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SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE DEF 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.__)
Filed by the Registrant (X)[X]
Filed by a Party other than the Registrant ( )[_]
Check the appropriate box:
( )[_] Preliminary Proxy Statement
( )[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
(X)[X] Definitive Proxy Statement
( )[_] Definitive Additional Materials
( )[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Nations Government Income Term Trust 2003,Unifi, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X)[X] No fee required
( )[_] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1)(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(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)----------------------------------------------------------------------------
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[_] Fee paid previously with written preliminary materials.
( )[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1)(1) Amount Previously Paid: N/A
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(4) Date Filed: N/A
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(Unifi, logo appears here)Inc. Logo)
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 26, 200021, 2001
TO THE SHAREHOLDERS OF
UNIFI, INC.
The Annual Meeting of the Shareholders of your Company will be held at
10:00 A.M. Eastern Daylight Savings Time on Thursday, October 26, 2000,25, 2001, at the
Company's Plant T-5 facility
locatedcorporate headquarters at 1641 Shacktown Road, in Yadkinville,7201 West Friendly Avenue, Greensboro, North
Carolina. The Notice of the Annual Meeting and the Proxy Statement containing
detailed information about the business to be transacted at the meeting, as well
as a form of proxy, are enclosed.
Detailed information relating to the Company's activities and operating
performance is contained in our 20002001 Annual Report on Form 10-K, which is also
enclosed.
You are cordially invited to attend the Annual Meeting of the Shareholders
in person. We would appreciate your signing and returning your proxy in the
enclosed postage-paid return envelope so that your shares can be voted in the
event you are unable to attend the meeting. Your proxy will be returned to you
if you are present at the meeting and so request.
Sincerely,
/s/ G. Allen Mebane, IV
G. ALLEN MEBANE, IV
Chairman of the Board of DirectorsBrian R. Parke
Brian R. Parke
President and Chief Executive Officer
3
(Unifi, logo appears here)Inc. Logo)
7201 West Friendly Avenue
Greensboro, North Carolina 27410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 26, 200025, 2001
TO THE SHAREHOLDERS OF UNIFI, INC.:
The Annual Meeting of the Shareholders of Unifi, Inc. will be held at the
corporation's Plant T-5 facilityCompany's corporate headquarters at 1641 Shacktown Road, in Yadkinville,7201 West Friendly Avenue, Greensboro, North
Carolina 27410 on Thursday, October 26, 2000,25, 2001 at 10:00 A.M. Eastern Daylight
Savings Time, for the following purposes:
1. To elect as directorsDirectors of the corporationCorporation those nominees listed in the
accompanying Proxy Statement;
2. To transact such other business as may properly come before the meeting or
any adjournment or adjournments thereof.
The Board of Directors, under the provisions of the Bylaws, has fixed the
close of business on September 18, 2000,13, 2001, as the record date for determination of
Shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or adjournments thereof. The transfer books of the Corporation will
not be closed.
YOUR VOTE IS IMPORTANT and the Board of Directors would appreciate your
signing and returning the accompanying proxy card promptly. A proxy may be
revoked by the Shareholder at any time before it is exercised.
BY ORDER OF THE BOARD OF DIRECTORS:
/s/ Clifford Frazier, Jr.
CLIFFORD FRAZIER, JR.Charles F. McCoy
Charles F. McCoy
Vice President, Secretary and General
Counsel
Greensboro, North Carolina
September 26, 200021, 2001
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(Unifi, logo appears here)Inc. Logo)
7201 West Friendly Avenue
Greensboro, North Carolina 27410
PROXY STATEMENT
SOLICITATION OF PROXIES
This solicitation of the enclosed proxy is made by the Board of Directors
(the "Board") of Unifi, Inc. (the "Company") for use at the Annual Meeting of
the Shareholders to be held Thursday, October 26, 2000,25, 2001, at 10:00 A.M. Eastern
Daylight Savings Time, at the Company's Plant T-5 facilitycorporate headquarters located on 1641
Shacktown Road in Yadkinville,at 7201
West Friendly Avenue, Greensboro, North Carolina 27410, or at any adjournment or
adjournments thereof. This statement and the form proxy will first be mailed to
the shareholdersShareholders entitled to notice of the Annual Meeting on or about September
26, 2000.21, 2001.
The expense of this solicitation will be borne by the Company.
Solicitations of proxies may be made in person, by mail or other telephone,
telegraph or electronic means by directors, officers and regular employees of
the Company who will not be specifically compensated in such regard. In
addition, the Company has retained D. F. King & Company to assist in the
solicitation of proxies and will pay such firm a fee estimated not to exceed
$6,500 plus reimbursement of expenses. Arrangements will be made with brokers,
nominees and fiduciaries to send proxies and proxy materials, at the Company's
expense, to their principals.
The Company's common stock, par value $.10 per share (common stock) is the
only type of stock of the Company. Shareholders of record, as of the close of
business on September 18, 2000,13, 2001, will be entitled to notice of and to vote at the
meeting or any adjournment thereof. On August 24, 2000,September 4, 2001, the Company had
outstanding approximately 54,526,65953,811,533 shares of its common stock. Each share of the Company's
common stock entitles the holder to one vote with respect to all matters coming
before the meeting and all of such shares vote as a single class.
All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made with respect to the matter
to be acted upon, the shares represented by the proxies will be voted in favor
of Proposal No. 1, the election as directors of those nominees named in this
proxy statement.
If the enclosed form of proxy is executed and returned it
may, nevertheless, be revoked at any time before it is voted by written notice
to the secretary of the Company or by the shareholder personally attending and
voting his or her shares at the meeting.IF THE ENCLOSED FORM OF PROXY IS EXECUTED AND RETURNED IT MAY, NEVERTHELESS, BE
REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE TO THE SECRETARY OF THE
COMPANY OR BY THE SHAREHOLDER PERSONALLY ATTENDING AND VOTING HIS OR HER SHARES
AT THE MEETING.
VOTING OF SHARES
The holders of a majority of the outstanding shares entitled to vote,
present in person or represented by proxy at this meeting, will constitute a
quorum for the transaction of business. New York law and the Company's By-Laws
require the presence of a quorum at Annual Meetings. Votes withheld from
director nominees and abstentions are counted as present for purposes of
determining a quorum.
Each share represented is entitled to one vote on all matters properly
brought before the meeting. Please specify your choice by marking the
appropriate boxes on the enclosed proxy card and signing it. Directors shall be
elected by a plurality of the votes cast by the shareholdersShareholders at a meeting in
which a quorum was present. Therefore, shares not voted and broker non-votes
will have no affect on the election of directors.
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INFORMATION RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of August 24, 2000September 4, 2001 (unless
otherwise set forth in the footnotes), with respect to each person known or
believed by the Company to be the beneficial owner, having sole voting and/or
investment power (other than as set forth below) of more than five percent (5%)
of the Company's common stock and the Company's directors and officers as a
group.
Amount and
Name and Address of More Amount and Nature Percent of
than 5% Owners Beneficially Owned Class
- ------------------------------------------- -------------------- ----------------------------------- ------------------ ----------
Dimensional Fund Advisors Inc. (a) 3,182,500 5.91%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
FMR Corp. (a) 4,178,100 7.06%(b) 3,562,700 6.62%
82 Devonshire Street
Boston, MA 02109
Wachovia Corporation (b) 3,587,363 6.06%
100 North Main Street
Winston-Salem, NC 27104
AXA and Equitable Companies Incorporated, 5,730,300 9.70%
and their respective subsidiaries,
1290 Avenue of the AmericasMerrill Lynch & Co., Inc. (c) 3,783,861 7.03%
4 World Financial Center
New York, NY 10104(c)10080
All Directors and Executive 4,804,368 8.85%4,981,337 9.26%
Officers and Nominees for
Directors, as a group on
August 24, 2000September 4, 2001 (d)
- -------------------------
(a) As indicated in its Schedule 13G, dated February 2, 2001, Dimensional Fund
Advisors Inc., an investment advisor under Section 203 of the Investment
Advisors Act of 1940, may be deemed to beneficially own 3,182,500 shares by
virtue of having sole voting and dispositive power over 3,182,500 shares.
(b) As indicated in its Schedule 13G/A, dated February 14, 2000, by2001, FMR Corp, a
holding company and certain of its subsidiaries, and Mr. Edward C. Johnson,
III and Ms. Abigail P. Johnson, may be deemed to beneficially own 3,562,700
shares by virtue of having sole dispositive power over 3,562,700 shares.
(c) As indicated in its Schedule 13G/A, dated August 8, 2001, Merrill Lynch &
Co. and certain of its subsidiaries, may be deemed to beneficially own
4,178,1003,783,861 shares by virtue of having sole voting power over 299,800 shares
and sole power to dispose or to direct the disposition of 4,178,100 shares.
(b) As indicated in its Schedule 13G, dated February 14, 2000, Wachovia
Corporation and its wholly-owned subsidiary Wachovia Bank, N.A., as
Trustee, may be deemed to beneficially own 3,587,363 shares by virtue of
having sole voting power over 2,435,607 shares, shared voting power over
1,090,219 shares, sole dispositive power over 2,789,031 shares, and shared
dispositive power over 794,582 shares.
(c) As indicated in its Schedule 13G, dated March 31, 2000, AXA, a holding
company and its subsidiaries, and Equitable Companies Incorporated, a
holding company and its subsidiaries, under a joint filing agreement, held
sole voting power over 3,565,900 shares, shared voting power over 2,100,000
shares, sole dispositive power over 5,729,700 shares, and shared
dispositive power over 6003,783,861 shares.
(d) This amount includes the 1,386,222857,658 shares of the common stock of the Company
which could be acquired through the exercise of stock options within sixty
(60) days after June 25, 2000, and restricted shares, which
have voting rights, issued during the last fiscal year. Additional
information regarding stock options is provided on pages 8-12.24, 2001.
Cede & Co., as of August 24, 2000,September 4, 2001, the nominee of the Depository Trust
Company, New York, New York, which provides custodial service for various
institutions such as banks and brokerage firms, was the record holder of
49,727,39449,509,476 shares of the Company's common stock representing 91.20%92% of the
outstanding shares of said stock. The Company does not believe that any of these
shares were owned beneficially by Cede & Co.
The definition of "beneficial ownership" referred to herein is that the
owner listed has either the voting or investment power, or both, alone or shared
with others over the number of shares shown, and options beneficially owned
under Rule 13d-3.
ELECTION OF DIRECTORS
General InformationGENERAL INFORMATION --
The Board of Directors presently consistsrecently amended the By-Laws of 11 members. Thethe Company to
reduce the number of directors are
divided into three classes;serving on the Board from eleven (11) to ten (10)
members, with Class 1 consists of four (4) directors; Classand 2 directors consisting of three (3) directors;persons each and
Class 3 consisting of four (4) directors.persons. The term of each class is staggered so
that the term of one class expires at each Annual Meeting of the Shareholders. A
director shall hold office
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until the Annual Meeting for the year in which his or her term expires and until
his or her successor shall be elected and qualified, subject to his or her prior
death, resignation, retirement or removal from office.
2
The term of office of the
current directors serving as Class 31 directors will expire at this annual
meeting and, except as otherwise indicated below, the term of office for the
current directors serving in Class 12 and Class 23 will expire at the 20012002 and
20022003 Annual Meetings of the Shareholders,
respectively,Shareholders.
Jerry W. Eller, a Class 2 Director, resigned as of October 26, 2000 and G.
Allen Mebane, a Class 1 Director, resigned as of March 28, 2001. The Board of
Directors subsequently elected William J. Armfield, IV to serve as a Class 2
Director and Sue W. Cole to serve as a Class 3 Director until the 2001 Annual
Meeting of the Shareholders. The Board of Directors has nominated the following
persons to the respective classes designated: CLASS 1 DIRECTORS -- Donald F.
Orr, Robert A. Ward, and G. Alfred Webster; CLASS 2 DIRECTOR -- William J.
Armfield, IV and CLASS 3 DIRECTOR -- Sue W. Cole. The Class 1 Directors will
serve until the Annual Meeting in 2004, the Class 2 Director will serve until
the Annual Meeting in 2002 and the Class 3 Director will serve until the Annual
Meeting in 2003, or until their respective successors are elected and qualified.
All the nominees for election are presently serving and have consented to
be named in this proxy statement and to serve, if elected. If for any reason any
of the nominees should not be a candidate for election at the time of the
meeting, the proxy will be voted for substitute nominees designated by the Board
of Directors. The Board does not anticipate that any of the nominees will be
unavailable. The nominees and directors continuing in office will normally hold
office until the Annual Meeting of the shareholdersShareholders in the year indicated.
Listed below are the names of the fourthree (3) nominees to serve as Class 1
directors, the one (1) nominee to serve as a Class 2 director, the one (1)
nominee to serve as a Class 3 directors,director and the sevenfive (5) incumbent directors who
will be continuing in office following this meeting, together with: 1) their
ages; 2) their principle occupation during the past five years; 3) any other
directorships they hold with companies having securities registered under the
Securities and Exchange Act of 1934 (the "1934 Act"); 4) the years during which
their consecutive terms as directors of the Company first commenced; and 5) the
number of beneficially owned shares of common stock of the Company for each
director and nominee, being set forth on the table beginning on page 5.
NOMINEES FOR ELECTION AS DIRECTORS
Class 3 DirectorsCLASS 1 DIRECTORS -- Nominees for Election to Terms Expiring the 2003 Annual
Meeting:
G. ALLEN MEBANE, (70)NOMINEES FOR ELECTION TO TERMS EXPIRING AT THE 2004 ANNUAL
MEETING:
DONALD F. ORR, (57), is chairman of Sweet Pea Capital, Greensboro, North
Carolina, an investment capital firm, which was formed in November, 1978. He
serves as Chairman of the Moses H. Cone Health System, as Chairman of the
Advisory Board of Directorsthe Duke Eye Institute, and as a Director of the U.S. Trust
Company of North Carolina. He has been a Director of the Company since 1988, and
in October 2000, was elected the Company's Chairman of the Board. He is also a
member of the Company's Audit Committee and Compensation Committee (Chair).
ROBERT A. WARD, (61), Unifi, Inc., Greensboro, North Carolina. He was an
Executive Officer of the Company from 1971 to 1996, has served on various
committees of the Board and has been a Director of the Company since 1971. He is
a Director of Mid Carolina Bank.
G. ALFRED WEBSTER, (53), Executive Vice President of Unifi, Inc.,
Greensboro, North Carolina. He was co-founderhas been an officer of the Company since 1979,
and a Director since 1986.
CLASS 2 DIRECTOR -- NOMINEE FOR ELECTION TO TERM EXPIRING AT THE 2002 ANNUAL
MEETING:
WILLIAM J. ARMFIELD, IV, (67), President of Spotswood Capital, Greensboro,
North Carolina. He was a Director and President of Macfield, Inc., a textile
company in 1971, has
beenNorth Carolina, from 1970 until August 8, 1991, when Macfield, Inc.
merged with and into Unifi, Inc. He was an Executive Officer and a Director of
the Company from 1991 to December of 1995. He was again elected a Director of
the Company by the Board of Directors as of May 24, 2001. He was also elected to
Company's Audit Committee.
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CLASS 3 DIRECTOR -- NOMINEE FOR ELECTION TO TERM EXPIRING AT THE 2003 ANNUAL
MEETING:
SUE W. COLE, (50), President, U.S. Trust Company of North Carolina. She
also serves as a member of the Board of Directors since said date and became Chairmanof U.S. Trust Company of North
Carolina. She joined NC Trust Company (predecessor to U.S. Trust) in 1987. She
serves as a Trustee of the University of North Carolina at Greensboro; as a
director, member of Executive Committee, and Second Vice Chair of North Carolina
Citizens for Business and Industry; and as a director and member of Executive
Committee for NC Center for Public Policy Research. She was elected a Director
of the Company by the Board in 1977.of Directors as of May 24, 2001. She was also
elected to the Company's Compensation Committee.
DIRECTORS REMAINING IN OFFICE
CLASS 2 DIRECTORS -- TERMS EXPIRING IN 2002
CHARLES R. CARTER, (69), Retired Minister of the Forest Hills Presbyterian
Church, High Point, North Carolina, which position he held from 1967 to 1997. He
served ashas been a Director of the Company since 1982, and is a member of the Company's
Compensation Committee, Audit Committee and Corporate Governance Committee
(Chair).
KENNETH G. LANGONE, (66), an Investment Banker, President and Chief
Executive Officer of Invemed Associates, Inc., an investment banking firm, New
York, New York, since 1974. He is a Director of ChoicePoint Inc., General
Electric Company, The Home Depot, Inc., Microtune, Inc., the New York Stock
Exchange and Tricon Global Restaurants, Inc. He has been a Director of the
Company from 1971 until 1985since 1969, and in January 1999 was again elected as Chief
Executive Officer and served until January 26, 2000. He is a member of the Company's Executive Committee (Chair). He has announced that he will retire as
Chairman of the Board of Directors effective at the end of the October 26, 2000
Annual Meeting of the Board of Directors.Compensation Committee.
CLASS 3 DIRECTORS -- TERMS EXPIRING IN 2003
BRIAN R. PARKE, (52)(53), President and Chief Executive Officer of Unifi, Inc.,
Greensboro, North Carolina. He became an employee of the Company in 1984, served
as President of Unifi Textured Yarns Europe (UTYE) in Ireland from October 1997
until January 20, 1999, when he moved to the U.S. and became President and Chief
Operating Officer of the Company. He was elected a directorDirector of the Company by
the Board of Directors on July 22, 1999, and by the shareholdersShareholders on October 21,
1999, and was elected President and Chief Executive Officer of the Company in
January 2000.
He is a member of the Company's Executive Committee.
J.B. DAVIS, (56)(57), is President and Chief Executive Officer of
Klaussner-Furniture Industries, Inc., Asheboro, North Carolina. He has been an
Executive Officer and Director of Klaussner Furniture Industries, Inc. since
February 1970 and was elected as President and Chief Executive Officer in 1981.
He has been a Director of the Company since 1996, and is a member of the
Company's Executive Committee and Corporate Governance Committee.
R. WILEY BOURNE, JR. (63), (64), Retired Vice-Chairman and Executive Vice
President of Eastman Chemical Company, Kingsport, Tennessee. He serves on the
boards of the East Tennessee State University Foundation and School of Medicine,
and on the Sloan SchoolBoard of the Massachusetts InstituteTrustees of Technology, and Tennessee Wesleyan College. He has been a
Director of the Company since 1997, and is a member of the Company's Corporate
Governance Committee and the Audit Committee (Chair).
DIRECTORS REMAINING IN OFFICE
Class 1 Directors -- Terms Expiring in 2001:
DONALD F. ORR, (56), is chairman of Sweet Pea Capital, Greensboro, North
Carolina, an investment capital firm, which was formed in November, 1978. He is
a Vice Chairman of the Moses H. Cone Health System, Chairman of the Advisory
Board of the Duke Eye Institute, and a Director of the U.S. Trust Company of
North Carolina and Arrow Paper Products Company. He has been a Director of the
Company since 1988, and is a member of the Company's Executive Committee, Audit
Committee, and Compensation Committee (Chair). Mr. Orr has been elected by the
Board of Directors to become Chairman of the Board effective as of the end of
the October 26, 2000 Annual Meeting of the Board of Directors.
34
ROBERT A. WARD, (58), Unifi, Inc., Greensboro, North Carolina. He is a
Director of Mid Carolina Bank. He was an Executive Officer of the Company from
1971 to 1996, has served on various committees of the Board, has been a
Director of the Company since 1971 and is an ex-officio member of the Company's
Audit Committee.
G. ALFRED WEBSTER, (52), Executive Vice President of Unifi, Inc.,
Greensboro, North Carolina. He has been an Executive Officer of the Company
since 1985, a Director since 1986, and is a member of the Company's Executive
Committee.
SIR RICHARD GREENBURY, (63), has been an officer and director of Marks and
Spencer Plc, London, England, a global retail firm, since 1986 and Chief
Executive Officer of said company since April 1991. He has been a Non-Executive
Director of Lloyds Bank Plc from 1992 through 1997, is a Non-Executive Director
of Zeneca Plc from 1993, and was elected a director of the Company by the Board
of Directors on July 22, 1999 and by the shareholders on October 21, 1999, and
is a member of the Company's Corporate Governance Committee.
Class 2 Directors -- Terms Expiring in 2002
CHARLES R. CARTER, (68), Retired Minister of the Forest Hills Presbyterian
Church, High Point, North Carolina, which position he held from 1967 to 1997.
He has been a Director of the Company since 1982, and is a member of the
Company's Compensation Committee, Audit Committee and Corporate Governance
Committee (Chair).
JERRY W. ELLER, (60), Retired Executive Vice President of Unifi, Inc.,
Yadkinville, North Carolina. He was an Executive Officer of the Company from
1981 until his retirement on July 1, 2000, and has been a Director of the
Company since 1985, and is a member of the Company's Executive Committee.
KENNETH G. LANGONE, (65), an Investment Banker, President and Chief
Executive Officer of Invemed Associates, Inc., an investment banking firm, New
York, New York, since 1974. He is a Director of GE, DBT Online, Inc., The Home
Depot, Inc., and TRICON Global Restaurants. He has been a Director of the
Company since 1969, and is a member of the Company's Compensation Committee.
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SECURITY HOLDING OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
Amount and Nature of Percentage of
DirectorsName Beneficial Ownership(1) Ownership
(1) Ownership
- ------------------------------------------------------ -------------------------- ------------------ ----------------------- -------------
Kenneth G. Langone (2) 2,195,000 4.04%
G. Allen Mebane2,198,334 4.09%
William J. Armfield, IV (3) 1,002,972 1.85%1,417,600 2.63%
Brian R. Parke (5) 147,699 (4) Jerry W. Eller (6) 527,143 (4)206,232 (5)
G. Alfred Webster (7) 282,081 (4)(6) 309,027 (5)
Charles R. Carter (8) 52,167 (4)(7) 55,501 (5)
Donald F. Orr (9) 183,030 (4)(8) 186,364 (5)
Robert A. Ward (10) 199,583 (4)(9) 202,917 (5)
R. Wiley Bourne, Jr. (11) 17,986 (4)(10) 21,320 (5)
J. B. Davis (12) 36,666 (4)(11) 40,000 (5)
Sir Richard Greenbury -- --
Sue W. Cole 10,000 (5)
Willis C. Moore, III (13) 82,747 (4)(12) 111,559 (5)
Stewart Q. Little (13) 95,699 (5)
Michael E. Delaney (14) 77,294 (4)18,600 (5)
All Directors and Executive Officers and Nominees for
Directors [13 persons] (15) 4,804,368 8.85%4,981,337 9.26%
- -------------------------
(1) All shares are owned directly and with sole voting and dispositive power,
except as otherwise noted. Ownership is as of August 24, 2000 and excludes
restricted stock awards granted after the end of the Company's fiscal
year.September 4, 2001.
(2) Includes 6,66610,000 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, 135,000 shares
owned by Invemed Associates, Inc., in which Mr. Langone owns 81%, and
1,885,000 shares owned by Invemed Catalyst Fund, LLP managed by Invemed
Catalyst General Partnership, LLC, of which Mr. Langone has voting power,
which shares may be determined to be beneficially owned by him.
(3) Includes 561,5232,660 shares that he has a right to purchase under presently
exercisable stock options granted to him byheld in trust for the Company, 76,125 shares
owned bybenefit of his wife over which he has voting rights but disclaims any other
beneficial ownership,children, which
shares may be determined to be beneficially owned by him, and 7,500 shares of restricted stock with voting rights.him.
(4) Represents less than one percent (1%) of the Company's common stock.
(5) Includes 139,999198,632 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company 100 shares owned
by his wife and 100 shares
owned by his minor child/children livingson who lives with him, which shares may be determined to be
beneficially owned by him, and
7,500 shareshim.
(5) Represents less than one percent (1%) of restricted stock with voting rights.the Company's common stock.
(6) Includes 141,145160,775 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company which shares may
be determined to be beneficially owned by him, and 5,000 shares of
restricted stock with voting rights.
(7) Includes 141,829 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, 39,339 shares
held in trust for the benefit of his children, which shares may be
determined to be beneficially owned by him, and 5,000 shares of restricted
stock with voting rights.
(8)him.
(7) Includes 31,66635,000 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, which shares may
be determined to be beneficially owned by him.
(9)(8) Includes 31,66635,000 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, which shares may
be determined to be beneficially owned by him, and 3,950 shares owned by
the Orr Family Trust over which he has voting power, which shares may be
determined to be beneficially owned by him.
(10)(9) Includes 122,572125,906 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 77,011 shares
owned jointly with his wife, which shares may be determined to be
beneficially owned by him.
5
(11)(10) Includes 16,66620,000 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 1,320 shares
owned by his wife over which he has voting rights, which shares may be
determined to be beneficially owned by him.
(12)(11) Includes 16,66620,000 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company and 20,000 shares
held by North Carolina Trust Company over which he has sole voting and
dispositive power, which shares may be determined to be beneficially owned
by him.
(13)5
9
(12) Includes 73,74798,708 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, which shares may
be determined to be beneficially owned by him, and 5,000 shares of
restricted stock with voting rights.
(14)him.
(13) Includes 67,07784,146 shares that he has the right to purchase under presently
exercisable stock options granted to him by the Company, which shares may
be determined to be beneficially owned by him.
(14) Includes 11,106 shares that he has the right to purchase under presently
exercisable stock options granted to him and 5,000by the Company, which shares of
restricted stock with voting rights.may
be determined to be beneficially owned by him.
(15) Includes 1,386,222857,658 shares that they have the right to purchase within sixty
(60) days after June 25, 2000,24, 2001, under presently exercisable stock options
granted to them by the Company, which shares may be determined to be
beneficially owned by them, and restricted shares, which have voting
rights, issued during the last fiscal year.them.
DIRECTORS' COMPENSATION
Each directorDirector who is not an employee of the Company was paid, for serving
on the Board during fiscal year ended June 25, 2000,24, 2001, a retainer at the rate of
$24,000 per annum and an additional $1,000 for each meeting of the Board of
Directors attended, as well as being reimbursed for reasonable expenses incurred
in attending said meetings. The Chairman of the Board of Directors is paid an
additional annual compensation of $50,000, in addition to his regular director
fee, for serving as Chairman of the Board of Directors and the Chairman of the
Company's Audit Committee and Corporate Governance Committee are paid additional
annual compensation of $15,000 each, in addition to their regular directors fees
for serving as Chairman of said Committees. Directors who are employees of the
Company are paid an attendance fee of $1,000 for each meeting of the Board
attended.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has four (4)three (3) standing committees: the Executive
Committee,COMPENSATION
COMMITTEE, the Compensation Committee, the Audit Committee,AUDIT COMMITTEE, and the Corporate
Governance Committee.CORPORATE GOVERNANCE COMMITTEE. The
Executive Committee (composed of Messrs. Mebane,
Parke, Eller, Webster, Orr and Davis) met regularly during the year. The
Compensation CommitteeCOMPENSATION COMMITTEE (composed of Messrs. Carter, Langone, Orr and Orr)Ms. Cole)
met four times during the year. The Audit CommitteeAUDIT COMMITTEE (composed of Messrs. Carter,
Orr, Bourne, and Ward as an ex-officio member)Armfield) met four times during the year. The Corporate Governance CommitteeCORPORATE
GOVERNANCE COMMITTEE (composed of Messrs. Carter, Bourne, Davis, and Sir
Greenbury) met threetwo times during the year.
The Board of Directors has no Nominating Committee; however, in relation to
nominations, the Corporate Governance CommitteeCORPORATE GOVERNANCE COMMITTEE recommends to the Board nominees
for election as directors. The Corporate Governance CommitteeCORPORATE GOVERNANCE COMMITTEE will consider
those recommendations by shareholdersShareholders which are submitted with biographical and
business experience information to the Committee Chairman,Secretary of the Company, in compliance
with the Shareholder Proposals provision, hereinafter set forth.
The Executive Committee has, except to the extent prohibited by the
Business Corporation Law of the State of New York, all the powers of the Board
in the management of the Company. All important actions taken by the Executive
Committee are required to be reported to the Board at the meeting next
succeeding such action.
The Compensation Committee'sCOMPENSATION COMMITTEE's duties include, reviewing and recommending
compensation of principal officers, salary policy, benefit programs, future
objectives and goals of the Company, and recommending and approving the granting
of options to eligible persons under the Company's incentive and non-qualified
stock option plans.
The Audit Committee'sAUDIT COMMITTEE's function is to be aware of the financial reporting
procedures of the Company, review with the independent auditors the plans and
results of the audit engagement, and to investigate when called upon and
recommend such changes as deemed desirable to the Board. The control over the
financial reports of the Company is the function of Management and the objective
of this committee is to act as liaison with the Board in a recommendation
capacity. The Corporate Governance Committee'sBoard of Directors has considered the independence of each member
of the Audit Committee and has determined that each member is free from any
relationship that would interfere with his exercise of independent judgment.
The CORPORATE GOVERNANCE COMMITTEE's duties include, considering candidates
for the boardBoard of Directors recommended by shareholders,Shareholders, recommending candidates
for membership on the boardBoard and boardBoard committees, overseeing matters of
corporate governance, including boardBoard performance, reviews and recommending
compensation of non-employee directors.
6
The Board of Directors met five (5)four (4) times during fiscal year 2000.2001. All
directors attended at least seventy-five percent (75%) of the meetings of the
Board and the Committees of the Board during the period in which they served as
a director or a committee member.
6
10
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Mr. Langone is a director, controlling stockholder, and Chairman of the
Executive Committee of Salem National Corporation. In fiscal year 2000,2001, the
Company paid Salem Leasing Corporation, a wholly-ownedwholly owned subsidiary of Salem
National Corporation, $3,687,770$3,208,420 on leases of tractors and trailers, and for
services thereto. The terms of the Company's leaseleases with Salem Leasing
Corporation are, in Management's opinion, no less favorable than the Company
would have been able to negotiate with an independent third party for similar
equipment and services.
Mr. Langone is Chairman of the Board of Directors, principal shareholder,Shareholder,
President and Chief Executive Officer of Invemed Associates, Inc., an investment
firm. During fiscal year 2000,2001, such firm performed certain advisory services for
the Company and acted as broker on the repurchase of the Company's shares on the
NYSE. Mr. Mebane owns in excess of ten percent (10%) of said
firm's equity securities. The fees of $60,000 and commissions of $178,492$56,976 paid Invemed Associates,
Inc. during the fiscal year ended in 20002001 were, in the opinion of Management, fair and reasonable and as favorable to the Company as
could have been obtained from unrelated third parties.
Mr. Eller's son, C.W. Eller, is a controlling stockholder in Advantage
Machinery Services, Inc. In fiscal year 2000, the Company paid Advantage
Machinery Services, Inc. $2,058,072 for services rendered in moving machinery,
erecting said machinery, and for contract labor. In the opinion of Management,
the amount paid Advantage Machinery Services, Inc. for the work performed is
fair and reasonable and as favorable to the Company as could have been obtained
from unrelated third parties.
The Company, in relation to Mr. Parke's move from Ireland to the United
States to become the President and Chief Operating Officer of the Company,
agreed to loan Mr. Parke, with the approval of the Board of Directors,
sufficient funds for acquiring a home, making repairs and improvements thereto
and other expenses relating to the move of he and his family to the U.S. The
loan amounted to $1,160,741, of which $749,203 was used to purchase the property
known as 1510 Edgedale Road, Greensboro, North Carolina, and is evidenced by Mr.
and Mrs. Parke's Promissory Note to the Company for said amount, bearing
interest at 6% per annum, payable annually beginning December
31, 1999, with the unpaid principal amount of
said Note and all accrued and unpaid interest being due and payable in full on
May 1, 2002, and secured by a first deed of trust on said property.
TheOn October 21, 1999, the Company made a loanloans to Mr. Parke in the amount of
$37,758 and Mr. Webster, Mr. Moore and Mr. Little in the amount of $25,172 in
connection with the restrictedpayment of income taxes relating to stock awardawards granted to
himthem under the 1999 Unifi, Inc. Long-Term Incentive Plan,
in the principal amount of $37,750.80, withPlan. Said loans bear
interest at thea rate of 6.08% per annum for payment of income taxes relating to said award. The loan isand are evidenced by a Promissory Note in the principal amount and isNotes that
are payable as follows: (a) interest only at the aforementioned rate is payable for the first
four (4) years. The first payment of interest is due and payable on December 30, 2000, with annual payments of interest due and payable thereafter on
December 30,
2001, December 30, 2002 and December 30, 2003; and (b) the principal of said
loan plus all accrued interest at the aforementioned rate shall be due and payable on December 30, 2004.
On December 31, 2000, the Company made loans to Mr. Webster in the amount
of 39,150, Mr. Moore in the amount of $41,851 and Mr. Little in the amount of
$34,291 in connection with the payment of income taxes relating to stock awards
granted to them under the 1999 Unifi, Inc. Long-Term Incentive Plan. Said loans
bear interest at a rate of 5.87% per annum and are evidenced by Promissory Notes
that are payable as follows: (a) interest only on December 31, 2001, December
31, 2002, December 31, 2003 and December 31, 2004; and (b) the principal of said
loan plus all accrued interest on December 31, 2005.
The Company made a personal loan on October 22, 1999 to Mr. Stewart Q.
Little, a Senior Vice President of the Company, in the amount of $75,000. The
loan is evidenced by a Promissory Note in the principal amount of $75,000 with
interest at the rate of 6.5% per annum and is secured by the pledge of 5,000
shares of Unifi, Inc. Common Stock. The loan is payable as follows: (a) interest
only at the aforementioned rate shall be due and payable on October 22, 2000,
October 22, 2001 and October 22, 2002; and (b) the principal and interest of
said loan at the aforementioned rate shall be payable in thirty-six (36) monthly
installments of $2,298.68 each beginning on November 22, 2002.
AUDIT COMMITTEE REPORT
The Company madeCompany's Audit Committee consists of four directors. The Board has
adopted a loancharter that governs the Audit Committee. The Charter is attached to
Mr. Littlethis Proxy Statement as Appendix A. The members of the Committee are William J.
Armfield, IV, R. Wiley Bourne, Jr., who is the Committee chair, Charles R.
Carter, and Donald F. Orr.
The Company's management is responsible for the Company's internal controls
and financial reporting. Ernst & Young LLP, the Company's independent auditors,
are responsible for auditing the Company's
7
11
annual consolidated financial statements in connectionaccordance with generally accepted
auditing standards and for issuing a report on those financial statements. The
Audit Committee monitors and oversees these processes, and recommends to the
Board for its approval a firm of certified independent accountants to be the
Company's independent auditors.
To fulfill our responsibilities, we did the following:
- We reviewed and discussed with the restricted
stock award grantedCompany's management and the
independent auditors the Company's consolidated financial statements for
the fiscal year ended June 24, 2001.
- We reviewed management's representations to him underus that those consolidated
financial statements were prepared in accordance with generally accepted
accounting principles.
- We discussed with the 1999 Unifi, Inc. Long-Term Incentive Plan,independent auditors the matters that Statement on
Auditing Standards 61 requires them to discuss with us, including matters
related to the conduct of the audit of the Company's consolidated
financial statements.
- We received written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1 relating
to their independence from the Company and we have discussed with Ernst &
Young LLP their independence from the Company.
- Based on the discussions we had with management and the independent
auditors, the independent auditors' disclosures and letter to us, the
representations of management to us and the report of the independent
auditors, we recommended to the Board that the Company's audited annual
consolidated financial statements for fiscal year 2001 be included in the
principal amount of $25,171.88,Company's Annual Report on Form 10-K for the fiscal year ended June 24,
2001 for filing with interest at the rate of 6.08% per
annum,Securities and Exchange Commission.
- Ernst & Young LLP's Fees for payment of income taxes relating to said award. The loan is
evidenced by a Promissory Note in the principal amount and is payablefiscal year ended June 24, 2001 were as
follows:
(a) interest only at
Audit Fees $298,000
Financial Information System Design and Implementation Fees 0
All Other Fees
-audit-related services, including fees for foreign
statutory and benefit plan audits 103,000
-non-audit services, including healthcare claims and tax
services 114,000
--------
TOTAL $515,000
- We considered whether Ernst & Young LLP's provision of financial
information systems design and implementation services and other
non-audit services to the aforementioned rateCompany is payable forcompatible with Ernst & Young LLP
maintaining their independence from the first
four (4) years.Company and concluded that it is.
The first payment of interest is due and payable on December
30, 2000, with annual payments of interest due and payable thereafter on
December 30, 2001, 2002 and 2003; and (b) the principal of said loan plus all
accrued interest at the aforementioned rate shall be due and payable on
December 30, 2004.
7
Audit Committee submits this report:
R. Wiley Bourne, Chairperson
William J. Armfield, IV
Charles R. Carter
Donald F. Orr
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
This report of the Compensation Committee ("Committee") of the Board of
Directors sets forth the Company's compensation policies with respect to the
executives of the Company, including the named executives for whom specific
compensation information is reported in the accompanying summary compensation
tables.
The Compensation Committee during fiscal year 20002001 was composed of
non-employee directors. The Committee determines the compensation of the
employee directors as well as other executive officers of the Company. It's
duties also include the review of performance and approval of salaries and other
types of compensation for senior management of the Company; advising senior
management with respect to the
8
12
range of compensation to be paid to other officers of the Company; and making
recommendations to the full Board concerning benefit plans for the Company's
directors, officers and employees, the granting of restricted stock and stock
options under the 1999 Unifi, Inc. Long-Term Incentive Plan (the "1999 Plan")
and recommending benefit programs and future objectives and goals of the
Company.
In GeneralIN GENERAL
The Committee views executive compensation in three component parts: base
salary; annual incentive compensation and long-term incentive compensation. The
primary goalgoals of the Compensation Committee in setting executive compensation
is: (i) to ensure that the Company's compensation program for executive officers
attracts and retains qualified, talented, and highly motivated personnel, links
executive compensation to corporate and individual performance, and is
administered in an equitable manner; and (ii) to align the interest of the
executives with those of our shareholdersShareholders and also with the Company's
performance.
The annual and long-term incentive portions of the executive's compensation
are intended to achieve the committee'sCommittee's goal of aligning the executive's
interest with those of our shareholdersShareholders and with Company performance. These
portions of an executive's compensation are placed at risk and are linked to the
accomplishment of specific results that are designated to benefit our
shareholdersShareholders and the Company, both in the long and short term. As a result,
during years of excellent performance, the executives are provided the
opportunity to earn a higher competitive level of compensation and, conversely,
in years of below average performance, their compensation may be below
competitive levels.
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code on the Company's executive compensation program. Section 162(m)
denies a public company a deduction, except in limited circumstances, for
compensation paid to "covered employees," i.e., those employees named in the
"Summary Compensation Table" below, to the extent such compensation exceeds
$1,000,000. Based on its review of the likely impact of Section 162(m), the
Committee may in the future recommend changes to the Company's benefit plans in
order to qualify compensation paid to covered employees for such exception.
Base SalariesBASE SALARIES
The Compensation Committee recommends to the Board of Directors base
salaries they think are fair and reasonable for the services rendered by the
respective executive officers and to retain his or her services. The Committee
evaluates the base salary of each of the executive officers on an annual basis,
or more frequently if appropriate, and recommends to the entire Board any
changes in such base salary levels. In making such evaluations and
recommendations, the Committee considers the historical practices of the
Company, the officer's leadership and advancement of the Company's long term
strategy, plans and objectives, individual performance and contribution to the
Company's success and salary levels of other executives holding similar
positions in certain other textile companies. Base salary adjustments are
approved by the full Board. The base salaries for Mr. Mebane'sMebane and Mr. Eller's base salariesEller are
covered by Employment Agreements.
Annual Incentive Compensationagreements with the Company. Mr. Mebane and Mr. Eller retired as
employees of the Company on October 26, 2000 and January 31, 2001, respectively.
ANNUAL INCENTIVE COMPENSATION
The Committee designed the annual bonus component of incentive compensation
to align officer pay with the annual performance of the Company, based on
corporate earnings per share objectives. Bonuses, if any, recommended by the
Committee are subject to the approval of the full Board. No bonuses were awarded
to the named executive officers during the last fiscal year.
Outstanding Stock OptionsLONG-TERM INCENTIVE COMPENSATION
The 1999 Plan was approved by the Shareholders of the Company at their 1999
Annual Meeting. The 1999 Plan provides for the grant of incentive stock options
("ISO's"), non-qualified stock options ("NQSO's"), restricted stock awards
and/or performance based awards.
The Company hadalso has six other stock option plans, (excluding the 1999 Unifi, Inc.
Long-Term Incentive Plan), to wit: the 1996
Incentive Stock Option Plan; the 1996 Non-Qualified Stock Option Plan; the 1992
Incentive Stock Option Plan; 8
the 1987 Non-Qualified Stock
9
13
Option Plan; the 1982 Incentive Stock Option Plan; the Unifi Employee Stock
option Plan (this Plan was acquired in the Vintage Yarns, Inc. merger). No
additional options will be granted under any of the aforesaid six option plans
however, all outstanding option grants remain in full force and effect.
Long Term Awards
The 1999 Unifi, Inc. Long-Term Incentive Plan ("1999 Plan") was approved
by the shareholders at their 1999 Annual Meeting. The Plan provideseffect under
there respective terms.
STOCK OPTIONS -- Stock options provide incentive for the grantcreation of
any or allShareholder value over the long term since the full benefit of an executive
officer's compensation package cannot be realized unless Unifi common stock
appreciates in value during the term of the following types of awards: stock grants as either
incentiveoption. All stock options ("ISO's") or non-qualified stock options ("NQSO's"),
restricted stock awards and performance based awards.
Stock Options -- Original stock grantsgranted
under the 1999 Plan specified thatduring the fiscal year had an exercise price of one-third of the granted shares shall be the fair market
value of said stock on the date of grant for one-third of the granted shares,
shall
be exercisable at the fair market value of said stock on the date of grant plus 6%, for one-third of the granted shares, and fair market
value plus 12% for the remaining one-third of the granted shares shall be exercisable at
the fair market value of saidshares. The stock
on the date of grant plus 12%. Theoption grants
shall become exercisable 20% per year for five years on the first year anniversary
and 20% ondate of the second, third, and fourth years' anniversary, respectively, and the remaining
20% of granted shares on the fifth year anniversary,grant and unless otherwise provided, may be exercised until the
earlier of ten (10) years from the date of grant or, as to the number of shares
then exercisable, upon the termination of employment of the participant other
than by death, disability, retirement, or change of control, when all options
vest. No stock options were granted to any of the named executive officers
during the fiscal year.
RESTRICTED STOCK -- Restricted Stock --stock is 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 Committee lapse. Recipients of restricted stock
are not required to provide consideration other than the rendering of their
services. Restricted stock awards for 129,500104,366 shares were granted under the 1999
Unifi, Inc. Long-Term Incentive Plan ("1999 Plan") to employees, including the named executive officers (except for Mr. Parke,
who did not receive a grant of restricted stock), during the last fiscal year.
The
shares of restricted stock may not be sold, assigned, transferred, pledged, or
otherwise encumbered until the expiration of each "Restricted Period". The
Restricted Period begins on the date of grant and the shares are vested and
released from restriction as follows: 20% on the first anniversary of the grant
date and 20% on the second, third, fourth and fifth years' anniversary dates,
respectively. If termination of employment does not occur during a Restricted
Period, then at the end of such Restricted Period 20% of the shares of
restricted stock shall vest and be free of all restriction, subject to the
rules and regulations of the Securities and Exchange Commission. Termination of
employment with the Company for any reason other than death, disability or
retirement after age 57, with the approval of the Committee, or a change in
control of the Company, prior to the end of a Restricted Period, shall cause
forfeiture of the remaining restricted stock as of the date of such
termination.
2000 Compensation for Chief Executive Officer
Mr. Mebane, the Chairman of the Board and Chief Executive Officer ("CEO"),
resigned as CEO effective January 26, 2000, and Mr. Parke became President and
CEO of the Company.
Mr. Mebane's base salary was $800,000, as provided in his Employment
Agreement. All other compensation paid to him during the past fiscal year was
based upon the same factors generally applicable to compensation paid to other
executives of the Company. He did not receive any cash bonus compensation in
the fiscal year.2001 COMPENSATION FOR CHIEF EXECUTIVE OFFICER
Compensation paid to Mr. Parke as CEO of the Company during the fiscal year
was based on the same factors generally applicable to compensation paid to other
executives of the Company. In January 2000, Mr. Parke was elected President and Chief
Executive Officer and indoes not have an employment agreement with
the Company. In April 2000, the Board of Directors increased hisset Mr. Parke's base salary
from $500,000 toat $750,000 per annum, effective May 1, 2000. He did not receive any cash bonus
compensation, stock options or restricted stock grants in the 2001 fiscal year.
Committee's JudgmentCOMMITTEE'S JUDGMENT
It is the judgment of the Committee that in 2000,2001, and for the three fiscal
years ending June 25, 2000,24, 2001, the total compensation to the executives was
appropriate for the performance of the Company and to retain and motivate such
executives in the future.
The foregoing report has been furnishedis submitted by the
members of the following Committee: Compensation Committee:
Donald F. Orr (Chairman)
Charles R. Carter
Sue W. Cole
Kenneth G. Langone
910
14
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth information for fiscal years ended June
2001, 2000, 1999 and 1998,1999, as to compensation paid by the Company and its
subsidiaries (for the purpose of this section, collectively referred to as
"Company") to the Chief Executive officer ("CEO"); Mr. Mebane was CEO from June
28, 1999 through January 26, 2000, at which time Mr. Parke became CEO, which
position he continues to hold; and the other four most highly
compensated executive officers for services rendered in all capacities during
the last three (3) fiscal years.
UNIFI, INC. Summary Compensation TableSUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation ---------------------------------------------------
-------------------------------------- Restricted Securities All Other
Other Annual Stock Underlying Compensation
Name and Principal Position Year Salary Bonus Compensation (1)
- ----------------------------- ------ ----------- ----------- ------------------Compensations(1) Awards($) Options/SARs(#) ($)(3)
--------------------------- ---- -------- -------- ---------------- ---------- --------------- ------------
G. Allen Mebane, IV 2000 $800,000
Brian R. Parke 2001 $750,000 $ -- $ 44,753
Chairman of the Board, 1999 $800,0004,415 $ -- -- $ 67,56116,628
President, CEO and Director 1998 $800,000 $100,000 $140,376
Brian R. Parke 2000 $541,670 $ -- $18,310 $83,906 268,159(4) $ 18,310
President/COO/CEO24,415
and Director 1999 $341,297 $100,000 $ -- and Director 1998 $201,223 $ 90,000 $ -- Jerry W. Eller 2000 $420,00065,000(6) $ -- $ 15,048
Executive Vice Pres. 1999 $420,000 $160,000 $ 15,230
and Director 1998 $400,000 $160,000 $ 14,62135,514
Willis C. Moore, III 2001 $350,004 $ -- $ 7,197 $93,003(2) -- $ 9,342
Executive Vice President 2000 $310,000 $ -- $20,266 $55,938 83,131(4) $ 20,26617,866
and Chief Financial Officer 1999 $310,000 $155,000 $19,969 $ 19,969
and Sen. Vice President 1998 $300,000 $155,000-- 25,000(5) $ 21,91717,134
G. Alfred Webster 2001 $350,004 $ -- $ 6,047 $87,000(2) -- $ 16,593
Executive Vice Pres 2000 $260,000 $ -- $16,093 $55,938 69,722(4) $ 16,093
Executive Vice Pres.24,376
and Director 1999 $260,000 $145,000 $16,772 $ 16,772
and Director 1998 $250,000 $135,000-- 15,000(5) $ 22,794
Michael E. Delaney (8) 2001 $240,000 $ -- $ 5,261 $57,007(2) -- $ 8,714
Senior Vice President 2000 $112,500 $ -- $62,392 $60,782 55,527(4) $ --
1999 $ -- $ -- $ -- $ -- -- $ --
Stewart Q. Little 2001 $250,008 $ -- $ 8,551 $76,201(2) -- $ 9,504
Senior Vice President 2000 $225,000 $ -- $21,680 $55,938 60,336(4) $ 21,680
Senior Vice President18,176
1999 $225,000 $127,000 $ 19,242
1998 $220,000 $127,000 $ 25,938
Options
------------------------------------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Position Awards ($)(2) Options/SARs (#) Compensation ($)(3)
- ----------------------------- --------------- ----------------- --------------------
G. Allen Mebane, IV $ 83,906 429,051(4) $ 55,387
Chairman of the Board,$19,242 $ -- 20,000(5)15,000(5) $ 38,244
CEO and Director16,890
Jerry W. Eller (9) 2001 $280,000 $ -- $ -- $ -- -- $ 43,031
Brian R. Parke $ 83,906 268,159(4) $ 24,415
President/COO/CEO$259,798
2000 $420,000 $ -- 65,000(6) $ 35,514
and Director $ -- -- $ 11,917
Jerry W. Eller $ 55,938$15,048 $55,938 112,626(4) $ 27,188
Executive Vice Pres.1999 $420,000 $160,000 $15,230 $ -- 15,000(7) $ 25,574
and DirectorG. Allen Mebane, IV (9) 2001 $266,667 $ -- $66,241 $ -- -- $ 30,206
Willis C. Moore, III $ 55,938 83,131(4) $ 17,866
Chief Financial Officer$154,609
2000 $800,000 $ -- 25,000(5)$44,753 $83,906 429,051(4) $ 17,134
and Sen. Vice President55,387
1999 $800,000 $ -- -- $ 21,642
G. Alfred Webster $ 55,938 69,722(4) $ 24,376
Executive Vice Pres.$67,561 $ -- 15,000(5)20,000(5) $ 22,794
and Director $ -- -- $ 27,014
Stewart Q. Little $ 55,938 60,336(4) $ 18,176
Senior Vice President $ -- 15,000(5) $ 16,890
$ -- -- $ 21,75938,244
- -------------------------
Footnotes:
(1) As permitted by the Securities and Exchange Commission's rules regarding
disclosure of executive compensation in proxy statements, this column
excludes perquisites and other personal benefits of the named executive
officer if their total cost is less than $50,000. The amounts reported under
"Other Annual Compensation" are the approximate incremental cost to the
Company of their respective personal travel expense, where applicable.
(2) Amounts in this column reflect the aggregate market value of shares of restricted stock
awarded under the Company's 1999 Long-Term Incentive Plan ("Plan") based on
$11.1875$10.875 per share which was the closing price of the Company's common stock
on October 21, 1999,July 26, 2000, the date the award was made. The number of restricted
shares awarded under the Plan in fiscal 20002001 were as follows: to Messrs. MebaneMr.
Moore -- 8,552 shares, Mr. Webster -- 8,000, Mr. Delaney -- 5,242 shares and
Parke -- 7,500 shares respectively; and
to Messrs. Eller, Webster, Moore andMr. Little -- 5,000 shares respectively;7,007 shares; with the shares being released from restriction
over a 52 year period -- 20%33.3% being released as of the date of grant, 33.3%
being released on the first anniversary of the grant date, and 20%33.4% being released on
the second third, fourth and fifth years' anniversary dates,
respectively,date; or upon termination due to death, disability,
retirement after age 57, with the approval of the Compensation Committee, or
upon a change in control. The market value does not reflect that the shares
are restricted. The number and aggregate market value of the non-vested
restricted shares of common stock as of June 25, 200024, 2001 for the six named
executives receiving such grant are: 7,5005,701 shares -- $94,571$45,323 for Mr. Mebane; 7,500Moore;
5,333 shares -- $94,571 for Mr. Parke; 5,000 shares -- $63,047 for Mr. Eller; 5,000 shares
-- $63,047$42,397 for Mr. Webster; 5,0003,495 shares -- $63,047$27,785 for Mr.
Moore;Delaney; and 5,0004,671 shares -- $63,047$37,134 for Mr. Little. Dividends, to the
extent declared and paid by the Company in the future, are payable to these
individuals on shares of restricted stock owned by them.
Additional information relating
to the restricted stock awards granted is set forth on page 9.
10
(3) The components of the amounts shown in this column consists of the
following: (i) a director's feefees in 2001, 2000 and 1999, respectively, for Mr.
Parke of $5,000 each paid to Messrs.$6,000, 5000 and 0; Mr. Webster of 6,000, 5,000 and 4,000; Mr.
Eller of 5,000, 4,000 and 4,000; and Mr. Mebane Parke,of 6,000, 5,000 and Webster, and a director's fee of $4,000 paid to Mr. Eller;4,000;
(ii) payments of the Company's portion of the premiums on the split-dollar
life and other life insurance in 2001, 2000, 1999, and 1998,1999, respectively,
amounted to: Mr. Mebane -- $33,096, $17,640 and $17,640; Mr. Parke -- $1,932, $2,327 $8,718 and $7,446;$8,718; Mr. Moore -- $882,
$1,242 and $1,210; Mr. Webster -- $1,882, $2,259 and $2,190; Mr. Delaney
$342, $0 and $0; Mr. Little -- $764, $1,001
11
15
and $957; Mr. Eller -- $3,687, $5,897 $4,970 and $4,815; Mr. Moore -- $1,242, $1,210
and $1,129; Mr. Webster -- $2,259, $2,190 and $1,623;$4,970; and Mr. LittleMebane -- $1,001, $957$6,491,
$33,096 and $682;$17,640; (iii) beneficial income to Mr. Parke from loan
forgiveness in 2000, 1999 and 1998 of $0, $10,675 and $4,471, respectively;
and$10,675; (iv) allocation of the Company's
contribution to the Profit Sharing Plan in 2001, 2000 1999 and 1998,1999, respectively
to: Mr. Mebane -- $17,291, $16,604 and
$21,391; Mr. Parke -- $8,696, $17,088 $16,121and $16,121; Mr. Moore -- $8,460, $16,624
and $15,924; Mr. Webster -- $8,711, $17,117, and $16,604; Mr. Delaney --
$8,372, $0 and $0; Mr. Little -- $8,740, $17,175, and $15,933; Mr. Eller --
$0, $17,291 $16,604
and $21,391; Mr. Moore -- $16,624, $15,924 and $20,513; Mr. Webster --
$17,117, $16,604 and $21,391;$16,604; and Mr. LittleMebane -- $17,175, $15,933$8,785, $17,291 and $21,077. No$16,604; and
(v) consulting fees of $133,333 to Mr. Mebane and termination fees of
$251,111 to Mr. Eller after their retirements from the Company.
Additionally, Mr. Eller and Mr. Mebane received full distributions were made underfrom the
Company's Profit Sharing Plan to anyduring fiscal 2001, in the amount of
$1,070,354 and $1,938,334, respectively. No other executive officers
received distributions under the executive officers.Company's Profit Sharing Plan.
(4) Amounts in this column reflect the number of stock options granted each
year to the listed
individuals. The shareholders approvedindividuals in fiscal 2000 under the 1999 Unifi,
Inc. Long-Term Incentive Plan in October 1999 and options were granted for
the first time under said Plan in October 1999. ThePlan. These stock options vest 20%
per year on the
first anniversary of the grant date with 20% of said options vesting on the
second, third, and fourth years' anniversary dates, respectively, and the
balance of said options vesting on the fifth year's anniversary date.
Further information relating to the stock options granted is set forth on
page 9.for five (5) years.
(5) Options granted under the 1996 Incentive Stock Option Plan which vest in
three approximately equal increments.
(6) Includes 15,000 options granted under the 1996 Incentive Stock Option Plan
which vest in three approximately equal increments and 50,000 options
granted under the 1996 Non-Qualified Stock Option Plan which are fully
vested.
(7) Options granted under the 1996 Non-Qualified Stock Option Plan which are
fully vested.
(8) Mr. Delaney was hired by the Company effective on January 1, 2000.
(9) Mr. Eller and Mr. Mebane retired as employees of the Company on January 31,
2001, and October 26, 2000, respectively. Their compensation is disclosed in
the compensation table because if they had retained their respective
positions in the Company both of them would have been included in the group
of the top five highest paid executive officers.
OPTION GRANTS IN FISCAL YEAR 2000 (1)
[Graph appears here with the following values.]
Potential Realized Value
at Assumed Annual Rates of Stock
Individual Grants Price Appreciation
----------------------------------------- ---------------------------------------
% of Total
Options Options Granted Exercise or Present
Granted to Employees Base Price Expiration Value
Name (#) in Fiscal Year ($/Share) Date 5% ($) 10% ($) ($)(2)
- --------- --------- ----------------- ------------- ------------ ----------- ------------- -------------
Mebane 143,017 7.2% $ 11.1875 10/21/09 $993,682 $2,537,408 $1,094,652
143,017 7.2% $ 11.8587 10/21/09 $910,732 $2,454,172 $1,079,778
143,017 7.2% $ 12.5300 10/21/09 $826,924 $2,370,936 $1,064,905
Parke 89,387 4.5% $ 11.1875 10/21/09 $621,061 $1,585,904 $ 684,168
89,386 4.5% $ 11.8587 10/21/09 $569,210 $1,533,864 $ 674,864
89,386 4.5% $ 12.5300 10/21/09 $516,830 $1,481,841 $ 665,568
Eller 37,542 1.9% $ 11.1875 10/21/09 $260,842 $ 666,070 $ 287,346
37,542 1.9% $ 11.8587 10/21/09 $239,067 $ 644,221 $ 283,442
37,542 1.9% $ 12.5300 10/21/09 $217,068 $ 622,371 $ 279,538
Moore 27,711 1.4% $ 11.1875 10/21/09 $192,536 $ 491,649 $ 212,100
27,710 1.4% $ 11.8587 10/21/09 $176,457 $ 475,504 $ 209,211
27,710 1.4% $ 12.5300 10/21/09 $160,219 $ 459,376 $ 206,329
Webster 23,241 1.2% $ 11.1875 10/21/09 $161,478 $ 412,342 $ 177,887
23,241 1.2% $ 11.8587 10/21/09 $147,999 $ 398,816 $ 175,470
23,241 1.2% $ 12.5300 10/21/09 $134,374 $ 385,273 $ 173,045
Little 20,112 1.0% $ 11.1875 10/21/09 $139,738 $ 356,827 $ 153,937
20,112 1.0% $ 11.8587 10/21/09 $128,073 $ 345,122 $ 151,846
20,112 1.0% $ 12.5300 10/21/09 $116,288 $ 333,417 $ 149,754
- ----------
Footnotes:
1) Total amount granted in FY 2000 equals 1,975,570. These options2001
There were granted under the 1999 Unifi, Inc. Long-Term Incentive Plan and are
intended to constitute incentiveno stock options as that term is used in Code
ss.422. If,
11
as a result of options granted to the named individual under this Plan and
all plans of the Company, the aggregate fair market value (FMV) of said
stock (determined as of the time the option is granted), with respect to
which incentive stock options are exercisable for the first time by the
participantExecutive Officers during any
fiscal year under this Plan, would exceed $100,000,
any excess amount will be treated as non-qualified stock options. The first
one-third of the options granted were at an exercise price equal to the FMV
of the stock on the grant date which was $11.1875, with the exercise price
of the second one-third of the options being increased by 6% and the final
one-third of the options being increased by 12%.
2) The Grant Date Present Value was calculated using the Black-Scholes option
valuation model. Assumptions used in the calculation of the Black-Scholes
values are as follows:
Option Exercise and Stock prices on ISO's and NQSO's is: $11.1875 for the
first one-third of the options, $11.8587 for the second one-third of said
options, and $12.5300 for the remaining one-third of said options.
Expected Dividend Yield: 0% -- Risk-Free Rate: 6.0% -- Term: 10 Years --
Volatility: 49.5%
The actual value of the options will depend on the market value of the
Company's common stock when the options are exercised.2001.
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in fiscal year 20002001 of previously
granted options and the number and value of unexercised options are shown in the
following table.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option/AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR
ValuesVALUES
Number of Unexercised Value of Unexercised
Options/SARsSARS In-the-Money Options/SARs
Shares Acquired Value at Year End(1)(2) at Year End(3)
on Exercise Realized ----------------------------- ----------------------------------------------------------- ----------------------------
Name (#) ($)(4) Exercisable Unexercisable Exercisable Unexercisable(2)
- ---------- ----------------- ---------Unexercisable
---- --------------- -------- ----------- ------------- -------------------------- ------------- -----------------
Parke 0 $0 198,632 214,527 $0 $0
Moore 0 $0 98,708 66,504 $0 $0
Webster 0 $0 160,775 55,777 $0 $0
Delaney 0 $0 11,106 44,421 $0 $0
Little 0 $0 84,146 48,268 $0 $0
Eller 0 $0 253,771 -- $0 $0
Mebane 0 $ 0 561,523 435,718 $ 0 $322,067
Parke 0 $ 0 139,999 273,160 $ 0 $201,294
Eller 0 $ 0 141,145 112,626 $ 0 $ 84,543
Moore 0 $ 0 73,747 91,465 $ 0 $ 62,403
Webster 0 $ 0 141,829 74,723 $ 0 $ 52,337
Little 0 $ 0 67,077 65,337 $ 0 $ 45,291$0 997,241 -- $0 $0
- -------------------------
Footnotes:
1) Stock options granted under the 1996 Incentive Stock Option Plan on
10/22/98 are subject to a three year vesting schedule. One-third were
vested at the time of grant, one-third were vested and became exercisable
on 10/22/99 and the final one-third will vest and be exercisable on
10/22/00.
2) Stock options granted under the 1999 Unifi, Inc. Long-Term Incentive Plan on 10/21/99 are exercisable as
follows: one-fifthOne-fifth on October 21, 2000, one-fifth on October 21, 2001,
one-fifth on October 21, 2002, one-fifth on October 21, 2003 and one-fifth on
October 21, 2004.
2) Messrs. Mebane and Eller were 100% vested in all of their outstanding
options.
3) The fair market value of the Company's common stock at fiscal year-end, June
25, 2000,24, 2001, was $12.6094.$7.95. An option is "in-the-money" if the market value of the
common stock exceeds the exercise price.
4) Value represents fair market value at exercise minus the exercise price.
12
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EMPLOYMENT AND TERMINATION AGREEMENTS
Employment Agreement with Mr. MebaneEMPLOYMENT AGREEMENT WITH MR. MEBANE
The Company has an Employment Agreement dated July 19, 1990, with Mr.
Mebane which provides
that from July 1, 1990, through June 30, 2000, (the "executive period"),Mebane. Under the terms of his Employment Agreement, Mr. Mebane would receivewas paid a base
salary of $800,000 per annum, plus such additional
compensation and bonuses as may be awarded, from time to time, byyear during the Boardterm of Directors ofhis employment with the Company
and upon his retirement from the Company on October 26, 2001, is entitled to receive Directors' Fees; and from
July 1, 2000, untilbeing paid a
consulting fee of $200,000 per year through June 30, 2005, (the "consultant period"), Mr. Mebane would
receive annual compensation equal to one-fourth of the base compensation being
paid to him during the last year of his executive employment.
12
Employment Agreement with Mr. Eller2005.
AGREEMENT WITH MR. ELLER
The Company entered into an Agreement with Mr. Eller under which Mr.
Eller's employment would continue for a two-year period commencing oneffective February 1,
1999 and terminating1999. Under the terms of his Agreement, the Company paid Mr. Eller the sum of
$126,000 within 10 days of his retirement from the Company on January 31, 2001,
("Termination Date"). The
Termination Date could be accelerated by mutual consent. During his continued
employment, he would: (a) receive the same base salary he was receiving on the
date of his Agreement, subject to change by the Board of Directors, plus such
additional compensation and bonuses as may be awarded to him from time to time;
(b) have the same rights and privileges to participate in any retirement,
profit sharing, insurance plans and other benefits provided for other executive
officers and key employees; and (c) receive, for his unexercised incentive
stock options granted from time to time, new non-qualified stock options,
immediately exercisable, for the same number of shares, at the same exercise
price, and with the same expiration date as provided in the terminated
incentive stock options. Upon his retirement, the Company will: (a) pay to him
within ten (10) days the sum of $126,000; (b) pay tois paying him $1,160,000 in 36 equal monthly installments of $32,222,
beginning February 1, 2001; (c) provide2001. Mr. Eller, and his
family, until he obtains the age of 65, on conditions set forth in said
Agreement, the following: (i)is
eligible to receive medical and dental insurance as provided to executive
officers covered by the terms of the Company's Employee Welfare Benefit Plan;Plan and
(ii) continuethe Company is continuing to pay the premiums on the life insurance policies
covering Mr. Eller, currently owned by the Company under the split dollar
arrangement.
Severance Employment Agreements with Messrs. Mebane, Parke, Moore, and Littlearrangements.
CHANGE OF CONTROL AGREEMENT WITH MR. WEBSTER
The Company has Severance Employment Agreementsa Change of Control Agreement with Messrs. Mebane,
Parke, Moore, and Little.Mr. Webster. The
agreements provideagreement provides that if said officers'Mr. Webster's employment is terminated involuntarily,
other than by death or disability or cause, or voluntarily, other than for good
reason, after a change in control of the Company, such officerMr. Webster may receive
certain benefits. The present value of the benefits will be 2.99 times such officers'Mr.
Webster's average annual taxable compensation paid during the five (5) calendar
years preceding the change in control of the Company limited to the amount
deductible by Unifi, Inc. and as may be subject to excise taxes under the
Internal Revenue Code, all as determined by the Company's Independent Certified
Public Accountants, whose decision shall be binding upon the Company and the
officers. A change in control is deemed to occur if someone acquires twenty
percent (20%) or more of the outstanding voting stock of the Company, or if
there is a change in the majority of directors under specified conditions within
a two (2) year period. The benefits under these contingent employment agreements are, as noted,this Change of Control Agreement is
contingent and therefore not reported under the Summary Compensation Table.
13
17
PERFORMANCE GRAPH -- SHAREHOLDER RETURN ON COMMON STOCK
Comparison ofCOMPARISON OF 5 Year Cumulative Total Return* Among
Unifi, Inc.YEAR CUMULATIVE TOTAL RETURN*
AMONG UNIFI, INC., TheTHE NYSE Composite Index, and a Peer Group
[GraphCOMPOSITE INDEX AND A PEER GROUP
[Performance Graph appears here with the following values.]
Comparison of Five Year Cumulative Total Return* Among Unifi, Inc.,
New York Stock Exchange Composite Index and a Peer Grouphere. See table below for plot points.)
Company June 1995 June 1996 June 1997 June 1998 June 1999 June 2000
- ----------------UNIFI, INC. NYSE COMPOSITE PEER GROUP
----------- ----------- ----------- ----------- ----------- -------------------------- ----------
Unifi, Inc. $1996 100.00 $ 114.37 $ 152.17 $ 143.39 $ 77.45 $ 52.59
NYSE Composite $ 100.00 $ 123.08 $ 158.46 $ 198.30 $ 222.08 $ 220.30
Peer Group $ 100.00
$ 105.94 $ 118.99 $ 143.07 $ 109.63 $ 69.021997 133.04 128.98 116.37
1998 125.37 160.78 132.69
1999 67.72 173.54 96.43
2000 45.98 178.16 60.48
2001 29.10 174.10 63.25
- -------------------------
* $100 invested on June 25, 199530, 1996 in stock or on June 30, 19951996 in
index -- including reinvestment of dividends.
14
18
NEW YORK STOCK EXCHANGE
Unifi, Inc.'s Common Stock trades on the New York Stock Exchange (NYSE)
under the symbol "UFI", with the closing price of said stock on September 18,
2000,4,
2001, being $11.09375$9.98 per share.
INFORMATION RELATING TO THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP, has been selected as the Company's Independent Certified Public Accountantsindependent auditors
for fiscal year ended June 25, 2000, is expected to be present at24, 2001. Ernst & Young, LLP has been the shareholders' meeting, at which time a representativeCompany's
independent auditors since 1990. Representatives of Ernst & Young LLP will
attend the Annual Meeting. They will have anthe opportunity to make a statement if
he/shethey so desiresdesire and to answer appropriate questions from shareholders.Shareholders.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and any person who owns
more than ten percent of the Company's stock, to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and reports of changes
in ownership of common stock. Such persons are required by the SEC's regulations
to furnish the Company with copies of all Section 16(a) reports they filed.
14
To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representation that no other
reports were required, all such Section 16(a) filing requirements have been made
during fiscal year ended June 25, 2000.24, 2001, except that Ms. Cole and Mr. Armfield,
who were elected to the Company's Board of Directors effective May 24, 2001,
filed their Initial Statements of Beneficial Ownership of Securities on Form 5's
in August, 2001.
SHAREHOLDER PROPOSALS
Proposals which shareholdersShareholders intend to present at the Company's 20002002 Annual
Meeting of the Shareholders pursuant to Rule 14a-8 promulgated under the
Securities and Exchange Act of 1934, as amended, and wish to have included in the Company's proxy
materials should be sent registered, certified or express mail to Charles F.
McCoy, Vice President, Secretary and General Counsel of the Company, at 7201
West Friendly Avenue, Greensboro, North Carolina, 27410. Proposals must be
received by the Company no later than May 25, 2001. If a proponent fails21, 2002.
OTHER MATTERS
The Board of Directors does not intend to notifypresent any items of business
other than those stated in the Company by August 11, 2000Notice of a
non-Rule 14a-8 shareholder proposal which it intends to submit at the Company's
2000 Annual Meeting of the Shareholders, the proxy solicited by the Board of
Directors with respect to such meeting may grant discretionary authority to the
proxies named therein to vote with respect to such matter.
OTHER MATTERS
The Management of the Company is not aware of anyShareholders. If
other matters which may
be presented for action atare properly brought before the meeting, other than those set forth herein.
However, should any other matter requiring the vote of the shareholders arise,
it is intended that shares represented by proxies in the accompanying form will
be voted by the persons named in the
accompanying proxy will vote the shares represented by it in accordance with
their best judgment.judgement. Discretionary authority to vote on other matters is
included in the proxy.
By Order of the Board of Directors
/s/ Clifford Frazier, Jr.
CLIFFORD FRAZIER, JR.Charles F. McCoy
Charles F. McCoy
Vice President, Secretary & General
Counsel
Greensboro, North Carolina
September 26, 200021, 2001
15
19
APPENDIX A
UNIFI, INC.
AUDIT COMMITTEE CHARTER
(1) CHARTER
This charter governs the operations of the Audit Committee. The Audit
Committee shall review and reassess the charter at least annually and obtain the
approval of the Board of Directors.
(2) ORGANIZATION
There shall be a committee appointed by the Board of Directors to be known
as the Audit Committee. The Audit Committee of the Board of Directors shall be
comprised of at least three directors all of whom are independent of management
and the Company. Members of the Audit Committee shall be considered independent
if they have no relationship to the Company that may interfere with the exercise
of their independence from management and the Company. All Audit Committee
members shall be financially literate, (or shall become financially literate
within a reasonable time after appointment to the Committee), and at least one
member shall have accounting or related financial management expertise.
(3) INDEPENDENCE
In addition to the description of independence described in paragraph (2),
the following restrictions shall apply to every Audit Committee member:
(a) Employees
A director who is an employee (including non-employee executive
officers) of the Company or any of its affiliates may not serve on the
Audit Committee until three years following the termination of his or her
employment with the Company.
(b) Business Relationship
A director (i) who is a partner, controlling shareholder, or executive
officer of an organization that has a business relationship with the
Company, or (ii) who has a direct business relationship with the Company
(e.g. a consultant) may serve on the Audit Committee only if the Company's
Board of Directors determines in its business judgement that the
relationship does not interfere with the director's exercise of independent
judgement. In making a determination regarding the independence of a
director pursuant to this requirement, the Board of Directors should
consider, among other things, the materiality of the relationship to the
Company, to the director, and, if applicable, to the organization with whom
the director is affiliated. A director may serve on the Audit Committee
without the aforesaid Board of Directors determination three years after
termination of (i) or (ii) above.
(c) Cross Compensation Committee Link
A director who is employed as an executive of another corporation
where any of the Company's executives serve on that corporation's
compensation committee may not serve on the Company's Audit Committee.
(d) Immediate Family
A director who is an Immediate Family member of an individual who is
an executive officer of the Company or any of its affiliates cannot serve
on the Audit Committee until three years following the termination of such
employment relationship by said executive.
Notwithstanding the requirements of paragraphs (3)(a) and (d) above,
one director who is no longer an employee or who is an Immediate Family
member of a former executive officer of the Company or its affiliates, but
is not considered independent pursuant to these provisions due to the
three-year restriction period, may be appointed, under exceptional and
limited circumstances, to the
16
20
Audit Committee if the Company's Board of Directors determines in its
business judgement that membership on the committee by the individual is
required by the best interest of the Company and its Shareholders, and the
Company discloses, in the next annual proxy statement subsequent to such
determination, the nature of the relationship and the reasons for that
determination.
(4) STATEMENT OF POLICY
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their responsibility to the Shareholders, potential shareholders, the
investment community and others relating to the Company's financial statements
and the financial reporting process, the systems of internal accounting and
financial controls, the annual independent audit of the Company's financial
statements, and the legal compliance and ethics programs as established by
management and the Board. In so doing, it is the responsibility of the Audit
Committee to maintain free and open communication between the committee, the
independent auditors, and management of the Company. In discharging its
oversight role, the Audit Committee is empowered to investigate any matter
brought to its attention with full access to all books, records, facilities, and
personnel of the Company and the power to retain outside counsel, or other
experts for this purpose.
(5) RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and Shareholders that the
corporate accounting and reporting practices of the Company are in accordance
with all requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
(a) Review Procedures
1. Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have
the document published at least every three years in accordance
with SEC regulations.
2. Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues regarding
accounting principles, practices, and judgements.
3. In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting
processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control,
and report such exposures. Review significant findings prepared by
the independent auditors and the internal auditing department
together with management's responses.
4. Review with financial management and the independent auditors the
company's quarterly financial results prior to the release of
earnings and/or the company's quarterly financial statements prior
to filing or distribution. Discuss any significant changes to the
Company's accounting principles and any items required to be
communicated by the independent auditors in accordance with SAS 61
(see item 9). The Chair of the Committee may represent the entire
Audit Committee for purposes of this review.
(b) Independent Auditors
5. The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and
annually recommend to the Board of Directors the appointment of the
independent auditors or approve any discharge of auditors when
circumstances warrant.
6. Approve the fees and other significant compensation to be paid to
the independent auditors.
17
21
7. On an annual basis, the Committee should review and discuss with
the independent auditors all significant relationships they have
with the Company that could impair the auditors' independence.
8. Review the independent auditors audit plan - discuss scope,
staffing, locations, reliance upon management, and general audit
approach.
9. Prior to releasing the year-end earnings, discuss the results of
the audit with the independent auditors. Discuss certain matters
required to be communicated to audit committees in accordance with
AICPA SAS 61.
10.Consider the independent auditors' judgements about the quality and
appropriateness of the Company's accounting principles as applied
in its financial reporting.
(c) Legal Compliance
11.On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the
organization's financial statements, the Company's compliance with
applicable laws and regulations, and inquiries received from
regulators or governmental agencies.
(d) Other Audit Committee Responsibilities
12.At such time or times as it determines to be appropriate and in the
best interest of the Company, the Audit Committee shall have the
discretion to retain a third party independent auditor to provide
such internal audit services for the Company as the Audit Committee
shall determine is appropriate.
13.Annually prepare a report to Shareholders as required by the
Securities and Exchange Commission. The report should be included
in the Company's annual proxy statement.
14.Perform any other activities consistent with this Charter, the
Company's By-Laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
15.Maintain minutes of meetings and periodically report to the Board
of Directors on significant results of the foregoing activities.
16.Establish, review, and update periodically, as deemed appropriate,
a Code of Ethical Conduct and ensure that management has
established a system to enforce this Code.
17.Periodically perform self-assessment of audit committee
performance.
18.Review financial and accounting personnel succession planning
within the company.
19.Annually review a summary of Directors' and Officers' related party
transactions and potential conflicts of interest.
18
22
UNIFI, INC.
ANNUAL MEETING, OCTOBER 26, 200025, 2001
PLEASE DATE, SIGN AND DETACH THE PROXY CARD BELOW, AND
RETURN IN THE ENCLOSED BUSINESS REPLY ENVELOPE TO:
UNIFI, INC.
C/O FIRST UNION NATIONAL BANK
PROXY TABULATION
P.O. BOX 217950
CHARLOTTE, NC 28254-3556
(arrow)- FOLD AND DETACH HERE (arrow)
------------------------------------------------------------------------------
The undersigned hereby appoints Willis C. Moore, III and Charles F. McCoy,
or either of them, with full power of substitution, as attorneys and proxies to
represent and vote all shares of Unifi, Inc. Common Stock which the undersigned
is entitled to vote at the Annual Meeting of the Shareholders to be held at the
Corporation's corporate headquarters at 7201 West Friendly Avenue, in
Greensboro, North Carolina, on Thursday, October 25, 2001, at 10:00 A.M. Eastern
Daylight Savings Time, and any adjournment or adjournments thereof as follows:
PROPOSAL NO. 1 -- Election of Directors
[ ] To vote FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the contrary below) for all nominees listed below
NOMINEES:
CLASS 1 -- Donald F. Orr, Robert A. Ward and G. Alfred Webster
CLASS 2 -- William J. Armfield, IV
CLASS 3 -- Sue W. Cole
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
--------------------------------------------------------------------------------
The undersigned hereby authorizes the proxies, in their discretion, to vote on
any other business which may properly be brought before the meeting or any
adjournment thereof to the extent authorized by Rule 14a-4(c) promulgated by the
Securities and Exchange Commission.
23
UNIFI, INC.
ANNUAL MEETING, OCTOBER 25, 2001
PLEASE DATE, SIGN AND DETACH THE PROXY CARD BELOW, AND
RETURN IN THE ENCLOSED BUSINESS REPLY ENVELOPE TO:
UNIFI, INC.
C/O FIRST UNION NATIONAL BANK
PROXY TABULATION
P.O. BOX 217950
CHARLOTTE, NC 28254-3556
- FOLD AND DETACH HERE -
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED
FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS UNLESS A CONTRARY CHOICE IS
SPECIFIED, IN WHICH CASE THE PROXY WILL BE VOTED AS SPECIFIED.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders, dated September 26, 2000,21, 2001, and the Proxy Statement furnished
therewith.
Dated this day of , 2000.
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_____________________________(SEAL)
_____________________________(SEAL)2001.
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--------------------------------(SEAL)
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NOTE: Signature should agree with
name on stock certificate as printed
hereon. Executors, administrators,
trustees and other fiduciaries should
so indicate when signing. If the
signer is a corporation, please sign
in full corporate name, by duly
authorized officer.
This Proxy is Solicited on Behalf
of the Board of Directors. Please
date, sign and return this Proxy.
Thank you.
(arrow) FOLDTHIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS. PLEASE DATE,
SIGN AND DETACH HERE (arrow)
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The undersigned hereby appoints Willis C. Moore, III and C. Clifford
Frazier, Jr., or either of them, with full power of substitution, as
attorneys and proxies to represent and vote all shares of Unifi, Inc. Common
Stock which the undersigned is entitled to vote at the Annual Meeting of the
Shareholders to be held at the corporation's Plant T-5 facility at 1641
Shacktown Road, in Yadkinville, North Carolina, on Thursday, October 26,
2000, at 10:00 A.M. Eastern Daylight Savings Time, and any adjournment or
adjournments thereof as follows:
PROPOSAL NO. 1 -- Election of Directors
[ ] To vote FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for
(except as marked to the contrary below) all nominees listed below
Nominees: G. Allen Mebane, IV, Brian R. Parke, J.B. Davis and R. Wiley
Bourne, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
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The undersigned hereby authorizes the proxies, in their discretion, to vote
on any other business which may properly be brought before the meeting or
any adjournment thereof to the extent authorized by Rule 14a-4(c)
promulgated by the Securities and Exchange Commission.RETURN THIS PROXY. THANK YOU.