strategy, plans and
objectives, individual performance and contribution to the
Companys success, budget guidelines and assessment of the
Companys financial condition. It is the intent of the
Compensation Committee to maintain a close relationship between
the Companys performance and the base salary component of
the compensation for each NEO. No formula based salary increases
were provided to the NEOs during fiscal 2010.
To aid the Compensation Committee in making its determination,
the CEO provides recommendations annually to the Compensation
Committee regarding the compensation of all NEOs. Generally,
each NEO participates in an annual performance review with the
CEO to provide input about his contributions to the
Companys success for the period being assessed. The
overall performance of each NEO is reviewed annually by the
Compensation Committee, which then makes recommendations on the
actual base salary for each NEO to the Board for approval.
During fiscal 2010, Mr. Caudles base salary was
increased to $290,000, an increase from his fiscal 2009 base
salary of approximately 11.5%, reflecting a merit-based increase
based on the Compensation Committees determination that
Mr. Caudle had not received an increase in his base salary
since fiscal year 2007, and that under Mr. Caudles
leadership there had been process improvements and efficiency
gains in the Companys manufacturing operations over such
time. During fiscal 2010, Mr. McCoys base salary was
increased to $295,000, an increase from his fiscal year 2009
base salary of approximately 7.3%, based on his undertaking the
additional role of Chief Risk Officer. For fiscal 2010, the base
salaries for Messrs. Jasper, Berrier and Smith were not
increased.
Annual
Incentive Compensation
The Company structures its annual incentive compensation, in the
form of a bonus, to reward its NEOs based on the Companys
fiscal year performance. All NEOs are eligible to earn a bonus
which is a predetermined percentage of their base salary (called
target bonus). These targets are set by the Compensation
Committee and have a minimum (threshold) achievement level.
At its meeting in July 2009, the Compensation Committee approved
a revision to the annual incentive compensation, to revise the
annual incentive compensation targets to include both adjusted
EBITDA (Earnings Before Interest, Taxes, Depreciation and
Amortization, adjusted to exclude certain items such as
restructuring charges, equity in earnings and losses of
unconsolidated affiliates, write down of long-lived assets and
unconsolidated affiliates, non-cash compensation expense net of
distributions, gains and losses on sales of property, plant and
equipment, hedging gains and losses, asset consolidation and
optimization expense, and certain other special charges
13
as determined by the Compensation Committee) and earnings from
50% or more owned equity affiliates (Affiliate
Earnings). The Companys adjusted EBITDA is a measure
of cash flow generated by the Companys business. The
Compensation Committee uses adjusted EBITDA as a measure of
Company performance because the Compensation Committee believes
it provides a clear indicator of cash generation. In setting the
adjusted EBITDA target for fiscal 2010, the Compensation
Committee considered the expected performance of the Company.
However, the Compensation Committee determined that due to the
changing nature of the Companys business, adjusted EBITDA
was no longer the sole measure of the Companys
performance. While the Compensation Committee believed that
adjusted EBITDA is a clear indicator of cash generation, the
Compensation Committee also believed that due to the shifting
nature of the Companys business and the increased role 50%
or more owned equity affiliates would play in driving the
success of the business, the NEOs should be incentivized to
increase Affiliate Earnings. The Compensation Committee set the
Companys combined target of both adjusted EBITDA and
Affiliate Earnings at $41 million (the Bonus
Target), which it projected would be achieved through an
adjusted EBITDA target for fiscal 2010 of $40 million and
an Affiliate Earnings target for fiscal 2010 of $1 million.
The Company was not restricted in how it achieved the Bonus
Target, meaning the Bonus Target would be achieved if the
Company had adjusted EBITDA of $41 million and Affiliate
Earnings of $0, or if the Company had adjusted EBITDA of
$35 million, and Affiliate Earnings of $6 million.
The annual incentive bonus awarded to NEOs may be increased or
decreased by the Compensation Committee as a result of the
individuals performance
and/or
contribution to Company achievement of financial objectives.
Each NEOs performance, including the CEO, is evaluated
against specific financial goals prior to payment of bonuses,
and the final bonus payment may be adjusted relative to the
achievement of those goals. The performance criteria in the
annual incentive bonus program may be adjusted by either the
Compensation Committee or the Board of Directors to account for
unusual events, such as extraordinary transactions, asset
dispositions and purchases, and merger and acquisitions if, and
to the extent, either the Compensation Committee or the Board of
Directors considers the effect of such events indicative of the
Companys performance. Additionally, the Compensation
Committee or the Board of Directors has the discretion to award
additional bonus compensation even if the executive officer
would not be entitled to any bonus based on the targets
previously determined. As mentioned above, the specific
financial goals for fiscal 2010 were based on adjusted EBITDA
and Affiliate Earnings.
Each NEOs annual incentive compensation for fiscal 2010
was based upon the Companys achievement of the Bonus
Target, and each NEOs target bonus upon the Companys
achievement of the Bonus Target was set at 50% of his annual
base salary, up to a maximum of 100% of his annual base salary.
Each NEOs bonus would be adjusted on a pro rata basis
upward or downward, such that an NEO would receive a bonus equal
to 100% of his base salary if the Company achieved 120% of its
Bonus Target, or a bonus equal to 12.5% of his base salary if
the Company achieved 90% of its Bonus Target. The NEO would not
be entitled to a bonus if the Company achieved less than 90% of
its Bonus Target. As a result of the Companys performance
during fiscal 2010, the Company achieved 135% of its Bonus
Target, and thus all NEOs were entitled to bonus compensation
equal to 100% of their base salary.
At its meeting in July 2010, the Compensation Committee approved
a revision to the annual incentive compensation for fiscal 2011,
so that the annual incentive compensation target includes only
adjusted EBITDA. As described above, in fiscal 2010, the
Compensation Committee used a combination of adjusted EBITDA and
Affiliate Earnings based on the Companys belief that due
to the shifting nature of the Companys business and the
increased role 50% or more owned equity affiliates would play in
driving the success of the business, the NEOs should be
incentivized to increase Affiliate Earnings. However, during
fiscal 2010, the Compensation Committee recognized that the
Companys business in Central America was not developing as
previously anticipated and, accordingly, that 50% or more equity
affiliates would not play the increased role in driving the
success of the business previously thought. As a result, the
Compensation Committee revised its view concerning the best
indicator of Company performance, and returned to the use of
adjusted EBITDA. In setting the adjusted EBITDA target for
fiscal 2011, the Compensation Committee considered the expected
performance of the Company. The Compensation Committee set the
Companys adjusted EBITDA target for fiscal 2011 at
$60 million, and set each NEOs target bonus at 50% of
his annual base salary. If the Company achieves its adjusted
EBITDA target, then the NEOs will be entitled to their target
bonus. Furthermore, each NEOs bonus will be adjusted on a
pro rata basis upward, such that a NEO will receive a bonus
equal to 100% of his base salary if the Company achieves 120% of
its targeted adjusted EBITDA, or downward, such that a NEO will
receive a bonus equal to 25% of his base salary if the Company
achieved 80% of its targeted adjusted EBITDA. The NEO will not
be entitled to a bonus if the Company achieves less than 80% of
its adjusted EBITDA target.
14
The Compensation Committee believes the cash portion of the
annual incentive bonus provides the necessary incentives to
retain, reward and motivate the NEOs for short-term strong
Company performance.
Long-Term
Incentive Compensation
Equity Incentives. The Compensation Committee
believes that stock-based performance compensation is essential
in aligning the interests of management and the Shareholders in
enhancing the long-term value of the Companys equity. The
2008 Unifi, Inc. Long-Term Incentive Plan (the 2008
Plan) provides for the issuance to the Companys
officers and employees of shares of incentive stock options,
non-qualified stock options, restricted stock awards and
performance-based awards for the Companys Common Stock.
These awards are granted to the Companys executive
officers and other employees both to build the value of the
Company, and to retain key individuals. Stock options provide
incentive for the creation of Shareholder value over the long
term since the full benefit of an executive officers
compensation package cannot be realized unless the Common Stock
appreciates in value during the term of the option. Restricted
stock is available to be granted from time to time to executive
officers, primarily for purposes of retention. Restricted stock
is subject to forfeiture and may not be disposed of by the
recipient until certain restrictions established by the
Compensation Committee have lapsed. Generally the Compensation
Committee believes that granting stock options and restricted
stock awards can be an effective tool for meeting the
Companys compensation goal of increasing long-term
Shareholder value by tying the value of the executives
performance compensation to the Companys Common Stock
performance. Employees are able to profit from stock options
only if the Companys stock price increases in value over
the stock options exercise price. Recipients of restricted
stock are not required to provide consideration other than the
rendering of their services.
In July 2006, the Compensation Committee established a policy
providing for the grant of an annual stock option to the NEOs.
The purpose of the annual grant of stock options to the NEOs is
to provide the NEOs with additional incentives to remain with
the Company. In accordance with this policy, at its July 2009
meeting, the Compensation Committee approved a grant of options
to the NEOs. The Compensation Committee based the number of
shares which were granted to each NEO, other than the CEO,
primarily upon the recommendation of the CEO.
Supplemental Key Employee Retirement Plan. In
July 2006, the Company established an unfunded supplemental
retirement plan known as the Unifi, Inc. Supplemental Key
Employee Retirement Plan (the Plan) for a select
group of management employees (including the CEO and the other
NEOs). Participants in the Plan are those employees of the
Company or its subsidiaries who are determined to be
participants in the Plan by the Compensation Committee in its
sole and exclusive discretion. The Company established the Plan
in order to provide certain management employees additional
compensation benefits in order to further incentivize them and
to provide better retention opportunities.
The Plan provides that as of the end of each calendar year, each
participants account shall be credited with an amount
equal to the product of such participants base salary for
such calendar year multiplied by the participants
applicable SERP Credit Percentage
(81/2%
of the annual base salary for executive officers of the Company
and
51/2%
of the annual base salary for participants who are not executive
officers of the Company). Each participants account will
be adjusted as if the balance in such account had been invested
in the stocks that make up the Standard & Poors
500 Index in the same proportion as their respective weighting
therein. Upon a participants termination of employment
with the Company, the participant shall be entitled to receive
the amount credited to such participants account in a
single lump sum payable six months after the participants
termination of employment with the Company, except in the event
that the participants termination is due to death or
disability, in which case the participant or the
participants designated beneficiary, as applicable, shall
immediately be entitled to such payout.
Perquisites
and Other Benefits
Automobile Allowance. The Company provided to
certain employees an automobile allowance during fiscal 2010.
During fiscal 2010, the Company paid its NEOs approximately
$6,000 in automobile allowance, in the form of a bi-weekly
stipend. In addition the Company reimbursed its NEOs for actual
automobile expenses during fiscal 2010. The Company provides
these benefits to the NEOs because the Compensation Committee
believes that these benefits are common among executive officers
at similarly situated companies, and thus are an essential
element in providing the NEOs with a competitive compensation
package.
Retirement Benefits. In order to provide
employees at all levels with greater incentive, the Company
makes available to all employees, including the NEOs, the
opportunity to make contributions to the Companys
Retirement
15
Savings Plan (401(k) Plan), under which employees
may elect to defer up to 75% of their total compensation, not to
exceed the amount allowed by applicable IRS regulations.
Pursuant to the 401(k) Plan, beginning in January 2010, the
Company reinstated its policy to match contributions equal to
100% of the employees first 3% of compensation contributed
to the 401(k) Plan and 50% of the next 2% of compensation
contributed to the 401(k) Plan.
Health Plan, Life Insurance and Other
Benefits. The Company makes available health and
insurance benefits to all employees, including the NEOs. The
cost of the health plans is covered partially through
employees payroll deductions, with the remainder covered
by the Company. Disability and life insurance benefits are paid
by the Company for all salaried employees, however the NEOs
receive additional life insurance coverage provided by the
Company. In fiscal 2010, the cost of certain golf and social
club memberships was covered for NEOs, provided that the club
membership provides for a business-use opportunity, such as use
of the facilities for functions and meetings, and client
networking and entertainment. On limited occasions, spousal
travel in connection with a business-related event is also a
covered expense. This is limited to events sponsored for the
purpose of building customer or employee relationships, where
the travel is for an extended period of time or extends into the
personal time of the executive, or it is expected or customary
for the executive to be accompanied by a spouse. Other
perquisites such as moving and relocation costs are provided
from time to time.
Change of Control Agreements. On
August 14, 2009, the Company entered into Change of Control
Agreements with each of the NEOs. The agreements provide that if
an NEOs employment is terminated involuntarily, other than
by death, disability or cause, or voluntarily, for good reason,
after a change of control of the Company, such NEO will receive
certain benefits. The present value of those benefits will be
2.99 times the average of such NEOs annual compensation
paid during the five (5) calendar years preceding the
change of control of the Company, subject to being reduced to
the largest amount which will result in no portion of the
payment being subject to excise taxes under the Internal Revenue
Code, all as determined by the Companys independent
certified public accountants, whose decision shall be binding
upon the Company and such NEO. These benefits will be paid to
such NEO in equal installments over a twenty-four
(24) month period. To be entitled to payments upon such a
change of control, (a) the NEOs employment must be
terminated other than by death, disability, retirement, or
cause, or (b) the NEO must terminate his employment for
good reason, in either case within two years following the
change of control. Pursuant to their terms, each of the Change
of Control Agreements with the NEOs will expire upon the earlier
of two (2) years from the date of a change of control, the
termination of the NEO prior to the change of control, or if no
change of control has occurred, December 31, 2011.
For purposes of the Change of Control Agreements, a change of
control is deemed to occur if, among other things,
(i) there is a consolidation or merger of the Company or
the sale of all or substantially all of the assets of the
Company, (ii) the Shareholders of the Company have approved
any plan or proposal for the liquidation or dissolution of the
Company, (iii) any person acquires twenty percent (20%) or
more of the outstanding voting stock of the Company, or
(iv) if there is a change in the majority of directors
under specified conditions within a two (2) year period.
The benefits under these Change of Control Agreements are
contingent and therefore not reported under the Summary
Compensation Table.
Tax
Impact on Compensation
The Compensation Committee has considered the impact of
Section 162(m) of the Internal Revenue Code on the
Companys 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 $1,000,000. Based on its review of the
likely impact of Section 162(m), the Compensation Committee
may in the future recommend changes to the Companys
benefit plans in order to qualify compensation paid to covered
employees for such exception.
16
EXECUTIVE
OFFICERS AND THEIR COMPENSATION
Summary
Compensation Table
The following table sets forth a summary of all compensation
awarded or paid to or earned by the Companys NEOs for
services rendered in all capacities to the Company (including
its subsidiaries) for each of the fiscal years indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name and Principal Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
William L. Jasper
|
|
|
2010
|
|
|
|
635,000
|
|
|
|
635,000
|
|
|
|
|
|
|
|
495,855
|
|
|
|
|
|
|
|
|
|
|
|
91,792
|
|
|
|
1,857,647
|
|
President and Chief
|
|
|
2009
|
|
|
|
635,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
69,438
|
|
|
|
704,438
|
|
Executive Officer
|
|
|
2008
|
|
|
|
392,118
|
|
|
|
225,000
|
|
|
|
|
|
|
|
716,000
|
|
|
|
|
|
|
|
|
|
|
|
50,743
|
|
|
|
1,383,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ronald L. Smith
|
|
|
2010
|
|
|
|
325,000
|
|
|
|
325,000
|
|
|
|
|
|
|
|
247,928
|
|
|
|
|
|
|
|
|
|
|
|
47,403
|
|
|
|
945,331
|
|
Vice President and Chief
|
|
|
2009
|
|
|
|
325,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,518
|
|
|
|
373,518
|
|
Financial Officer
|
|
|
2008
|
|
|
|
228,731
|
|
|
|
125,000
|
|
|
|
|
|
|
|
268,500
|
|
|
|
|
|
|
|
|
|
|
|
33,244
|
|
|
|
655,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Roger Berrier, Jr.
|
|
|
2010
|
|
|
|
360,000
|
|
|
|
360,000
|
|
|
|
|
|
|
|
396,684
|
|
|
|
|
|
|
|
|
|
|
|
55,628
|
|
|
|
1,172,312
|
|
Executive Vice President,
|
|
|
2009
|
|
|
|
360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,931
|
|
|
|
414,931
|
|
Sales, Marketing and
|
|
|
2008
|
|
|
|
291,347
|
|
|
|
162,500
|
|
|
|
|
|
|
|
537,000
|
|
|
|
|
|
|
|
|
|
|
|
43,382
|
|
|
|
1,034,229
|
|
Asian Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas H. Caudle, Jr.
|
|
|
2010
|
|
|
|
279,617
|
|
|
|
290,000
|
|
|
|
|
|
|
|
121,209
|
|
|
|
|
|
|
|
|
|
|
|
44,778
|
|
|
|
735,604
|
|
Vice President,
|
|
|
2009
|
|
|
|
260,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,537
|
|
|
|
301,541
|
|
Manufacturing
|
|
|
2008
|
|
|
|
260,004
|
|
|
|
130,002
|
|
|
|
|
|
|
|
89,500
|
|
|
|
|
|
|
|
|
|
|
|
47,944
|
|
|
|
527,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles F. McCoy
|
|
|
2010
|
|
|
|
278,077
|
|
|
|
295,000
|
|
|
|
|
|
|
|
121,209
|
|
|
|
|
|
|
|
|
|
|
|
41,653
|
|
|
|
735,939
|
|
Vice President, Secretary,
|
|
|
2009
|
|
|
|
275,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,542
|
|
|
|
316,542
|
|
General Counsel and
|
|
|
2008
|
|
|
|
243,269
|
|
|
|
125,000
|
|
|
|
|
|
|
|
89,500
|
|
|
|
|
|
|
|
|
|
|
|
40,115
|
|
|
|
497,884
|
|
Chief Risk Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts reflect the grant date fair value computed in accordance
with FASB ASC Topic 718, related to options granted in the
fiscal year noted. See Note 5 to the consolidated financial
statements included in the Companys 2010 Annual Report on
Form 10-K
for more information about the value of stock option awards. |
|
(2) |
|
All other compensation for each of the NEOs for fiscal 2010
consists of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William L.
|
|
Ronald L.
|
|
R. Roger
|
|
Thomas H.
|
|
Charles F.
|
|
|
Jasper
|
|
Smith
|
|
Berrier, Jr.
|
|
Caudle, Jr.
|
|
McCoy
|
|
Automobile Expense
|
|
$
|
6,000
|
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
6,000
|
|
|
|
6,000
|
|
Auto Expenses
|
|
|
3,912
|
|
|
|
2,516
|
|
|
|
8,974
|
|
|
|
5,896
|
|
|
|
3,675
|
|
Country Club Dues
|
|
|
|
|
|
|
3,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spousal Travel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life Insurance
|
|
|
16,399
|
|
|
|
1,890
|
|
|
|
2,100
|
|
|
|
4,887
|
|
|
|
2,393
|
|
Matching 401(k) Contribution
|
|
|
9,430
|
|
|
|
4,583
|
|
|
|
6,777
|
|
|
|
4,554
|
|
|
|
5,311
|
|
Contributions to Supplemental Key
Employee Retirement Plan
|
|
|
56,051
|
|
|
|
28,688
|
|
|
|
31,777
|
|
|
|
23,441
|
|
|
|
24,274
|
|
|
|
|
|
|
|
Total
|
|
|
91,792
|
|
|
|
47,403
|
|
|
|
55,628
|
|
|
|
44,778
|
|
|
|
41,653
|
|
17
Outstanding
Equity Awards
The following table provides information concerning the
unexercised stock options outstanding for each of the NEOs of
the Company as of the end of fiscal 2010.
OUTSTANDING
EQUITY AWARDS AT 2010 FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
|
William L. Jasper
|
|
|
100,000
|
|
|
|
0
|
|
|
|
3.40
|
|
|
|
4/19/2016
|
|
|
|
|
65,000
|
|
|
|
0
|
|
|
|
2.89
|
|
|
|
7/26/2016
|
|
|
|
|
0
|
|
|
|
400,000
|
|
|
|
2.72
|
|
|
|
10/24/2017
|
|
|
|
|
0
|
|
|
|
450,000
|
|
|
|
1.91
|
|
|
|
7/28/2019
|
|
|
Ronald L. Smith
|
|
|
10,000
|
|
|
|
0
|
|
|
|
7.48
|
|
|
|
10/2/2011
|
|
|
|
|
5,000
|
|
|
|
0
|
|
|
|
7.33
|
|
|
|
1/23/2012
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
2.76
|
|
|
|
7/1/2014
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
2.89
|
|
|
|
7/26/2016
|
|
|
|
|
0
|
|
|
|
150,000
|
|
|
|
2.72
|
|
|
|
10/24/2017
|
|
|
|
|
0
|
|
|
|
225,000
|
|
|
|
1.91
|
|
|
|
7/28/2019
|
|
|
Thomas H. Caudle, Jr.
|
|
|
15,000
|
|
|
|
0
|
|
|
|
7.48
|
|
|
|
10/2/2011
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
7.33
|
|
|
|
1/23/2012
|
|
|
|
|
120,000
|
|
|
|
0
|
|
|
|
2.76
|
|
|
|
7/1/2014
|
|
|
|
|
65,000
|
|
|
|
0
|
|
|
|
2.89
|
|
|
|
7/26/2016
|
|
|
|
|
0
|
|
|
|
50,000
|
|
|
|
2.72
|
|
|
|
10/24/2017
|
|
|
|
|
0
|
|
|
|
110,000
|
|
|
|
1.91
|
|
|
|
7/28/2019
|
|
|
Charles F. McCoy
|
|
|
15,000
|
|
|
|
0
|
|
|
|
7.48
|
|
|
|
10/2/2011
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
7.33
|
|
|
|
1/23/2012
|
|
|
|
|
100,000
|
|
|
|
0
|
|
|
|
2.76
|
|
|
|
7/1/2014
|
|
|
|
|
65,000
|
|
|
|
0
|
|
|
|
2.89
|
|
|
|
7/26/2016
|
|
|
|
|
0
|
|
|
|
50,000
|
|
|
|
2.72
|
|
|
|
10/24/2017
|
|
|
|
|
0
|
|
|
|
110,000
|
|
|
|
1.91
|
|
|
|
7/28/2019
|
|
|
R. Roger Berrier, Jr.
|
|
|
10,000
|
|
|
|
0
|
|
|
|
7.48
|
|
|
|
10/2/2011
|
|
|
|
|
5,000
|
|
|
|
0
|
|
|
|
7.33
|
|
|
|
1/23/2012
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
2.76
|
|
|
|
7/1/2014
|
|
|
|
|
50,000
|
|
|
|
0
|
|
|
|
3.40
|
|
|
|
4/19/2016
|
|
|
|
|
65,000
|
|
|
|
0
|
|
|
|
2.89
|
|
|
|
7/26/2016
|
|
|
|
|
0
|
|
|
|
300,000
|
|
|
|
2.72
|
|
|
|
10/24/2017
|
|
|
|
|
0
|
|
|
|
360,000
|
|
|
|
1.91
|
|
|
|
7/28/2019
|
|
18
Grants
of Plan Based Awards
The following table provides information concerning the annual
performance bonus and long-term incentive awards made to each of
the NEOs in fiscal 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stock
|
|
|
|
|
|
|
|
|
Awards: Number of
|
|
Exercise or Base
|
|
Grant Date Fair
|
|
|
|
|
Securities
|
|
Price of Option
|
|
Value of Stock and
|
|
|
Grant
|
|
Underlying Options
|
|
Awards
|
|
Option Awards
|
Name
|
|
Date
|
|
(#)
|
|
($)/Sh
|
|
($)
|
(a)
|
|
(b)
|
|
(j)
|
|
(k)
|
|
(l)
|
|
William L. Jasper(1)
|
|
|
July 28, 2009
|
|
|
|
450,000
|
|
|
|
1.91
|
|
|
|
859,500
|
|
Ronald L. Smith(1)
|
|
|
July 28, 2009
|
|
|
|
225,000
|
|
|
|
1.91
|
|
|
|
429,750
|
|
R. Roger Berrier(1)
|
|
|
July 28, 2009
|
|
|
|
360,000
|
|
|
|
1.91
|
|
|
|
687,600
|
|
Thomas H. Caudle, Jr.(1)
|
|
|
July 28, 2009
|
|
|
|
110,000
|
|
|
|
1.91
|
|
|
|
210,100
|
|
Charles F. McCoy(1)
|
|
|
July 28, 2009
|
|
|
|
110,000
|
|
|
|
1.91
|
|
|
|
210,100
|
|
|
|
|
(1) |
|
The options granted had a vesting schedule such that 1/3 of the
options will vest on July 28, 2010, 1/3 vest on
July 28, 2011, and the remaining 1/3 vest on July 28,
2012. |
Options
Exercised and Stock Vested
During fiscal 2010 there were no exercises of stock options or
vesting of stock awards issued to the NEOs of the Company.
Non-Qualified
Deferred Compensation
The following table provides information with respect to the
Companys non-tax qualified compensation deferral plans for
each of the Companys NEOs. For a description of the
material terms of the Companys Supplemental Key Employee
Retirement Plan, see Compensation Discussion &
Analysis Elements of Compensation Long
Term Incentive Compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Deferred Compensation for Fiscal Year 2010
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
Contributions
|
|
Contributions
|
|
Earnings (Loss)
|
|
Withdrawals
|
|
Balance at
|
|
|
in Last
|
|
in Last
|
|
in Last
|
|
and/or
|
|
Last Fiscal
|
|
|
Fiscal Year
|
|
Fiscal Year
|
|
Fiscal Year
|
|
Distributions
|
|
Year End
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
William L. Jasper
|
|
|
|
|
|
|
56,051
|
|
|
|
20,997
|
|
|
|
|
|
|
|
192,411
|
|
Ronald L. Smith
|
|
|
|
|
|
|
28,688
|
|
|
|
11,433
|
|
|
|
|
|
|
|
102,692
|
|
Thomas H. Caudle, Jr.
|
|
|
|
|
|
|
23,441
|
|
|
|
18,698
|
|
|
|
|
|
|
|
141,365
|
|
Charles F. McCoy
|
|
|
|
|
|
|
24,274
|
|
|
|
16,734
|
|
|
|
|
|
|
|
130,246
|
|
R. Roger Berrier, Jr.
|
|
|
|
|
|
|
31,777
|
|
|
|
15,408
|
|
|
|
|
|
|
|
130,605
|
|
Compensation
Policies and Practices as They Relate to Risk
Management
As previously discussed, the Companys compensation
policies and practices for its employees are designed to attract
and retain highly qualified and engaged employees, and to
minimize risks that would have a material adverse effect on the
Company. In addition the Companys compensation policies
and practices seek to align the interests of management with
those of the Companys Shareholders. The Company believes
its incentive compensation programs are appropriately balanced
between value created indirectly by the performance of the
Companys stock and payments resulting from the achievement
of specific financial performance objectives. The Compensation
Committee considers risks arising from the Companys
employee compensation policies and practices and has concluded
that any risks from such policies and practices are not
reasonably likely to have a material adverse effect on the
Company. Overall, the Compensation Committee reached this
conclusion after considering a number of features of the
Companys compensation structure that are designed to
mitigate risk, such as:
|
|
|
|
|
The Company uses a balance of fixed and variable compensation in
the form of cash and equity, which is designed to provide both
short and long-term focus.
|
19
|
|
|
|
|
The overall compensation of our NEOs is not overly-weighted
towards the achievement of performance criteria in a particular
fiscal year and an appropriate portion of compensation is
awarded in the form of equity awards that vest over a multi-year
period, subject to continued service by the recipient. This
further aligns the interests of the NEOs to long-term
shareholder value and helps retain management.
|
|
|
|
Payouts under the Companys annual incentive compensation
and other long-term incentive programs are based on performance
criteria that the Compensation Committee believes to be
challenging yet reasonable and attainable without excessive
risk-taking.
|
Potential
Payments Upon Termination or Change in Control
Accrued and Vested Benefits. Each of the NEOs
has accrued various benefits under the Companys
compensation programs and retirement and other broad-based
employee benefit plans. Many of these benefits and awards are
fully vested and each of the NEOs would receive all of his
vested benefits and awards in the event that his employment with
the Company ends for any reason. On August 14, 2009, the
Company entered into Change of Control Agreements with each of
the NEOs. Under these Agreements, the NEOs will receive
additional benefits as described below in the event of
termination of employment without cause or resignation for good
reason following a change of control. Additionally, under the
Unifi, Inc. 1999 Long-Term Incentive Plan and 2008 Plan, upon a
change of control all options and stock awards will become fully
exercisable.
The table below summarizes the accrued and vested benefits that
each of the NEOs would be entitled to, assuming he left the
Company on June 27, 2010, including pursuant to death,
disability, retirement or termination.
Accrued
and Vested Benefits(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William L.
|
|
|
Ronald L.
|
|
|
Thomas H.
|
|
|
Charles F.
|
|
|
R. Roger.
|
|
|
|
Jasper
|
|
|
Smith
|
|
|
Caudle, Jr.
|
|
|
McCoy
|
|
|
Berrier, Jr.
|
|
|
Vested Deferred Compensation Balance
|
|
$
|
192,411
|
|
|
$
|
102,692
|
|
|
$
|
141,365
|
|
|
$
|
130,246
|
|
|
$
|
130,605
|
|
Vested Stock Options(1)
|
|
|
135,450
|
|
|
|
119,500
|
|
|
|
224,650
|
|
|
|
199,450
|
|
|
|
167,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
327,861
|
|
|
$
|
222,192
|
|
|
$
|
366,015
|
|
|
$
|
329,696
|
|
|
$
|
298,055
|
|
|
|
|
(1) |
|
Stock options are exercisable for three (3) months after
termination other than for cause and are exercisable for one
(1) year in the event of retirement, death or disability.
For purposes of this table, it is assumed that all vested stock
options are exercised on the last business day before
June 27, 2010, and the value of such vested stock options
is calculated by multiplying the number of options by the
difference between the exercise price and the closing market
price. |
Termination Following a Change in Control. The
table below summarizes the incremental benefits (beyond the
accrued and vested benefits) that each of the NEOs would be
entitled to, assuming their termination without cause or
resignation for good reason occurred on June 27, 2010
following a change in control.
Termination
Without Cause or Resignation For Good Reason Following a Change
in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William L.
|
|
|
Ronald L.
|
|
|
Thomas H.
|
|
|
Charles F.
|
|
|
R. Roger.
|
|
|
|
Jasper
|
|
|
Smith
|
|
|
Caudle, Jr.
|
|
|
McCoy
|
|
|
Berrier, Jr.
|
|
|
Severance Benefit
|
|
$
|
1,682,788
|
|
|
$
|
989,140
|
|
|
$
|
1,170,920
|
|
|
$
|
1,058,540
|
|
|
$
|
1,127,474
|
|
Health and Welfare Benefits(1)
|
|
|
52,695
|
|
|
|
34,655
|
|
|
|
43,303
|
|
|
|
23,439
|
|
|
|
30,941
|
|
Accelerated Stock Options(2)
|
|
|
1,604,950
|
|
|
|
789,250
|
|
|
|
521,750
|
|
|
|
496,550
|
|
|
|
1,317,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,340,433
|
|
|
$
|
1,813,045
|
|
|
$
|
1,735,973
|
|
|
$
|
1,578,529
|
|
|
$
|
2,475,465
|
|
|
|
|
(1) |
|
This represents the aggregate estimated net cost to the Company
of health and welfare benefits provided to each NEO under the
terms of the Change in Control Agreements. |
|
(2) |
|
Upon a Change in Control all previously unvested stock options
will become vested. For purposes of this table, it is assumed
that all such options are exercised on the last business day
before June 27, 2010, and the value of such options is
calculated by multiplying the number of options by the
difference between the exercise price and the closing market
price. |
20
BENEFICIAL
OWNERSHIP OF COMMON STOCK
BY DIRECTORS AND EXECUTIVE OFFICERS
The following table presents information regarding the
beneficial ownership of the Common Stock, within the meaning of
applicable securities regulations, of all current directors of
the Company and each of the NEOs in the Summary Compensation
Table included herein, and of all current directors and
executive officers of the Company as a group, as of
September 1, 2010.
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
and Nature of
|
|
Percentage
|
Name
|
|
Beneficial Ownership(1)
|
|
of Class
|
|
William J. Armfield, IV(2)
|
|
|
937,515
|
|
|
|
1.56
|
%
|
R. Roger Berrier, Jr.(3)
|
|
|
623,994
|
|
|
|
1.03
|
%
|
Thomas H. Caudle, Jr.(4)
|
|
|
341,587
|
|
|
|
|
*
|
Archibald Cox, Jr.(5)
|
|
|
431,667
|
|
|
|
|
*
|
William L. Jasper(6)
|
|
|
730,000
|
|
|
|
1.20
|
%
|
Kenneth G. Langone(7)
|
|
|
2,290,000
|
|
|
|
3.80
|
%
|
Chiu Cheng Anthony Loo
|
|
|
|
|
|
|
|
*
|
Charles F. McCoy(8)
|
|
|
324,671
|
|
|
|
|
*
|
George R. Perkins, Jr.(9)
|
|
|
1,018,644
|
|
|
|
1.69
|
%
|
William M. Sams(10)
|
|
|
5,701,000
|
|
|
|
9.47
|
%
|
Michael Sileck(11)
|
|
|
51,667
|
|
|
|
|
*
|
Ronald L. Smith(12)
|
|
|
340,000
|
|
|
|
|
*
|
G. Alfred Webster(13)
|
|
|
120,000
|
|
|
|
|
*
|
Stephen Wener(14)
|
|
|
5,473,948
|
|
|
|
9.10
|
%
|
All directors and executive officers as a group (14 persons)
|
|
|
18,384,693
|
|
|
|
30.55
|
%
|
|
|
|
* |
|
Represents less than one percent (1%) of the Common Stock. |
|
|
|
(1) |
|
All shares are owned directly and with sole voting and
investment power, except as otherwise noted. The information
presented in this table was based upon Company information,
information furnished to the Company by the named persons and
information contained in filings with the SEC. |
|
(2) |
|
Includes 10,000 shares that Mr. Armfield would have
the right to purchase pursuant to stock options that could
become exercisable within 60 days of September 1,
2010, provided that the closing price of the Companys
Common Stock as listed on the NYSE shall be at least $8.00 per
share for 30 consecutive days, and 10,000 shares that
Mr. Armfield would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $10.00 per share for 30 consecutive days, as to which
he would have sole voting and investment power upon acquisition. |
|
(3) |
|
Includes 300,000 shares that Mr. Berrier has the right
to purchase pursuant to stock options that are currently
exercisable or become exercisable within 60 days of
September 1, 2010, and 300,000 shares that
Mr. Berrier would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $6.00 per share for 30 consecutive days, as to which he
would have sole voting and investment power upon acquisition,
and 23,994 shares that Mr. Berrier owns jointly with
his wife, and together they share voting and investment power. |
|
(4) |
|
Includes 286,667 shares that Mr. Caudle has the right
to purchase pursuant to stock options that are currently
exercisable or become exercisable within 60 days of
September 1, 2010, and 50,000 shares that
Mr. Caudle would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $6.00 per share for 30 consecutive days, as to which he
would have sole voting and investment power upon acquisition. |
|
(5) |
|
Includes 6,667 shares that Mr. Cox has the right to
purchase under currently exercisable stock options, as to which
he would have sole voting and investment power upon acquisition. |
|
(6) |
|
Includes 315,000 shares that Mr. Jasper has the right
to purchase pursuant to stock options that are currently
exercisable or become exercisable within 60 days of
September 1, 2010, and 400,000 shares that
Mr. Jasper would |
21
|
|
|
|
|
have the right to purchase pursuant to stock options that could
become exercisable within 60 days of September 1,
2010, provided that the closing price of the Companys
Common Stock as listed on the NYSE shall be at least $6.00 per
share for 30 consecutive days, as to which he would have sole
voting and investment power upon acquisition. |
|
(7) |
|
Includes 270,000 shares owned by Invemed Associates, LLC,
in which Mr. Langone owns an 81% interest, and of which
Mr. Langone has shared voting and investment power, and
10,000 shares that Mr. Langone would have the right to
purchase pursuant to stock options that could become exercisable
within 60 days of September 1, 2010, provided that the
closing price of the Companys Common Stock as listed on
the NYSE shall be at least $8.00 per share for 30 consecutive
days, and 10,000 shares that Mr. Langone would have
the right to purchase pursuant to stock options that could
become exercisable within 60 days of September 1,
2010, provided that the closing price of the Companys
Common Stock as listed on the NYSE shall be at least $10.00 per
share for 30 consecutive days, as to which he would have sole
voting and investment power upon acquisition. |
|
(8) |
|
Includes 266,667 shares that Mr. McCoy has the right
to purchase pursuant to stock options that are currently
exercisable or become exercisable within 60 days of
September 1, 2010, and 50,000 shares that
Mr. McCoy would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $6.00 per share for 30 consecutive days, as to which he
would have sole voting and investment power upon acquisition,
and 1,100 shares jointly owned with his wife as to which he
has shared voting and investment power. |
|
(9) |
|
Includes 10,000 shares that Mr. Perkins would have the
right to purchase pursuant to stock options that could become
exercisable within 60 days of September 1, 2010,
provided that the closing price of the Companys Common
Stock as listed on the NYSE shall be at least $8.00 per share
for 30 consecutive days, and 10,000 shares that
Mr. Perkins would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $10.00 per share for 30 consecutive days, as to which
he would have sole voting and investment power upon acquisition. |
|
(10) |
|
Includes 1,181,000 shares owned by Marlin Sams Fund L.P.,
of which Mr. Sams is deemed to be the beneficial owner, but
as to which he specifically disclaims ownership, and
10,000 shares that Mr. Sams would have the right to
purchase pursuant to stock options that could become exercisable
within 60 days of September 1, 2010, provided that the
closing price of the Companys Common Stock as listed on
the NYSE shall be at least $8.00 per share for 30 consecutive
days, and 10,000 shares that Mr. Sams would have the
right to purchase pursuant to stock options that could become
exercisable within 60 days of September 1, 2010,
provided that the closing price of the Companys Common
Stock as listed on the NYSE shall be at least $10.00 per share
for 30 consecutive days, as to which he would have sole voting
and investment power upon acquisition. |
|
(11) |
|
Includes 6,667 shares that Mr. Sileck has the right to
purchase under currently exercisable stock options, as to which
he would have sole voting and investment power upon acquisition. |
|
(12) |
|
Includes 190,000 shares that Mr. Smith has the right
to purchase pursuant to stock options that are currently
exercisable or become exercisable within 60 days of
September 1, 2010, and 150,000 shares that
Mr. Smith would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $6.00 per share for 30 consecutive days, as to which he
would have sole voting and investment power upon acquisition. |
|
(13) |
|
Includes 10,000 shares that Mr. Webster would have the
right to purchase pursuant to stock options that could become
exercisable within 60 days of September 1, 2010,
provided that the closing price of the Companys Common
Stock as listed on the NYSE shall be at least $8.00 per share
for 30 consecutive days, 10,000 shares that
Mr. Webster would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $10.00 per share for 30 consecutive days, as to which
he would have sole voting and investment power upon acquisition
and 100,000 shares which Mr. Webster owns jointly with
his wife, and together they share voting and investment power. |
|
(14) |
|
Includes 5,191,298 shares owned by Dillon, in which
Mr. Wener owns
151/2%
and his wife owns 2%, as to which Mr. Wener has shared
voting and investment power, and 10,000 shares that
Mr. Wener would have the right to purchase pursuant to
stock options that could become exercisable within 60 days
of September 1, 2010, provided that the closing price of
the Companys Common Stock as listed on the NYSE shall be
at least $8.00 per share for 30 consecutive days, and
10,000 shares that Mr. Wener would have the right to
purchase pursuant to stock options that could become exercisable
within 60 days of September 1, 2010, provided that the
closing price of the Companys Common Stock as listed on
the NYSE shall be at least $10.00 per share for 30 consecutive
days, as to which he would have sole voting and investment power
upon acquisition. |
22
DIRECTORS
COMPENSATION
The following table shows compensation information for the
Companys directors for fiscal 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified
|
|
|
|
|
|
|
|
|
|
Fees
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
All
|
|
|
|
|
|
|
Earned or
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
Other
|
|
|
|
|
|
|
Paid in Cash
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
William J. Armfield, IV
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. Roger Berrier, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Archibald Cox, Jr.
|
|
|
|
|
|
|
|
|
|
|
22,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,038
|
|
William L. Jasper
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth G. Langone
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chiu Cheng Anthony Loo
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
George R. Perkins, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William M. Sams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Sileck
|
|
|
|
|
|
|
|
|
|
|
22,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,038
|
|
G. Alfred Webster
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
Stephen Wener
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts reflect the aggregate grant date fair value, computed in
accordance with FASB ASC Topic 718, related to options granted
in fiscal 2010. See Note 5 to the consolidated financial
statements included in the Companys 2010 Annual Report on
Form 10-K
for more information about the value of stock option awards.
With respect to Mr. Berrier and Mr. Jasper please see
Outstanding Equity Awards for a list of equity
awards outstanding at June 27, 2010. Messrs. Armfield,
Cox, Langone, Perkins, Sams, Sileck, Webster and Wener each had
options to purchase 20,000 shares of common stock at
June 27, 2010 and Mr. Loo did not have any options at
such date. |
Previously, the Board approved the suspension of director
retainer and meeting fees for all directors, other than
Mr. Loo for fiscal 2008, and this suspension remained in
effect for fiscal 2010. During fiscal 2008, the Board also
approved an annual directors fee of $100,000 for
Mr. Webster for his service as Chairman of the Executive
Committee. During fiscal 2010, only Mr. Loo and
Mr. Webster received compensation pursuant to their service
on the Board. The suspension of the director retainer and
meeting fees shall be effective until such time as the Board
determines to reinstate such fees.
In prior fiscal years, each director, who was not an employee of
the Company, was paid an annual retainer of $24,000 and an
additional $1,000 for each Board meeting attended and for each
meeting of Board committees on which they serve when such
meeting was held on a day other than a day scheduled for a
regular Board meeting. Each such director was also reimbursed
for reasonable expenses incurred in attending those meetings.
The Chairman of each of the Companys Audit Committee,
Compensation Committee and Corporate Governance and Nominating
Committee was also paid $15,000, in addition to their regular
directors fees, for serving in that capacity on those
committees. Directors who are employees of the Company were paid
an attendance fee of $1,000 for each Board meeting attended.
Directors who attended Board or committee meetings via telephone
conferencing received attendance fees as if they were physically
present at such Board or committee meetings.
The compensation for outside directors is periodically reviewed
for adjustment by the Compensation Committee.
23
COMMITTEES
OF THE BOARD OF DIRECTORS
The Board has four standing committees: the Compensation
Committee, the Audit Committee, the
Corporate Governance and Nominating Committee (the
Governance Committee) and the
Executive Committee. The Compensation
Committee met two (2) times during the last fiscal
year. The Audit Committee met seven (7) times
during the last fiscal year. The Governance Committee
met one (1) time during the last fiscal year. The
Executive Committee met nine (9) times during
the last fiscal year.
The Compensation Committee operates under a
written charter, adopted in April 2003 and amended in
July 2004. The Compensation Committee discharges the
Boards responsibilities relating to compensation of the
Companys executive officers. At least annually, the
Compensation Committee reviews and approves corporate goals and
objectives relevant to the compensation of each executive
officer of the Company (including the CEO), evaluates each
executive officers performance in light of these goals and
objectives, and sets each executive officers compensation
level based on this evaluation. The Compensation Committee
annually determines whether the CEO and other executive officers
will participate in any annual or long-term incentive plans
established for the Companys executive officers or
employees. The Compensation Committee also advises senior
management with respect to the range of compensation to be paid
to other employees of the Company and administers and grants
stock options to the Companys officers, employees and
consultants pursuant to the Companys equity-based plans,
including the 2008 Plan. Each member of the Compensation
Committee is an independent director, in accordance with the
independence requirements of the NYSE Corporate Governance
Standards. The current members of the Compensation Committee are
Messrs. Sams (Chair), Armfield, Loo and Perkins.
The Audit Committee operates under a written
charter, adopted in April 2000 and most recently amended in July
2004. The Audit Committee was established in accordance with
Section 3(a)(58)(A) of the Exchange Act. The Audit
Committee discharges the Boards responsibility relating to
the oversight of: (i) the integrity of the financial
statements of the Company, (ii) the compliance by the
Company with legal and regulatory requirements, (iii) the
independent auditors independence and qualifications, and
(iv) the performance of the Companys internal audit
function and independent auditors. The Audit Committee, among
other things, is responsible for the appointment, compensation,
retention, and oversight of the Companys independent
auditors and reviews the financial statements, audit reports,
internal controls and internal audit procedures. Each member of
the Audit Committee is an independent director, in accordance
with the independence requirements of the Exchange Act and the
NYSE Corporate Governance Standards. The current members of the
Audit Committee are Messrs. Armfield (Chair), Sams, Sileck
and Webster.
The Governance Committee operates under a written
charter, adopted in April 2003 and most recently amended in
August 2007. The Governance Committee is responsible for, among
other things, identifying candidates to serve as directors of
the Company consistent with criteria approved by the Board, and
for making recommendations to the Board of qualified nominees
for election or re-election as directors of the Company. It is
also responsible for recommending to the Board, for the
Boards approval, all committee members and chairpersons.
The Governance Committee is responsible for establishing a
system for, and monitoring the process of, performance reviews
of the Board, its committees and key management personnel. The
Governance Committee reviews the Corporate Governance Issues and
Policies Guidelines (the Corporate Governance
Guidelines) from time to time and recommends to the Board
any changes to the Corporate Governance Guidelines. The
Governance Committee also monitors compliance with the
Companys Ethical Business Conduct Policy Statement (the
Policy Statement), reviews the Policy Statement from
time to time and provides recommendations to the Board for any
changes to the Policy Statement. The Governance Committee also
administers the Companys Related Person Transactions
Approval Policy (the Related Person Transactions
Policy) and may from time to time recommend to the Board
any changes to the Related Person Transactions Policy. Each
member of the Governance Committee is an independent director,
in accordance with the independence requirements of the NYSE
Corporate Governance Standards. The current members of the
Governance Committee are Messrs. Langone (Chair), Armfield,
Loo, Sams and Webster.
The Executive Committee operates under a written
charter adopted in September 2007. The Executive Committee may
exercise all of the authority of the Board of Directors in the
management of the Company, subject to limitations under New York
law. The current members of the Executive Committee are
Messrs. Webster (Chair), Berrier, Jasper and Wener.
24
SHAREHOLDER
RECOMMENDATIONS FOR DIRECTOR NOMINEES
The Governance Committee will consider those recommendations by
Shareholders of director nominees which are submitted in writing
with biographical and business experience information to the
Secretary of the Company, in the manner described in the section
entitled Shareholder Proposals contained in this
Proxy Statement. All nominees for director must demonstrate
integrity, accountability, informed judgment, financial
literacy, passion, creativity and vision. In addition, the Board
is comprised of directors from various backgrounds and
professions in order to maximize perspective and ensure a wealth
of experiences to inform its decisions. The objective of the
Governance Committee is to structure a Board that brings to the
Company a variety of skills and perspectives developed through
high-quality business and professional experience. The
Governance Committee believes that men and women of different
ages, races and ethnic backgrounds can contribute different,
useful perspectives, and can work effectively together to
further the Companys mission.
The Governance Committee reviews the background and
qualifications of each nominee to determine his or her
experience, competence and character, and assesses such
nominees potential contribution to the Board. Other than
the foregoing, there are no stated minimum criteria for director
nominees. The Governance Committee may, however, consider such
other factors as it deems are in the best interests of the
Company and the Shareholders. Shareholder nominees will be
analyzed by the Governance Committee in the same manner as
nominees that are otherwise considered by the Governance
Committee.
The Governance Committee identifies nominees by first evaluating
the current members of the Board willing to continue to serve.
Current members of the Board with skills and experience that are
relevant to the Companys business and who are willing to
continue in service are considered for re-nomination, balancing
the value of continuity of service by existing members of the
Board with that of obtaining new perspectives. If any member of
the Board does not wish to continue in service, or if the
Governance Committee decides not to nominate a member for
re-election, unless the Board determines not to fill a vacancy,
the Governance Committee will identify a new nominee with the
desired skills and experience as outlined above. To date, the
Governance Committee has not engaged a third party to identify
or evaluate or assist in identifying potential nominees,
although it reserves the right to do so in the future if
necessary.
Pursuant to the Corporate Governance and Nominating Committee
Charter, the Governance Committee periodically reviews the
criteria for the selection of Board members to insure that the
criteria, including diversity, are being addressed
appropriately. The Governance Committee conducts an annual
assessment of its performance and of the Charter in general in
accordance with the Corporate Governance and Nominating
Committee Charter and recommends changes to the Board when
necessary.
All nominees for election to the Board have been recommended by
the Governance Committee. All such nominees are current
directors standing for re-election.
ATTENDANCE
OF DIRECTORS
The Board met four (4) times during fiscal 2010. All
directors attended at least seventy-five percent (75%) of the
aggregate number of meetings of the Board and meetings held by
all committees of the Board on which they serve during the
period in which they served as a director or a committee member.
CORPORATE
GOVERNANCE MATTERS
Director
Independence
For a director to be considered independent under the NYSE
Corporate Governance Standards, the Board must affirmatively
determine that the director has no direct or indirect
material relationship with the Company, other than
as a director. As permitted by the NYSE Corporate Governance
Standards, the Board has adopted its Director Independence
Standards to assist it in making its independence
determinations. These standards are attached to this Proxy
Statement as Appendix B and are also available on the
Companys web site referenced below as Exhibit A to
the Corporate Governance Guidelines.
After considering the Director Independence Standards, the NYSE
Corporate Governance Standards, and all other relevant facts and
circumstances, including the existence of any commercial or
charitable relationships between
25
the directors and the Company and the transactions described in
the section entitled Transactions with Related Persons,
Promoters and Certain Control Persons below, the Board has
determined that all of its current members, other than
Messrs. Wener, Berrier and Jasper, meet the Companys
categorical standards, meet the independence requirements of the
NYSE and are independent.
Corporate
Governance Guidelines and Committee Charters
In furtherance of its longstanding goal of providing effective
governance of the Companys business for the benefit of
Shareholders, the Board has adopted the Corporate Governance
Guidelines. Each of the Audit Committee, the Compensation
Committee and the Governance Committee operate under written
charters that have been adopted by the Board. The Corporate
Governance Guidelines and the committee charters are available
on the Companys web site at www.unifi.com under the
Investor Relations section. In addition, print
copies of the Corporate Governance Guidelines and the committee
charters are available to any Shareholder that requests a copy.
Audit
Committee Financial Expert
The Board has determined that at least one member of the Audit
Committee, William J. Armfield, IV, is an audit committee
financial expert. Mr. Armfield is independent
as that term is defined in the NYSE Corporate Governance
Standards.
Executive
Sessions of Non-Management Directors
Non-management Board members meet without management present at
regularly scheduled executive sessions. The group of
non-management directors currently includes directors that are
not independent. To the extent, however, that there are
non-management directors who are not independent, then at least
once a year there will be scheduled an executive session
including only independent directors. During fiscal 2010,
Mr. Sams, as the Companys independent Lead Director,
presided over meetings of the independent and non-management
directors.
Code of
Business Conduct and Ethics; Ethical Business Conduct Policy
Statement
The Company has adopted a written Code of Business Conduct and
Ethics applicable to members of the Board and executive
officers, including the CEO and CFO (the Code of Business
Conduct and Ethics). The Company has also adopted the
Policy Statement that applies to all employees. The Code of
Business Conduct and Ethics and the Policy Statement are
available on the Companys web site referenced above, under
the Investor Relations section and printed copies of
each are available to any Shareholder that requests a copy. Any
amendments to or waiver of the Code of Business Conduct and
Ethics will be disclosed on the Companys web site promptly
following the date of such amendment or waiver.
Shareholder
and Interested Party Communications
Shareholders and other interested parties may communicate
directly with the entire Board, any committee of the Board, the
Chair of any Board committee, any individual director, the
independent Lead Director, the independent or non-management
directors, as a group, or any other group of directors by
writing to: Unifi, Inc. Board of Directors,
c/o Corporate
Compliance Officer, 7201 West Friendly Avenue, Greensboro,
North Carolina 27410. Any correspondence sent in this manner and
directed to the Lead Director, any particular director, or any
particular committee or group will be forwarded accordingly. If
no specific addressee is provided, the communication will be
forwarded to the Chairman of the Board. Reference is also made
to Article IX of the Corporate Governance Guidelines.
Director
Attendance at Annual Meetings
At the 2009 Annual Meeting of Shareholders, all eleven members
of our Board at that time were in attendance. The Company
believes that the Annual Meeting is an opportunity for
Shareholders to communicate directly with our directors.
Directors are encouraged to attend the Annual Meeting of
Shareholders.
Board
Leadership Structure
Currently, the positions of Chairman of the Board and Chief
Executive Officer of the Company are held by separate
individuals, with Mr. Jasper serving as CEO and
Mr. Wener serving as Chairman of the Board. The Board
26
believes that at the current time this structure is best for the
Company, as it allows Mr. Jasper to focus on the
Companys strategy, business and operations, while enabling
Mr. Wener to assist with Board matters and serve as a
liaison between the Board and the Companys management.
Role in
Risk Oversight
As the Companys principal governing body, the Board has
the ultimate responsibility for overseeing the Companys
risk management practices. Certain risk management functions
have been delegated to committees of the Board of Directors.
Pursuant to the Audit Committee Charter, one of the primary
roles and responsibilities of the Audit Committee is the
supervision of the integrity of the financial statements of the
Company, the compliance by the Company with legal and regulatory
requirements, and the oversight of the performance of the
Companys internal audit function and outside auditors.
Under the Audit Committee Charter, the Audit Committee will,
among other responsibilities and duties:
|
|
|
|
|
Review with the outside auditor and management, as appropriate,
significant financial reporting issues and judgments identified
by management or the outside auditor and made in connection with
the preparation of the Companys financial statements;
|
|
|
|
Review with the outside auditor and management, major issues
identified by management or the outside auditor regarding the
Companys accounting and auditing principles and practices,
including critical accounting policies, and major changes in
auditing and accounting principles and practices suggested by
the outside auditor, internal auditor or management; and
|
|
|
|
In consultation with the management and the outside auditors,
consider the integrity of the Companys financial reporting
processes and controls and consult concerning the Companys
internal controls, including any significant deficiencies and
significant changes in internal controls.
|
In addition, the Company performs an Enterprise Risk Management
(ERM) risk assessment that is presented to and
approved by the Audit Committee. On a quarterly basis, the ERM
Steering Committee meets to review the Companys
Critical Risks to make sure there have been no
changes in any Critical Risk that would require immediate action
by the Company. The ERM Steering Committee also reviews
Emerging Risks to determine if there are any such
risks that could affect the Company and take appropriate actions
should an Emerging Risk be identified. The Companys Chief
Risk Officer prepares quarterly reports to the Executive
Committee, which is the Board Committee with primary oversight
responsibility for the Companys ERM system, and gives the
Executive Committee a quarterly update on the Companys ERM
actions. The Executive Committee then updates the Board.
COMPENSATION
COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
None of the individuals that served as a member of the
Compensation Committee during fiscal 2010 were at any time
officers or employees of the Company or any of its subsidiaries
or had any relationship with the Company requiring disclosure
under SEC regulations.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND
CERTAIN CONTROL PERSONS
Policies
and Procedures with Respect to Related Party
Transactions
The Board is committed to upholding the highest legal and
ethical conduct in fulfilling its responsibilities and
recognizes that related party transactions can present a
heightened risk of potential or actual conflicts of interest.
Accordingly, as a general matter, it is the Boards
preference to avoid related party transactions.
Pursuant to the Code of Business Conduct and Ethics, all
executive officers and directors are required to discuss with
the Companys General Counsel any transaction or
relationship which does or may conflict with the interests of
the Company, prior to the entry into of such transaction.
Pursuant to the Related Person Transactions Policy the
Companys General Counsel must submit any potential or
actual conflict of interest involving an officer, director or
27
related person to the Governance Committee for review and
approval. Under this policy, the Governance Committee will
determine an appropriate resolution on a
case-by-case
basis, including approval, ratification, amendment, termination
or rescission of the transaction. All directors must excuse
themselves from any discussion or decision affecting their
personal, business or professional interests.
All related party transactions shall be disclosed in the
Companys applicable filings with the SEC, as required
under SEC rules.
Transactions
with Dillon Yarn Corporation and Mr. Wener
In fiscal year 2007, the Company purchased the polyester and
nylon texturing operations of Dillon (the
Transaction). In connection with the Transaction the
Company and Dillon entered into a Sales and Services Agreement
for a term of two years from January 1, 2007, pursuant to
which the Company agreed to pay Dillon an aggregate amount of
$6.0 million in exchange for certain sales and transitional
services to be provided by Dillons sales staff and
executive management. On December 1, 2008, the Company and
Dillon entered into an amendment to the Sales and Services
Agreement which extended the term of the Agreement for a one
(1) year term, which expired on December 31, 2009, and
revised the amount to be paid by the Company to $425,000
quarterly, during the term. On December 11, 2009, the
Company and Dillon entered into a second amendment to the Sales
and Services Agreement which extended the term of the Agreement
for a one (1) year term, which will expire on
December 31, 2010, and revised the amount to be paid by the
Company to $325,000 quarterly, during the term. Pursuant to the
Sales and Services Agreement, the Company paid Dillon
$1.5 million for fiscal 2010. In addition, during fiscal
2010, the Company recorded sales to and commission income from
Dillon in the aggregate amount of $71,000, has purchased
products from Dillon in an aggregate amount of $3.2 million
and paid to Dillon, for certain employee and other expense
reimbursements, an aggregate amount of $0.2 million.
Mr. Wener, a director of the Company, is the President and
Chief Executive Officer of Dillon, and Mr. Wener owns a
151/2%
and his wife owns a 2% equity interest in Dillon. The terms of
the Sales and Services Agreement with Dillon are, in
managements opinion, no less favorable than the Company
would have been able to negotiate with an independent third
party for similar services.
Mr. Wener is an Executive Vice President of American
Drawtech Company, Inc. (ADC) and beneficially owns a
12.5% equity interest in ADC. During fiscal 2010, the Company
recorded sales to and commission income from ADC in the
aggregate amount of $2.0 million and paid expenses to ADC
of $53 thousand. The sales terms, in managements opinion,
are comparable to terms that the Company would have been able to
negotiate with an independent third party.
Transactions
with Salem Holding Company
Mr. Langone, a director of the Company, owns a
331/3%
equity interest in, is a director and is the Chairman of the
Board of Salem Holding Company. In fiscal 2010, the Company paid
Salem Leasing Corporation, a wholly owned subsidiary of Salem
Holding Company, $3.0 million in connection with leases of
tractors and trailers, and for related services. The terms of
the Companys leases with Salem Leasing Corporation are, in
managements opinion, no less favorable than the Company
would have been able to negotiate with an independent third
party for similar equipment and services.
Transactions
with Invemed Catalyst Fund
On November 25, 2009, the Company entered into a stock
purchase agreement with Invemed Catalyst Fund L.P. (the
Fund). Pursuant to the stock purchase agreement, the
Company agreed to purchase 1,885,000 shares of its Common
Stock from the Fund for an aggregate purchase price of
$5.0 million. The Company and the Fund negotiated the per
share purchase price of $2.65 per share based on an
approximately 10% discount to the closing price of the
Companys Common Stock on November 24, 2009.
Mr. Langone is the principal stockholder and CEO of Invemed
Securities, Inc., which is a managing member of Invemed Catalyst
Gen Par, LLC, the general partner of the Fund. Mr. William
M. Sams, a director of the Company, is a limited partner of the
Fund. Neither Mr. Langone nor Mr. Sams was involved in
any decisions by the Board or any committee thereof with respect
to this stock purchase transaction.
For a discussion of agreements with the Companys NEOs see
Compensation Discussion & Analysis
Elements of Compensation Perquisites and Other
Benefits Change of Control Agreements.
28
AUDIT
COMMITTEE REPORT
The Companys Audit Committee consists of four independent
Directors and operates under a written charter adopted by the
Board and most recently amended in July 2004. The current
members of the Audit Committee are William J. Armfield, IV
(Chair), William M. Sams, Michael Sileck and G. Alfred Webster.
The Companys management is responsible for the
Companys financial statements and reporting process and
for establishing and maintaining an adequate system of internal
control over financial reporting. Ernst & Young LLP
(E&Y), the Companys independent
registered public accounting firm, is responsible for auditing
the Companys consolidated financial statements, and for
assessing the effectiveness of the Companys internal
control over financial reporting. The Audit Committee monitors
and oversees these processes and is directly responsible for the
appointment, compensation, retention and oversight of the
Companys independent registered public accounting firm.
To fulfill its responsibilities, the Audit Committee has:
|
|
|
|
|
reviewed and discussed with the Companys management and
the independent registered public accounting firm the
Companys audited consolidated financial statements for the
fiscal year ended June 27, 2010 and Managements
Report on Internal Control over Financial Reporting for the
fiscal year ended June 27, 2010;
|
|
|
|
reviewed managements representations to the Audit
Committee that those audited consolidated financial statements
were prepared in accordance with generally accepted accounting
principles;
|
|
|
|
discussed with the independent registered public accounting firm
the matters required to be discussed by Statement on Auditing
Standards 61, as amended (AICPA, Professional Standards, Vol. 1.
AU section 380), as adopted by the Public Company Accounting
Oversight Board in Rule 3200T; and
|
|
|
|
received the written disclosures and the letter from the
independent registered public accounting firm required by the
Public Company Accounting Oversight Board regarding the
independent accountants communications with the Audit
Committee concerning independence, and has discussed with
E&Y their independence from the Company.
|
Based on its review and discussions with management and the
independent registered public accounting firm, the
representations of management and the report of the independent
registered public accounting firm, the Audit Committee
recommended to the Board that the Companys audited
consolidated financial statements for fiscal 2010 be included in
the Companys Annual Report on
Form 10-K
for the fiscal year ended June 27, 2010 for filing with the
SEC.
Submitted by the Audit Committee of the Board:
William J. Armfield, IV, Chairman
William M. Sams
Michael Sileck
G. Alfred Webster
29
INFORMATION
RELATING TO THE COMPANYS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Pursuant to its authority, the Companys Audit Committee
will select the Companys independent registered public
accounting firm for the current fiscal year at a meeting
subsequent to the Annual Meeting. E&Y was selected as the
Companys independent registered public accounting firm for
the fiscal year ended June 27, 2010. E&Y has been the
Companys independent auditors since 1990. Representatives
of E&Y will attend the Annual Meeting. They will have the
opportunity to make a statement if they so desire and to answer
appropriate questions from Shareholders.
Fees Paid
to Independent Registered Public Accounting Firm
The fees paid to E&Y for services rendered to the Company
for the fiscal years indicated below were as follows:
|
|
|
|
|
|
|
|
|
|
|
Fiscal Years Ended
|
|
|
|
June 27,
|
|
|
June 28,
|
|
|
|
2010
|
|
|
2009
|
|
|
Audit Fees
|
|
$
|
826,960
|
|
|
$
|
833,051
|
|
Audit-Related Fees
|
|
|
|
|
|
|
|
|
Tax Fees(1)
|
|
$
|
140,184
|
|
|
$
|
9,288
|
|
All Other Fees(2)
|
|
$
|
27,434
|
|
|
|
|
|
|
|
|
(1) |
|
Consists of aggregate fees paid for tax compliance, consultation
and related tax matters. |
|
(2) |
|
Consists of transaction advisor services in connection with
strategic planning process. |
Policy on Audit Committee Pre-Approval of the Audit and
Permissible Non-Audit Services by the Companys Independent
Registered Public Accounting Firm
The Audit Committee has adopted a policy governing the provision
of all audit and non-audit services by the Companys
independent registered public accounting firm. Pursuant to this
policy, the Audit Committee will annually consider and approve,
if appropriate, the provision of audit services (including audit
review and attest services) and of certain specific defined
permitted non-audit services (pre-approved services)
by its independent registered public accounting firm. It will
also consider on a
case-by-case
basis and, if appropriate, approve specific engagements that do
not fit within the definition of pre-approved services.
The policy provides that any proposed engagement that does not
fit within the definition of a pre-approved service must be
presented to the Audit Committee for consideration (a) at a
regular meeting, (b) at a special meeting called to
consider the proposed engagement or by a unanimous written
consent of the Audit Committee or (c) by the Chairperson of
the Audit Committee, or another member of the Audit Committee.
If permissible non-audit services are pre-approved by the
Chairperson or another member of the Committee, that decision is
required to be presented at the next meeting of the Audit
Committee. The Audit Committee will regularly review summary
reports detailing all services (and related fees and expenses)
being provided to the Company by the independent registered
public accounting firm.
SECTION 16(a)
BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the
Companys directors and executive officers, and any person
who owns more than ten percent of the Companys stock, to
file with the SEC initial reports of beneficial ownership and
reports of changes in beneficial ownership of the Common Stock.
Such persons are required by the SECs regulations to
furnish the Company with copies of all Section 16(a)
reports they filed.
To the Companys knowledge, based solely on its review of
the copies of such reports furnished to the Company and written
representations that no other reports were required, all such
Section 16(a) filings were timely made during the fiscal
year ended June 27, 2010.
30
SHAREHOLDER
PROPOSALS
The deadline for submission of Shareholder proposals pursuant to
Rule 14a-8
under the Exchange Act for inclusion in the Companys Proxy
Statement for its 2011 Annual Meeting of Shareholders is
May 17, 2011. Any Shareholder proposal to be submitted at
the 2011 Annual Meeting of Shareholders (but not required to be
included in the Companys Proxy Statement), must be
received by July 31, 2011, or such proposal will be
considered untimely pursuant to
Rules 14a-4
and 14a-5
under the Exchange Act and the persons named in the proxies
solicited by us may exercise discretionary voting authority with
respect to such proposal. Proposals which Shareholders intend to
present at the Companys 2011 Annual Meeting of
Shareholders or wish to have included in the Companys
proxy materials should be sent registered, certified or express
mail to Charles F. McCoy, Vice President, Secretary, General
Counsel and Chief Risk Officer of the Company, at 7201 West
Friendly Avenue, Greensboro, North Carolina, 27410.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
The SEC has adopted rules permitting registrants to send a
single set of the annual report and proxy statement to any
household at which two or more shareholders reside if the
registrant believes they are members of the same family. This
procedure, referred to as householding, reduces the
volume of duplicate information Shareholders receive and reduces
the expense to the registrant. The Company has not implemented
these householding rules with respect to its record holders;
however, a number of brokerage firms have instituted
householding which may impact certain beneficial owners of the
Common Stock. If your family has multiple accounts by which you
hold the Common Stock, you may have received a householding
notification from your broker. Please contact your broker
directly if you have any questions or wish to revoke your
decision to household.
ANNUAL
REPORT
The Company filed its Annual Report on
Form 10-K
for the fiscal year ended June 27, 2010 with the SEC on
September 10, 2010. The Company makes available through its web
site its annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
and amendments to those reports filed or furnished pursuant to
Section 13(a) of the Exchange Act as soon as reasonably
practicable after the Company electronically files such material
with, or furnish it to, the SEC. Shareholders may also obtain a
copy of these reports, without charge, upon request to the
Companys Vice President, Secretary, General Counsel and
Chief Risk Officer, Charles McCoy, at 7201 West Friendly
Avenue, Greensboro, North Carolina, 27410.
OTHER
MATTERS
The Board does not intend to present any items of business other
than those stated in the Notice of Annual Meeting of
Shareholders. If other matters are properly brought before the
meeting, the persons named in the accompanying proxy will vote
the shares represented by it in accordance with their best
judgment. Discretionary authority to vote on other matters is
included in the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Charles F. McCoy
Vice President, Secretary, General Counsel
and Chief Risk Officer
Greensboro, North Carolina
September 16, 2010
31
APPENDIX A
PROPOSED
AMENDMENT TO THE
RESTATED CERTIFICATE OF INCORPORATION OF UNIFI, INC.
Reverse Stock Split Proposal
The reverse stock split proposal provides that the Restated
Certificate of Incorporation of Unifi, Inc. will be amended by
adding the following new paragraph at the end of
Article Fourth:
Upon the filing of this Certificate of Amendment with the
Department of State of the State of New York (the
Effective Time), each three (3) shares of the
Corporations Common Stock issued and outstanding
immediately prior to the Effective Time shall automatically be
reclassified and combined into one (1) validly issued,
fully paid and non-assessable share of Common Stock, without any
further action by the Corporation or the holder thereof, subject
to the treatment of fractional share interests as described
below (the Reverse Stock Split). No fractional
shares will be issued in connection with the Reverse Stock Split
and in lieu of issuing fractional shares, each holder of Common
Stock who would otherwise have been entitled to a fraction of a
share by reason of the Reverse Stock Split will be entitled to
receive a cash payment, without interest, determined by
multiplying (i) the fractional share interest to which the
holder would otherwise be entitled, after taking into account
all shares of Common Stock then held by the holder, and
(ii) the closing price of the Common Stock as reported on
the New York Stock Exchange on the trading day immediately prior
to the Effective Time, as adjusted for the split ratio.
A-1
APPENDIX B
DIRECTOR
INDEPENDENCE STANDARDS
A majority of Board of Directors of Unifi, Inc. (the
Company) shall be independent. No director shall
qualify as independent unless the Board of Directors
affirmatively determines that the director has no material
relationship with the Company (either directly or as a partner,
shareholder or officer of an organization that has a
relationship with the Company). In making such determination,
the Board of Directors shall consider the factors identified
below, as well as such other factors that the Board of Directors
may deem relevant. A director will not be deemed independent if:
|
|
1.
|
the director is employed by the Company or any of its affiliates
(as used herein, such term shall have the meaning set forth in
Rule 144(a)(1) promulgated under the Securities Act of 1933, as
amended) or was employed by the Company or any of its affiliates
at any time during the preceding year, provided that as of
November 4, 2004 (the Effective Date), the
lookback period shall be three years;
|
|
2.
|
the director is a member of the immediate family of an
individual who is, or has been, employed by the Company or any
of its affiliates as an executive officer at any time during the
preceding year, provided that as of the Effective Date the
lookback period shall be three years;
|
|
3.
|
the director (a) presently receives, or his or her
immediate family member receives, more than $100,000 per year in
direct compensation from the Company, other than director and
committee fees and pension or other forms of deferred
compensation for prior service (provided such compensation is
not contingent in any way on continued service), or (b) the
director or the directors immediate family member had
received such compensation within the preceding year, provided
that as of the Effective Date the lookback period shall be three
years [Note: Compensation received by an immediate family member
for service as a non-executive employee of the Company need not
be considered in determining independence under this test.];
|
|
4.
|
the director (a) is presently affiliated with or employed
by, or his or her immediately family member is affiliated with
or employed in a professional capacity by, a present or former
internal or external auditor of the Company, or (b) the
director or the directors immediate family member had been
affiliated with or employed by such internal or external auditor
of the Company within the preceding year, provided that as of
the Effective Date the lookback period shall be three years;
|
|
5.
|
the director (a) is presently an executive officer or an
employee, or his or her immediate family member is an executive
officer, of another company that makes payments to, or receives
payments from, the Company for property or services in an amount
which, in any single fiscal year, exceeds $1 million or
2 percent of such other companys consolidated gross
revenues for its last fiscal year, whichever is greater, or
(b) the Company and the company of which director is an
executive officer or employee or his or her immediate family
member is an executive officer had such relationship within the
preceding year, provided that as of the Effective Date the
lookback period shall be three years;
|
|
6.
|
the director is affiliated with, or his or her immediate family
member is affiliated with, a paid advisor or consultant to the
Company;
|
|
7.
|
the director has, or his or her immediate family member has, a
personal services contract with the Company;
|
|
8.
|
the director or his or her immediate family member is employed
and compensated by a foundation, university or other nonprofit
institution that has received significant charitable
contributions from the Company that are disclosed or will be
required to be disclosed in the Companys proxy
statement; and
|
|
9.
|
the director (a) is presently employed, or his or her
immediate family member is presently employed, as an executive
officer of another company where any of the Companys
present executive officers serves on that companys
compensation committee, or (b) such director or his or her
immediate family member was employed in such capacity within the
preceding year, provided that as of the Effective Date the
lookback period shall be three years.
|
In addition to being independent as determined by the Board of
Directors in accordance with the factors set forth above,
(a) members of the Audit Committee may not
(i) receive, directly or indirectly, any compensation other
than directors fees from the Company, or (ii) be an
affiliated person of the Company or any of its
subsidiaries as such term is defined under
Rule 10A-3
promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the Exchange Act), and (b) members of
the Compensation Committee must qualify as outside
directors as such term is defined under
Section 162(m) of the Internal Revenue Code of 1986, as
amended, and as non-employee directors as such term
is defined under
Rule 16b-3
promulgated under the Exchange Act.
B-1
UNIFI, INC.
7201 WEST FRIENDLY AVENUE
GREENSBORO, NC 27410
VOTE
BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until
11:59 P.M. Eastern Daylight Saving Time the day
before the cut-off date or meeting date. Have your
proxy card in hand when you access the web site and
follow the instructions to obtain your records and to
create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our
Company in mailing proxy materials, you can consent
to receiving all future proxy statements, proxy cards
and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please
follow the instructions above to vote using the
Internet and, when prompted, indicate that you agree
to receive or access proxy materials electronically
in future years.
VOTE
BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting
instructions up until 11:59 P.M. Eastern Daylight
Saving Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you
call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in
the postage-paid envelope we have provided or return
it to Vote Processing, c/o Broadridge, 51 Mercedes
Way, Edgewood, NY 11717.
|
|
|
|
|
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
|
M27057-P01641 |
|
KEEP THIS PORTION FOR YOUR RECORDS |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
|
DETACH AND RETURN THIS PORTION ONLY |
|
|
|
|
|
|
|
|
|
|
|
|
|
UNIFI, INC. |
|
For All |
|
Withhold All |
|
For All Except |
|
To withhold authority to vote for any individual nominee(s), mark
For All Except and write the number(s) of the nominee(s) on the line
below.
|
|
The Board of Directors recommends
that you vote FOR the following: Vote on Directors |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROPOSAL NO. 1 To elect the nine (9)
Directors listed below to serve until the
next Annual Meeting of Shareholders or
until their respective successors are duly
elected and qualified: |
|
|
|
|
|
|
|
|
|
|
|
Nominees: |
|
|
|
|
|
|
|
|
|
|
|
|
|
01) William J. Armfield, IV 02) R. Roger Berrier, Jr. 03) Archibald Cox, Jr. 04) William L. Jasper 05) Kenneth G. Langone |
06) George R. Perkins, Jr. 07) William M. Sams 08) G. Alfred Webster 09) Stephen Wener
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse Stock Split |
|
|
|
|
|
For |
|
Against |
|
Abstain |
|
|
|
|
|
|
|
|
|
|
PROPOSAL NO. 2 To approve an amendment
to Unifi, Inc.s Restated Certificate of Incorporation to
effect a reverse stock split of the companys common stock at a reverse stock split ratio of
1-for-3. |
|
o |
|
o |
|
o |
|
|
|
|
|
|
|
|
|
|
In their discretion, the proxies are authorized to
vote upon such other business as may properly
come before the Annual Meeting
of Shareholders. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature [PLEASE SIGN WITHIN BOX]
|
Date |
|
|
|
|
|
Signature (Joint Owners) |
Date |
|
|
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
|
|
|
|
|
|
|
é FOLD AND DETACH HERE é
|
|
M27058-P01641 |
UNIFI, INC.
ANNUAL MEETING, OCTOBER 27, 2010
PLEASE COMPLETE, DATE, SIGN AND DETACH THE PROXY CARD AS INSTRUCTED AND
RETURN IT IN THE ENCLOSED BUSINESS REPLY ENVELOPE TO:
UNIFI, INC.
C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NY 11717
The undersigned hereby appoints Charles F. McCoy, with full power of substitution, as attorney
and proxy to represent and vote all shares of Unifi, Inc.s Common Stock which the undersigned is
entitled to vote at the Annual Meeting of the Shareholders to be held at the Companys corporate
headquarters at 7201 West Friendly Avenue, in Greensboro, North Carolina, on Wednesday, October 27,
2010, at 9:00 AM Eastern Daylight Saving Time, and any adjournment or adjournments thereof as
indicated on the reverse side:
The undersigned hereby authorizes the proxy, in his 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.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED FOR EACH OF THE BOARD
OF DIRECTORS NOMINEES FOR DIRECTOR SPECIFIED IN PROPOSAL NO. 1 AND FOR THE AMENDMENT TO UNIFI,
INC.S RESTATED CERTIFICATE OF INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT AS SPECIFIED IN
PROPOSAL NO. 2, 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 16, 2010, and the Proxy Statement furnished therewith.