UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant   x☒

Filed by a Party other than the Registrant   ¨☐

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UNIFI, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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MAKERS OF REPREVE^®

UNIFI, INC.

Notice of Annual Meeting

and

Proxy Statement

20162017 Annual Meeting of Shareholders

October 26, 201625, 2017

MAKERS OF REPREVE^®

Unifi, Inc.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

September 13, 201612, 2017

Dear Shareholder:

On behalf of the Board of Directors and the management of Unifi, Inc., I invite you to attend the 20162017 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m. (Eastern Time), Eastern Time, on Wednesday, October 26, 201625, 2017 at The Roosevelt Hotelthe Lotte New York Palace located at 45 East 45th Street &455 Madison Avenue at 50th Street, New York, New York 10017.10022. Details regarding admission to the meetingAnnual Meeting and the business to be conducted are described in the accompanying Notice of 20162017 Annual Meeting of Shareholders and Proxy Statement.

I hope that you will attend the Annual Meeting in person, but even if you are planning to come, I strongly encourage you to vote as soon as possible to ensure that your shares are represented at the meeting. The accompanying Proxy Statement explains more about voting. Please read it carefully.

Thank you for your continued support.

Sincerely,

Thomas H. Caudle, Jr.Kevin D. Hall

PresidentChief Executive Officer

UNIFI, INC.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

(336) 294-4410

Notice of 20162017 Annual Meeting of Shareholders

The 20162017 Annual Meeting of Shareholders (the “Annual Meeting”) of Unifi, Inc. (the “Company”) will be held at 8:30 a.m. (Eastern Time), Eastern Time, on Wednesday, October 26, 201625, 2017 at The Roosevelt Hotelthe Lotte New York Palace located at 45 East 45th Street &455 Madison Avenue at 50th Street, New York, New York 10017,10022, for the purpose of voting on the following matters:

The Board of Directors unanimously recommends athat you vote “FOR” Proposalsitems 1, 2 3 and 4.4, and vote in favor of a frequency of every “1 YEAR” for item 3. The persons named as proxiesproxy holders will use their discretion to vote on other matters that may properly arise at the Annual Meeting or any adjournment or postponement thereof.

Only shareholders of record as of the close of business on September 1, 2016August 31, 2017 will be entitled to vote at the Annual Meeting. You may obtain directions to the Annual Meeting, where you may vote in person, by calling (336) 294-4410.

Your vote is important. Whether or not you plan to attend the Annual Meeting, you are encouraged to vote as soon as possible to ensure that your shares are represented at the meeting. If you received a hardpaper copy of the proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote via the Internet; (ii) vote by telephone; or (iii) complete, sign, date and return your proxy card in the postage-paid envelope provided. If you received only a Notice of Internet Availability of Proxy Materials by mail, you may vote your shares by proxy at the Internet site address listed on your Notice. If you hold your shares through an account with a bank, broker or similar organization, please follow the instructions you receive from the holder of record to vote your shares.

By Order of the Board of Directors,

Ben Sirmons

Secretary and Assistant General Counsel

September 13, 201612, 2017

Table of Contents

i

PROXY STATEMENT

The Board of Directors (the “Board of Directors” or the “Board”) of Unifi, Inc. (“Unifi” or the “Company”) is providing these materials to you in connection with the 20162017 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m. (Eastern Time), Eastern Time, on Wednesday, October 26, 201625, 2017 at The Roosevelt Hotelthe Lotte New York Palace located at 45 East 45th Street &455 Madison Avenue at 50th Street, New York, New York 10017.10022.

General Information

Why am I receiving these materials?

You have received these materials because the Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting. This Proxy Statement includes information that Unifi is required to provide you under the Securities and Exchange Commission rules and regulations (the “SEC rules”) and is designed to assist you in voting your shares.

What is a proxy?

The Board is asking for your proxy. This means you authorize persons selected by the Company to vote your shares at the Annual Meeting in the way that you instruct. All shares represented by valid proxies received and not revoked before the Annual Meeting will be voted in accordance with the shareholder’s specific voting instructions.

Why did I receive a one-page notice regarding internetInternet availability of proxy materials instead of a full set of proxy materials?

The SEC rules allow companies to choose the method for delivery of proxy materials to shareholders. For most shareholders, the Company has elected to mail a notice regarding the availability of proxy materials on the Internet (the “Notice of Internet Availability”), rather than sending a full set of these materials in the mail. The Notice of Internet Availability, or a full set of the proxy materials (including the Proxy Statement and form of proxy), as applicable, was sent to shareholders beginning September 13, 2016,12, 2017, and the proxy materials were posted on the investor relations portion of the Company’s website,www.unifi.com, and on the website referenced in the Notice of Internet Availability on the same day. Utilizing this method of proxy delivery expedites receipt of proxy materials by the Company’s shareholders and lowers the cost of the Annual Meeting. If you would like to receive a paper or e-mail copy of the proxy materials, you should follow the instructions in the Notice of Internet Availability for requesting copies.a copy.

What is included in these materials?

These materials include:

If you received printed copiesa paper copy of these materials by mail, these materials also include the proxy card or voting instruction form for the Annual Meeting.

What items will be voted on at the Annual Meeting?

There are four (4) proposals scheduled to be voted on at the Annual Meeting:

●

the approval, on an advisory basis, of the amendment to the Company’s Restated Certificate of Incorporation to reduce the required minimum number of directors on the Board of Directors;named executive officer compensation in fiscal 2017;

The Board is not aware of any other matters to be brought before the Annual Meeting. If other matters are properly raised at the meeting,Annual Meeting, the proxy holders may vote any shares represented by proxy in their discretion.

What are the Board’s voting recommendations?

The Board unanimously recommends that you vote your shares:

Who can attend the Annual Meeting?

Admission to the Annual Meeting is limited to:

Admission to the meetingAnnual Meeting will be on a first-come, first-served basis. Each shareholder may be asked to present valid photo identification, such as a driver’s license or passport, and proof of stock ownership as of the record date.date for admittance.

When is the record date and who is entitled to vote?

The Board set September 1, 2016August 31, 2017 as the record date. As of the record date, 18,018,44518,261,067 shares of common stock, $0.10 par value per share, of the Company (the “Common(“Common Stock”) were issued and outstanding. Shareholders are entitled to one vote per share of Common Stock outstanding on the record date on any proposalmatter properly presented at the Annual Meeting.

What is a shareholder of record?

A shareholder of record or registered shareholder is a shareholder whose ownership of Common Stock is reflected directly on the books and records of the Company’s transfer agent, American Stock Transfer & Trust Company, LLC. If you hold Common Stock through an account with a bank, broker or similar organization, you are considered the beneficial owner of shares held in street name and are not a shareholder of record. For shares held in street name, the shareholder of record is your bank, broker or similar organization. The Company only has access to ownership records for the registered shares. If you are not a shareholder of record and you wish to attend the Annual Meeting, the Company will require additional documentation to evidence your stock ownership as of the record date, such as a copy of your brokerage account statement, a letter from your bank, broker or other nominee, or a copy of your voting instruction form or Notice of Internet Availability.

How do I vote?

You may vote by any of the following methods:

How can I revoke my proxy or change my vote?

You may revoke your proxy or change your vote as follows:

What happens if I vote by proxy and do not give specific voting instructions?

Shareholders of record.  If you are a shareholder of record and you vote by proxy, by phone,telephone, via the Internet or by signing, dating and returning a proxy card, without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as the proxy holders may determine in their discretion for any other matters properly presented for a vote at the Annual Meeting.

Beneficial owners of shares held in street name.  If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform the inspector of election that it does not have the authority to vote on that matter with respect to your shares. This is referred to as a “broker non-vote.”

The election of directors, the approval of the amendment to the Company’s Restated Certificate of Incorporation and the advisory vote to approve the Company’s named executive officer compensation paidin fiscal 2017 and the advisory vote on the frequency of future advisory votes to approve the Company’s named executive officers in fiscal 2016officer compensation are non-routine matters. Consequently, without your voting instructions, the organization that holds your shares cannot vote your shares on these proposals. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 20172018 is considered a routine matter.

What is the voting requirement to approve each of the proposals?

What is the quorum for the Annual Meeting? How are abstentions and broker non-votes treated?

The presence, in person or by proxy, of the holders of a majority of the outstanding shares entitled to vote is necessary for the transaction of business at the Annual Meeting. Your shares are counted as being present if you vote in person at the Annual Meeting, by telephone, via the Internet or by submitting a properly executed proxy card or voting instruction form by mail. Abstentions and broker non-votes are counted as present for the purpose of determining a quorum for the Annual Meeting.

With respect to Proposal 1, the election of directors, you may vote “for” or “against” each of the nominees for the Board, or you may “abstain” from voting for one or more nominees. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will therefore have no effect on the election of director nominees.

With respect to Proposals 2 3 and 4, the approval of the amendment to the Company’s Restated Certificate of Incorporation, the advisory vote to approve the compensation paid to the Company’s named executive officersofficer compensation in fiscal 20162017 and the ratification of the appointment of KPMG LLP as the Company’s

independent registered public accounting firm for fiscal 2017,2018, you may vote “for,”“for” or “against” these proposals, or you may “abstain” from voting on these proposals. For Proposal 2, abstentions and broker non-votes will have the same effect as votes against the proposal. For Proposals 3 and 4, abstentionsAbstentions and broker non-votes are not considered votes cast for the foregoing purposes and will therefore have no effect on the vote for these proposals.

With respect to Proposal 3, the advisory vote on the frequency of future advisory votes to approve the Company’s named executive officer compensation, you may vote for a frequency of future advisory “say-on-pay” votes of every “one year,” “two years” or “three years,” or you may “abstain” from voting on this proposal. Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will therefore have no effect on the vote for this proposal.

Who are the proxy holders and how will they vote?

The persons named as attorneys-in-fact in the proxies, Kevin D. Hall and Thomas H. Caudle, Jr. and Sean D. Goodman,, were selected by the Board and are officers and with respect to Mr. Caudle, a director,directors of the Company. If you are a shareholder of record and return an executed and dated proxy card but do not provide specific voting instructions, your shares will be voted on the proposals as follows:

If other matters properly come before the Annual Meeting and you do not provide specific voting instructions, your shares will be voted in the discretion of the proxy holders.

Who pays for solicitation of proxies?

The Company is paying the cost of soliciting proxies and will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to shareholders and obtaining their votes.proxies. In addition to soliciting the proxies by mail and the Internet, certain of the Company’s directors, officers and regular employees, without compensation, may solicit proxies personally or by telephone, facsimile and e-mail. The Company has retained Alliance Advisors, LLC to provide certain monitoring and vote reporting services, for which the Company has paid such firm a fee of $5,000, and may request the firm to perform proxy solicitation services, for which the Company could incur additional costs of $7,500, plus, in each case, reimbursement of expenses.

Where can I find the voting results of the Annual Meeting?

The Company will announce preliminary or final voting results at the Annual Meeting and publish final results in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) within four (4) business days of the completion of the meeting.

Security Ownership of Certain Beneficial Owners and Management

The following table provides information about the beneficial ownership of the Company’s Common Stock as of August 23, 2016,31, 2017, by each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock as well as each director, nominee for director and named executive officer and all directors and executive officers as a group. In computing the number of shares beneficially owned by a person and the ownership percentage ownership of that person, shares deemed outstanding include (i) shares of Common Stock subject to stock options held by that person that are currently exercisable or exercisable within sixty (60)60 days of August 23, 201631, 2017 and (ii) shares of restricted stock units whichthat vest within sixty (60)60 days of August 23, 2016 are deemed outstanding. These31, 2017. However, these shares or units however, are not deemed outstanding for the purposes of computing the ownership percentage ownership of any other person. The ownership percentage ownership is based on 17,995,94518,261,067 shares of Common Stock outstanding as of August 23, 2016.31, 2017. Except as otherwise indicated in the footnotes below, each of the persons named in the table has sole voting and investment power with respect to the securities indicated as beneficially owned by them, subject to community property laws where applicable. Unless otherwise indicated in the footnotes below, the address for each of the beneficial owners is c/o Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410.

shown. Dimensional provides investment advice to four registered investment companies and serves as

investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, funds, trusts and accounts, collectively referred to as the “Funds”). In certain cases, subsidiaries of Dimensional may act as an adviser or sub-adviser to certain Funds. In its role as investment adviser, sub-adviser and/or manager, Dimensional or its subsidiaries may possess voting and/or investment power over the securities owned by the Funds and may be deemed to beneficially own these shares. However, all securities reported on the Schedule 13G/A are owned by the Funds, and Dimensional and its subsidiaries disclaim beneficial ownership of all of the shares shown.

(13)(11)

Consists of 20,23525,048 shares that Ms. Present has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of her services as a director.

Proposal 1: Election of Directors

The Board currently consists of nine (9) members. William L. Jasper, who served as Chairman and Chief Executive Officer of the Company until April 2016, is not standing for reelection. Effective on the date of the Annual Meeting, the size of the Board will be reduced to eight (8) members.

On the recommendation of the Corporate Governance and Nominating Committee, the Board has nominated the eight (8)nine persons namedlisted below for election as directors at the Annual Meeting. If elected, each nominee will serve until his or her term expires at the 20172018 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified. Each nominee has agreed to be named in this Proxy Statement and to serve if elected.

All of the nominees are currently serving as directors. Except for JamesKevin D. Mead,Hall, who was elected to the Board in December 2015, Paul R. Charron, who was elected to the Board in February 2016, and Robert J. Bishop, Thomas H. Caudle, Jr. and James M. Kilts, who were each elected to the Board in April 2016,May 2017, all of the nominees were elected to the Board at the 20152016 Annual Meeting of Shareholders. Messrs. Bishop, Charron, Kilts and Mead were initially identified to the Board as potential directors by non-management directors of the Company.

Although the Company knows of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxy holders intend to vote your shares for any substitute nominee proposed by the Board. At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the eight (8)nine nominees named in this Proxy Statement.

The Board of Directors unanimously recommends that you vote “FOR” the election of each of the eight (8)nine nominees listed below.

Unless a proxy is marked to give a different direction, the persons named in the proxy will vote“FOR” the election of each of the eight (8)nine nominees listed below.

Nominees for Director

Listed below are the eight (8)nine persons nominated for election to the Board. The following paragraphs include information about each director nominee’s business background, as furnished to the Company by the nominee, and additional experience, qualifications, attributes or skills that led the Board of Directors to conclude that the nominee should serve on the Board.

Robert J. Bishop

Mr. Bishop founded Impala Asset Management LLC, a private investment management company, in 2004 and is the managing principalManaging Principal of the firm and manages the Impala, Waterbuck, Alpha and Alpha Funds.Resource Funds and other managed accounts. From 2002 to 2003, he was Chief Investment Officer at Soros Fund Management overseeing the Quantum Endowment Fund. From 1998 to 2002, he was a principal at Maverick Capital. Mr. Bishop was a portfolio manager at Kingdon Capital from 1995 to 1998 and from 1992 to 1995 he was a managing director of Tiger Management. From 1986 to 1992, Mr. Bishop was an equity analyst at Salomon Brothers and, from 1980 to 1984, he worked as a legislative assistant/director for Congressmen Toby Roth and Don Ritter.

Mr. Bishop brings valuable financial and managerial expertise to the Board through his extensive experience in investment and asset management.

Thomas H. Caudle, Jr.

Mr. Caudle has served as President & Chief Operating Officer of Unifi since April 2016.August 2017. Previously, he was President of the Company from April 2016 to August 2017, Vice President of Manufacturing of the Company from October 2006 to April 2016 and Vice President of Global Operations of the Company from April 2003 untilto October 2006. Mr. Caudle joined Unifi in 1982 and, since that time, has served in a variety of other leadership roles, including Senior Vice President in charge of manufacturing for the Company and Vice President of Manufacturing Services.

Mr. Caudle’s more than 30 years of experience with Unifi give him a comprehensive knowledge of the Company and the textile industry. He also brings important managerial and operational expertise to the Board.

Paul R. Charron

Mr. Charron has been a management consultant since 2007. He served as Chairman and Chief Executive Officer of Liz Claiborne Inc., a global fashion company, from 1996 to 2006 and was President and Chief Executive Officer in 1995 and Vice Chairman and Chief Operating Officer in 1994. Before joining Liz Claiborne Inc., Mr. Charron held executive positions with each of V.F. Corporation (between 1988 and 1994), Brown & Bigelow (between 1983 and 1987) and Cannon Mills Company (between 1981 and 1983), after beginning his business career in positions with The Procter & Gamble Company (1971 to 1978) and General Foods Corporation (1979 to 1981). Mr. Charron served as a director of Campbell Soup Company from 2003 to 2015 and as Chairman of its board of directors from 2009 to 2015. He served as Senior Advisor toat Warburg Pincus, a global private equity firm, from 2008 to 2012. Mr. Charron has also been a member of Escada SE’s (Germany) Supervisory Board since 2013.

Mr. Charron brings to the Board extensive experience in a number of critical areas, including leadership, strategic management and corporate strategy skills.strategy. Mr. Charron also brings to the Board valuable experience with global consumer businesses.product companies.

Archibald Cox, Jr.

Mr. Cox has served as Chairman of Sextant Group, Inc., a financial advisory and private equity firm, since 1993. Mr. Cox is the former Chairman of Barclays Americas, a position he held from May 2008 untilto June 2011. Mr. Cox was a director of Hutchinson Technology Incorporated from May 1996 to September 2009,2009. He was thealso Chairman of Magnequench, Inc., a manufacturer of magnetic material, from September 2005 to September 2006 and was the President and Chief Executive Officer of Magnequench, Inc., from October 1995 to August 2005. HeMr. Cox was Chairman of Neo Material Technologies Inc., a manufacturer of rare earth, zirconium and magnetic materials, from September 2005 to September 2006. Mr. Cox also serves on the boards of several private companies and as chairmanChairman of two of these companies. Since July 2012, Mr. Cox has served on the board of trustees of St. Paul’s School, a secondary educational institution located in Concord, New Hampshire, where he currently serves as board president.

Mr. Cox brings to the Board executive decision-making skills, operating and management experience, expertise in finance, and investment and business development experience. In addition, Mr. Cox brings to the Board considerable experience with financial and strategic planning matters critical to the oversight of the Company’s financial reporting, compensation practices and business strategy implementation.

Kevin D. Hall

Mr. Hall has served as Chief Executive Officer of the Company since May 2017. Prior to joining Unifi, Mr. Hall served as Chief Executive Officer of NatPets LLC, a high-growth natural/organic premium pet company, from September 2016 to May 2017. From 2014 to 2015, Mr. Hall was President and Chief Executive Officer of Geneva Watch Group, a global fashion watch and accessories business. Between 2012 and 2014, Mr. Hall ran the

KDH Advisory Group where he served as a consultant/advisor to a number of companies, including Pact at Revelry Brands, Vogue International, Inmar, Inc. and TCS Education System. From 2006 to 2011, he served as Chief Marketing Officer at Hanesbrands Inc. and then was promoted to President of the Outerwear strategic business unit of Hanesbrands Inc., a business unit that included Champion Activewear, Just My Size and Hanes Casualwear. From 2001 to 2006, Mr. Hall was Senior Vice President of Marketing at Fidelity Investments Retirement Services Company. Prior to that, he held various brand marketing and general manager positions at The Procter & Gamble Company from 1985 to 2001.

Mr. Hall brings to the Board more than 30 years of strategic marketing and brand development experience. In addition, Mr. Hall brings to the Board his substantial leadership and managerial experience in the apparel industry.

James M. Kilts

Mr. Kilts is the founding partner of Centerview Capital, a private equity firm which was founded in 2006. Mr. Kilts served as Chairman and Chief Executive Officer of The Gillette Company from 2001, and as President from 2003, until it merged with The Procter & Gamble Company in 2005, at which time he became Vice Chairman of The Procter & Gamble Company. Prior to Gillette, Mr. Kilts served as President and Chief Executive Officer of Nabisco Group Holdings Corporation from 1998 until its acquisition by the Philip Morris Companies in 2000. Before joining Nabisco, Mr. Kilts was an Executive Vice President of the Philip Morris

Companies from 1994 to 1997 and headed the Worldwide Food Group. In that role, Mr. Kilts was responsible for integrating Kraft and General Foods and for shaping the group’s domestic and international strategy. Mr. Kilts has served as a member of the board of directors of MetLife, Inc. since 2005, Pfizer Inc. since 2007 Nielsen Holdings plc since 2006, and The Simply Good Foods Company (formerly known as Conyers Park Acquisition Corp.) since June 2016. Mr. Kilts was also Chairman of Nielsen Holdings N.V. until 2013, Chairman of Nielsen Company B.V. until 2014, Chairman of Big Heart Pet Brands until 2015 and a director of MeadWestvaco Corporation until 2014.2014 and Nielsen Holdings plc until August 2017.

As Chief Executive Officer of Gillette and Nabisco and as Vice Chairman of Procter & Gamble, Mr. Kilts developed valuable business, leadership and strategic management skills, including expertise in cost management, value creation and resource allocation.allocation, which he brings to the Board. Mr. Kilts also brings to the Board valuable experience with consumer businesses.

Kenneth G. Langone

Mr. Langone has been President and Chief Executive Officer of Invemed Associates LLC, an investment banking firm, since 1974. From 2011 to 2013, he served as Chief Executive Officer, President and Chairman of Geeknet, Inc., a retailer of a wide range of products aimed at technology enthusiasts. Mr. Langone was a co-founder, and served as a director from 1978 to 2008, of The Home Depot, Inc. Mr. Langone was a director of ChoicePoint Inc. from 2002 to 2008, Geeknet, Inc. from 2010 to 2015, General Electric Company from 1999 to 2005 and YUM! Brands, Inc. from 1997 to 2012.

Mr. Langone brings to the Board extensive operating and management experience, including as Chief Executive Officer of a financial services business, financial expertise, and public company directorship and committee experience. In addition, Mr. Langone’s extensive service on the Board of Directors provides the Board with a valuable historical perspective through which it can contextualize and direct the Company’s performance and strategic planning.

James D. Mead

Mr. Mead is the founder, owner and President of James Mead & Company, a Connecticut-based executive search and management consulting firm. Since founding James Mead & Company in 1988, Mr. Mead has handled executive search and management consulting assignments for numerous major publicly held companies and for

several portfolio companies of major private equity firms. Prior to that, Mr. Mead held several positions with The Procter & Gamble Company from 1970 to 1984, including serving as the head of Procter & Gamble’s worldwide sales personnel and theas a multi-division manager in Europe and North America.

Mr. Mead brings to the Board extensive experience in a number of critical areas, including leadership and strategic management skills.management.

Suzanne M. Present

Ms. Present is a co-founder and has been a principal of Gladwyne Partners, LLC, a private partnership fund manager, since June 1998. She has also served, since 2014, as executive director of Ken’s Krew, Inc., a non-profit organization that provides training and other support services to individuals with intellectual and developmental disabilities to assist with entering the workforce. Ms. Present currently serves on the board of directors of Anshe Chung Studios, Limited, a privately-heldprivately held Chinese-based developer of content for virtual worlds, and she served on the board of directors of Geeknet, Inc. until 2010.

Through her experiences at Gladwyne Partners and service on various boards of directors, Ms. Present developed extensive financial expertise important to the oversight of the Company’s audit functions and analysis of business strategies.

Corporate Governance

The Board of Directors

The Company is governed by the Board of Directors and its various committees. The Board and its committees have general oversight responsibility for the affairs of the Company. In exercising its fiduciary duties, the Board represents and acts on behalf of Unifi’s shareholders. The Board has adopted written corporate governance policies, principles and guidelines, known as the Corporate Governance Guidelines. The Board also has adopted (i) a Code of Business Conduct and Ethics (the “Code of Ethics”), which applies to the Company’s directors and executive officers, including the principal executive officer, principal financial officer and principal accounting officer, and (ii) an Ethical Business Conduct Policy Statement (the “Ethics Policy Statement”), which applies to the Company’s directors and all of the Company’s officers and employees. The Code of Ethics and the Ethics Policy Statement include guidelines relating to the ethical handling of actual or potential conflicts of interest, compliance with laws, accurate financial reporting and other related topics.

Documents Available

All of the Company’s corporate governance materials, including the charters for the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee, as well as the Corporate Governance Guidelines, the Code of Ethics and the Ethics Policy Statement, are published on the investor relations portion of the Company’s website atwww.unifi.com. These materials are also available in print free of charge to any shareholder upon request by contacting the Company at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Investor Relations, or by telephone at (336) 294-4410. Any modifications to these corporate governance materials will be reflected, and the Company intends to post any amendments to, or waivers tofrom, the Code of Ethics that apply to the Company’s principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions and that relate to any element of the Code of Ethics enumerated in the SEC rules, on the investor relations portion of the Company’s website atwww.unifi.com. By referring to the Company’s website,www.unifi.com, or any portion thereof, including the investor relations portion of the Company’s website, the Company does not incorporate its website or its contents into this Proxy Statement.

Director Independence

The Board believes that a majority of its members are independent under both the applicable New York Stock Exchange rules (the “NYSE rules”) and the applicable SEC rules. The NYSE rules provide that a director does not qualify as “independent” unless the board of directors affirmatively determines that the director has no material relationship with the company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). The NYSE rules recommend that a board of directors consider all of the relevant facts and circumstances in determining the materiality of a director’s relationship with a company. The Board has adopted Director Independence Standards, which incorporate the independence standards of the NYSE rules, to assist the Board in determining whether a director has a material relationship with Unifi. The Director Independence Standards are available on the investor relations portion of the Company’s website,www.unifi.com, as an attachmentappendix to the Corporate Governance Guidelines.

In July 2016,2017, the Board of Directors, with the assistance of the Corporate Governance and Nominating Committee, conducted an evaluation of director independence based on the Director Independence Standards, the NYSE rules and the SEC rules. The Board considered all relationships and transactions between each director (and his or her immediate family and affiliates) and each of Unifi, its management and its independent registered public accounting firm, as well as the transactions described below under “Related“—Related Person Transactions.” In making its independence determination with respect to Mr. Langone, the Board also considered specifically the relationship between the Company and Invemed Associates LLC (“Invemed”). Mr. Langone is President and Chief Executive Officer of, and owns an 81% interest in, Invemed. In fiscal 2016, the Company paid approximately $4,120 in commissions to Invemed as the Company’s broker to execute open-market stock purchase transactions under the Company’s stock repurchase program. Invemed does not provide any professional services for the Company, nor does it provide investment banking or other substantive financial or

business advice or services in executing the Company’s instructions. The Company’s management makes all decisions regarding the stock repurchase program and does not confer any discretion with respect to the program on Invemed. The Board views the brokerage services provided by Invemed as administrative and ministerial in nature, and in any event does not view the Invemed services as a “material” transactional relationship.

As a result of its director independencethis evaluation, in July 2016, the Board determined those relationships that do exist or did exist within the last three fiscal years (except for Messrs. Hall’s and Caudle’s and Jasper’s)relationships as employees of Unifi) all fall below the thresholds in the Director Independence Standards. Consequently, the Board of Directors determined that each of Messrs. Bishop, Charron, Cox, Kilts, Langone and Mead and Ms. Present is an independent director under the

Director Independence Standards, the NYSE rules and the SEC rules. The Board also determined that each member of the Audit, Compensation and Corporate Governance and Nominating Committees (see membership information below under “Board“—Board Committees”) is independent, including that each member of the Audit Committee is “independent” as that term is defined under Rule 10A-3(b)(1)(ii) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Board Leadership Structure

The Company’s Corporate Governance Guidelines provide the Board with flexibility to select the appropriate leadership structure at a particular time based on the specific needs of the Company’s business and what is in the best interests of the Company and its shareholders. The Company’s Corporate Governance Guidelines provide that the Board has no established policy on whether the positions of Chairman of the Board and principal executive officerChief Executive Officer should be held by the same or different persons.

The Company currently has separated the roles of Chairman of the Board and principal executive officer.Chief Executive Officer. James D. Mead serves as the Non-Executive Chairman of the Board and Thomas H. Caudle, Jr., as President,Kevin D. Hall serves as the Company’s principal executive officer.Chief Executive Officer. The Company previously combined the roles of Chairman of the Board and principal executive officerChief Executive Officer and, in the future, the Board may determine in certain circumstances that it is in the best interests of the Company and its shareholders for the same person to hold the positions of Chairman of the Board and principal executive officer. The Board, however, believes that the Company’s present leadership structure is appropriate for the Company at the current time, as it provides an appropriate balance between the two roles.Chief Executive Officer. Mr. Caudle,Hall, as the Company’s principal executive officer,Chief Executive Officer, is responsible for setting the strategic direction for the Company and providing the day-to-day leadership and performance of the Company, while Mr. Mead, as the Non-Executive Chairman of the Board, provides guidance to Mr. CaudleHall and sets the agenda for Board meetings and presides over meetings of the full Board.

Board Committees

The Board has a standing Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee. Committee members and committee chairs are appointed by the Board of Directors. The members of these committees are identified in the following table:

Mr. Mead, as the Non-Executive Chairman of the Board, attends committee meetings in an ex officio capacity but is not a member of the committees.

Each committee of the Board of Directors functions pursuant to a written charter adopted by the Board. The following table provides information about the operation and key functions of these committees:

The Board may also establish other committees from time to time as it deems necessary.

Director Meeting Attendance

The Board of Directors held nine (9)seven meetings during fiscal 2016.2017. Each incumbent director attended 75% or more of the aggregate number of meetings of the Board and committees of the Board on which the director served during fiscal 2016.2017. It is the Board’s policy that the directors should attend the Company’s annual meeting of shareholders absent extenuating circumstances. Six (6) of the seven (7)Company’s eight directors in office at the time (including all current directors who were directors at that time) attended the 20152016 Annual Meeting of Shareholders.

Pursuant to the Company’s Corporate Governance Guidelines, the independent directors meet in regularly scheduled executive sessions without management. Mr. Mead, as the Non-Executive Chairman of the Board, presides over these executive sessions.

Director Nomination Process

The Corporate Governance and Nominating Committee is responsible for identifying and evaluating individuals qualified to become members of the Board and for recommending to the Board the individuals for nomination as members. In considering whether to recommend any particular candidate for inclusion in the Board’s slate of recommended director nominees, the Corporate Governance and Nominating Committee considers the following criteria, in addition to other factors it may determine appropriate: (i) the candidate’s roles and contributions valuable to the business community; (ii) the candidate’s diversity, integrity, accountability, informed judgment, financial literacy, passion, creativity and vision; (iii) the candidate’s knowledge about the Company’s business or industry; (iv) the candidate’s independence; (v) the candidate’s willingness and ability to devote adequate time and effort to Board responsibilities in the context of the existing composition and needs of the Board and its committees; and (vi) the NYSE rules.

Neither the Corporate Governance and Nominating Committee nor the Board has a specific policy with regard to the consideration of diversity in identifying director nominees. However, the Board believes that men and women of different ages, races, and ethnic and cultural backgrounds can contribute different and useful perspectives, and can work effectively together to further the Company’s objectives, and, as noted above, a candidate’s diversity is one of the criteria that the Corporate Governance and Nominating Committee considers in evaluating potential director nominees.

The Corporate Governance and Nominating Committee may, at its discretion, hire third parties to assist in the identification and evaluation of director nominees.

Shareholder Recommendations of Director Candidates

Recommendations by shareholders for director candidates to be considered for the 20172018 Annual Meeting of Shareholders must be delivered to, or mailedin writing and received by the Company’s Secretary at Unifi, Inc. c/o Secretary,, 7201 West Friendly Avenue, Greensboro, North Carolina 27410 notno earlier than June 28, 201727, 2018 and notno later than July 28, 2017. If27, 2018. However, if the date of the annual meeting2018 Annual Meeting of Shareholders is advanced or delayed by more than thirty (30)30 days frombefore or more than 90 days after October 26, 2017,25, 2018, then the written notice must be received by the shareholder to be timely must be so delivered or received not laterCompany’s Secretary no earlier than the later of (i) ninety (90)120 days prior to the date of the 20172018 Annual Meeting of Shareholders and no later than the close of business on the later of (i) 90 days prior to the date of such annual meeting or (ii) ten (10)10 days following the day on which the Company first announced publicly or(or mailed notice to the shareholders of,of) the date of such meeting.

Notice of a directorThe notice must contain certain information about both the nominee and the shareholder submitting the nomination must be submitted in accordance with the requirementsas set forth in the Company’s Amended and Restated By-laws (available atwww.unifi.comBy-laws. With respect to the nominee, the notice must contain, among other things, (i) the nominee’s name, age, business and residential addresses; (ii) the nominee’s background and qualification; (iii) the number of shares or upon request fromother securities of the Company), which include requirements to identify specifically, and provide reasonably detailed personal and professional biographical information about, each proposedCompany owned of record or beneficially by the nominee; (iv) any derivative positions held of record or beneficially by the nominee as well as to provide (i)any hedging or other transactions entered into by or on behalf of, or other similar agreements, arrangements or understandings of, the nominee; (v) a written statement signedexecuted by the proposed nominee (A) acknowledging that as a director of the Company, the nominee will owe a fiduciary duty under New York law with respect to the backgroundCompany and qualificationsits shareholders, (B) disclosing whether the nominee is a party to an

agreement, arrangement or understanding with, or has given any commitment or assurance to, any person or entity as to how the nominee, if elected as a director of the proposed nominee; (ii)Company, will act or vote on any issue or question, (C) disclosing whether the nominee is a party to an undertakingagreement, arrangement or understanding with any person or entity other than the Company with respect to any compensation, reimbursement or indemnification in connection with the nominee’s service or action as a director of the Company, (D) agreeing to update continually the accuracy of the information required by the proposedimmediately preceding clauses (B) and (C) for as long as the nominee to complete and signis a copynominee or a director of the standard questionnaire then being used byCompany and (E) agreeing, if elected as a director of the Company, to gathercomply with all corporate governance codes, policies and guidelines of the Company applicable to directors; and (vi) any other information regarding the nominee that would be required to be disclosed in a proxy statement or update informationother filings required to be made in connection with respecta contested solicitation of proxies for the election of directors or that the Company may reasonably require to its directors and executive officers; (iii) a descriptiondetermine the eligibility of all arrangements or understandings between the shareholder making the recommendation and the proposed nominee; and (iv) a consent signed by the proposed nominee agreeing to serve as a director if elected. Such information

should be sentof the Company. With respect to the Corporate Governanceshareholder submitting the nomination, the notice must contain: (1) the name and Nominating Committeeaddress, as they appear on the Company’s books, of such shareholder and any Shareholder Associated Person (as defined in the Company’s Amended and Restated By-laws); (2) the number of shares or other securities of the Company owned of record or beneficially by such shareholder or any Shareholder Associated Person; (3) any derivative positions held of record or beneficially by such shareholder or any Shareholder Associated Person as well as any hedging or other transactions entered into by or on behalf of, or other similar agreements, arrangements or understandings of, such shareholder or any Shareholder Associated Person; (4) any other information regarding such shareholder or any Shareholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with a contested solicitation of proxies for the election of directors; and (5) a representation whether either such shareholder or any Shareholder Associated Person intends to, or is part of a group which intends to, deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to elect the nominee and/or otherwise to solicit proxies from shareholders in support of such nomination.

A shareholder who is interested in recommending a director candidate should request a copy of the Company’s Amended and Restated By-laws by writing to the Company’s Secretary at Unifi, Inc. c/o Secretary,, 7201 West Friendly Avenue, Greensboro, North Carolina 27410. Recommended candidates will be subject to a comprehensive private investigation background check by a qualified firm of the Company’s choosing. Appropriate submission of a recommendation by a shareholder does not guarantee the selection of the shareholder’s candidate or the inclusion of the candidate in the Company’s proxy statement;materials; however, the Corporate Governance and Nominating Committee will consider any such candidate in accordance with the director nomination process described above.

Annual Evaluation of Directors and Board Committee Members

The Board of Directors evaluates the performance of each director, each committee of the Board, the Non-Executive Chairman and the Board of Directors as a whole on an annual basis. In connection with this annual self-evaluation, each director records his or her views on the performance of each director standing for reelection, each committee and the Board of Directors. The entire Board of Directors reviews the results of these reports and determines what, if any, actions should be taken in the upcoming year to improve its effectiveness and the effectiveness of each director and committee.

No Hedging, Pledging or Short Selling

Unifi maintains policies that apply to all directors, officers employees and the members of the Boardemployees that prohibit hedging, pledging or short selling (profiting if the market price of the securities decreases) of Unifi securities.

Related Person Transactions

Pursuant to the Company’s Related Persons Transactions Policy, which is available on the investor relations portion of the Company’s website atwww.unifi.com, the Company reviews relationships and transactions in which the Company and its directors and executive officers or their immediate family members are participants

to determine whether such related persons have a direct or indirect material interest in the relationshiprelationships or transaction.transactions. The Company’s executive management is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether a related person has a direct or indirect material interest in theany such transaction. As required under the SEC rules, transactions that are determined to be directly or indirectly material to a related person are disclosed in this Proxy Statement. In addition, the Audit Committee reviews and, if appropriate, approves or ratifies any related person transaction that is required to be disclosed under the SEC rules. As set forth in the Audit Committee’s charter, which is available on the investor relations portion of the Company’s website atwww.unifi.com, in the course of its review and, if appropriate, approval or ratification of a disclosable related person transaction, the Audit Committee considers the relevant facts and circumstances, including the material terms of the transactions,transaction, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence.

Transactions with Salem Holding Company

In fiscal 2016,2017, the Company paid Salem Leasing Corporation, a wholly-ownedwholly owned subsidiary of Salem Holding Company, approximately $3.75$3.914 million in connection with leases of tractors and trailers and for related services. In addition, the Company earned income from Salem Global Logistics, Inc., a wholly-ownedwholly owned subsidiary of Salem Holding Company, of approximately $253,000$128,000 in connection with providing for-hire freight services for Salem Global Logistics, Inc. Mr. Langone, a director of the Company, owns a non-controlling 33% equity interest in, and is a director and the Non-Executive Chairman of, Salem Holding Company. Mr. Langone is not an employee of Salem Holding Company or any of its subsidiaries and is not involved in the day-to-day operations of any such company. The terms of the Company’s leases with Salem Leasing Corporation are, in the Company’s opinion, no less favorable than the terms the Company would have been able to negotiate with an independent third party for similar equipment and services.party. The terms of payment to the Company by Salem Global Logistics, Inc. for the freight services were, no less favorable than terms the Company could have received from an independent third party. The foregoing was approved under Unifi’s Related Persons Transactions Policy.

Transactions with Cupron, Inc.

In fiscal 2016, the Company recorded approximately $477,000 of sales to Cupron, Inc. and approximately $36,000 of raw material purchases from Cupron, Inc. Mr. Armfield, a director of the Company until his passing in July 2016, was a director and the Non-Executive Chairman of, and held an indirect minority equity interest in, Cupron, Inc. The terms of the Company’s sales to and purchases from Cupron, Inc. are, in the Company’s opinion, no less favorable than the terms the Company would have been able to negotiate with an independent third party. The foregoing waswere approved under Unifi’s Related Persons Transactions Policy.

Transactions and Agreements with the Company’s Named Executive Officers

For a discussion of compensation and severance agreements with the Company’s named executive officers, see “Executive Compensation Tables—Potential Payments Upon Termination of Employment or Change in Control” beginning on page 35.

The Board’s Role in Risk Oversight

The Board of Directors oversees the Company’s risk profile and management’s processes for assessing and managing risk, both as a whole Board and through its committees. The full Board reviews strategic risks and opportunities facing the Company. Among other areas, the Board is involved in overseeing risks related to the Company’s overall strategy, business results, capital structure, capital allocation and budgeting and executive officer succession. Certain other important categories of risk are assigned to designated Board committees (which are compromised solely of independent directors) that report back to the full Board. In general, the committees oversee the following risks:

The Board leadership structure supports the Company’s governance approach to risk oversight as the principal executive officerChief Executive Officer is involved directly in risk management as a member of the Company’s management team, while the Chairman of the Board and the committee chairpersons, in their respective areas, maintain oversight roles as independent directorsmembers of the Board.

Compensation Committee Advisors

The Compensation Committee has sole authority under its charter to retain compensation consultants and other advisors and to approve such consultants’ and advisors’ fees and retention terms. In June 2016, theThe Compensation Committee has retained Korn Ferry Hay Group to serve as its independent advisor for fiscal 2017 and to provide it with advice and support on executive compensation issues.

The Compensation Committee has reviewed and confirmed the independence of Korn Ferry Hay Group as compensation consultant, has been reviewed and confirmed by the Compensation Committee.Committee’s compensation consultant. Neither Korn Ferry Hay Group nor any of its affiliates provideprovides any services to the CompanyUnifi except for services provided to the Compensation Committee. In addition to Korn Ferry Hay Group, the Compensation Committee has reviewed the independence of each other outside advisor in advance of receiving advice from such person.

Communications with the Board of Directors

Shareholders and other interested parties can communicate directly with any of the Company’s directors, including its non-management directors or the Non-Executive Chairman of the Board, by sending a written communication to a director at Unifi, Inc. c/o Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410. In addition, any party who has concerns about accounting, internal controls or auditing matters may contact the Audit Committee directly by sending a written communication to the Chair of the Audit Committee at the above address or by calling toll-free 1-800-514-5265. Such communications may be confidential or anonymous. All such communications are promptly reviewed before being forwarded to the addressee. Any concerns relating to accounting, internal controls, auditing matters or officer conduct are sent immediately to the Chair of the Audit Committee. Unifi generally will not forward to directors a shareholder communication that it determines to be primarily commercial in nature, relates to an improper or irrelevant topic or requests general information about the Company.

Director Compensation

Pursuant to the Company’s Director Compensation Policy, each director who is considered “independent” within the meaning of the Director Independence Standards adopted by the Board of Directors, which incorporate the independence standards of the NYSE rules, receives compensation for his or her service on the Board, while each non-independent director receives no compensation for his or her service as a director. In fiscal 2017, the Company’s non-independent directors were Messrs. Thomas H. Caudle, Jr., Kevin D. Hall and William L. Jasper. Mr. Jasper, who served as Chairman and Chief Executive Officer of the Company until April 2016, did not stand for reelection at the 2016 Annual Meeting of Shareholders. The following table below sets forth the compensation paid to each non-employeeindependent director who served on the Board in fiscal 2016. Directors who are also employees of Unifi (during fiscal 2016, Messrs. R. Roger Berrier, Jr., Thomas H. Caudle, Jr. and William L. Jasper) do not receive compensation (other than their compensation as employees of Unifi) for their service on the Board of Directors.2017:

20162017 Director Compensation Table

The following table below shows the number of unexercised options to purchase shares of Common Stock held by each non-employeeindependent director as of June 26, 2016;25, 2017; no non-employeeindependent director held any unvested restricted stock units:units. Mr. Langone exercised all of his options on August 30, 2017.

The CompensationCorporate Governance and Nominating Committee reviews the form and amount of director compensation and makes recommendations to the Board for its consideration and approval. The Corporate Governance and

The Company does not pay any annual cash retainers or meeting fees to its directors, although the Company may reimburse each director for reasonable expenses incurred in attending meetings. The Company’s practice for compensating its non-employee directors over the years has been to grant them an annual award of stock options and/or restricted stock units in amounts that have varied from time to time.

On October 21, 2015,Nominating Committee and the Board of Directors approved and the Company granted restricted stock units to each non-employeeCompany’s Director Compensation Policy on October 26, 2016. The compensation for Unifi’s independent directors is as follows:

Any independent director who had beenis initially appointed or elected to the Board of Directors other than at the 2015 Annual Meetingannual meeting of Shareholders asshareholders will receive an annual retainer for service in fiscal 2016 and until the Company’s 2016 Annual Meeting of Shareholders. These grants were made pursuant to the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Incentive Compensation Plan”). Each non-employee director received aequity grant of 4,335 restricted stock units, and Ms. Present received an additional grant of 867 restricted stock units (for a total of 5,202 restricted stock units) for her service as Lead Independent Director. These restricted stock units represent the right to receive shares of Common Stock, and convey no rights of ownership in shares of Common Stock until such restricted stock units have been distributed in the form of Common Stock. The restricted stock units became fully vestedone day following such appointment or election, where the amount of units to be granted would be calculated on a pro rata basis based upon the grantperiod between the date of such appointment or election and the anticipated date of the next annual meeting of shareholders.

Executive Officers

Set forth below are the names, ages and professional backgrounds of the Company’s executive officers, including all positions and offices with the Company held by each such person and each such person’s principal occupations or employment during at least the past five years. Each executive officer of the Company is elected by the Board of Directors and holds office from the date of election until thereafter removed by the Board.

Kevin D. Hall.Mr. Hall, age 58, has served as Chief Executive Officer of the Company since May 2017. Prior to joining Unifi, Mr. Hall served as Chief Executive Officer of NatPets LLC, a high-growth natural/organic premium pet company, from September 2016 to May 2017. From 2014 to 2015, Mr. Hall was President and Chief Executive Officer of Geneva Watch Group, a global fashion watch and accessories business. Between 2012 and 2014, Mr. Hall ran the KDH Advisory Group where he served as a consultant/advisor to a number of companies, including Pact at Revelry Brands, Vogue International, Inmar, Inc. and TCS Education System. From 2006 to 2011, he served as Chief Marketing Officer at Hanesbrands Inc. and then was promoted to President of the Outerwear strategic business unit of Hanesbrands Inc., a business unit that included Champion Activewear, Just My Size and Hanes Casualwear. Additional information about Mr. Hall can be found above under “Proposal 1: Election of Directors—Nominees for Director.”

Thomas H. Caudle, Jr.Mr. Caudle, age 65, has served as President & Chief Operating Officer of Unifi since August 2017. Previously, he was President of the Company from April 2016 to August 2017, Vice President of Manufacturing of the Company from October 21,2006 to April 2016 and Vice President of Global Operations of the Company from April 2003 to October 2006. Additional information about Mr. Caudle can be found above under “Proposal 1: Election of Directors—Nominees for Director.”

Jeffrey C. Ackerman. Mr. Ackerman, age 54, has served as Executive Vice President & Chief Financial Officer of Unifi since September 5, 2017. Previously, Mr. Ackerman served as Executive Vice President & Chief Financial Officer of The Fresh Market, Inc., a specialty grocery retailer focused on creating an extraordinary food shopping experience for its customers, from June 2013 to September 2016. Prior to that, he served as Executive Vice President & Chief Financial Officer of Sealy Corporation, one of the largest bedding manufacturers in the world, from 2006 to 2013. From 1997 to 2006, Mr. Ackerman held various finance positions, including Vice President, Finance, with Dade Behring Inc., a medical diagnostics company. From 1989 to 1997, he held a variety of finance roles at the Frito-Lay branded snack foods division of PepsiCo, Inc.

Richard E. Gerstein.Mr. Gerstein, age 52, has served as Executive Vice President, Global Branded Premium Value-Added Products and Chief Marketing Officer of the Company since August 2017. Before joining Unifi, Mr. Gerstein served from January 2015 to August 2017 as founder and a partner of two consulting firms, TNG Consulting and The Brand CHarGe, in San Francisco, California. With TNG Consulting, Mr. Gerstein worked with early-stage technology and consumer products companies on strategy, marketing and investment. With The Brand CHarGe, Mr. Gerstein assisted private equity firms with new business and proprietary customer assessments used in due diligence and growth plans. From May 2014 to May 2015, Mr. Gerstein served as Chief Customer Officer for Motista, LLC where he developed new client relationships and new products. Previously, Mr. Gerstein co-founded and served as Chief Executive Officer of ZigMail.com (from 2011 to 2014) and served in various executive roles with HP Inc. (formerly known as Hewlett-Packard Company) (from 2010 to 2011), Sears Holdings Corporation (from 2007 to 2010), Alberto-Culver Company (from 2005 to 2007) and The Procter & Gamble Company (from 1987 to 2005).

John D. Vegas.Mr. Vegas, age 46, has served as Executive Vice President, Global Chief Human Resources Officer of the Company since August 2017. Before joining Unifi, Mr. Vegas served, from August 2015 to August 2017, as Vice President, Human Resources and Chief Human Resources Officer of G&K Services, Inc., a service-focused provider of branded uniform and facility services programs, which was acquired by Cintas Corporation in March 2017. From 2003 to 2015, Mr. Vegas was with Ecolab Inc., the global leader in water, hygiene and energy technologies and services that protect people and vital resources, where he held several management positions, including Vice President and General Manager, Institutional Latin America; Regional Vice President of Sales; Vice President of Human Resources—Institutional Sector; and Director of

HR—Industrial Sector. Prior to that, Mr. Vegas worked for Food Lion, LLC, from 2001 to 2003, as Director of Organizational Development and for Hannaford Bros. Co., from 1993 to 2001, in a variety of management roles.

Mark A. McNeill.Mr. McNeill, age 42, has served as Executive Vice President, Global Innovation & Asia Business Unit of Unifi since August 2017. Prior to that, Mr. McNeill had served as Vice President of Technology and Business Development of the Company since June 2015. Previously, Mr. McNeill served as Corporate Product Development Manager in charge of product development and marketing for Unifi from July 2013 to June 2015 and will be converted into an equivalent number of shares of Common StockTechnical Service and distributedProduct Development Manager from February 2011 to July 2013. Mr. McNeill has been employed with the non-employee director following such director’s termination of services as a member of the Board. A director may elect to defer receipt of such shares of Common Stock pursuant to the Unifi, Inc. Director Deferred Compensation Plan.Company since 1997.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides an overview of the Company’s executive compensation program, including:

Executive Summary

Leadership Changes; NEOs for 2016Executive Team Additions and Promotions

The Company experienced a transition of its senior leadership team transition that began during fiscal 2016. The transition began2016 with the resignation of James M. Otterberg as Vice President and Chief Financial Officer in November 2015 and the appointment of Christopher A. SmosnaThomas H. Caudle, Jr. as the Company’s Interim Chief Financial and Chief Accounting Officer, who served in that capacity until the Company appointed Sean D. Goodman as Vice President and Chief Financial Officer of the Company effective in January 2016. In April 2016 William L. Jasper retiredgathered momentum during fiscal 2017.

In May 2017, the Board of Directors announced the appointment of Kevin D. Hall as the Chairman and Chief Executive Officer of the Company. Mr. Hall brings to the Company R. Roger Berrier, Jr. resignedextensive executive leadership and marketing experience in a number of industries. Mr. Hall will lead the Company’s growth efforts by emphasizing premium value-added (“PVA”) product sales, building Company brand awareness through marketing and strategic partnerships with leading brands and retailers and driving product innovation and continuous operational improvements.

In August 2017, the Company announced (i) the appointment of Mr. Caudle, the Company’s President, as President and& Chief Operating Officer, (ii) the appointment of Richard E. Gerstein as Executive Vice President, Global Branded Premium Value-Added Products and Chief Marketing Officer, (iii) the Boardappointment of Directors appointed Thomas H. Caudle, Jr.John D. Vegas as President. Mr. Caudle is a long-term executive employeeExecutive Vice President, Global Chief Human Resources Officer and (iv) the promotion of Mark A. McNeill to Executive Vice President, Global Innovation & Asia Business Unit.

On September 5, 2017, the Company and servedannounced the appointment of Jeffrey C. Ackerman as Executive Vice President & Chief Financial Officer to succeed Mr. Goodman who resigned from the Company at the end of Manufacturing prior to his promotion to President.fiscal 2017.

The SEC rules require the NEOs to be determined based on their status with the Company as of the last day of the fiscal year. The rules also require the inclusion of anyone who served as the Company’s principal executive officer or principal financial officer at any time during the yearappointments and certain former executive officers. Due to the Company leadership changes during fiscal 2016, the Company’s NEOs include the following currentpromotion provide a talented and former membersdeeply experienced team for execution of the Company’s senior management team. Messrs. Jasper, Berrier and Otterberg are included due to their status as former executive officers of the Company, and Mr. Smosna is included due to his service as Interim Chief Financial Officer.long-term growth plan.

Company Performance Highlights

The Company producedCompany’s solid resultsperformance in fiscal 2016 despite2017 was primarily the challenges presented byresult of its international operations, with continued growth in global sales of the Company’s PVA products (including REPREVE^®), and further growth and diversification in the Company’s recycling operations. For purposes of executive officer performance evaluation, the Company leadership changes and the ongoing macro-economic challenges for the textile industry. The Company achieved adjustedAdjusted EBITDA¹ (as hereinafter defined) results of $68.6$68.7 million, slightly above fiscal 2016 Adjusted EBITDA of $68.6 million but below the target level of $69.336 million set for fiscal 20162017 under the Company’s annual cash bonus incentive program. The Company also achieved a $3.7 million increase in its operating income and a gross marginPVA product sales reached 40% of 14.5% (an increase from 13.2%the consolidated portfolio for fiscal 2015). These achievements2017 and the Company’s net debt decreased from $106.4 million to $94.0

were primarilymillion at the end of fiscal 2017. The Company’s earnings from its core operations in fiscal 2017 was in-line with the prior fiscal year but consolidated net income decreased to $32.9 million from $34.4 million in fiscal 2016 as the result of a loss associated with the divestiture of a non-core business and a decline in earnings attributable to the Company’s international operations and the executive team’s continued focus on sales of the Company’s premium value-added yarns, including REPREVE^®, the Company’s recycled performance fibers and most successful branded product.investment in Parkdale America, LLC.

Executive Compensation Highlights

As described in greater detail below, the Company believes its executive compensation program should attract top executive talent, pay for performance and link executive retention to long-term shareholder value. Accordingly, our NEOs were compensated as follows forthe Company took the following actions during fiscal 2016:2017 with respect to compensation of its NEOs:

Compensation Philosophy, Principles and Policies

The Company’s executive compensation philosophy is to:

Therefore, the focus of the Company’s executive compensation program and the Compensation Committee is to ensure that an appropriate relationship exists between executive pay and the creation of shareholder value, while at the same time enabling the Company to attract, retain, reward and motivate high caliber employees. The Compensation Committee monitors the results of its executive compensation policy to ensure that compensation payable to executive officers creates proper incentives to enhance shareholder value, rewards superior performance, is justified by returns available to shareholders and discourages employees from taking unnecessary or excessive risks that could ultimately threaten the value of the Company.

In establishing compensation for the NEOs, the following principles and policies guide the Company’s executive compensation decisions:

The Compensation Committee reviews and approves all components of the NEOs’ compensation. The Compensation Committee also monitors the compensation levels in general for all other senior level employees of the Company. In addition, the Compensation Committee has the discretion to hire compensation and benefits consultants to assist in developing and reviewing overall executive compensation strategies.

Overview of Compensation Components

The Compensation Committee views executive compensation in four component parts:

A brief description of each of these components is provided below, together with a summary of its objectives:

Compensation Mix

Consistent with the philosophy, objectivesprinciples and principlespolicies of the executive compensation program, the program places approximately 60% of total executive compensation “at risk” based on the performance of the Company and the executive through an annual cash bonus incentive program and equity-based long-term incentive awards. The Company uses the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Incentive Compensation Plan”) in order to provide those awards. We believeThe Company believes the substantial weighting of performance-based compensation encourages ourits executives to achieve near-term and long-term operating performance goals designed to create or enhance shareholder value.

Control by the Compensation Committee

The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of each NEO, evaluates each NEO’s performance in light of these goals and objectives (with input from the principal executive officer for NEOs other than the principal executive officer), and sets each NEO’s

compensation level based on this evaluation and consultation. The Compensation Committee also advises senior management with respect to the range of compensation to be paid to other employees of the Company, administers and makes recommendations to the Board concerning benefit plans for the Company’s directors, officers and employees and recommends benefit programs and future objectives and goals for the Company.

As in the past, the Compensation Committee continued to consider a wide range of factors in making its fiscal 20162017 compensation decisions for ourthe Company’s NEOs, including the historical practices of the Company; the individual NEO’s leadership and role in advancement of the Company’s long-term strategy, plans and objectives; the individual’sindividual NEO’s performance and contribution to the Company’s success; budget guidelines established by the Board; and assessment of the Company’s financial condition. Additionally, the Compensation Committee considered the Company’s operating and adjustedAdjusted EBITDA results, along with the current economic climate. Based on this information and these factors, the Compensation Committee set executive compensation for fiscal 2016.2017.

During fiscal 2013,2017, the Compensation Committee engaged Frederick W. Cook & Co., Inc. (“Cook & Co.”)Korn Ferry Hay Group as an independent advisor to assist the Compensation Committee with developing a peer groupmarket-based compensation and benefit levels for compensation comparison purposesnewly recruited members of the Company’s senior leadership team, evaluating an appropriate retention award for Mr. Caudle and to prepare a competitive market assessment of total compensation forreviewing the NEOs. Cook & Co. performs no other services for the Company, and its work for the Compensation Committee has not raised any conflict of interests.

While the Compensation Committee believes the information in the Cook & Co. report remains valuable, the Compensation Committee did not use or otherwise consider the Cook & Co. analysis for any particular purpose for fiscal 2016. The Compensation Committee also did not use any other report as a benchmark or otherwise in setting executive compensation for fiscal 2016.Company’s long-term incentive award strategy. The Compensation Committee does not believe it is appropriate to tie executive compensation directly to the compensation awarded by other companies or to a particular survey or group of surveys. Instead, the purpose of the Cook & Co. report obtained by the Compensation Committee wasconsults with Korn Ferry Hay Group to providegain a general understanding of compensation practices and trends of similarly situated companies. The Compensation Committee members use that knowledge as a tool in considering the overall compensation of the Company’s executives. No specific compensation decision for any individual was based on or justified by any market comparison reports or information.

Detailed Review of Compensation Components

Base Salaries

The Compensation Committee believes in maintaining a close relationship between the Company’s performance and the base salary component of the compensation for each NEO. As in prior fiscal years, no formula-based salary increases were provided to the NEOs during fiscal 2016.2017. The factors considered by the Compensation Committee in setting the NEOs’ base salaries for fiscal 20162017 included:

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the executive’s individual performance and contribution to the Company’s success and budget guidelines; and

In addition to reviewing the above factors, the Compensation Committee also believes that strong and effective communication with management helps the Company adhere to its compensation philosophy, objectivesprinciples and principles.policies. Therefore, the Compensation Committee consults with the principal executive officer and reviews his recommendations regarding the compensation of all NEOs (other than the principal executive officer) before making its final compensation decisions. Periodically, the principal executive officer meets with the other NEOs regarding their performance. The Compensation Committee reviews the overall performance of each NEO annually, and then approves the actual base salary for each NEO.

Upon completing this process, based on the Company’s performance in fiscal 20152016 as well as other factors, including each NEO’s individual performance, and in the case of Mr. Caudle, his promotion to President in April 2016, the Compensation Committee approved the base salaries set forth in the table below for each of the NEOs who were employed as of the beginning of fiscal 2016.NEOs.

Mr. Otterberg did not receive a base salary increase because his base salary was increased during fiscal 2015 to reflect his full year of service as Vice President and Chief Financial Officer. Mr. Goodman’s base salary was set at $450,000 when he joined the Company as Vice President and Chief Financial Officer on January 6, 2016.

Annual Incentive Compensation

To encourage executives to achieve near-term operating performance goals, the Company has established an annual incentive compensation program in the form of a cash bonus. All NEOs employed as of the beginning of the fiscal year or who are employed by January 1 of the fiscal year are eligible to earn annual bonuses based on the Company’s fiscal year performance.

For fiscal 2016,2017, the Compensation Committee established a performance target of $68.0$69.336 million of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), adjusted to exclude certain items, such as equity in earnings of Parkdale America, LLC, non-cash compensation expense, start-up costs, gains or lossesloss on sales or disposalssale of property, plant and equipment, currency and derivative gains or losses,business and other operating or non-operating income or expense items necessary to understand and compare the underlying results of the Company (“adjustedAdjusted EBITDA”). The target Adjusted EBITDA level was based on the Board-approved business plan for fiscal 2017 and was in-line with the fiscal 2016 Adjusted EBITDA target of $68.0 million.

The Compensation Committee uses adjustedAdjusted EBITDA as a measure for annual incentive compensation purposes because the Compensation Committee believes adjustedAdjusted EBITDA provides a clear indicator of cash generation, which is a key performance indicator used by the Board and management to assess the Company’s operating results generally. The Compensation Committee also believes that a Company-wide performance metric, such as adjustedAdjusted EBITDA, is appropriate for each NEO because each NEO plays a vital role in the overall success of the Company. Therefore, the Compensation Committee believes that the annual variable compensation received by the NEOs should reflect the Company’s near-term operating performance.

The annual incentive bonus awarded to NEOs may be decreased by the Compensation Committee as a result of the individual’s performance and/or contribution to the Company’s achievement of its financial objectives. The Compensation Committee did not use discretion in fiscal 2017 to decrease the annual incentive compensation earned based on overall Company performance. Each

NEO’s performance, including the principal executive officer’s, is evaluated against specific financial goals prior to payment of bonuses, and the final bonus payment may be adjusted relative to the achievement of those goals. The performance criteria in the annual incentive bonus program may be adjusted by either the Compensation Committee or the Board to account for unusual events, such as extraordinary transactions, asset dispositions and purchases, and mergers and acquisitions, if, and to the extent, either the Compensation Committee or the Board considers the effect of such events indicative of the Company’s performance. Additionally, the Compensation Committee or the Board has the discretion to award additional bonus compensation even if a NEO would not be entitled to any bonus based on the targets previously determined. The Compensation Committee did not use discretion in fiscal 2017 to award any additional bonus compensation.

For fiscal 2016,2017, the Compensation Committee set the threshold, target and maximum performance levels and corresponding potential annual incentive payments to the eligible NEOs, based on percentages of base salary, as set forth in the table below. A NEO would receive a maximum bonus equal to a percentage of his base salary if the Company achieved, for plan purposes, 120% of the adjustedAdjusted EBITDA target; a target bonus equal to a percentage of his base salary if the Company achieved, for plan purposes, 100% of the adjustedAdjusted EBITDA target; or a threshold bonus equal to a percentage of his base salary if the Company achieved, for plan purposes, 80% of the adjustedAdjusted EBITDA target. The Compensation Committee set the percentage of base salary for each NEO at its July 2015

September 2016 meeting. The calculation of each NEO’s annual incentive bonus in the event of adjustedAdjusted EBITDA results between these levels is made on a proportional sliding scale basis between the two level amounts. The NEO would not be entitled to a bonus if the Company achieved, for plan purposes, less than 80% of the adjustedAdjusted EBITDA target.

Annual Incentives for Fiscal 20162017

Upon Mr. Goodman’s employment, he became eligible for an annual incentive bonus between $168,750 (37.5% of his base salary) and $675,000 (150% of his base salary) based on

As shown in the adjusted EBITDA performance levels shown above.

Thechart below, the Company achieved, for plan purposes, 100.9%Adjusted EBITDA of $68.7 million, approximately 99% of the adjustedAdjusted EBITDA target.

Based on that level of performance, the Compensation Committee approved annual incentive bonus compensation of $274,312$638,138 to Mr. Caudle $352,688and $347,344 to Mr. Goodman and $67,795 to Mr. Smosna. In addition, the Compensation Committee awarded a $108,449 discretionary bonus to Mr. Caudle in August 2016 in recognition of his promotion to President in April 2016 and his leadership and performance for the remainder of fiscal 2016.

Messrs. Jasper, Berrier and Otterberg were not eligible for an annual incentive bonus for fiscal 2016 as their employment terminated prior to the end of the year.Goodman.

Long-Term Incentive Compensation

The Compensation Committee believes that stock-based performance compensation is essential to align the interests of management and the shareholders in enhancing the long-term value of the Company’s equity and to encourage executives to retain their employment with the Company. Among the varied types of equity awards the Compensation Committee is authorized to use under the 2013 Incentive Compensation Plan, the Compensation Committee has determined that incentive stock options (“ISOs”) are preferable for use with all Company employees at this time, (becausebecause their value depends upon a future increase in the value of the Common Stock), andStock. The Compensation Committee also has determined that restricted stock units (which the Compensation Committee has used in the past, along with stock options) should not be grantedunit grants to NEOs or other Company employees at this time. should be used for limited purposes, such as retention or recruiting incentives or to recognize outstanding performance.

Consistent with that

determination,those determinations, in fiscal 2016,2017, the Compensation Committee awarded stock options to each NEO, which haveMessrs. Hall, Caudle and Goodman and restricted stock units to Messrs. Hall and Caudle as shown in the attributes set forth below.following table:

The number of these stock options is listedoption awards vest and become exercisable in the table below. When determining the number of stock options to award each NEO, the Compensation Committee considered the difference between the base salary and bonus actually paid for fiscal 2015 and the total compensation that the Compensation Committee sought to award to the NEO basedthree equal installments beginning on the Company’s performance in fiscal 2015. The options are exercisable at a pricefirst anniversary of $32.36 per share, a third of which options vested on July 22, 2016, and the remaining of which vest in equal installments at each of July 22, 2017 and July 22, 2018.grant date. As “incentive stock options” (to the applicable maximum permitted under the 2013 Incentive Compensation Plan), these stock options offer the NEO the opportunity to receive favorable tax treatment if they retain the shares acquired upon exercise for at least one (1) year. The restricted stock units vest 25% 30 days after the first anniversary of the grant date, 25% on the second anniversary of the grant date and 50% on the third anniversary of the grant date. For additional information on the stock options and restricted stock units granted in fiscal 2016,2017, see “Grants“Executive Compensation Tables—Grants of Plan-Based Awards” below.

Mr. Goodman was not employed at the time the annual equity grants were awarded. Mr. Goodman received an award of 20,000 restricted stock units on January 6, 2016, his employment commencement date. The restricted stock units vest in three equal installments on February 5, 2017, January 6, 2018 and January 6, 2019.

Perquisites and Other Benefits

Perquisites. The Compensation Committee’s general philosophy is to provide executives, including the NEOs, with only limited perquisites. Therefore, the Company does not provide its NEOs with perquisites, such as car allowances, reimbursements for car expenses or payment of country club dues.

Retirement Benefits. In order to provide employees at all levels with greater incentives, the Company makes available to all employees, including the NEOs, the opportunity to make contributions to the Company’sUnifi, Inc. Retirement Savings Plan (the “401(k) Plan”), under which employees may elect to defer up to 75% of their total compensation, not to exceed the amount allowed by applicable Internal Revenue Service regulations. Pursuant to the 401(k) Plan, in fiscal 2016,2017, the Company matched contributions equal to 100% of the employee’s first 3% of compensation contributed to the 401(k) Plan and 50% of the next 2% of compensation contributed to the 401(k) Plan.

Health Plan, Life Insurance and Other Benefits. The Company makes available health and insurance benefits to all employees, including the NEOs. The cost of the health plans is covered partially through employees’employee payroll deductions, with the remainder covered by the Company. Disability and life insurance benefits are paid by the Company for all salaried employees; however, the NEOs receive additional life insurance coverage provided by the Company.

Supplemental Key Employee Retirement Plan. As an additional means of attracting top executive talent and encouraging executives to remain employed with the Company, the Company maintains the Unifi, Inc. Supplemental Key Employee Retirement Plan (the “SERP”). Participation in the SERP is limited to a select group of management employees who are selected by the Compensation Committee and includes each of our NEOs.Committee. As described in greater detail preceding the Nonqualified Deferred Compensation table on page 34,37, the SERP provides additional retirement benefits payable to ourthe Company’s NEOs following their termination of employment.

Employment and Change in Control Agreements. The Company hasentered into an employment agreement with Mr. Hall in connection with his appointment as Chief Executive Officer of the Company. The employment agreement provides that Mr. Hall will (i) receive an annual base salary of $775,000, (ii) be eligible to receive bonuses and to participate in compensation plans of the Company in accordance with any plan or decision that the Board may determine from time to time, (iii) be paid or reimbursed for business expenses and (iv) be entitled to participate in other employment benefits generally available to other executives of the Company. The employment agreement also contains provisions regarding the termination of Mr. Hall’s employment and related

severance obligations. Mr. Hall agreed in his employment agreement to neither compete with the Company or its affiliated entities nor solicit their respective customers, suppliers or employees for the 12 months immediately following termination of employment.

The Company historically provided its NEOs with severance benefits if their employment is involuntarily terminated (or they resign for good reason) after a change in control of the Company. Providing such “double-trigger” change in control benefits assists usthe Company in attracting and retaining executive talent and reduces the personal uncertainty that executives may feel when considering such a corporate transaction. As a result, ourthe Company’s NEOs are more likely to retain their employment with the Company and complete such a corporate transaction, thereby increasing the likelihood of enhancing long-term shareholder value. The terms ofMr. Caudle is the individual agreements, andonly NEO who is party to a change in control agreement with the Company.

A calculation of the estimated severance payments and benefits payable to each NEO,Mr. Hall under his employment agreement and to Mr. Caudle under his change in control agreement are set forth under “Executive Compensation Tables—Potential Payments Upon Termination of Employment or Change in Control” beginning on page 35.

Relocation Assistance.  In connection with his recruitment by the Company, the Compensation Committee agreed to provide relocation assistance benefits to Mr. Goodman and to gross-up the benefits for applicable taxes.37.

Policy on Executive Officer and Employee Incentive Compensation Recoupment

The Company has a written policy to address the recoupment of performance-based compensation awarded to or earned by an executive officer if there is a restatement of the Company’s financial results due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws. In the event of a restatement, the Board shall review the performance-based compensation awarded to or earned by the executive officers for the three (3)-yearthree-year period prior to the restatement event and, if the Board determines in its reasonable discretion that any such performance-based compensation would not have been awarded to or earned by an executive officer based on the restated financial results, the Board shall seek to recover from such executive officer any portion of the performance-based compensation that is greater than that which would have been awarded or earned had it been calculated on the basis of the restated financial results.

The Company’s recoupment policy also addresses the recoupment of performance-based compensation awarded to or earned by any current or former employee if such employee engaged in certain misconduct (e.g., embezzlement, fraud or theft or unethical behavior that harms the Company’s business, reputation or other employees). In such event, the Board may require reimbursement of compensation granted, earned or paid under any Company annual incentive or long-term incentive cash plans to such employee and cancellation of outstanding equity awards and reimbursement of any gains realized on the exercise, settlement or sale of equity awards held by such employee at any time during the three (3)-yearthree-year period ending on the date on which such misconduct is discovered.

Officers Stock Ownership Policy

During fiscal 2014, theThe Company has adopted itsan Officers Stock Ownership Policy to enhance the Company’s ongoing objective to align the compensation paid to its officers with the long-term interests of shareholders. The policy applies to any NEO, any person who holds the position of Vice President, Treasurer or higher with the Company, its primary operating subsidiary and possible other significant operating subsidiaries (“VP-Level Personnel”), and to certain other persons below those levels who may be designated for coverage by the Compensation Committee (for purposes of the policy, collectively, “covered officers”). The policy provides for a ramp-up period for complying with the expected stock ownership levels, both upon the initial implementation of the policy and thereafter upon each person first becoming a NEO or other covered officer. If a covered officer fails to comply with the stock ownership expectation, the Compensation Committee considers that fact in setting future salary, bonus or other compensation for the covered officer. The Company tests for compliance with the stock ownership expectation twice annually, once at the end of the second fiscal quarter and again at the end of the fiscal year.

The stock ownership expectation, calculation of shares of Common Stock counted towardtowards the ownership expectation and valuation of the shares of Common Stock for purposes of the policy are as set forth below. All NEOscovered officers are in compliance with their respective stock ownership expectations under the terms of the policy.

Tax Impact on Compensation

The Compensation Committee has considered the impact of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), on the Company’s executive compensation program. Code Section 162(m) denies a public company a deduction, except in limited circumstances, for compensation paid to “covered employees” – which includes the NEOs, other than the Company’s principal financial officer – to the extent such compensation exceeds $1,000,000.$1 million. Based on its review of the likely impact of Code Section 162(m) and other factors, the Compensation Committee previously recommended to the Board, the Board adopted and the shareholders approved, the 2013 Incentive Compensation Plan. The 2013 Incentive Compensation Plan allows the Company’s annual cash incentive bonus program for the NEOs, as well as equity and equity-based awards to the NEOs, to qualify for an exception to the Code Section 162(m) deduction limitation. The Compensation Committee may in the future adopt or change benefit plans in order to cause the compensation paid to covered employees under the plans to qualify for the exception. In any event, the Compensation Committee may authorize payments or equity awards to retain and motivate key executives, in any situation it believes to be appropriate, without regard to tax deductibility considerations.

Risk Analysis of Compensation PoliciesPrograms and Practices

While the Company’s compensation policiesprograms and practices are designed to motivate its employees and encourage performance that improves the Company’s financial and other operating results, the Company and the Compensation Committee also seek to design and implement compensation programs and practices that discourage employees from taking unnecessary or excessive risks that could ultimately threaten the value of the Company or otherwise have a material adverse effect on the Company. Management and the Compensation Committee periodically review and assess potential risks associated with the Company’s compensation programs and practices. Management and the Compensation Committee believe that the Company’s incentive

compensation programs and practices are appropriately balanced between value created indirectly by the performance of the Company’s stockCommon Stock and payments resulting from the achievement of specific financial performance objectives, so as to minimize the likelihood of unnecessary or excessive risk-taking by Company employees. Management and the Compensation Committee have concluded that any risks from such programs and practices are not reasonably likely to have a material adverse effect on the Company. The Compensation

Committee reached its conclusion after considering a number of features of the Company’s compensation structure that are designed to mitigate risk, such as:

Shareholder Say-on-Pay Vote

At the 20152016 Annual Meeting of Shareholders, ourthe Company’s shareholders had the opportunity to vote, on an advisory basis, on a proposal to approve the compensation of the NEOs for fiscal 2015.2016. This is referred to as a “say-on-pay” proposal. More than 95%97% of the votes cast at the 20152016 Annual Meeting of Shareholders on the say-on-pay proposal were voted in favor of the proposal. The Compensation Committee believes this vote result reflects the general concurrence by the shareholders inwith the Company’s philosophy and approach to executive compensation. Therefore, the Company has continued its philosophy and approach to executive compensation as discussed above.

The Board has determined that the Company’s shareholders should vote on a say-on-pay proposal each year, consistent with the preference expressed by the shareholders at the 2011 Annual Meeting of Shareholders. Accordingly, at At the Annual Meeting, shareholders will again have the opportunity to indicate their views on the Company’s NEO compensation. For additional information, see “Proposal 3:2: Advisory Vote to Approve Named Executive Officer Compensation.” The Compensation Committee will continue to consider the vote results for say-on-pay proposals in future years when making compensation decisions for ourthe Company’s NEOs.

The Company’s shareholders also will vote at the Annual Meeting on whether futuresay-on-pay votes should occur every one, two or three years. For additional information, see “Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes to Approve Named Executive Officer Compensation.” The Board of Directors will consider the results of the advisory vote on the frequency of futuresay-on-pay votes in determining how oftensay-on-pay votes will be conducted in the future.

Executive Compensation Tables

The following tables, narratives and footnotes describe the total compensation and benefits for the NEOs for fiscal 2016,2017, as well as total compensation and benefits for the NEOs for the two preceding fiscal years.

Summary Compensation Table

Grants of Plan-Based Awards