☒ | No fee required. | |||
☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies: |
(2) | Aggregate number of securities to which transaction applies: |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
(4) | Proposed maximum aggregate value of transaction: |
(5) | Total fee paid: |
☐ | Fee paid previously with preliminary materials. | |||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid: |
(2) | Form, Schedule or Registration Statement No.: | |||
(3) | Filing Party: | |||
(4) | Date Filed: | |||
UNIFI, INC.
UNIFI, INC.
Notice of Annual Meeting
and
Proxy Statement
20172021 Annual Meeting of Shareholders
October 25, 201727, 2021
Unifi, Inc.UNIFI, INC.
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 12, 20172, 2021
Dear Shareholder:
On behalf of the Board of Directors and the management of Unifi, Inc., I invite you to attend the 20172021 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m., Eastern Time, on Wednesday, October 25, 201727, 2021 at the Lotte New York Palace located at 455 Madison Avenue at 50th Street, New York, New York 10022.10022. Details regarding admission to the Annual Meeting and the business to be conducted are described in the accompanying Notice of 20172021 Annual Meeting of Shareholders and Proxy Statement.
I hope thatWhether or not you willplan to 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,
| |
Albert P. Carey | |
Executive Chairman |
Kevin D. Hall
Chief Executive Officer
UNIFI, INC.
7201 West Friendly Avenue
Greensboro, North Carolina 27410
(336) 294-4410
Notice of 2017 Annual Meeting of ShareholdersNOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS
The 20172021 Annual Meeting of Shareholders (the “Annual Meeting”) of Unifi, Inc. (the “Company”) will be held at 8:30 a.m., Eastern Time, on Wednesday, October 25, 201727, 2021 at the Lotte New York Palace located at 455 Madison Avenue at 50th Street, New York, New York 10022, for the purpose of voting on the following matters:purposes:
1. | To elect the |
2. | To approve, on an advisory basis, the Company’s named executive officer compensation in fiscal |
3. | To |
4. | To ratify the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal |
5. | To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
The Board of Directors unanimously recommends that you vote “FOR” itemsItems 1, 2, 3, and 4, and vote in favor of a frequency of every “1 YEAR” for item 3.4. The proxy 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 August 31, 20172021 will be entitled to vote at the Annual Meeting.
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 are a shareholder of record and received a paper copy of the proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote by telephone; (ii) 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 are a shareholder of record and 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 holdershareholder of record to vote your shares.
By Order of the Board of Directors,
Ben Sirmons
Secretary and Assistant General Counsel
September 12, 2017
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders To Be Held on October 25, 2017:
The Notice of 2017 Annual Meeting of Shareholders, Proxy Statement and 2017 Annual Report to Shareholders
are available atwww.proxyvote.com.
|
Gregory K. Sigmon
Vice President
General Counsel
Corporate Secretary
September 2, 2021
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders To Be Held on October 27, 2021: The Notice of Annual Meeting and Proxy Statement and the Annual Report on Form 10-K are available at www.proxyvote.com. | ||||
Table of Contents
Page | ||||||||
1 | ||||||||
Security Ownership of Certain Beneficial Owners and Management | 7 | |||||||
10 | ||||||||
10 | ||||||||
15 | ||||||||
15 | ||||||||
15 | ||||||||
15 | ||||||||
16 | ||||||||
17 | ||||||||
19 | ||||||||
19 | ||||||||
19 | ||||||||
21 | ||||||||
21 | ||||||||
21 | ||||||||
21 | ||||||||
21 | ||||||||
22 | ||||||||
22 | ||||||||
23 | ||||||||
25 | ||||||||
26 | ||||||||
26 | ||||||||
27 | ||||||||
29 | ||||||||
30 | ||||||||
30 | ||||||||
30 | ||||||||
31 | ||||||||
Policy on Executive Officer and Employee Incentive Compensation Recoupment | 35 | |||||||
35 | ||||||||
36 | ||||||||
36 | ||||||||
37 | ||||||||
38 | ||||||||
38 | ||||||||
39 | ||||||||
40 | ||||||||
41 | ||||||||
42 | ||||||||
Potential Payments Upon Termination of Employment or Change in Control | 42 | |||||||
44 | ||||||||
45 | ||||||||
45 | ||||||||
46 | ||||||||
47 | ||||||||
Advisory Vote to Approve Named Executive Officer Compensation | 48 | |||||||
49 | ||||||||
49 | ||||||||
49 | ||||||||
50 | ||||||||
50 | ||||||||
50 | ||||||||
50 | ||||||||
50 | ||||||||
50 | ||||||||
51 | ||||||||
51 | ||||||||
51 | ||||||||
51 | ||||||||
Ratification of the Appointment of Independent Registered Public Accounting Firm | 52 | |||||||
52 | ||||||||
i
Audit Committee Pre-Approval of Audit and Non-Audit Services | 53 | ||||||
54 | |||||||
Shareholder Proposals for the | 54 | ||||||
54 | |||||||
54 | |||||||
54 | |||||||
A-1 | |||||||
B-1 | |||||||
iii
PROXY STATEMENT
_______________PROXY STATEMENT
The Board of Directors (the “Board of Directors” or the “Board”) of Unifi, Inc. (“Unifi”UNIFI” or the “Company”) is providing these materials to you in connection with the 20172021 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m., Eastern Time, on Wednesday, October 25, 201727, 2021 at the Lotte New York Palace located at 455 Madison Avenue at 50th Street, New York, New York 10022.10022.
Why amdid I receivingreceive 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 UnifiUNIFI 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 Internet 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 12, 2017,2, 2021, 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 a copy.
What is included in these materials?
These materials include:
the Notice of Annual Meeting and Proxy Statement; and
|
the Annual Report on Form 10-K for fiscal 2021, which contains the Company’s audited consolidated financial statements.
|
If you received a 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 proposals scheduled to be voted on at the Annual Meeting:
the election of the 10 directors nominated by the Board of Directors;
|
the approval, on an advisory basis, of the Company’s named executive officer compensation in fiscal 2021;
|
the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022.
|
|
The Board is not aware of any other matters to be brought before the Annual Meeting. If other matters are properly raised at the 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:
|
|
|
|
“FOR” the election of each of the 10 directors nominated by the Board of Directors;
“FOR” the approval, on an advisory basis, of the Company’s named executive officer compensation in fiscal 2021;
“FOR” the approval of the Unifi, Inc. Employee Stock Purchase Plan; and
“FOR” the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022.
Who can attend the Annual Meeting?
Admission to the Annual Meeting is limited to:
shareholders of record as of the close of business on August 31, 2021;
|
holders of valid proxies for the Annual Meeting; and
|
invited guests.
|
Admission to the Annual 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 for admittance. Attendees must comply with any and all COVID-19 health and safety protocols imposed by the Annual Meeting venue or applicable governmental agency.
When is the record date and who is entitled to vote?
The Board set August 31, 20172021 as the record date. As of the record date, 18,261,06718,517,713 shares of common stock, $0.10 par value $0.10 per share, of the CompanyUNIFI (“Common Stock”) were issued and outstanding. Shareholders are entitled to one vote per share of Common Stock outstanding on the record date on any matter 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’sUNIFI’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 CompanyUNIFI 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 CompanyUNIFI 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 the shareholder of record (e.g., your bank, broker, or other nominee,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:
|
|
|
In person. Shareholders of record and beneficial owners of shares held in street name may vote in person at the Annual Meeting. If you hold shares in street name, you must also obtain a legal proxy from the shareholder of record (e.g., your bank, broker, or other nominee) to vote in person at the Annual Meeting.
By telephone or via the Internet. Shareholders of record may vote by proxy, by telephone, or via the Internet, by following the instructions included in the proxy card or Notice of Internet Availability provided or the instructions received by e-mail. If you are a beneficial owner of shares held in street name, your ability to vote by telephone or via the Internet depends on the voting procedures of the shareholder of record (e.g., your bank, broker, or other nominee). Please follow the instructions included in the voting instruction form or Notice of Internet Availability provided to you by the shareholder of record.
By mail. Shareholders of record and beneficial owners of shares held in street name may vote by proxy by completing, signing, dating, and returning the proxy card or voting instruction form provided.
How can I revoke my proxy or change my vote?
Shareholders of record. You may revoke your proxy or change your vote as follows:at any time prior to the taking of the vote at the Annual Meeting by (i) submitting a written notice of revocation to the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410; (ii) delivering a proxy bearing a later date using any of the voting methods described in the immediately preceding Q&A, including by telephone or via the Internet, and until the applicable deadline for each method specified in the accompanying proxy card or the Notice of Internet Availability; or (iii) attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request or vote in person at the meeting. For all methods of voting, the last vote cast will supersede all previous votes.
Beneficial owners of shares held in street name. You may revoke or change your voting instructions by following the specific instructions provided to you by the shareholder of record (e.g., your bank, broker, or other nominee), or, if you have obtained a legal proxy from the shareholder of record, by attending the Annual Meeting and voting in person.
|
|
What happens if I vote by proxy and do not give specific voting instructions?
Shareholders of record.record. If you are a shareholder of record and you vote by proxy, by telephone, via the Internet, or by signing, dating and returning a properly executed and dated proxy card by mail, 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.name. If you are a beneficial owner of shares held in street name and you 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“routine” matters but cannot vote on non-routine“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“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.”
TheProposals 1, 2, and 3, the election of directors, the advisory vote to approve the Company’s named executive officer compensation in fiscal 20172021, and the advisory vote onapproval of the frequency of future advisory votes to approve the Company’s named executive officer compensationUnifi, Inc. Employee Stock Purchase Plan, respectively, are non-routine“non-routine” matters. Consequently, without your voting instructions, the organization that holds your shares cannot vote your shares on these proposals. TheProposal 4, the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 20182022, is considered a routine“routine” matter.
What is the voting requirement to approve each of the proposals?
Proposal 1, Election of Directors. Directors shall be elected by the affirmative vote of a majority of the votes cast (meaning that the number of shares voted “for” a nominee must exceed the number of shares voted “against” such nominee). If any existing director who is a nominee for reelection receives a greater number of votes “against” his or her election than votes “for” such election, the Company’s Amended and Restated By-laws provide that such person shall be deemed to have tendered to the Board his or her resignation as a director. There is no cumulative voting with respect to the election of directors.
|
|
|
|
|
Proposal 2, Advisory Vote to Approve Named Executive Officer Compensation. Advisory approval of the Company’s named executive officer compensation in fiscal 2021 requires the affirmative vote of a majority of the votes cast (meaning that the number of shares voted “for” the proposal must exceed the number of shares voted “against” such proposal).
Proposal 3, Approval of the Unifi, Inc. Employee Stock Purchase Plan. Approval of the Unifi, Inc. Employee Stock Purchase Plan requires the affirmative vote of a majority of the votes cast (meaning that the number of shares voted “for” the proposal must exceed the number of shares voted “against” such proposal).
Proposal 4, Ratification of the Appointment of Independent Registered Public Accounting Firm. Ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022 requires the affirmative vote of a majority of the votes cast (meaning that the number of shares voted “for” the proposal must exceed the number of shares voted “against” such proposal).
Other Items. Approval of any other matters requires the affirmative vote of a majority of the votes cast (meaning that the number of shares voted “for” the item must exceed the number of shares voted “against” such item).
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 submittingreturning a properly executed and dated 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 advisory vote to approve the Company’s named executive officer compensation in fiscal 20172021, the approval of the Unifi, Inc. Employee Stock Purchase Plan, and the ratification of the appointment of KPMG LLP to serve as the Company’s
independent registered public accounting firm for fiscal 2018,2022, respectively, you may vote “for” or “against” these proposals, or you may “abstain” from voting on these proposals. Abstentions 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 As discussed above, because Proposal 4, the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022, is considered a “routine” matter, the Company does not expect any broker non-votes 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. HallEdmund M. Ingle and Thomas H. Caudle, Jr.,Gregory K. Sigmon, were selected by the Board and are officers, and directorswith respect to Mr. Ingle, a director, of the Company. If you are a shareholder of record and you return ana properly executed and dated proxy card but do not provide specific voting instructions, your shares will be voted on the proposals as follows:
“FOR” the election of each of the 10 directors nominated by the Board of Directors;
|
“FOR” the approval, on an advisory basis, of the Company’s named executive officer compensation in fiscal 2021;
|
“FOR” the approval of the Unifi, Inc. Employee Stock Purchase Plan; and
|
“FOR” the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2022.
|
If other matters properly come before the Annual Meeting and you do not provide specific voting instructions, your shares will be voted on such matters 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 proxies. In addition to soliciting the proxies by mail and the Internet, certain of the Company’s directors, officers, and employees, without compensation, may solicit proxies personally or by telephone, facsimile, and e-mail.
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 business days of the completion of the meeting.
Security Ownership of Certain BeneficialBeneficial Owners and Management
The following table below provides information about the beneficial ownership of Common Stock as of August 31, 2017,2021, by each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock as well as by each director, director nominee, for director and named executive officer and by all directors and executive officers as a group. In computing the number of shares beneficially owned by a person and the ownership percentage 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 60 days of August 31, 20172021 and (ii) shares of restricted stock units and vested share units that vest within 60 days of August 31, 2017.are currently vested. However, these shares or units are not deemed outstanding for the purposespurpose of computing the ownership percentage of any other person. The ownership percentage is based on 18,261,06718,517,713 shares of Common Stock outstanding as of August 31, 2017.2021. 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,such person, 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.
Name of Beneficial Owner | Number of Shares and Nature of Beneficial Ownership | Ownership Percentage | ||||||||||||||||||||||
Name |
| Number of Shares and Nature of Beneficial Ownership |
| Ownership Percentage | ||||||||||||||||||||
Principal Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
BlackRock, Inc. | 1,832,031 | (1) | 10.03% |
|
|
| 2,250,650 |
| (1) |
|
|
| 12.15 | % |
| |||||||||
Dimensional Fund Advisors LP | 1,529,244 | (2) | 8.37% | |||||||||||||||||||||
Kenneth G. Langone | 1,269,963 | (3) | 6.94% |
|
|
| 1,636,285 |
| (2) |
|
|
| 8.84 | % |
| |||||||||
Impala Asset Management LLC | 1,189,197 | (4) | 6.51% |
|
|
| 1,621,740 |
| (3) |
|
|
| 8.76 | % |
| |||||||||
Directors, Director Nominees and Named Executive Officers: | ||||||||||||||||||||||||
Dimensional Fund Advisors LP |
|
|
| 1,484,567 |
| (4) |
|
|
| 8.02 | % |
| ||||||||||||
Inclusive Capital Partners, L.P. |
|
|
| 1,417,054 |
| (5) |
|
|
| 7.65 | % |
| ||||||||||||
The Vanguard Group, Inc. |
|
|
| 1,006,355 |
| (6) |
|
|
| 5.43 | % |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Directors, Director Nominees, and Named Executive Officers: |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Emma S. Battle |
|
|
| 3,957 |
|
|
|
| * |
|
| |||||||||||||
Robert J. Bishop | 1,260,180 | (5) | 6.90% |
|
|
| 1,515,942 |
| (7) |
|
|
| 8.19 | % |
| |||||||||
Albert P. Carey |
|
|
| 190,230 |
| (8) |
|
|
| 1.03 | % |
| ||||||||||||
Thomas H. Caudle, Jr. | 83,373 | (6) | * |
|
|
| 216,916 |
| (9) |
|
|
| 1.17 | % |
| |||||||||
Paul R. Charron | 19,915 | (7) | * | |||||||||||||||||||||
Archibald Cox, Jr. | 129,097 | (8) | * |
|
|
| 119,980 |
| (10) |
|
| * |
|
| ||||||||||
Sean D. Goodman | 0 | * | ||||||||||||||||||||||
Kevin D. Hall | 0 | * | ||||||||||||||||||||||
Craig A. Creaturo |
|
|
| 31,945 |
| (11) |
|
| * |
|
| |||||||||||||
Edmund M. lngle |
|
|
| 54,451 |
| (12) |
|
| * |
|
| |||||||||||||
James M. Kilts | 11,200 | (9) | * |
|
|
| 32,661 |
| (13) |
|
| * |
|
| ||||||||||
Kenneth G. Langone | 1,269,963 | (3) | 6.94% |
|
|
| 1,636,285 |
| (2) |
|
|
| 8.84 | % |
| |||||||||
James D. Mead | 13,732 | (10) | * | |||||||||||||||||||||
Hongjun Ning |
|
|
| 5,000 |
| (14) |
|
| * |
|
| |||||||||||||
Suzanne M. Present | 25,048 | (11) | * |
|
|
| 48,099 |
| (15) |
|
| * |
|
| ||||||||||
Directors and executive officers as a group (13 persons) | 2,844,677 | 15.40% | ||||||||||||||||||||||
Rhonda L. Ramlo |
|
|
| — |
|
|
|
| * |
|
| |||||||||||||
Eva T. Zlotnicka |
|
|
| 1,422,039 |
| (16) |
|
|
| 7.68 | % |
| ||||||||||||
Directors, director nominees, and current executive officers as a group (13 persons) |
|
|
| 5,066,589 |
| (17) |
|
|
| 27.36 | % |
| ||||||||||||
* | Less than 1%. |
(1) | This information is based upon a Schedule 13G/A filed with the SEC on January |
(2) | Includes (i) 130,000 shares owned by Invemed Associates LLC, of which Mr. Langone is the principal equity holder and serves as President and Chief Executive Officer, as to which Mr. Langone has shared voting and investment power; (ii) 30,000 shares owned by Mr. Langone’s wife, as to which |
Mr. Langone has shared voting and investment power; and (iii) 47,767 shares that Mr. Langone has the right to receive pursuant to restricted stock units and vested share units that will automatically convert into shares of Common Stock following the termination of his service as a director of the Company. Mr. Langone disclaims beneficial ownership of (A) the shares of Common Stock held by Invemed Associates LLC, and any proceeds thereof, that exceed his pecuniary interest therein and/or are not actually distributed to him; and (B) the shares of Common Stock held by his wife. |
(3) | This information is based upon a Schedule 13D filed jointly with the SEC on February 14, 2020 by Impala Asset Management LLC, Impala Asset Advisors LLC, Impala Master Fund Ltd., Impala Alpha Master Fund Ltd., Waterbuck Master Fund Ltd., Impala Bluebuck LP, and Robert J. Bishop. The address for each of Impala Asset Management LLC and Mr. Bishop is 324 Royal Palm Way, 3rd Floor, Palm Beach, Florida 33480, each of Impala Asset Advisors LLC and Impala Bluebuck LP is 3500 South Dupont Highway, Dover, Delaware 19901, and each of Impala Master Fund Ltd., Impala Alpha Master Fund Ltd., and Waterbuck Master Fund Ltd. is PO Box 309, Ugland House, South Church Street, George Town KY1-1104, Cayman Islands. The Schedule 13D reports that each of Impala Asset Management LLC and Impala Asset Advisors LLC has shared voting and investment power over all of the shares shown; Impala Master Fund Ltd. has sole voting and investment power over no shares and shared voting and investment power over 1,228,021 shares; Impala Alpha Master Fund Ltd. has sole voting and investment power over no shares and shared voting and investment power over 56,532 shares; Waterbuck Master Fund Ltd. has sole voting and investment power over no shares and shared voting and investment power over 113,667 shares; Impala Bluebuck LP has sole voting and investment power over no shares and shared voting and investment power over 223,520 shares; and Mr. Bishop has sole voting and investment power over 26,702 shares (see clause (ii) in footnote (7) below) and shared voting and investment power over all of the shares shown. Impala Asset Management LLC, in its capacity as the investment adviser or manager to various private funds, has the power to direct the investment activities of each of the private funds. |
(4) | This information is based upon a Schedule 13G/A filed with the SEC on February |
shown. Dimensional |
(5) |
| This information is based upon a Schedule |
(6) | This information is based upon a Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group, Inc. (“Vanguard”), whose address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The Schedule 13G reports that Vanguard has sole voting power over no shares, shared voting power over 9,143 shares, sole investment |
(7) | Consists of (i) |
Principal, and a member of each of Impala Asset Management LLC and Impala Asset Advisors LLC and a limited partner in some of the funds that hold the securities owned by Impala Asset Management LLC and Impala Asset Advisors LLC, as to which Mr. Bishop has shared voting and investment power and of which Mr. Bishop disclaims beneficial ownership, except to the extent of his pecuniary interest therein. |
(8) | Includes (i) |
(9) | Includes 116,889 shares that Mr. Caudle has the right to purchase pursuant to stock options that are currently exercisable. |
(10) | Includes 51,917 shares that Mr. Cox has the right to receive pursuant to restricted stock units and vested share units that will automatically convert into shares of Common Stock following the termination of his service as a director of the Company. |
(11) | Includes (i) 5,000 shares that Mr. Creaturo has the right to purchase pursuant to stock options that are currently exercisable; (ii) 5,000 shares that Mr. Creaturo has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock |
(12) | Includes 15,000 shares that Mr. Ingle has the right to purchase pursuant to stock options that are currently exercisable. |
(13) | Includes |
(14) | Consists of 5,000 shares that Mr. |
(15) | Consists of |
(16) | Includes 1,417,054 shares held by Inclusive Capital Partners Spring Master Fund, L.P., which may be deemed to be indirectly beneficially owned by Inclusive Capital Partners, L.P. Ms. Zlotnicka and each of Inclusive Capital Partners, L.P. and Inclusive Capital Partners Spring Master Fund, L.P. disclaim beneficial ownership of the reported securities except to the extent of her or its pecuniary interest therein. |
(17) | Includes 400,745 shares that a director, a director nominee, or a current executive officer has the right to acquire within 60 days of August 31, 2021 through the exercise of stock options or the vesting of restricted stock units and vested share units. |
The Board currently consists of nine members. On the recommendation of the Corporate Governance and Nominating Committee, the Board has nominated the nine10 persons listed below for election as directors at the Annual Meeting. If elected, each nominee will serve until his or her term expires at the 20182022 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.directors, except Rhonda Ramlo whose Board service would commence upon her election at the Annual Meeting. Ms. Ramlo was identified to the Board as a potential director by a non-management director. Except for Kevin D. Hall,Emma S. Battle who was elected to the Board in May 2017, all ofeffective January 25, 2021, the nomineesother current directors were elected to the Board at the 20162020 Annual Meeting of Shareholders.Shareholders (the “2020 Annual Meeting”). Ms. Battle was identified to the Board as a potential director through the University of North Carolina at Chapel Hill School of Law’s Director Diversity Initiative (the “DDI”), a cost-free resource that maintains a database of prospective female and/or racially or ethnically diverse director candidates.
The Company’s Corporate Governance Guidelines establish certain limits for other directorships for the Company’s directors. In evaluating Mr. Kilts’ nomination for election as a director at the Annual Meeting, the Board determined that Mr. Kilts’ other directorships and officer positions would not impair his ability to carry out effectively his duties and responsibilities on the Board. Mr. Kilts has served as an integral member of the Board since 2016, and the Board believes that his strategic experience, acumen, and expertise provide valuable insights for UNIFI’s leadership.
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 nine nominees named in this Proxy Statement.
The Board of Directors unanimously recommends that you vote “FOR” the election of each of the nine10 nominees listed below.
Unless a proxy is marked to give a different direction, the persons named in the proxyotherwise specified, proxies will votebe voted “FOR” the election of each of the nine10 nominees listed below.
Director Nominees for Director
Listed below are the nine10 persons nominated for election to the Board.Board of Directors. 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.
Name | Age | Principal Occupation | Director Since |
| Age |
| Principal Occupation |
| Director Since | |||
Emma S. Battle |
| 60 |
| President and Chief Executive Officer, Market Vigor, L.L.C. |
| 2021 | ||||||
Robert J. Bishop | 60 | Managing Principal, Impala Asset Management LLC | 2016 |
| 64 |
| Managing Principal, Impala Asset Management LLC |
| 2016 | |||
Thomas H. Caudle, Jr. | 65 | President & Chief Operating Officer of Unifi | 2016 | |||||||||
Paul R. Charron | 75 | Independent Management Consultant | 2016 | |||||||||
Albert P. Carey |
| 69 |
| Executive Chairman of UNIFI |
| 2018 | ||||||
Archibald Cox, Jr. | 77 | Chairman, Sextant Group, Inc. | 2008 |
| 81 |
| Chairman, Sextant Group, Inc. |
| 2008 | |||
Kevin D. Hall | 58 | Chief Executive Officer of Unifi | 2017 | |||||||||
Edmund M. Ingle |
| 56 |
| Chief Executive Officer of UNIFI |
| 2020 | ||||||
James M. Kilts | 69 | Founding Partner, Centerview Capital | 2016 |
| 73 |
| Founding Partner, Centerview Capital |
| 2016 | |||
Kenneth G. Langone | 81 | President and Chief Executive Officer, Invemed Associates LLC | 1969 |
| 85 |
| President and Chief Executive Officer, Invemed Associates LLC |
| 1969 | |||
James D. Mead | 73 | President, James Mead & Company | 2015 | |||||||||
Suzanne M. Present | 58 | Principal, Gladwyne Partners, LLC | 2011 |
| 62 |
| Principal, Gladwyne Partners, LLC |
| 2011 | |||
Rhonda L. Ramlo |
| 61 |
| Vice President & General Manager, The Clorox Company |
| — | ||||||
Eva T. Zlotnicka |
| 38 |
| Managing Partner, Inclusive Capital Partners, L.P. |
| 2018 | ||||||
Emma S. Battle
Ms. Battle has served as President and Chief Executive Officer of Market Vigor, L.L.C., a business services company focused on strategic consulting and digital and online marketing, since she founded the company in 2003. From 2015 to 2017, Ms. Battle was Vice President of Client Success at Windsor Circle, an e-commerce marketing company. Previously, she served in executive and senior marketing and sales roles at Three Ships Media, Red Hat, Art.com, 1 Sync, and Sara Lee Branded Apparel (now known as Hanesbrands Inc.). Ms. Battle also serves on the boards of directors of Bassett Furniture Industries, Inc. and Nu Skin Enterprises, Inc., and was a director of Primo Water Corporation until 2020. Ms. Battle pursues continuing education through online classes and membership in professional organizations, like Brentwood Advisory Group, and supports and collaborates with current and aspiring board directors through the DDI, Onboard NC, Santa Clara University's Black Corporate Board Readiness program, and the newly established Take Your Seat initiative. Ms. Battle also devotes time to charitable and civic causes: since 2017, she has served as President and Chief Executive Officer of Higher Ed Works, a charitable organization that supports public higher education in North Carolina, and she also serves on the boards of FPG Child Development Institute, Southeastern Wind Coalition, and Elon University's Martha & Spencer Love School of Business.
Ms. Battle is a successful businessperson with an extensive background in digital and online marketing, marketing analytics, and business and marketing strategy. She also brings to the Board her perspective from working with other large corporations and serving on other public company boards. In addition, her commitment to sustainability and social responsibility is valuable to the Company.
Robert J. Bishop
Mr. Bishop founded Impala Asset Management LLC, a private investment management company,firm, in 2004 and is the Managing Principal of the firm and manages the Impala, Waterbuck, Alpha and ResourceAlpha 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 directorManaging 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 Don Ritter and Toby Roth and Don Ritter.Roth.
Mr. Bishop brings valuable financial and managerial expertise to the Board through his extensive experience in investment and asset management.
Thomas H. Caudle, Jr.Albert P. Carey
Mr. CaudleCarey has served as President & Chief Operating OfficerExecutive Chairman of Unifithe Board of UNIFI since August 2017. Previously, he was PresidentApril 2019. Mr. Carey previously served as Non-Executive Chairman of the Board of the Company from April 2016January 2019 to August 2017, Vice PresidentMarch 2019. In March 2019, Mr. Carey retired from PepsiCo, Inc., a consumer products company, after a 38-year career with the company in which he held a number of Manufacturing of the Company from October 2006 to April 2016 and Vice President of Global Operations of the Company from April 2003 to October 2006. Mr. Caudle joined Unifi in 1982 and, since that time, has served in a variety of othersenior leadership roles, including Senior ViceChief Executive Officer of PepsiCo North America from March 2016 to January 2019, Chief Executive Officer of PepsiCo North America Beverages from July 2015 to March 2016, Chief Executive Officer of PepsiCo Americas Beverages from September 2011 to July 2015, and 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,Frito-Lay North America from 1996June 2006 to 2006 and was President and Chief Executive OfficerSeptember 2011. Mr. Carey joined PepsiCo 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 positionsspending seven years with The Procter & Gamble Company (1971 to 1978) and General Foods Corporation (1979 to 1981).Company. Mr. Charron served as a director of Campbell Soup Company from 2003 to 2015 and as Chairman of itsCarey also serves on the board of directors from 2009 to 2015. He served as Senior Advisorof The Home Depot, Inc. and the board of trustees at Warburg Pincus, a global private equity firm, from 2008 to 2012. Mr. Charron has also been a memberthe University of Escada SE’s (Germany) Supervisory Board since 2013.Maryland, and volunteers at the Bridgeport Rescue Mission in Bridgeport, Connecticut.
Mr. CharronCarey brings to the Board extensivemore than 40 years of experience with consumer product companies. In addition, having served in a number of critical areas, including leadership, strategic management and corporate strategy.senior executive positions at PepsiCo, Mr. Charron alsoCarey brings to the Board valuable experience with global consumer product companies.leadership and strategic management skills.
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 to June 2011. Mr. Cox was a director of Hutchinson Technology Incorporated from May 1996 to September 2009. He was also Chairman of Magnequench, Inc., a manufacturer of magnetic material, from September 2005 to September 2006 and President and Chief Executive Officer of Magnequench, Inc. from October 1995 to August 2005. Mr. 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 Chairman 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 has served as Lead Independent Director of UNIFI since August 2019.
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. HallEdmund M. Ingle
Mr. HallIngle has served as Chief Executive Officer of the CompanyUNIFI since June 2020. From May 2017. Prior2019 to joining Unifi, Mr. HallJune 2020, he served as Chief Executive Officer of NatPets LLC,the Recycling group of Indorama Ventures, a high-growth natural/organic premium petglobal chemicals company from September 2016and a global integrated leader in PET and fibers serving major customers in diversified end-use markets. From May 2018 to May 2017. From 2014 to 2015, Mr. HallJune 2020, he was PresidentChairperson and Chief Executive Officer of Geneva Watch Group, a global fashion watch and accessories business. Between 2012 and 2014,Indorama’s Wellman International division. Prior to that, Mr. Hall ran the
KDH Advisory Group whereIngle was with UNIFI for approximately 30 years, during which time he served as a consultant/advisor to a number of companies,held various key leadership positions, 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 marketingGlobal Corporate Sustainability, Vice President of Supply Chain, General Manager of the Company’s Flake and general manager positions at The Procter & Gamble Company from 1985 to 2001.Chip business, Vice President and General Manager of REPREVE® Polymers, General Manager of the Company’s Nylon business, and Director of Global Procurement.
Mr. HallIngle brings to the Board more thana deep understanding of UNIFI’s operations and the textile industry, gained through his approximately 30 years of experience with the Company. He also brings important executive leadership and strategic marketing and brand development experience. In addition, Mr. Hall bringsmanagement skills to the Board his substantial leadership and managerial experience in the apparel industry.Board.
James M. Kilts
Mr. Kilts is the founding partner of Centerview Capital, a private equity firm which was founded in 2006.2006, and currently serves as Co-Chief Executive Officer of Conyers Park III Acquisition Corp., a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. 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, andChairman of The Simply Good Foods Company (formerly known as Conyers Park Acquisition Corp.) since 2016.2016, and Chairman of Advantage Solutions Inc. (formerly known as Conyers Park II Acquisition Corp.) since 2020. Mr. Kilts was also Executive Chairman of Conyers Park II Acquisition Corp. until 2020, 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, anda director of Nielsen Holdings plc until August 2017.2017, and a director of MetLife, Inc. until 2020.
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, which he brings to the Board. Mr. Kilts also brings to the Board valuable experience with consumer businesses.product companies.
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 as 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.
Suzanne M. Present
Ms. Present is a co-founder and has been a principal of Gladwyne Partners, LLC, a private partnership fund manager, since 1998. She has alsoPrior to Gladwyne’s formation, Ms. Present spent 15 years at Lazard Freres & Co., the first five as a securities analyst before moving on to investment banking. From 2013 to 2020, Ms. Present served since 2014, as executive directorExecutive 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.workforce, and now serves as Chairman and Treasurer, positions she assumed in 2020. Ms. Present currently serves on the boardhas served as a director of directorsnumerous public and private companies in a variety of Anshe Chung Studios, Limited, a privately held Chinese-based developer of content for virtual worlds,industries, including media, technology, healthcare, and she served on the board of directors of Geeknet, Inc. until 2010.retail.
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.
Rhonda L. Ramlo
Ms. Ramlo is Vice President & General Manager of Strategy, Acquisitions, and New Business Development at The Clorox Company, a leading multinational manufacturer and marketer of consumer and professional products, a position she has held since 2013. From 2010 to 2012, Ms. Ramlo served as Vice President & General Manager of The Clorox Company’s Laundry and Water Filtration businesses. Before joining The Clorox Company, Ms. Ramlo was with Dreyer’s Grand Ice Cream Holdings, Inc. for 16 years, where she held numerous executive leadership positions. Prior to that, Ms. Ramlo worked at Booz Allen Hamilton Holding Corporation as a strategic consultant. Ms. Ramlo also serves on the boards of directors of Nuun, Inc. and REDD Bar, two privately held consumer packaged goods companies.
Ms. Ramlo brings to the Board considerable strategic and development experiences, which offer brand strategy, marketing, sales, and innovation expertise.
Eva T. Zlotnicka
Ms. Zlotnicka is a co-founder and has been a Managing Partner and a member of the Management Committee of Inclusive Capital Partners, L.P., a San-Francisco-based investment firm, since July 2020. Prior to that, she was Managing Director of the ValueAct Spring Fund and Head of Stewardship at ValueAct Capital, a San-Francisco-based investment firm, from January 2020 to July 2020, and a Vice President of
Value Act Capital from February 2018 to December 2019. Prior to joining ValueAct Capital in February 2018, Ms. Zlotnicka was an Environmental, Social, and Governance (“ESG”) equity research analyst for nearly seven years. Previously, Ms. Zlotnicka was U.S. lead for the Sustainability Research team at Morgan Stanley, a global financial services firm, from January 2015 to February 2018, and held a similar role at UBS Investment Bank, a division of UBS Group AG, a Swiss multinational investment bank and financial services company, from July 2011 to January 2015. Prior to becoming an ESG equity research analyst, she spent five years at Morgan Stanley primarily focused on fixed income securities and derivatives. Ms. Zlotnicka is a director of Hawaiian Electric Industries, Inc. Ms. Zlotnicka also serves as a member of the Investor Advisory Group for the Sustainability Accounting Standards Board and is a member of the Advisory Board of the Institute for Corporate Governance and Finance at the New York University School of Law. Ms. Zlotnicka also co-founded Women Investing for a Sustainable Economy (WISE), a global professional community.
Ms. Zlotnicka brings to the Board valuable expertise in sustainable investing and multinational ESG initiatives. Ms. Zlotnicka also brings to the Board extensive experience in a number of critical areas, including investment management and finance.
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’sUNIFI’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 Ethics for Senior Financial and Executive Officers (the “Code of Ethics for Senior Financial and Executive Officers”), which applies to the Company’s Chief Executive Officer, Chief Financial Officer, Vice President & Treasurer, Vice President of Finance, and other senior financial and executive officers and employees; (ii) a Code of Business Conduct and Ethics (the “Code of Ethics”), which applies to the Company’s directors, officers, and executive officers, including the principal executive officer, principal financial officeremployees; and principal accounting officer, and (ii)(iii) 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 for Senior Financial and Executive Officers, 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.
AllCertain 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 for Senior Financial and Executive Officers, 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 in writing 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 from, the Code of Ethics that applyfor Senior Financial and Executive Officers (to the extent required to the Company’s principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions and that relatebe disclosed pursuant to any element of the Code of Ethics enumerated in the SEC rules,Form 8-K), 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.
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.UNIFI. The Director Independence Standards are available on the investor relations portion of the Company’s website,www.unifi.com, as an appendix to the Corporate Governance Guidelines.
In July 2017,August 2021, 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 or director nominee (and his or her immediate family members and affiliates) and each of Unifi,UNIFI, its management, and its independent registered public accounting firm, as well as the transactions described below under “—Related Person Transactions.” As a result of this evaluation, the Board determined those relationships that do exist or did exist within the last three fiscal years (except for Messrs. Hall’sIngle’s and Caudle’sCarey’s relationships as employees of Unifi)UNIFI and Mr. Caudle’s relationship as a former
employee 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.Mses. Battle, Present, isRamlo, and Zlotnicka qualifies (and, in the case of Mr. Mead, qualified) as 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 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”).
The Company’s Corporate Governance Guidelines provide the Board with flexibility to select the appropriate leadership structure at a particular time based on what the specific needs of the Company’s business and what isBoard determines to be 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 whetherwith respect to combining or separating the positionsoffices of Chairman of the Board and Chief Executive Officer should be held by the same or different persons.principal executive officer.
The Company currently has separated the roles of Chairman of the Board and Chief Executive Officer. James D. Meadprincipal executive officer. Albert P. Carey serves as the Non-ExecutiveExecutive Chairman of the Board and Kevin D. HallEdmund M. Ingle, as Chief Executive Officer, serves as the Company’s Chief Executive Officer.principal executive officer. The Company previously combined the roles of Chairman of the Board and Chief Executive Officerprincipal 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 Chief Executive Officer. Mr. Hall, asprincipal executive officer. The Board, however, believes that the Company’s Chief Executive Officer,present leadership structure is responsible for setting the strategic directionappropriate for the Company and providingat the current time, as it allows Mr. Ingle to focus on the day-to-day operation of the business, while allowing Mr. Carey to focus on overall leadership and strategic direction of UNIFI, guidance of the Company’s senior management, and leadership of the Company, while Mr. Mead,Board.
The Company’s Corporate Governance Guidelines further provide that if the Chairman is not determined by the Board as independent, the Non-Executive Chairmanindependent directors may determine that the Board should have a Lead Independent Director. In the event that the independent directors make such a determination, the Lead Independent Director is appointed by a majority of the independent directors. In October 2020, the independent directors reappointed Archibald Cox, Jr. to serve as Lead Independent Director, a position he has held since August 2019.
The duties of the Lead Independent Director include: (i) providing leadership to the Board; (ii) chairing Board provides guidance to Mr. Hall and setsmeetings in the absence of the Chairman; (iii) organizing, setting the agenda for, and leading executive sessions of the independent directors without the attendance of management; (iv) serving as a liaison between management and the independent directors; (v) consulting with the Chairman to approve the agenda for each Board meeting and the information that shall be provided to the directors for each scheduled meeting; (vi) approving meeting schedules to assure that there is sufficient time for discussion of all agenda items; (vii) meeting with the Chairman between Board meetings as appropriate in order to facilitate Board meetings and presides overdiscussions; (viii) advising the Corporate Governance and Nominating Committee on the selection of committee chairpersons; and (ix) having the authority to call meetings of the Board.independent directors.
The Board of Directors 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.Board. The members and chairs of these committees are identified in the following table:
Name | Audit Committee | Compensation Committee | Corporate Governance and Nominating Committee | ||||||||
| Member | ||||||||||
Robert J. Bishop | Member | ||||||||||
Albert P. Carey | |||||||||||
Archibald Cox, Jr. | Chair | Member | |||||||||
Edmund M. Ingle | |||||||||||
James M. Kilts | Member | ||||||||||
Kenneth G. Langone | Member | Member | |||||||||
Suzanne M. Present | Chair | ||||||||||
Eva T. Zlotnicka | Member | Chair |
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:
| |||||
Committee | Key Functions and Additional Information | Number of Meetings in Fiscal | |||
Audit Committee | • Assists the Board in its oversight of (i) the Company’s accounting and financial reporting processes, (ii) the integrity of the Company’s financial statements, (iii) the Company’s compliance with legal and regulatory requirements, (iv) the qualifications and independence of the Company’s independent registered public accounting firm, and (v) the performance of the Company’s internal audit function and the Company’s independent registered public accounting firm. • Appoints, compensates, retains, and oversees the work of the Company’s independent registered public accounting firm. • Reviews and discusses with management and the Company’s independent registered public accounting firm the annual and quarterly financial statements. • Reviews and discusses with management the quarterly earnings releases. • Reviews and pre-approves all audit and non-audit services proposed to be performed by the Company’s independent registered public accounting firm. • Reviews and, if appropriate, approves or ratifies related person transactions. • Discusses with management, the Company’s independent registered public accounting firm, and Company personnel responsible for the Company’s internal audit function, the quality and adequacy of the Company’s internal controls. • Assists the Board in its oversight of enterprise risk management. • The Board of Directors has determined that | 9 | |||
Compensation Committee | • Oversees the administration of the Company’s compensation plans. • Reviews and approves the compensation of the executive officers and oversees management’s decisions concerning the compensation of the other officers. • Reviews and makes recommendations to the independent directors on the Board with respect to any employment agreements, consulting arrangements, severance or retirement arrangements, or change • Conducts annual performance evaluation of management. • Oversees regulatory compliance regarding compensation matters. | 5 | |||
Corporate Governance
Committee | • Identifies, evaluates, and recommends director candidates to the Board. • Determines the criteria for membership on the Board and its committees and recommends such criteria to the Board for approval. • Makes recommendations to the Board concerning committee appointments and Board and committee leadership. • Makes recommendations to the Board with respect to determinations of director independence. • Reviews and recommends to the Board the form and amount of director compensation. • Oversees annual performance evaluation of the Board, the committees of the Board, leadership of the Board (including the Chairman of the • Oversees director education and new director onboarding. • Considers and recommends to the Board other actions relating to corporate governance. | 5 | |||
The Board may also establish other committees from time to time as it deems necessary.
The Board of Directors held sevennine meetings during fiscal 2017.2021. 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 2017.2021. It is the Board’s policy that the directors should attend the Company’s annual meeting of shareholders absent extenuating circumstances. SixAll of the Company’s eightnine directors in office at the time attended the 20162020 Annual Meeting of Shareholders.Meeting.
Pursuant to the Company’s Corporate Governance Guidelines, the independent directors meet in regularly scheduled executive sessions without management. Mr. Mead,Archibald Cox, Jr., as the Non-Executive Chairman of the Board,Lead Independent Director, presides over these executive sessions.
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 or solicit 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 20182022 Annual Meeting of Shareholders must be in writing and received by the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410 no earlier than June 27, 201829, 2022 and no later than July 27, 2018.29, 2022. However, if the date of the 20182022 Annual Meeting of Shareholders is more than 30 days before or more than 90 days after October 25, 2018,27, 2022, then the written notice must be received by the Company’s Corporate Secretary no earlier than 120 days prior to the date of the 20182022 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) 10 days following the day on which the Company first announced publicly (or mailed notice to the shareholders of) the date of such meeting.
The notice must contain certain information about both the nominee and the shareholder submitting the nomination as set forth in the Company’s Amended and Restated By-laws. With respect to the nominee,
the notice must contain, among other things, (i) the nominee’s name, age, and business and residentialresidence addresses; (ii) the nominee’s background and qualification;qualification, including, the principal occupation or employment of the nominee; (iii) the class and number of shares or other securities of the Company owned of record or beneficially by the nominee;nominee or any Shareholder Associated Person (as defined in the Company’s Amended and Restated By-laws); (iv) any derivative positions held of record or beneficially by the nominee as well asor any Shareholder Associated Person related to, or the value of which is derived in whole or in part from, the value of any class of the Company’s shares or other securities and whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other similar agreements, arrangementsagreement, arrangement, or understandingsunderstanding has been made, the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, the nominee;nominee or any Shareholder Associated Person with respect to the Company’s shares or other securities; (v) a written statement executed by the 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 Company and its shareholders,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 Company, will act or vote on any issue or question,question; (C) disclosing whether the nominee is a party to an agreement, arrangement, or understanding with any person or entity other than the Company with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with the nominee’s service or action as a director of the Company,Company; (D) agreeing to update continually the accuracy of the information required by the immediately preceding clauses (B) and (C) for as long as the nominee is a nominee or a director of the CompanyCompany; and (E) agreeing, if elected as a director of the Company, to comply with all codes of conduct and ethics, corporate governance, codes,conflict of interest, confidentiality, and stock ownership and trading policies and guidelines of the Company applicable to directors; and (vi) any other information regarding the nominee 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 or that the Company may reasonably require to determine the eligibility of the nominee to serve as a director of the Company. With respect to the shareholder submitting the nomination, the notice must contain: (1) the name and address, as they appear on the Company’s books, of such shareholder and any Shareholder Associated Person (as defined inPerson; (2) the Company’s Amendedclass 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 asrelated to, or the value of which is derived in whole or in part from, the value of any class of the Company’s shares or other securities and whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other similar agreements, arrangementsagreement, arrangement, or understandingsunderstanding has been made, the effect or intent of which is to mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such shareholder or any Shareholder Associated Person;Person with respect to the Company’s shares or other securities; (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 Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410. Recommended candidates will be subject to a 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 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, the Lead Independent Director, 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 of the Board, the Chairman, the Lead Independent Director, and the Board of Directors.Directors as a whole. 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.
NoProhibitions Against Hedging, Pledging, or Short Selling
UnifiUNIFI maintains policies that apply to all directors, officers, and employees that prohibit hedging pledging or short selling (profiting if the market price decreases) of Company securities. Such policies also prohibit all directors, officers, and employees from pledging any Company securities, purchasing any Company securities on margin, or incurring any indebtedness secured by a margin or similar account in which Company securities are held, without the prior approval of the securities decreases)Audit Committee of Unifi securities.the Board.
Policy for Review of 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 relationships or transactions. The Company’s executive management is primarily responsible for the developmentdeveloping and implementation ofimplementing 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 any 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 transaction, risks, benefits, costs, availability of other comparable services or products, and, if applicable, the impact on a director’s independence.
Related Person Transactions with Salem Holding Company
In fiscal 2017,2021, the Company paid Salem Leasing Corporation, a wholly owned subsidiary of Salem Holding Company, approximately $3.914$4.12 million in connection with leases of tractors and trailers and for related transportation services. In addition, the Company earned income from Salem Global Logistics, Inc., a wholly owned subsidiary of Salem Holding Company, of approximately $128,000 in connection with providing for-hire freight services for Salem Global Logistics, Inc. Mr.Kenneth G. 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. The terms of payment to the Company by Salem Global Logistics, Inc. for the freight services were, 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 weretransaction was approved under Unifi’sUNIFI’s Related Persons Transactions Policy.
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 compromisedcomposed solely of independent directors) that report back to the full Board. In general, the committees oversee the following risks:
Audit Committee oversees risks related to internal financial and accounting controls, legal, regulatory, cyber security, and compliance risks, work performed by the Company’s independent registered public accounting firm and the Company’s internal audit function, related person transactions, and the overall risk management governance structure and risk management function;
|
Compensation Committee oversees the Company’s compensation programs and practices. For a detailed discussion of the Company’s efforts to manage compensation-related risks, see “Compensation Discussion and Analysis—Risk Analysis of Compensation Programs and Practices” beginning on page 36; and
|
Corporate Governance and Nominating Committee oversees issues that may create governance risks, such as Board composition and structure, director selection, director succession planning, and environmental, social, and sustainability activities.
|
The Board believes that its leadership structure supports the Company’s governance approach to risk oversight as both the Chief Executive Officer isChairman and the principal executive officer are involved directly in risk management as a membermembers 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 members 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. The Compensation Committee has retained Korn Ferry Hay Group to serve as its independent advisor 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 the Compensation Committee’s compensation consultant. Neither Korn Ferry Hay Group nor any of its affiliates provides any services to UnifiUNIFI 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.advisor.
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 Corporate Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410. Shareholders and other interested parties wishing to communicate with Archibald Cox, Jr., as Lead Independent Director, or with the independent directors as a group may do so by sending a written communication to Mr. Cox at the above address. 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. UnifiUNIFI 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.
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 2017,2021, the Company’s non-independent directors were Messrs. Thomas H.Ingle, 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.Carey. The following table sets forth the compensation paid to each independent director who served on the Board in fiscal 2017:2021:
20172021 Director Compensation Table
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) |
| Fees Earned or Paid in Cash ($) |
| Stock Awards ($)(1) |
| Option Awards ($) |
|
| Total ($) |
| ||||||||||||||||||||
William J. Armfield, IV(2) | — | — | — | ||||||||||||||||||||||||||||||
Emma S. Battle |
|
| — |
|
|
|
| 75,995 |
|
|
|
| — |
|
|
| 75,995 |
| |||||||||||||||
Robert J. Bishop | — | 125,000 | 125,000 |
|
| — |
|
|
|
| 100,000 |
|
|
|
| — |
|
|
| 100,000 |
| ||||||||||||
Paul R. Charron | — | 135,000 | 135,000 | ||||||||||||||||||||||||||||||
Archibald Cox, Jr. | 10,000 | 125,000 | 135,000 |
|
| — |
|
|
|
| 125,000 |
| (2) |
|
| — |
|
|
| 125,000 |
| ||||||||||||
James M. Kilts | — | 125,000 | 125,000 |
|
| — |
|
|
|
| 100,000 |
|
|
|
| — |
|
|
| 100,000 |
| ||||||||||||
Kenneth G. Langone | — | 125,000 | 125,000 |
|
| — |
|
|
|
| 100,000 |
|
|
|
| — |
|
|
| 100,000 |
| ||||||||||||
James D. Mead | 45,000 | 125,000 | 170,000 | ||||||||||||||||||||||||||||||
James D. Mead (3) |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
| — |
| |||||||||||||||
Suzanne M. Present | — | 140,000 | 140,000 |
|
| — |
|
|
|
| 115,000 |
| (4) |
|
| — |
|
|
| 115,000 |
| ||||||||||||
Eva T. Zlotnicka |
|
| 60,000 |
| (5) |
|
| 50,000 |
|
|
|
| — |
|
|
| 110,000 |
| |||||||||||||||
(1) | Represents the |
(2) | In addition to the annual retainer for his service as an independent director in fiscal 2021, Mr. Cox received (i) a $15,000 annual retainer for his service as Lead Independent Director and (ii) a $10,000 annual retainer for his service as Chair of the Compensation Committee. |
(3) | On August 4, 2020, Mr. Mead notified the Company of his resignation from the Board of Directors, effective October 29, 2020. |
(4) | In addition to the annual retainer for her service as an independent director in fiscal 2021, Ms. Present received a $15,000 annual retainer for her service as Chair of the Audit Committee. |
(5) | In addition to the annual retainer for her service as an independent director in fiscal 2021, Ms. Zlotnicka received a $10,000 annual retainer for her service as Chair of the Corporate Governance and Nominating Committee. |
The table below shows the number of unexercised options to purchase shares of Common Stock held by each independent director as of June 25, 2017; no independent director held any unvested restricted stock units. Mr. Langone exercised all of his options on August 30, 2017.
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
The Corporate Governance and Nominating Committee reviews the form and amount of director compensation and makes recommendations to the Board of Directors for its consideration and approval. The Corporate Governance and
Nominating Committee and the Board of Directors approved the Company’s Director Compensation Policy on October 26, 2016.30, 2019. The compensation for Unifi’sUNIFI’s independent directors is as follows:
$100,000 annual retainer, where up to 50% of such amount is payable (at the director’s election) in cash and the remainder of such amount is an equity grant payable in shares of Common Stock;
$15,000 annual retainer for the Lead Independent Director, payable (at the director’s election) in cash or shares of Common Stock; $15,000 annual retainer for the Chair of the Audit Committee, payable (at the director’s election) in cash or shares of Common Stock; $10,000 annual retainer for the Chairs of the Compensation Committee and the Corporate Governance and Nominating Committee, payable (at such director’s election) in cash or shares of Common Stock; and reimbursement of reasonable expenses incurred for attending Board and committee meetings. A director may be issued stock units, in lieu of shares of Common Stock, which would be payable upon the director’s cessation of service as a member of the Board. The number of any shares of Common Stock or stock units granted to a director shall be determined based on the fair market value of the Common Stock on the date of the director’s election to the Board, and the number of shares of Common Stock underlying any stock option granted to a director shall be determined based on the Black-Scholes value of the Common Stock on the option grant date. |
|
|
|
|
Any independent director who is initially appointed or elected to the Board of Directors other than at the annual meeting of shareholders will receive an equity grant in the form of restricted stock units one day following such appointmenthis or election, where the amount of units to be granted would beher annual retainer calculated on a pro rata basis based upon the period between the date of such appointment or election and the anticipated date of the next annual meeting of shareholders.
Information about our 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 occupationsoccupation or employment during at least the past five years. Each executive officer of the CompanyUNIFI is elected by the Board of Directors and holds office from the date of election until thereafter removed by the Board.
Edmund M. Ingle.Kevin D. Hall.Mr. Hall,Ingle, age 58,56, has served as Chief Executive Officer of UNIFI and a member of the CompanyBoard of Directors since June 2020. From May 2017. Prior2019 to joining Unifi, Mr. HallJune 2020, he served as Chief Executive Officer of NatPets LLC,the Recycling group of Indorama Ventures, a high-growth natural/organic premium petglobal chemicals company and a global integrated leader in PET and fibers serving major customers in diversified end-use markets. From May 2018 to June 2020, he was Chairperson and Chief Executive Officer of Indorama’s Wellman International division. Prior to that, Mr. Ingle was with UNIFI for approximately 30 years, during which time he held various key leadership positions, including Vice President of Global Corporate Sustainability, Vice President of Supply Chain, General Manager of the Company’s Flake and Chip business, Vice President and General Manager of REPREVE® Polymers, General Manager of the Company’s Nylon business, and Director of Global Procurement. Additional information about Mr. Ingle can be found under “Proposal 1: Election of Directors—Director Nominees” beginning on page 10 of this Proxy Statement.
Albert P. Carey. Mr. Carey, age 69, has served as Executive Chairman of the Board of UNIFI since April 2019 and a member of the Board of Directors since 2018. Mr. Carey previously served as Non-Executive Chairman of the Board of the Company from January 2019 to March 2019. In March 2019, Mr. Carey retired from PepsiCo, Inc., a consumer products company, after a 38-year career with the company in which he held a number of senior leadership roles, including Chief Executive Officer of PepsiCo North America from March 2016 to January 2019, Chief Executive Officer of PepsiCo North America Beverages from July 2015 to March 2016, Chief Executive Officer of PepsiCo Americas Beverages from September 20162011 to May 2017. From 2014 toJuly 2015, Mr. Hall wasand 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. FromFrito-Lay North America from June 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.September 2011. Additional information about Mr. HallCarey can be found above under “Proposal 1: Election of Directors—Nominees for Director.”Director Nominees” beginning on page 10 of this Proxy Statement.
Craig A. Creaturo.Thomas H. Caudle, Jr.Mr. Caudle,Creaturo, 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 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 54,51, has served as Executive Vice President & Chief Financial Officer of UnifiUNIFI since September 5, 2017. Previously,2019. Mr. AckermanCreaturo served as Executive Vice President & Chief Financial Officer & Vice President-Administration of The Fresh Market,Chromalox, Inc., a specialty grocery retailer focused on creating an extraordinary food shopping experience for its customers,advanced thermal technologies manufacturing company, from June 2013February 2015 to September 2016.March 2019. Prior to that, he served as Executive Vice President & Chief Financial Officer of Sealy Corporation, oneII-VI Incorporated, a publicly traded global leader in engineered materials and optoelectronic components, from 2004 to 2014, Treasurer of the largest bedding manufacturers in the world,II-VI from 20062000 to 2013.2014, and Corporate Controller of II-VI from 1998 to 2000. From 19971992 to 2006, Mr. Ackerman held various finance positions, including Vice President, Finance, with Dade Behring Inc., a medical diagnostics company. From 1989 to 1997,1998, he held a variety of financeaudit roles at Arthur Andersen LLP. Mr. Creaturo is a certified public accountant in the Frito-Lay branded snack foods divisionCommonwealth of PepsiCo, Inc.Pennsylvania.
Hongjun Ning.Richard E. Gerstein.Mr. Gerstein,Ning, age 52,54, has served as an Executive Vice President Global Branded Premium Value-Added Products and Chief Marketing Officer of the CompanyUNIFI 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 ViceJuly 2020, President of Sales; ViceUnifi Textiles (Suzhou) Co. Ltd. (“UTSC”) (UNIFI’s subsidiary in China) since March 2020, and 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,Unifi Asia Pacific (Hong Kong) Company, Limited (“UAP”) (UNIFI’s subsidiary 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 UnifiHong Kong) since AugustJune 2017. Prior to that, Mr. McNeill hadPreviously, he 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 UnifiUTSC from JulySeptember 2013 to June 20152017, Director of Sales & Marketing of UTSC from August 2008 to September 2013, and Technical ServiceGeneral Manager, Sales & Marketing of a former UNIFI joint venture in China from January 2006 to August 2008.
Lucas de Carvalho Rocha. Mr. Rocha, age 64, has served as an Executive Vice President of UNIFI since July 2020 and Product Development ManagerVice President of Unifi Latin America (“ULA”) (UNIFI’s subsidiary in Colombia) and President of Unifi do Brasil, Ltda. (“UdB”) (UNIFI’s subsidiary in Brazil) since January 2018. Previously, he served as Director of Operations of UdB from February 2011April 1999 to July 2013.January 2018. Prior to his career with UNIFI, Mr. McNeill has been employed withRocha also spent time at the Company since 1997.following textile entities in Brazil: Fairway Filamentos SA (Rhodia & Hoechst J.V.), Textuval Indústria Têxtil Ltda., Rhodia SA (Rhone Poulenc Group), and Polyenka SA (ex-AKZOGroup).
Compensation DiscussionDiscussion and Analysis
This Compensation Discussion and Analysis provides an overview of the Company’s executive compensation program, including:
the process the Compensation Committee used to determine compensation and benefits for the following named executive officers (“NEOs”) for fiscal 2021:
Edmund M. Ingle |
|
| Chief Executive Officer | |||
Thomas H. Caudle, Jr. | Former President & Chief Operating Officer(1) | ||
Albert P. Carey | Executive Chairman | ||
Craig A. Creaturo | Executive Vice President & Chief Financial Officer | ||
| |||
Hongjun Ning | Executive Vice President, President of UTSC, and President of UAP | ||
(1) | On April 20, 2020, Mr. Caudle informed the Board that he would retire from his |
the material elements |
|
Executive Summary
Executive Team Additions and Promotions
The senior leadership team transition that began during fiscal 2016 with the appointment of Thomas H. Caudle, Jr. as President of the Company in April 2016 gathered momentum during fiscal 2017.
In May 2017, the Board of Directors announced the appointment of Kevin D. Hall as Chief Executive Officer of the Company. Mr. Hall brings to the Company extensive 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 & 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 appointment of John D. Vegas as Executive 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 announced 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 fiscal 2017.
The appointments and promotion provide a talented and deeply experienced team for execution of the Company’s long-term growth plan.executive compensation program; and
the key principles and objectives, including the Company’s focus on pay for performance, that guide the Company’s executive compensation program.
Company Performance Highlights
In fiscal 2021, the Company’s Polyester and Nylon Segments were adversely impacted by the COVID-19 pandemic, as manufacturing activity in the North and Central America regions has recovered less rapidly than in Asia and Brazil. Although productivity remains pressured by lower global demand, the Company’s Asia Segment continues to perform well with both new and existing customer programs. The Company’s solidBrazil Segment was able to navigate its domestic recovery more favorably than competitive importers, resulting in sales volume and market share growth compared to recent fiscal years. The Company believes the outperformance by the Brazil Segment includes the temporary capture of market share from competitive imports and higher conversion margin due to the unfavorable dynamics facing competitors regarding input and freight costs combined with weaker delivery speed. Such competition, pricing, and gross margins are expected to normalize over the mid- to long-term, especially following the exceptional gross margin rates achieved by the Brazil Segment during most of fiscal 2021.
Although sales volumes in the North and Central America regions were pressured in fiscal 2021, the Company’s operations benefited from selling price stability and responsiveness and sales mix improvements. Accordingly, the Company was able to achieve better-than-expected operating results in fiscal 2021. The Company achieved a significant year-over-year increase in its key performance indicators, including net sales growth of 10% and gross profit growth of 139%, along with operating income and net income levels that had not been achieved in recent fiscal years.
Additionally, the Company generated strong operating cash flows and reduced its debt principal during fiscal 2021 despite an increase in working capital following the economic rebound that occurred after the most severe months of demand pressures from the COVID-19 pandemic. The Company’s performance in fiscal 2017 was primarily2021 has further strengthened its balance sheet and solidified the resultfoundation for additional growth subsequent to the negative impacts of the COVID-19 pandemic.
The Company believes that several aspects of its international operations, withbusiness will remain drivers for growth once the COVID-19 pandemic subsides, including: (i) continued sales and portfolio 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 achieved Adjusted EBITDA1 (as hereinafter defined) results of $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 2017 under the Company’s annual cash bonus incentive program. PVA product sales reached 40% of the consolidated portfolio for fiscal 2017 and the Company’s net debt decreased from $106.4 million to $94.0
million at the end of fiscal 2017. The Company’s earningsits Asia Segment; (ii) U.S. market share recapture from its core operations in fiscal 2017 was in-linerecent trade initiatives; (iii) continued commitments to sustainability by corporations, governments, and other entities leading to further demand for its REPREVE® platform; (iv) leading-edge innovation and commercialization efforts that deliver meaningful consumer products; and (v) continued expansion of its portfolio 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 businessadditional markets, applications, and a decline in earnings attributable to the Company’s investment in Parkdale America, LLC.brand partners.
Executive Compensation Highlights
As described in greater detail below, the Company believes its executive compensation program should attract top executive talent, pay for performancefollow a pay-for-performance compensation model, and link executive retention to long-term shareholder value. Accordingly, the Company took the following actions during fiscal 20172021 with respect to the compensation of its NEOs:
based annual incentive compensation payments to the NEOs, with the exception of Mr. Caudle, on Adjusted EBITDA (as hereinafter defined) targets for fiscal 2021, and made no payouts below applicable Adjusted EBITDA thresholds;
|
awarded a one-time cash payment to Mr. Caudle, who did not participate in the Company’s annual incentive compensation program, in recognition of his key strategic accomplishments during fiscal 2021;
|
entered into an employment agreement with Mr. Ning, in substantially the same form as the employment agreements between the Company and its other executive officers; and
|
awarded long-term incentives in the form of stock options and restricted stock units consistent with past practice.
|
|
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.talented and experienced executives. 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:
set all components of executive compensation so that the Company can continue to attract, retain, reward, and motivate talented and experienced executives;
|
ensure alignment of executive compensation with the Company’s corporate strategies and business objectives and the long-term interests of shareholders;
|
enhance the NEOs’ incentive to increase the Company’s long-term value, as well as promote the retention of key personnel, by providing a portion of total compensation opportunities in the form of direct ownership in the Company through stock ownership.
|
|
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.
What the Company Does | What the Company Doesn’t Do | ||
• The Company’s pay-for-performance philosophy means the majority of executive officer compensation is |
| • The Company doesn’t discount, reload, or reprice stock option awards. | |
• The Company’s stock ownership guidelines align the interests of the Company’s executives with those of its shareholders. |
| • The Company doesn’t pay gross-ups for golden parachute excise taxes. | |
• The Company uses |
| • The Company doesn’t permit hedging or short selling (profiting if the market price decreases) of UNIFI securities. | |
• The Company has caps on payouts for annual incentive compensation. | • The Company doesn’t design compensation plans that encourage unnecessary or excessive risk. | ||
• The Company has a robust clawback policy for annual and long-term incentive awards. |
| • The Company doesn’t provide guaranteed minimum payouts of annual incentive opportunities. | |
• The Company has engaged an independent compensation consultant. |
| • The Company doesn’t provide excessive perquisites. |
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 Component | Description | Objectives | ||
Base Salary | • Fixed compensation that is reviewed | • Provide a base level of compensation that fairly accounts for the job and scope of the role being performed.
• Attract, retain, reward, and motivate | ||
Annual Incentives | • “At-risk” variable compensation earned based on performance measured against pre-established annual goals. | • Provide incentives for achieving annual operating goals that ultimately contribute to long-term value for shareholders. | ||
Long-Term Incentives | • “At-risk” variable compensation in the form of equity awards, | • Align the economic interests of the Company’s executives with its shareholders by rewarding executives for stock price improvement. • Promote retention (through time-based vesting periods). | ||
• Supplemental retirement contributions based on executives’ respective base salaries earned over time, |
|
Compensation Element |
|
| Objectives | |
Other Personal Benefits | • Broad-based benefits provided to all of the Company’s employees (e.g., health and group term life | • Provide a competitive total compensation package to attract and retain key executives. |
Consistent with the philosophy, principles, and policies of the Company’s 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. TheDuring fiscal 2021, the Company usesused the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “2013“Amended 2013 Plan”) and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “Second Amended 2013 Plan”) in order to provide those equity-based awards. The Company believes the substantial weighting of performance-based compensation encourages its 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 objectivesgoals and goalsobjectives for the Company.
As in the past, the Compensation Committee continued to consider a wide range of factors in making its fiscal 20172021 compensation decisions for the 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 NEO’s performance and contribution to the Company’s success; budget guidelines established by the Board; and an assessment of the Company’s financial condition. Additionally, the Compensation Committee considered the Company’s fiscal 2020 operating and Adjusted EBITDA results, along with the currentexisting economic climate. Based on this information and these factors, the Compensation Committee set executive compensation for fiscal 2017.2021.
During fiscal 2017,2021, the Compensation Committee engaged Korn Ferry Hay Group as an independent advisor to assist the Compensation Committee with developing market-based compensation and benefit levels for newly recruited membersthe administration of the Company’s senior leadership team, evaluating an appropriate retention award for Mr. Caudle and reviewing the Company’s long-term incentive award strategy.executive compensation program. 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 Compensation Committee consults with Korn Ferry Hay Group to gain a general understanding of compensation practices and trends of similarly situated companies.the Company’s peer group. 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.
The Compensation Committee periodically compares the Company’s compensation practices to those of other companies within its U.S. geographical footprint and industry (or related industries from which UNIFI might seek, or to which UNIFI possibly could lose, management talent). Such comparisons have been done
with the assistance of Korn Ferry. The Compensation Committee believes the comparison data provides useful information for the administration of the Company’s executive compensation program.
The Compensation Committee evaluates and approves of the peer group of companies each year. For fiscal 2021, the Compensation Committee considered a number of factors and determined to leave the peer group unchanged from fiscal 2020. It includes the following 10 companies:
• Culp, Inc. | • Interface, Inc. |
• Delta Apparel, Inc. | • Lifetime Brands, Inc. |
• Ethan Allen Interiors Inc. | • Oxford Industries, Inc. |
• Flexsteel Industries, Inc. | • Superior Group of Companies, Inc. |
• Hooker Furniture Corporation | • Vera Bradley, Inc. |
The peer group allows the Compensation Committee to monitor the compensation practices of the Company’s primary competitors for executive talent. However, the Compensation Committee does not target any specific pay percentile of the peer group for the Company’s executive officers. Instead, this information is used to provide a general overview of market practices and trends and to ensure the Compensation Committee makes informed decisions regarding the Company’s executive compensation program.
Detailed Review of Compensation Components
Base SalariesSalary
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 2017. The factors considered by the Compensation Committee in setting the NEOs’ base salaries for fiscal 2017 included:include:
the executive’s leadership and role in advancement of the Company’s long-term strategy, plans, and objectives;
|
the executive’s performance and contribution to the Company’s success;
|
budget guidelines established by the Board; and
|
an assessment of the Company’s financial condition.
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, principles, and 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 reviewsmade no adjustments to the overall performancebase salaries of each NEO annually, and then approves the actualNEOs during fiscal 2021, because their base salary for each NEO.
Upon completing this process,salaries were appropriate based on the Company’s performance inexecutives’ roles during fiscal 2016 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.
NEO Kevin D. Hall(1) Thomas H. Caudle, Jr.(2) Sean D. Goodman(3) Fiscal 2017
Base Salary
($) Fiscal 2016
Base Salary
($) Percentage
Change 775,000 N/A N/A 770,000 475,000 62.1% 475,000 450,000 5.5%
Annual Incentive Compensation
To encourage executives to achieve near-term operating performance goals, the Company has established an annual incentive compensation programplan in the form of a cash bonus. AllCertain NEOs employed as of the beginning of the fiscal year or who are employed by January 1 ofduring the fiscal year are eligible to earn annual bonuses based on the Company’s fiscal year performance.
Forperformance provided they remain employed through the last day of the fiscal 2017,year. Any bonus payouts for NEOs employed after the beginning of a fiscal year are prorated.
The Compensation Committee established a performance target of $69.336 million ofuses EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and adjusted to exclude certain items, such as equity in earnings of Parkdale America, LLC, loss on sale of business and other operating or non-operating income or expense items necessary to understand and compare the underlying results of the Company (“Adjusted 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 Adjusted EBITDA, as a performance measure for the annual incentive compensation purposesplan because the Compensation Committee believes Adjusted EBITDA providesserves as a clear indicator ofhigh-level proxy for cash generation,generated from operations, which is a key performance indicator used by the Board of Directors and management to assess the Company’s operating results generally. Accordingly, the Compensation Committee elected to use Adjusted EBITDA as the sole metric by which annual incentive compensation was calculated for fiscal 2021, which was consistent with fiscal 2020.
The Compensation Committee also believes that a Company-widethe single performance metric, such asmeasure of Adjusted 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. In accordance with this belief, the annual incentive compensation for the U.S.-based NEOs was based on Global Adjusted EBITDA for the Company and the annual incentive compensation for Mr. Ning was based on Adjusted EBITDA for the subsidiary over which he serves as President, as described below.
For fiscal 2021, the Compensation Committee set the Global Adjusted EBITDA target for the Company at $24.7 million. The target Global Adjusted EBITDA level for the Company was based on the Board-approved business plan for fiscal 2021 and represented an increase from the Company’s actual fiscal 2020 Global Adjusted EBITDA of $16.6 million. Mr. Ning’s annual incentive compensation was based on an Adjusted EBITDA target of 70.0 million Chinese Renminbi (“RMB”) for UAP.
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 programcompensation plan 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, either 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 2017,2021, the Compensation Committee set theannual incentive opportunities, threshold, target, and maximum performance levels, and corresponding potential annual incentive payments to the eligible NEOs based(based on percentages of base salary,salary) as set forth in the tabletables 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 Adjusted EBITDA target; a target bonus equal to a percentage of his base salary if the Company achieved, for plan purposes, 100% of the Adjusted EBITDA target; or a threshold bonus equal to a percentage of his base salary if the Company achieved, for plan purposes, 80% of the Adjusted EBITDA target. The Compensation Committee set the percentage of base salary for each NEO at its
September 2016 meeting. The calculation of each NEO’s annual incentive bonus in the event of Adjusted 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 Adjusted EBITDA target.
Annual Incentives for Fiscal 2017
|
| Annual Incentive Opportunity (as a % of Base Salary) | |||||||||||||
Name(1) |
| Threshold |
| Target |
| Maximum | |||||||||
Edmund M. Ingle |
|
| 50.0 | % |
|
|
| 100.0 | % |
|
|
| 150.0 | % |
|
Craig A. Creaturo |
|
| 37.5 | % |
|
|
| 75.0 | % |
|
|
| 120.0 | % |
|
Hongjun Ning |
|
| 30.0 | % |
|
|
| 60.0 | % |
|
|
| 100.0 | % |
|
Name(1) | Performance Measure | Weight | Target Performance | ||||||||
| Global Adjusted EBITDA | 100.0 | % | 24.7M | USD | ||||||
| Global Adjusted EBITDA | 100.0 | % | 24.7M | USD | ||||||
| UAP Adjusted EBITDA | 100.0 | % | 70.0M | RMB | ||||||
(1) | Messrs. Carey and Caudle | ||||||
|
AsThe following table shows the threshold, target, and maximum performance levels established by the Compensation Committee for fiscal 2021 as well as the Company’s actual performance in fiscal 2021.
Performance Metric | Threshold Performance | Target Performance | Maximum Performance | Actual Fiscal 2021 Performance | |||||||||||||
Global Adjusted EBITDA | 19.8M | USD | 24.7M | USD | 29.6M | USD | 64.6M | USD | |||||||||
UAP Adjusted EBITDA | 56.0M | RMB | 70.0M | RMB | 83.9M | RMB | 119.2M | RMB | |||||||||
The fiscal 2021 Global Adjusted EBITDA performance shown above reflects the Company’s publicly reported results. Adjusted EBITDA is a non-GAAP financial performance measure. A reconciliation of Net income, which is the most directly comparable GAAP financial measure, to Adjusted EBITDA is presented in Appendix A to this Proxy Statement.
Based on the performance measures established by the Compensation Committee for fiscal 2021 and the Company’s actual performance (adjusted as described above), the annual incentive compensation award earned by the NEOs for fiscal 2021 is shown in the chart below, the Company achieved, for plan purposes, Adjusted EBITDA of $68.7 million, approximately 99% of the Adjusted EBITDA target.table below.
|
| Fiscal 2021 Annual Incentive Compensation Payout |
| ||||
Name |
| % of Base Salary | Amount ($) |
| |||
Edmund M. Ingle |
| 150.0% |
|
|
| 1,012,500 |
|
Craig A. Creaturo |
| 120.0% |
|
|
| 576,000 |
|
Hongjun Ning |
| 100.0% |
|
|
| 320,000 |
|
Based on that level of performance, the Compensation Committee approved annual incentive bonus compensation of $638,138 to Mr. Caudle and $347,344 to Mr. Goodman.
Long-Term Incentive Compensation
The Compensation Committee believes that stock-based performance compensation is essential to align the interests of the Company’s management and theits shareholders in enhancing the long-term value of the Company’s equity and to encourage executives to retain their employment with the Company. Among the varied types of equity awards the Compensation Committee is authorized to use under both the Amended 2013 Incentive CompensationPlan and the Second Amended 2013 Plan, the Compensation Committee has determined that an equal blend of incentive stock options are preferableand restricted stock units is appropriate for use with all Company employees at this time, because theircovered officers (as defined below under “—Officers Stock Ownership Policy”) to provide a mix composed of awards whose value depends upon a future increase in the value of the Common Stock. TheStock (incentive stock options) and awards that serve primarily as a retention or recruitment tool (restricted stock units). For other key employees, the Compensation Committee also has determined that restricted stock unit grants to NEOs or other Company employees should be used for limited purposes, suchunits are preferable, because they serve as an important retention or recruiting incentives or to recognize outstanding performance.recruitment tool.
Consistent with those determinations, in fiscal 2017,2021, the Compensation Committee awarded stock options to Messrs. Hall, Caudle and Goodman and restricted stock units to Messrs. Hall and Caudlethe NEOs on October 28, 2020 (except as otherwise noted) as shown in the following table:Grants of Plan-Based Awards table beginning on page 39.
NEO | Grant Date | Number of Stock Options (#) | Exercise Price of Stock Options ($) | Number of Restricted Stock Units (#) | ||||
Kevin D. Hall | 05/19/2017 | 25,000 | 27.44 | 75,000 | ||||
Thomas H. Caudle, Jr. | 10/26/2016 | 20,000 | 29.09 | |||||
| 02/21/2017 | 75,000 | |||||||
Sean D. Goodman | 10/26/2016 | 10,000 | 29.09 |
The stock option awards vest and become exercisable in three equal installments beginning25% on 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. As “incentive stock options” (to the applicable maximum permitted under either the Amended 2013 Incentive Compensation Plan)Plan or the Second Amended 2013 Plan, as may apply), these stock options offer the NEO the opportunity to receive favorable tax treatment if they retainhe retains the shares acquired upon exercise for at least one 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 2017, see “Executive Compensation Tables—Grants of Plan-Based Awards” below.
Perquisites and Other Benefits
PerquisitesPerquisites. 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 (other than Mr. Ning) with perquisites, such as car allowances, reimbursements for car expenses, or payment of country club dues. In fiscal 2021, Mr. Ning was (i) reimbursed for the cost of one personal trip to the United States, (ii) reimbursed for the cost of rental housing in China, (iii) afforded de minimis personal use of Company car services, and (iv) reimbursed for de minimis personal tax services.
Retirement Benefits.Benefits. In order to provide employees at all levels with greater incentives, the Company makes available to all U.S.-based employees, including the NEOs, the opportunity to make contributions to the Unifi, 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 2017,2021, 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.Benefits. The Company makes available health and insurance benefits to all employees (subject to standard eligibility waiting periods), including the NEOs. The cost of the health plans is covered partially through employee payroll deductions (except for Mr. Ning, who incurs no such 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 currently employed NEOs, with the exception of Messrs. Ingle and Carey, currently receive or will 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. As described in greater detail preceding the Nonqualified Deferred Compensation table on page 37,41, the SERP provides additional retirement benefits payable to the Company’s NEOs following their termination of employment.
Employment and Change in Control Agreements.Agreements. The Company entered into anis party to employment agreementagreements with each of Messrs. Ingle, Carey, Creaturo, and Ning. With the exception of Mr. Hall in connection with his appointment as Chief Executive Officer of the Company. TheCarey, each employment agreement provides that Mr. Halleach executive will (i) receive an annual base salary of $775,000,at the annual rate set forth in the agreement, (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. TheEach employment agreement (with the exception of Mr. Carey’s agreement) also contains provisions regarding the termination of Mr. Hall’sthe executive’s employment and related
severance obligations. Mr. HallCarey’s employment agreement provides that he will (A) receive an annual base salary at the annual rate set forth in the agreement and (B) be paid or reimbursed for business expenses. Mr. Carey’s employment agreement does not provide eligibility for bonus plan or other employment benefits generally available to other executives of the Company. The executives agreed in histheir employment agreementagreements 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 the 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, the 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. Mr. Caudle is the only NEO who is party to a change in control agreement with the Company.
A calculationCalculations of the estimated severance payments and benefits payable to Mr. Hall under histhe employment agreement and to Mr. Caudle under his change in control agreementagreements are set forth under “Executive Compensation Tables—Potential Payments Upon Termination of Employment or Change in Control” beginning on page 37.42.
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 the 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-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-year period ending on the date on which such misconduct is discovered.
Officers Stock Ownership Policy
The Company has adopted an 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 and 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 at the end of the fiscal year.
The stock ownership expectation, the calculation of shares of Common Stock counted towards the ownership expectation, and the valuation of shares of Common Stock for purposes of the policy are as set
forth below. All covered officers arewere in compliance with their respective stock ownership expectations under the terms of the policy.
Stock Ownership Expectation | Shares of Common Stock Counted Towards Ownership Expectation | Valuation of Shares of Common Stock | ||
• • • | • Shares of Common Stock owned directly by the officer and shares of Common Stock held indirectly (e.g., by his or her spouse persons). • • Restricted stock units that | •
|
If an officer falls below the applicable minimum ownership guideline due solely to a decline in the value of the Common Stock, the officer will not be required to acquire additional shares to meet the guideline; however, the officer will be required to retain all shares then held (except for shares withheld to pay withholding taxes or the exercise price of options) until such time that the officer again satisfies the policy’s minimum ownership requirements.
The Compensation Committee considers the tax and accounting effects of compensation components when designing the Company’s incentive and equity compensation plans. However, the Compensation Committee has considered the impact ofnot adopted a policy that all compensation must be deductible for federal income tax purposes.
Under Section 162(m) of the Internal Revenue Code of 1986 as amended (the “Code”), onas amended by the Company’s executiveTax Cuts and Jobs Act in December 2017, the Company may not deduct compensation program. Code Section 162(m) denies a public company a deduction, except in limited circumstances, for compensationexcess of $1 million paid to “covered employees” – which includes the NEOs, other than the Company’s principal financial officer –individuals” (as defined in Section 162(m)). Therefore, compensation in excess of $1 million paid to the extent such compensation exceeds $1 million. Based on its review ofcovered NEOs is not deductible by 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 programCompany for the NEOs, as well as equity and equity-based awards to the NEOs, to qualifyfederal income tax purposes unless it qualifies for an exception to the Code Section 162(m) deduction limitation. The Compensation Committee maya transition relief provision included in the future adopt or change benefit plansTax Cuts and Jobs Act for certain arrangements 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.place as of November 2, 2017.
Risk Analysis of Compensation Programs and Practices
While the Company’s compensation programs 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 Common 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:
The Company uses a balance of fixed and variable compensation in the form of cash and equity, which is designed to provide both near-term and long-term focus.
|
The overall compensation of the Company’s NEOs is not overly weighted towards the achievement of performance criteria in a particular fiscal year, and an appropriate portion of compensation is awarded in the form of equity awards that vest over a multi-year period, subject to continued service by the recipient. This further aligns the interests of the NEOs to long-term shareholder value and helps retain management.
|
Payouts under the Company’s annual incentive compensation and other long-term incentive plans are based on performance criteria that the Compensation Committee believes to be challenging, yet reasonable and attainable without excessive risk-taking.
|
The Company caps payouts from its annual incentive compensation plan.
|
The Company has a compensation recoupment policy that allows the Company to recover certain compensation from an executive officer in the event of a restatement of its financial results due to the material noncompliance of the Company with any financial reporting requirement under the federal securities laws or in the event of certain fraud or other misconduct by an employee.
|
The Company has a stock ownership policy under which its NEOs and other key personnel are expected to own a significant amount of Common Stock, further aligning their interests with those of the Company’s other shareholders.
|
The Compensation Committee maintains an open dialogue with management regarding executive compensation programs and practices and the appropriate incentives to use in achieving near-term and long-term operating performance goals.
At the 20162020 Annual Meeting, of Shareholders, the Company’s shareholders had the opportunity to vote, on an advisory basis, on a proposal to approve the compensation of the NEOs for fiscal 2016.2020. This is referred to as a “say-on-pay” proposal. More thanApproximately 97% of the votes cast at the 20162020 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 generalrobust concurrence by the Company’s shareholders with the Company’s philosophy and approach to executive compensation. Therefore,Additionally, management will continue to have open, transparent communications with the Company has continued its philosophy and approach to executive compensation as discussed above.investment community throughout fiscal 2022. At the Annual Meeting, shareholders will again have the opportunity to indicate their views on the Company’s NEO compensation.compensation for fiscal 2021. For additional information, see “Proposal 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 the 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.
The following tables, narratives, and footnotes describe the total compensation and benefits for the NEOs for fiscal 2017,2021, as well as the total compensation and benefits for the NEOs for the two preceding fiscal years.
Name | Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||||||||||
Kevin D. Hall(4) | Chief Executive Officer | 2017 | 77,500 | — | 2,058,000 | 230,741 | — | 14,750 | 2,380,991 | |||||||||||||||||||||||||
Sean D. Goodman(5) | Vice President & Chief Financial Officer | | 2017 2016 |
| | 478,847 212,885 |
| | — — |
| | — 549,200 |
| | 103,013 — |
| | 347,344 352,688 |
| | 372,721 52,255 |
| | 1,301,925 1,167,028 |
| |||||||||
Thomas H. Caudle, Jr.(6) | President & Chief Operating Officer | | 2017 2016 2015 |
| | 836,884 370,785 335,000 |
| | — 108,449 — |
| | 2,090,250 — — |
| | 206,026 152,036 190,462 |
| | 638,138 274,312 270,094 |
| | 94,718 58,543 54,907 |
| | 3,866,016 964,125 850,463 |
| |||||||||
Name |
| Position |
| Year |
| Salary ($) |
|
| Bonus ($)(1) |
|
| Stock Awards ($)(2) |
|
| Option Awards ($)(2) |
|
| Non-Equity Incentive Plan Compensation ($)(3) |
|
| All Other Compensation ($)(4) |
|
| Total ($) |
| |||||||
Edmund M. Ingle |
| Chief Executive |
| 2021 |
|
| 675,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,012,500 |
|
|
| 60,873 |
|
|
| 1,748,373 |
|
|
| Officer |
| 2020 |
|
| 25,961 |
|
|
| — |
|
|
| 670,000 |
|
|
| 330,000 |
|
|
| — |
|
|
| — |
|
|
| 1,025,961 |
|
Thomas H. Caudle, Jr. |
| Former President & |
| 2021 |
|
| 770,000 |
|
|
| 230,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 162,674 |
|
|
| 1,162,674 |
|
|
| Chief Operating |
| 2020 |
|
| 770,000 |
|
|
| — |
|
|
| 192,488 |
|
|
| 192,501 |
|
|
| — |
|
|
| 156,846 |
|
|
| 1,311,835 |
|
|
| Officer |
| 2019 |
|
| 770,000 |
|
|
| — |
|
|
| 270,864 |
|
|
| 404,479 |
|
|
| — |
|
|
| 163,729 |
|
|
| 1,609,072 |
|
Albert P. Carey |
| Executive |
| 2021 |
|
| 700,000 |
|
|
| — |
|
|
| 350,000 |
|
|
| 350,000 |
|
|
| — |
|
|
| — |
|
|
| 1,400,000 |
|
|
| Chairman |
| 2020 |
|
| 700,000 |
|
|
| — |
|
|
| 699,981 |
|
|
| 1,779,434 |
|
|
| — |
|
|
| — |
|
|
| 3,179,415 |
|
Craig A. Creaturo |
| Executive Vice |
| 2021 |
|
| 480,000 |
|
|
| — |
|
|
| 120,000 |
|
|
| 120,000 |
|
|
| 576,000 |
|
|
| 57,303 |
|
|
| 1,353,303 |
|
|
| President & |
| 2020 |
|
| 387,692 |
|
|
| — |
|
|
| 411,000 |
|
|
| 105,904 |
|
|
| — |
|
|
| 117,049 |
|
|
| 1,021,645 |
|
|
| Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hongjun Ning |
| Executive Vice |
| 2021 |
|
| 320,000 |
|
|
| — |
|
|
| 160,000 |
|
|
| — |
|
|
| 320,000 |
|
|
| 76,812 |
|
|
| 876,812 |
|
|
| President, |
| 2020 |
|
| 307,193 |
|
|
| — |
|
|
| 80,000 |
|
|
| — |
|
|
| 171,282 |
|
|
| 240,834 |
|
|
| 799,309 |
|
|
| President of UTSC, and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| President of UAP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Mr. Caudle did not participate in the annual incentive compensation plan for fiscal 2021 and was instead awarded a one-time cash payment of $230,000 in recognition of his key strategic accomplishments during fiscal 2021. Mr. Caudle received the cash payment on June 18, 2021. |
(2) | Amounts reflect the grant date fair value computed in accordance with FASB ASC Topic 718, related to stock and option awards granted in the fiscal year noted. See Note 16 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for |
(3) | Amounts are attributable to cash payments earned under the annual incentive compensation plan for the applicable fiscal year, as described above under “Compensation Discussion and Analysis” with respect to the fiscal years noted. |
(4) | All Other Compensation for each of the NEOs for fiscal |
| Kevin D. Hall | Sean D. Goodman | Thomas H. Caudle, Jr. | Edmund M. Ingle |
| Thomas H. Caudle, Jr. |
| Craig A. Creaturo |
| Hongjun Ning | ||||||||||||||||||||||||||
Life Insurance ($) | 288 | 5,415 | 30,495 |
|
| 12,231 |
|
|
|
|
| 86,415 |
|
|
|
|
| 6,072 |
|
|
|
|
| 745 |
|
| |||||||||
Matching 401(k) Plan Contribution ($) | 2,385 | 8,191 | 10,938 |
|
| 16,644 |
|
|
|
|
| 8,292 |
|
|
|
|
| 8,862 |
|
|
|
|
| 8,485 |
|
| |||||||||
Contributions to SERP ($) | — | 38,610 | 53,285 |
|
| 31,998 |
|
|
|
|
| 67,967 |
|
|
|
|
| 42,369 |
|
|
|
|
| 13,914 |
|
| |||||||||
Relocation Assistance Benefits ($) | 11,918 | 257,283 | — | ||||||||||||||||||||||||||||||||
Tax Gross-Up on Relocation Assistance Benefits ($) | 159 | 63,222 | — | ||||||||||||||||||||||||||||||||
Company Paid Travel ($)(a) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 15,443 |
|
| ||||||||||||
Company Paid Housing ($)(a) |
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 38,225 |
|
| ||||||||||||
Total ($) | 14,750 | 372,721 | 94,718 |
|
| 60,873 |
|
|
|
|
| 162,674 |
|
|
|
|
| 57,303 |
|
|
|
|
| 76,812 |
|
| |||||||||
(a) | In connection with performing various duties outside of the United States, Mr. |
Grants of Plan-BasedPlan-Based Awards
Name | Grant Type | Grant Date | Date of Committee Action (If Different from Grant Date) |
Estimated Possible | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | All Other Option Awards: Number of Securities Underlying Options (#)(3) | Exercise or Base Price of Option Awards ($ / Share) | Grant Date Fair Value of Stock and Option Awards ($)(4) | ||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||
Kevin D. Hall | Stock Options | 05/19/2017 | 05/03/2017 | 25,000 | 27.44 | 230,741 | ||||||||||||||||||||||
Restricted Stock Units | 05/19/2017 | 05/03/2017 | 75,000 | 2,058,000 | ||||||||||||||||||||||||
Sean D. Goodman | Annual Cash Incentive | 178,125 | 356,250 | 712,500 | ||||||||||||||||||||||||
| Stock Options | 10/26/2016 | 10,000 | 29.09 | 103,013 | ||||||||||||||||||||||||
Thomas H. Caudle, Jr. | Annual Cash Incentive | 327,250 | 654,500 | 1,309,000 | ||||||||||||||||||||||||
| Stock Options | 10/26/2016 | 20,000 | 29.09 | 206,026 | ||||||||||||||||||||||||
Restricted Stock Units | 02/21/2017 | 75,000 | 2,090,250 | |||||||||||||||||||||||||
|
|
|
| Grant |
|
| Approval |
| Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) ($) |
|
| All Other Stock Awards: Number of Shares of Stock or Units |
|
| All Other Option Awards: Number of Securities Underlying Options |
|
| Exercise or Base Price of Option Awards |
|
| Grant Date Fair Value of Stock and Option Awards |
| |||||||||||||||||
Name |
| Grant Type |
| Date |
|
| Date |
| Threshold |
|
| Target |
|
| Maximum |
|
| (#) (2) |
|
| (#) (3) |
|
| ($ / Share) |
|
| ($) (4) |
| |||||||||||
Edmund M. Ingle |
| Annual Cash Incentive |
|
|
|
|
|
|
|
|
|
|
| 337,500 |
|
|
| 675,000 |
|
|
| 1,012,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Options |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| Restricted Stock Units |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| — |
|
Thomas H. Caudle, Jr. |
| Annual Cash Incentive |
|
|
|
|
|
|
|
|
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Options |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| Restricted Stock Units |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| — |
|
Albert P. Carey |
| Annual Cash Incentive |
|
|
|
|
|
|
|
|
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Options |
| 10/29/2020 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 51,852 |
|
|
| 15.10 |
|
|
| 350,000 |
| |
|
| Restricted Stock Units |
| 10/29/2020 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 23,180 |
|
|
|
|
|
|
|
|
|
|
| 350,000 |
| |
Craig A. Creaturo |
| Annual Cash Incentive |
|
|
|
|
|
|
|
|
|
|
| 180,000 |
|
|
| 360,000 |
|
|
| 576,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock Options |
| 10/28/2020 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 17,780 |
|
| 15.91 |
|
|
| 120,000 |
| ||
|
| Restricted Stock Units |
| 10/28/2020 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,544 |
|
|
|
|
|
|
|
|
|
|
| 120,000 |
| |
Hongjun Ning |
| Annual Cash Incentive |
|
|
|
|
|
|
|
|
|
|
| 96,000 |
|
|
| 192,000 |
|
|
| 320,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restricted Stock Units(5) |
| 10/28/2020 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 10,060 |
|
|
|
|
|
|
|
|
|
|
| 160,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Represents the threshold, target, and maximum payments |
The threshold, target and maximum payout amounts were based on the Company achieving $55.469 million, $69.336 million and $83.203 million, respectively, of Adjusted EBITDA for fiscal 2017. Based on the Company’s actual fiscal 2017 Adjusted EBITDA of $68.7 million, Messrs. Goodman and Caudle received a payment under the Company’s fiscal 2017 annual cash incentive plan, based on a percentage of fiscal 2017 base salary, equal to approximately 73.1% (Mr. Goodman) and 82.9% (Mr. Caudle).
Mr. Hall was not eligible to earn an incentive payment under the Company’s fiscal 2017 annual cash incentive plan because his employment commenced in May 2017.
(2) | Represents restricted stock units granted to |
(3) | Represents stock options granted to the NEOs pursuant to the Amended 2013 Plan, or, in the case of Mr. |
(4) |
| The amounts in this column do not represent amounts the NEOs received or are entitled to receive. As required by the SEC rules, this column represents the full grant date fair value of the stock options granted to the NEOs during fiscal |
(5) | The restricted stock units granted to Mr. Ning vest over a three-year period, with 25% vesting on the first anniversary of the grant date, 25% vesting on the second anniversary of the grant date, and 50% vesting on the third anniversary of the grant date, and, pursuant to the terms of the grant, will be settled in cash within 30 days following the applicable vesting date. |
Outstanding Equity AwardsAwards at Fiscal Year-End
| Option Awards | Stock Awards |
| Option Awards |
| Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) |
| Number of Securities Underlying Unexercised Options (#) Exercisable |
| Number of Securities Underlying Unexercised Options (#) Unexercisable |
| Option Exercise Price ($) |
| Option Expiration Date |
| Number of Shares or Units of Stock That Have Not Vested (#) |
| Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||||||||||||
Kevin D. Hall | — | 25,000 | 27.44 | 05/19/2027 | (1) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Edmund M. Ingle |
|
|
| 15,000 |
|
|
|
|
| 45,000 |
|
|
|
| 13.23 |
|
|
|
| 6/15/2030 |
| (1) |
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||||||||||||||||||||||||
| — | — | — | — | 75,000 | (2) | 2,169,000 |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
| 50,662 |
| (2) |
|
|
| 1,253,885 |
|
| |||||||||||||||||||||||||
Sean D. Goodman | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thomas H. Caudle, Jr. | 36,666 | — | 5.73 | 07/28/2019 | — | — |
|
| 3,000 |
|
|
|
|
| — |
|
|
|
| 11.23 |
|
|
|
| 7/25/2022 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||
| 6,000 | — | 12.47 | 07/27/2021 | — | — |
|
| 6,000 |
|
|
|
|
| — |
|
|
|
| 22.08 |
|
|
|
| 7/24/2023 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||||||||||||||||||||
| 3,000 | — | 11.23 | 07/25/2022 | — | — |
|
| 11,000 |
|
|
|
|
| — |
|
|
|
| 27.38 |
|
|
|
| 7/22/2024 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||||||||||||||||||||
| 6,000 | — | 22.08 | 07/24/2023 | — | — |
|
| 7,500 |
|
|
|
|
| — |
|
|
|
| 32.36 |
|
|
|
| 7/22/2025 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||||||||||||||||||||
| 7,334 | 3,666 | 27.38 | 07/22/2024 | (3) | — | — |
|
| 20,000 |
|
|
|
|
| — |
|
|
|
| 29.09 |
|
|
|
| 10/26/2026 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||
| 2,500 | 5,000 | 32.36 | 07/22/2025 | (4) | — | — |
|
| 48,000 |
|
|
|
|
| — |
|
|
|
| 23.76 |
|
|
|
| 10/30/2028 |
| (3) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||
| — | 20,000 | 29.09 | 10/26/2026 | (5) | — | — |
|
| 21,389 |
|
|
|
|
| — |
|
|
|
| 25.72 |
|
|
|
| 10/29/2029 |
| (3) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||
Albert P. Carey |
|
| 32,894 |
|
|
|
|
| — |
|
|
|
| 21.02 |
|
|
|
| 1/29/2029 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
| — | — | — | — | 75,000 | (6) | 2,169,000 |
|
| 100,000 |
|
|
|
|
| — |
|
|
|
| 11.74 |
|
|
|
| 5/1/2030 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
| 100,000 |
|
|
|
| 11.74 |
|
|
|
| 5/1/2030 |
| (4) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
| 100,000 |
|
|
|
| 11.74 |
|
|
|
| 5/1/2030 |
| (5) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
| 233,000 |
|
|
|
| 11.74 |
|
|
|
| 5/1/2030 |
| (6) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
| 51,852 |
|
|
|
| 15.10 |
|
|
|
| 10/29/2030 |
| (7) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 42,517 |
| (8) |
|
|
| 1,052,296 |
|
| ||||||||||||||||||||||||||||||
Craig A. Creaturo |
|
| 5,000 |
|
|
|
|
| 10,000 |
|
|
|
| 20.55 |
|
|
|
| 9/9/2029 |
| (9) |
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
|
| 17,780 |
|
|
|
| 15.91 |
|
|
|
| 10/28/2030 |
| (10) |
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
| 22,544 |
| (11) |
|
|
| 557,964 |
|
| |||||||||||||||||||||||||||||||
Hongjun Ning |
|
| 5,000 |
|
|
|
|
| — |
|
|
|
| 29.09 |
|
|
|
| 10/26/2026 |
|
|
|
|
| — |
|
|
|
|
| — |
|
| |||||||||||||||||||||||||||||||||
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
| 14,278 |
| (12) |
|
|
| 353,381 |
|
| |||||||||||||||||||||||||||||||
(1) | Represents stock options granted on |
(2) | Represents the unvested portion of 50,662 restricted stock units granted on |
(3) | Represents stock options granted on |
(4) | Represents stock options granted on |
(5) | Represents stock options granted on May 1, 2020, which are scheduled to vest between May 1, 2024 and May 1, 2025, if the closing market price of the Common Stock (i) is $40 or more per share for any 10 consecutive trading days before May 1, 2024, or (ii) is $50 or more per share for any 10 consecutive trading days after May 1, 2024 and before May 1, 2025, contingent upon Mr. Carey’s continued service through the vesting date. |
(6) | Represents stock options granted on May 1, 2020, which are scheduled to vest on May 1, 2025, if the closing market price of the Common Stock is $50 or more per share for any 10 consecutive trading days before May 1, 2025, contingent upon Mr. Carey’s continued service through the vesting date. |
(7) | Represents stock options granted on October 29, 2020, with 25% scheduled to vest on each of |
(8) | Represents the unvested portion of (i) 23,180 restricted stock |
(9) | Represents |
(10) | Represents stock options granted on October 28, 2020, with 25% scheduled to vest on each of October 28, 2021 and October 28, 2022, and 50% scheduled to vest on October 28, 2023, contingent upon Mr. Creaturo’s continued service through the applicable vesting date. |
(11) | Represents the unvested portion of (i) 20,000 restricted stock units granted on September 9, 2019 in connection with Mr. Creaturo’s commencement of service as Executive Vice President & Chief Financial Officer of the Company, with 25% vested on October 9, 2020, 25% scheduled to vest on September 9, 2021, and 50% scheduled to vest on September 9, 2022, and (ii) 7,544 restricted stock units granted on October 28, 2020, with 25% scheduled to vest on each of November 27, 2021 and October 28, 2022, and 50% scheduled to vest on October 28, 2023, contingent upon Mr. Creaturo’s continued service through the applicable vesting date. |
(12) | Represents the unvested portion of cash-settled restricted stock units granted on various dates. The unvested cash-settled restricted stock units would become vested as follows, contingent upon Mr. Ning’s continued service through the applicable vesting date: 2,515 on October 28, 2021, 778 on October 29, 2021, 1,886 on January 28, 2022, 2,515 on October 28, 2022, 1,554 on October 29, 2022, and 5,030 on October 28, 2023. |
Option Exercises and Stock Vested
| Option Awards | Stock Awards |
| Option Awards |
| Stock Awards | |||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) |
| Number of Shares Acquired on Exercise (#) |
| Value Realized on Exercise ($)(1) |
| Number of Shares Acquired on Vesting (#)(2) |
| Value Realized on Vesting ($)(3) | ||||||||||||||||||||
Kevin D. Hall | — | — | — | — | ||||||||||||||||||||||||||||
Sean D. Goodman | — | — | 6,667 | 178,109 | ||||||||||||||||||||||||||||
Thomas H. Caudle, Jr. | — | — | 1,000 | 28,435 |
|
|
| 6,000 |
|
|
|
|
| 74,490 |
|
|
|
|
| 23,534 |
|
|
|
|
| 539,379 |
|
| ||||
Craig A. Creaturo |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 5,000 |
|
|
|
|
| 71,825 |
|
| ||||||||
Hongjun Ning |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| 1,721 |
| (4) |
|
|
| 31,730 |
|
| ||||||||
(1) | Value realized equals the fair market value of the shares of Common Stock underlying the options on the date of exercise less the exercise price. |
(2) | Shares included in this column represent |
(3) | Calculated based on the market price of the shares of Common Stock underlying the restricted stock units, which was computed as the average of the high and low trading prices on the |
(4) | Mr. Ning received $31,730 in cash in connection with the conversion of |
Nonqualified DeferredDeferred Compensation
The Company maintains the SERP to provide additional retirement benefits to a select group of management or highly compensated employees, including each of its NEOs.NEOs (with the exception of Mr. Carey, who does not participate in the SERP). On an annual basis, the Company credits to theeach participant’s account an amount equal to 8.5% for executive officers or 5.5% for non-executive officers, multiplied by the participant’s base salary.officers. Each participant is always 100% vested in the participant’s SERP account and earns a return on the amounts contributed to the participant’s account balance as if it had been invested in the stocks that make up the Standard & Poor’s 500 Index in the same proportion as their respective weighting therein.a money market fund. Participants are not entitled to a distribution from the SERP until their termination of employment with the Company, at which time they must wait six months to receive a lump-sum payment equal to the balance of their respective accounts. If a participant’s termination is due to death or disability, this six-month delay period is waived.
Name | Executive Contributions in Last Fiscal Year ($) | Company Contributions in Last Fiscal Year ($)(1) | Aggregate Earnings (Loss) in Last Fiscal Year ($) | Aggregate Withdrawals and/or Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($) |
| Executive Contributions in Last Fiscal Year ($) |
| Company Contributions in Last Fiscal Year ($)(1) |
| Aggregate Earnings in Last Fiscal Year ($) |
| Aggregate Withdrawals and/or Distributions ($) |
| Aggregate Balance at Last Fiscal Year-End ($) | |||||||||||||||||||||||||
Kevin D. Hall | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Sean D. Goodman | — | 38,610 | 3,823 | — | 42,433 | |||||||||||||||||||||||||||||||||||
Edmund M. Ingle |
|
|
| — |
|
|
|
|
| 31,998 |
|
|
|
|
| 1 |
|
|
|
|
| — |
|
|
|
|
| 31,999 |
|
| ||||||||||
Thomas H. Caudle, Jr. | — | 53,285 | 120,638 | — | 697,142 |
|
|
| — |
|
|
|
|
| 67,967 |
|
|
|
|
| 477 |
|
|
|
|
| — |
|
|
|
|
| 1,082,457 |
|
| |||||
Albert P. Carey |
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
|
|
|
| — |
|
| ||||||||||
Craig A. Creaturo |
|
|
| — |
|
|
|
|
| 42,369 |
|
|
|
|
| 8 |
|
|
|
|
| — |
|
|
|
|
| 54,194 |
|
| ||||||||||
Hongjun Ning |
|
|
| — |
|
|
|
|
| 13,914 |
|
|
|
|
| 16 |
|
|
|
|
| — |
|
|
|
|
| 103,930 |
|
| ||||||||||
(1) | Amounts represent Company contributions to the SERP on behalf of the NEOs during fiscal |
Potential Payments Upon Termination of Employment or Change in Control
Employment Agreement with Mr. HallAgreements. On May 3, 2017, in connection with his appointment as Chief Executive OfficerEach of the Company, Mr. Hall entered intoMessrs. Ingle, Carey, Creaturo, and Ning is party to an Employment Agreementemployment agreement with the Company. The Employment AgreementMr. Carey’s employment agreement does not contain the provisions described in this section. Each employment agreement contains provisions regarding the termination of Mr. Hall’sthe executive’s employment and related severance obligations. If the Company terminates Mr. Hall’s employmentany of the foregoing executives for “Cause” or if Mr. Hallany of them resigns without “Good Reason” (as each term is defined in the Employment Agreement)respective employment agreement), the Company will pay Mr. Hallthe executive all accrued and unpaid base salary and any accrued and unpaid benefits through the date of termination, after which the Company will have no further obligation under the Employment Agreement to Mr. Hall.employment agreement. If Mr. Hall’sthe employment of any of the foregoing executives terminates due to his death or “Disability” (as defined in the Employment Agreement)respective employment agreement), Mr. Hallhe or his estate will receive all accrued and unpaid base salary and any accrued and unpaid benefits through the date of termination, after which all right to benefits will terminate and the Company will have no further obligation under the Employment Agreement to Mr. Hall.employment agreement. If Mr. Hallthe employment of any of the foregoing executives is terminated for any reason other than death, Disability, or Cause, or if Mr. Hallany of the executives resigns with Good Reason, Mr. Hallhe will be entitled to (i) cash severance payments equal to 12 months of Mr. Hall’shis annual base salary at the time of termination, payable in equal monthly installments, and (ii) if Mr. Hallhe elects COBRA continuation coverage, reimbursement for the monthly cost of such continuation coverage for Mr. Hall’s medical and health insurance benefits until the earlier of (a)(A) the date Mr. Hallhe ceases to maintain such continuation coverage in effect or (b)(B) 12 months from the termination of Mr. Hall’s employment. The foregoing severance benefits are subject to Mr. Hallthe executive entering into and not revoking a release of claims in favor of the Company and its affiliated entities. The severance benefits payable upon termination for any reason other than death, Disability, or Cause, or resignation with Good Reason, also are subject to Mr. Hallthe executive abiding by certain restrictive covenants. Additionally, upon Mr. Hall’sthe death or Disability of any of the foregoing executives or a “Change of Control” (as defined in the Amended 2013 Incentive CompensationPlan and the Second Amended 2013 Plan), all outstanding unvested equity awards issued to Mr. Hallthe executive by the Company shall vest in full.
Change in Control AgreementIn connection with his retirement effective June 27, 2021, Mr. Caudle. The Company entered into a Change in Control Agreement in August 2009 with Mr. Caudle and amended that agreement effective December 31, 2014. The primary purpose is no longer eligible for potential payments upon termination of the Change in Control Agreement is to promote stability and continuity within management in the event of a “Change in Control” (as defined below) transaction that might otherwise be distractingemployment or disruptive to management’s continued performance of its responsibilities. The Change in Control Agreement with Mr. Caudle will expire on December 31, 2017 (assuming he remains employed with the Company through that date) unless it is extended or renewed, or unless a change in control occurs prior to that date; in the latter event, Mr. Caudle’s Change in Control Agreement would extend past December 31, 2017 and expire on the second anniversary of the change in control event.control.
The Change in Control Agreement will provide for the severance benefits described below, if Mr. Caudle’s employment with the Company is terminated without “Cause” or if he resigns for “Good Reason” within two years following a “Change in Control” of the Company (as each term is defined in the Change in Control Agreement):
|
|
Mr. Caudle’s Change in Control Agreement does not provide for any tax “gross-up” payments, and the salary continuation payments may also be reduced to an amount such that they do not constitute an excess parachute payment under Code Section 280G.
Outstanding Equity Awards. Upon a “Change of Control” or a “Change in Control” of the Company (as either term is defined in the Company’s incentive compensation plans), all outstanding stock options and other stock awards under the plans will become fully vested and/or will be immediately exercisable.
The Company’s NEOs may also become vested in restricted stock units and certain stock options that vest based on continued service with the Company, including the stock options granted to them in fiscal 2017,2021, upon a termination of employment due to death or disability.Disability. In addition, all of the Company’s unvested restricted stock unit awards granted to NEOs provide for accelerated vesting of all unvested restricted stock units upon the Company’s termination of a NEO’s employment without causeCause after the NEO has attained age 65.
Hypothetical Payments Table. The table below summarizes the potential severance payments and benefits payable to Mr. Halleach applicable executive under his Employment Agreement and to Mr. Caudle under his Change in Control Agreementrespective employment agreement and the value of the accelerated vesting of all of the NEOs’executive’s equity awards upon terminationa “Change of employmentControl” or a Change of Control (as defined“Change in Mr. Hall’s Employment Agreement) or a Change in Control (as defined in Mr. Caudle’s Change in Control Agreement)Control” of the Company as of June 23, 2017,25, 2021, the last business day of fiscal 2017 (other than2021. The amounts included in the table for Mr. Goodman whose employment terminated duringCaudle are the year).amounts payable to him in connection with his retirement on June 27, 2021.
Name Type of Payment or Benefit Kevin D. Hall Severance and Benefit Continuation(2) Accelerated Equity Awards(3)(4) Thomas H. Caudle, Jr. Severance and Benefit Continuation(2) Accelerated Equity Awards(3)(4) Change in
Control
($) Termination
Without
Cause or
Resignation
for Good
Reason
($) Termination
Without
Cause After
Attaining
Age 65
($) Termination
Due to
Death or
Disability
($) Termination
Due to
Approved
Retirement
($) Termination
Without
Cause or
Resignation
for Good
Reason
After a
Change in
Control
($)(1) — 782,311 — — — 782,311 2,206,000 — 2,169,000 2,206,000 37,000 2,206,000 Total 2,206,000 782,311 2,169,000 2,206,000 37,000 2,988,311 — — — — — 2,271,886 2,174,646 — 2,169,000 2,174,646 5,646 2,174,646 Total 2,174,646 — 2,169,000 2,174,646 5,646 4,446,532
Name |
| Type of Payment or Benefit |
| Change of Control ($) |
|
| Termination Without Cause or Resignation for Good Reason ($) |
|
| Termination Without Cause After Attaining Age 65 ($) |
|
| Termination Due to Death or Disability ($) |
|
| Termination Due to Approved Retirement ($) |
|
| Termination Without Cause or Resignation for Good Reason After a Change of Control ($)(1) |
| ||||||
Edmund M. Ingle |
| Severance and Benefit Continuation(2) |
|
| — |
|
|
| 700,110 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 700,110 |
|
|
| Accelerated Equity Awards(3)(4) |
|
| 1,772,510 |
|
|
| — |
|
|
| 1,253,885 |
|
|
| 1,772,510 |
|
|
| 518,625 |
|
|
| 1,772,510 |
|
|
| Total |
|
| 1,772,510 |
|
|
| 700,110 |
|
|
| 1,253,885 |
|
|
| 1,772,510 |
|
|
| 518,625 |
|
|
| 2,472,620 |
|
Thomas H. Caudle, Jr. |
| Accelerated Equity Awards(3)(4) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| #REF! |
|
|
| 23,760 |
|
|
| #REF! |
|
Albert P. Carey |
| Accelerated Equity Awards(3)(4) |
|
| 7,686,370 |
|
|
| — |
|
|
| 1,052,296 |
|
|
| 1,552,668 |
|
|
| 500,372 |
|
|
| 7,686,370 |
|
Craig A. Creaturo |
| Severance and Benefit Continuation(2) |
|
| — |
|
|
| 500,807 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 500,807 |
|
|
| Accelerated Equity Awards(3)(4) |
|
| 757,139 |
|
|
| — |
|
|
| 557,964 |
|
|
| 757,139 |
|
|
| 199,175 |
|
|
| 757,139 |
|
|
| Total |
|
| 757,139 |
|
|
| 500,807 |
|
|
| 557,964 |
|
|
| 757,139 |
|
|
| 199,175 |
|
|
| 1,257,946 |
|
Hongjun Ning |
| Severance and Benefit Continuation(2) |
|
| — |
|
|
| 378,188 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 378,188 |
|
|
| Accelerated Equity Awards(3)(4) |
|
| 353,381 |
|
|
| — |
|
|
| 353,381 |
|
|
| 353,381 |
|
|
| — |
|
|
| 353,381 |
|
|
| Total |
|
| 353,381 |
|
|
| 378,188 |
|
|
| 353,381 |
|
|
| 353,381 |
|
|
| — |
|
|
| 731,569 |
|
(1) | Amounts shown assume the Company experienced a |
(2) | Consists of severance benefits and health and welfare benefits. Health and welfare benefits represent the aggregate estimated net cost to the Company for reimbursement of the cost of 12 months of COBRA continued medical coverage provided |
(3) | As described above, all |
executive’s termination of employment due to death or |
(4) | For purposes of this table, it is assumed that: (i) all vested stock options |
The SEC rules require the Company to disclose annually (i) the median annual total compensation of all employees of the Company (excluding the Company’s principal executive officer); (ii) the annual total compensation of the Company’s principal executive officer; and (iii) the ratio of the Company’s principal executive officer’s annual total compensation to the median annual total compensation of all employees (excluding the Company’s principal executive officer).
Based on the methodology and material assumptions described below, the Company has estimated these amounts to be as follows:
Median annual total compensation of all employees (excluding Mr. Ingle) |
| $ | 33,263 |
|
Annual total compensation of Mr. Ingle |
| $ | 1,748,373 |
|
Ratio of Mr. Ingle’s annual total compensation to the median annual total compensation of all other employees |
| 53:1 |
| |
For fiscal 2021, the Company updated its determination of the median employee. To determine the median employee in fiscal 2021, the Company compiled a list of all employees (excluding the Company’s principal executive officer) as of June 2, 2021, sorted the list of employees by their gross cash compensation for the period from June 28, 2020 through June 27, 2021, and selected the employee with the median gross cash compensation amount. The Company annualized the gross cash compensation of any employee who was not employed for the entire period from June 28, 2020 through June 27, 2021. The gross cash compensation amounts did not include the value of Company-provided benefits, such as retirement and medical and life insurance benefits. As of June 2, 2021, the Company employed 2,943 persons, of which 888 employees were employed outside of the United States. The compensation of employees in foreign countries was converted to an equivalent U.S. dollar amount using foreign exchange rates averaged over the 12-month period ended December 31, 2020.
The annual total compensation of the Company’s principal executive officer is the total amount of his compensation presented in the Summary Compensation Table beginning on page 38. The Company calculated the annual total compensation of the median employee using the same rules applicable to the completion of the Summary Compensation Table for the principal executive officer and the other NEOs.
Equity Compensation Plan Information
The table below provides information as of June 25, 2017,27, 2021, with respect to the securities authorized for issuance to the Company’s employeesdirectors, officers, and directorsemployees under the Second Amended 2013 Plan, the Amended 2013 Plan, the Unifi, Inc. 2013 Incentive Compensation Plan.Plan (the “2013 Plan”), and the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”). The Second Amended 2013 Incentive CompensationPlan, which was approved by the Company’s shareholders at the 2020 Annual Meeting, replaced the Amended 2013 Plan for purposes of all incentive awards issued to the Company’s directors, officers, and employees on or after October 29, 2020; the Amended 2013 Plan, which was approved by the Company’s shareholders at the 2018 Annual Meeting of Shareholders, replaced the 2013 Plan for purposes of all incentive awards issued to the Company’s directors, officers, and employees after October 24, 2018, and the 2013 Plan, which was approved by the Company’s shareholders at the 2013 Annual Meeting of Shareholders, replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”)LTIP for purposes of all incentive awards issued to the Company’s personneldirectors, officers, and employees after October 22, 2013. As a result, no further awards were made or will be made under the 2008 LTIP. Any optionAmended 2013 Plan, the 2013 Plan, or restricted stock unit previously granted under the 2008 LTIP that is forfeited or cancelled may be reissued underafter the terms of the 2013 Incentive Compensation Plan and is included in the number of securities remaining available for future issuance reflected in column (c) in the table below. The Company does not have any equity compensation plans under which equity awards may be made that were not approveddate it was replaced by its shareholders.a successor plan.
Plan Category |
| Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (#) (a) |
| Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights ($) (b) |
| Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) (c) | |||||||||
Equity compensation plans approved by security holders |
|
| 1,517,104 |
| (1) |
|
| 16.82 |
| (1) |
|
| 771,011 |
|
|
Equity compensation plans not approved by security holders |
|
| — |
|
|
|
| — |
|
|
|
| — |
|
|
Total |
|
| 1,517,104 |
| (1) |
|
| 16.82 |
| (1) |
|
| 771,011 |
|
|
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (#) (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (#) (c) | |||
Equity compensation plans approved by | 758,675(1) | 19.93 | 680,518 | |||
Equity compensation plans not approved by | — | — | — | |||
Total | 758,675(1) | 19.93 | 680,518 |
(1) | Includes securities issuable upon exercise of outstanding options and |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Unifi’s executive officers, directors and persons who beneficially own more than 10% of the outstanding Common Stock (collectively, the “reporting persons”) to file with the SEC initial reports of their beneficial ownership and reports of changes in their beneficial ownership of Common Stock. Based solely on a review of such reports and written representations made by Unifi’s executive officers and directors with respect to the completeness and timeliness of their filings, the Company believes that the reporting persons complied with all applicable Section 16(a) filing requirements on a timely basis during fiscal 2017, except for Archibald Cox, Jr., a director, who filed a late Form 4 to report a sale of shares of Common Stock.
Compensation Committee Interlocks and Insider Participation
Emma S. Battle, Archibald Cox, Jr., James M. Kilts, and Kenneth G. Langone James D. Mead and William J. Armfield, IV (until his passing on July 11, 2016) served on the Compensation Committee in fiscal 2017.2021. None of the directors who served on the Compensation Committee in fiscal 20172021 has ever served as one of the Company’s officers or employees or had any relationship with the Company or any of its subsidiaries since the beginning of fiscal 20172021 pursuant to which disclosure would be required under the SEC rules pertaining to the disclosure of transactions with related persons.persons, except for the transaction between a wholly owned subsidiary of Salem Holding Company and the Company described above under “Corporate Governance—Related Person Transactions.” Mr. Langone owns a non-controlling 33% equity interest in, and is a director and the Non-Executive Chairman of, Salem Holding Company. During fiscal 2017,2021, none of the Company’s executive officers served as a director or a member of the compensation committee (or other committee performing equivalent functions) of any other entity of which an executive officer of such other entity served on the Board or its Compensation Committee.
Compensation CommitteeCommittee Report
The Compensation Committee has reviewed and discussed the Compensation“Compensation Discussion and AnalysisAnalysis” section included in this Proxy Statement with management and, based on such review and discussions, recommended to the Board that the Compensation“Compensation Discussion and AnalysisAnalysis” section be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2017.2021.
Respectfully submitted by the Compensation Committee of the Board,
Archibald Cox, Jr., Chair
Emma S. Battle
James M. Kilts
Kenneth G. Langone
Audit CommitteeCommittee Report
The primary purpose of the Audit Committee is to act on behalf of the Board in its oversight of all material aspects of the accounting and financial reporting processes, internal controls, and internal audit functions of the Company, including its compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Management has primary responsibility for the Company’s consolidated financial statements and reporting processes, including its internal controls and disclosure controls and procedures. The Company’s independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of the consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”) and expressing an opinion on the conformity of those audited consolidated financial statements with generally accepted accounting principles.principles and for auditing the effectiveness of the Company’s internal control over financial reporting.
In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2017. This review2021. These reviews included a discussion of the quality and acceptability of the Company’s financial reporting and internal controls. During the past fiscal year, the Audit Committee discusseddiscussions with the Company’s independent registered public accounting firm of the matters required to be discussed bypursuant to PCAOB Auditing Standard No. 1301 “Communications(Communications with Audit Committees,” as adopted byCommittees), including the Public Company Accounting Oversight Board. quality (not merely the acceptability) of the Company’s accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements and disclosures related to critical accounting practices. The Audit Committee also received during the past fiscal year the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence.
Based on the reviews, discussions, and disclosures referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements of the Company for the fiscal year ended June 25, 20172021 be included in its Annual Report on Form 10-K for such fiscal year.
Respectfully submitted by the Audit Committee of the Board,
Suzanne M. Present, Chair
Robert J. Bishop
Archibald Cox, Jr.
Named Executive Officer Compensation
As required by Section 14A of the Exchange Act, this proposal, commonly known as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to vote to approve or not approve, on an advisory basis, the compensation of the Company’s NEOs, which is described in the “Compensation Discussion and Analysis” and “Executive Compensation Tables” sections of this Proxy Statement. This vote is not intended to address any specific item or element of compensation or the compensation of any particular officer, but rather the overall compensation of the Company’s NEOs and the philosophy, principles, and policies used to determine compensation.
At the 2016 Annual Meeting of Shareholders the Company provided shareholders with an opportunitywere most recently asked to cast an advisory vote to approve or not approve the compensation of itsthe Company’s NEOs at the 2020 Annual Meeting, and shareholders approved the Company’s NEO compensation with more thanapproximately 97% of the votes cast in favor. At the 2011Company’s 2017 Annual Meeting of Shareholders, the Company alsoshareholders were asked shareholders to indicate whether afuture advisory say-on-pay votevotes should occur every one, two, or three years, with the Board recommending an annual advisory vote. Because the Board views it as a good corporate governance practice, and because at the 20112017 Annual Meeting of Shareholders a majority of the votes cast were in favor of an annual advisory vote, shareholdersthe Board adopted a policy that the Company will have the opportunity at the Annual Meeting to provide feedback to the Compensation Committee oninclude an advisory say-on-pay vote in the Company’s executive compensation program by endorsing or not endorsingproxy materials on an annual basis until the compensation of its NEOs. Shareholders will also have the opportunity at the Annual Meeting to cast annext required advisory shareholder vote on the frequency of futureadvisory say-on-pay votes, (see Proposal 3: Advisory Vote onwhich will occur no later than the FrequencyCompany’s annual meeting of Future Advisory Votes to Approve Named Executive Officer Compensation).shareholders in 2023.
As described in detail in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company’s executive compensation program is designed not only to attract and retain highly qualifiedtalented and effectiveexperienced executives, but also to motivate them to contribute substantially to the Company’s future success for the long-term benefit of shareholders and to reward them for doing so. Accordingly, the Compensation Committee and the Board believe that there should be a strong relationship between pay and corporate performance (both financial results and stock price), and that the Company’s executive compensation program reflects this belief.
Shareholders are urged to read the “Compensation Discussion and Analysis” and “Executive Compensation Tables” sections of this Proxy Statement, which more thoroughly discuss the Company’s compensation programsprinciples and practices.policies. The Compensation Committee and the Board believe that these programsprinciples and practicespolicies are effective in implementing the Company’s overall compensation philosophy.
Accordingly, the Company is asking shareholders to vote, on an advisory basis,“FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the Compensation“Compensation Discussion and Analysis,Analysis” section, the compensation tables, and the related narrative discussion, is hereby approved.”
This vote is advisory, which means that the shareholder vote on this proposal will not be binding on Unifi,UNIFI, the Compensation Committee, or the Board of Directors.Board. However, the Compensation Committee valuesand the Board value the opinions of the Company’sUNIFI’s shareholders and will carefully consider the outcome of the vote when making future compensation decisions for Unifi’sthe Company’s NEOs.
The Board of Directors unanimously recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of the Company’s NEOs in fiscal 20172021 as disclosed in this Proxy Statement.
Unless a proxy is marked to give a different direction, the persons named in the proxyotherwise specified, proxies will votebe voted “FOR” the approval, on an advisory basis, of the compensation of the Company’s NEOs in fiscal 20172021 as disclosed in this Proxy Statement.
Approval of the Unifi, Inc. Employee Stock Purchase Plan
The Board of Directors proposes that shareholders approve the Unifi, Inc. Employee Stock Purchase Plan (the “Plan”). The Board has approved the Plan, subject to shareholder approval. The principal features of the Plan are summarized below. This summary is not intended to be a complete description of the Plan and is qualified in its entirety by reference to the full text of the Plan, a copy of which is attached to this Proxy Statement as Appendix B.
Upon approval, the Plan will allow eligible employees to purchase Common Stock at a 15% discount from market value in accordance with Section 423 of the Code. The Board believes that the Plan will benefit the Company by encouraging employees to purchase Common Stock and thereby promote their increased interest in the successful operation of the Company and to remain in the employ of the Company. 100,000 shares of Common Stock will be reserved for issuance under the Plan, which the Company anticipates will provide sufficient shares for purchases during the Plan’s five-year term.
All employees of the Company and its subsidiaries are eligible to participate in the Plan on the Frequencyfirst day of
Future Advisory Votes the next pay period following the date on which they complete 30 days of continuous employment, except (i) employees whose customary employment is less than 20 hours per week or five months or less in any calendar year, (ii) employees who immediately after the purchase of Common Stock pursuant to Approve
Named Executive Officer Compensation
As required bythe Plan would own Common Stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or one of its subsidiaries, and (iii) employees who are highly compensated employees (within the meaning of Section 14A414(q) of the Code) and who have reporting obligations pursuant to Section 16(a) of the Exchange Act,Act. The Company estimates that approximately 2,868 employees are eligible to elect to participate in the Plan.
An eligible employee becomes a participant in the Plan by completing a participation application designating the amount to be deducted from his or her pay and contributed to the Plan, which may not exceed 6% of Eligible Compensation (as defined in the Plan) or be less than one half of one percent (0.5%) of the Participant’s eligible compensation, and authorizing the purchase of Common Stock on each purchase date under the Plan.
Amounts elected by a participant to be contributed to the Plan will be accumulated in a record-keeping account maintained by the Company. The accumulated funds will be utilized only for the purchase of Common Stock, except for funds refunded to withdrawing participants. Funds will accumulate in each participant’s account over payroll deduction periods during each calendar year (“Payroll Deduction Periods”). The beginning and ending dates of the Payroll Deduction Periods will be determined by the Benefits Committee (as defined in the Plan) and may commence at any time, including at quarterly or semi-annual intervals. The Plan administrator will announce the date each Payroll Deduction Period will commence and the duration of that Payroll Deduction Period.
Unless a participant files a new application or withdraws from the Plan, deductions and Common Stock purchases will continue under the authorization on file for as long as the Plan remains in effect.
A participant may amend his or her application at any time by the execution of a new participation application.
A participant may withdraw from the Plan prior to a purchase date under the Plan by filing a withdrawal notice with the Plan administrator that becomes effective prior to the last payroll period of the Payroll Deduction Period. If a withdrawal notice is received after such time, the participant will be deemed to have elected the purchase of Common Stock on the next purchase date. Termination of employment for any reason will be deemed a withdrawal by a participant as of the date of such termination. Withdrawing or terminating participants will be refunded, without interest, the entire balance of their payroll deductions not used to purchase Common Stock. A participant who withdraws from the Plan may enter the Plan again by filing a new participation application.
The purchase of Common Stock with funds accumulated during a Payroll Deduction Period will be made on the first business day following the expiration of the Payroll Deduction Period (the “Stock Purchase Date”). Each participant shall have purchased on his or her behalf on each Stock Purchase Date the maximum number of whole and fractional shares of Common Stock that may be purchased at the purchase price established pursuant to the Plan with his or her payroll deductions accumulated during the relevant Payroll Deduction Period.
Common Stock purchased pursuant to the Plan on behalf of a participant will be deposited in book-entry form into the participant’s brokerage account.
The purchase price of Common Stock purchased on a Stock Purchase Date will be 85% of the average of the high and low trading prices as recorded on the Composite Tape of the New York Stock Exchange for the business day immediately preceding the Stock Purchase Date. As of August 27, 2021, the closing price of the Common Stock was $22.62 per share.
Limitation on Common Stock Purchases
A participant may not purchase in any calendar year under the Plan and under all other “employee stock purchase plans” (as defined in Section 423 of the Code) of the Company alsoand its subsidiaries Common Stock which has a fair market value in excess of $25,000.
Transfer or Assignment of Participant’s Right to Purchase
Rights to purchase Common Stock granted to a participant pursuant to the Plan are nontransferable and are exercisable only during the lifetime of the participant while employed by the Company or its subsidiaries. A participant’s death terminates participation in the Plan and the right to purchase may not be exercised by the participant’s legal representative.
The Plan and all options to purchase Common Stock under the Plan may be terminated at any time by the Board of Directors. If at any time any shares of Common Stock reserved for issuance under the Plan remain available for purchase, but not in sufficient number to satisfy all of the purchase requirements, the Plan administrator will provide for the purchase of the remaining Common Stock on a pro rata basis among the participants.
The Board of Directors, acting through the Plan administrator, may amend the Plan in any respect whatsoever except that, without the approval of shareholders of the Company, no amendment may change the number of shares subject to the Plan, permit the granting of options to persons other than employees
of the Company and its subsidiaries, increase the discount granted for purchase of Common Stock, or cause the Plan to fail to meet the requirements of Section 423 of the Code.
Sale of Common Stock Purchased under the Plan
The Plan is providingintended to encourage employee stock ownership and the Company hopes its shareholdersemployees will retain the Common Stock purchased under the Plan for investment. A participant who is not an affiliate of the Company may, however, sell the Common Stock at any time. Because of certain federal tax requirements, each employee agrees by entering into the Plan to give notice to the Plan administrator if he or she disposes of any Common Stock within two years from the date of the granting of the option or one year after the transfer of the shares to him or her.
The Plan is administered by the Benefits Committee, the members of which are appointed by the Board of Directors. A member of the Benefits Committee can be removed at any time by the Board of Directors. The Benefits Committee interprets and construes the Plan. Members of the Benefits Committee do not receive compensation for their services as such; however, they will be reimbursed by the Company for any expenses incurred in connection with the opportunityadministration of the Plan. The Company will pay all costs of administering the Plan.
United States Federal Income Tax Consequences
The Plan is intended to castqualify as an advisory vote“employee stock purchase plan” within the meaning of Section 423 of the Code. Under Section 423 of the Code, the purchase of Common Stock pursuant to expressthe Plan will not result in taxable income to a preference regardingparticipant, and the frequencyCompany and its subsidiaries will not be allowed any deductions with respect to such Common Stock, provided no disposition of future shareholder advisory votessuch Common Stock is made by such participant within two years after the date of the beginning of the Payroll Deduction Period for the purchase of such Common Stock nor within one year after the Common Stock is purchased in accordance with the Plan.
If the holding period requirements are not met, the disposition of the Common Stock will result in taxable ordinary income to the participant in the year of the disposition in an amount equal to the difference between the purchase price and the fair market value of the Common Stock on the day of purchase and, subject to the limits of reasonable compensation, the Company or a subsidiary will be allowed a deduction in such amount. This amount must be reported as ordinary income even if the participant disposed of the Company’s NEOs. Unifi currently holds its say-on-pay vote every year. In votingCommon Stock by gift or made no profit on this proposal, youthe sale.
If the holding period requirements are met, or if the participant dies while holding the Common Stock, the amount included in gross income as compensation in the year of the disposition or the participant’s death is equal to the lesser of (i) the excess of the fair market value of the Common Stock at the time of the disposition or death over the purchase price or (ii) the excess of the fair market value of the Common Stock at the time the Common Stock was purchased. The balance, if any, will be askedaccorded long-term capital gain treatment. The Company and its subsidiaries will not be entitled to select from the following four options: whether the advisory vote should occur every one, two or three years, or to abstain from voting on the proposal. For the reasons explained below, theany deduction.
The Board of Directors recommends that you vote for a one-year frequency, a continuation“FOR” the approval of the Company’s current policy.
After careful consideration,Plan. Unless otherwise specified, proxies will be voted “FOR” the Board of Directors believes that holding an advisory vote on the compensationapproval of the Company’s NEOs every year is the best approach for Unifi and its shareholders. An annual say-on-pay vote provides shareholders with the opportunity to annually evaluate the Company’s overall executive compensation program. As described in greater detail in the “Compensation Discussion and Analysis” section beginning on page 23 of this Proxy Statement, the Company believes its executive compensation program should attract top executive talent, pay for performance and link executive retention to long-term shareholder value. The Board of Directors believes that the annual say-on-pay vote has worked well, allowing shareholders to provide input on the Company’s executive compensation philosophy, principles and policies as disclosed in the proxy statement each year and giving the Compensation Committee and the Board the opportunity to evaluate executive compensation decisions each year in light of the shareholder feedback.Plan.
The option of every one year, two years or three years that receives the highest number of votes cast will be considered to be the frequency for the advisory vote on NEO compensation that has been selected by the Company’s shareholders. The Board of Directors will consider the shareholder vote when determining how often an advisory vote on NEO compensation will be requested from the Company’s shareholders. Because this vote is advisory, and not binding on Unifi, the Compensation Committee or the Board of Directors, the Board may decide that it is in the best interests of the Company and its shareholders to hold an advisory vote on NEO compensation more or less frequently than the option selected by the Company’s shareholders.
The Board of Directors unanimously recommends that you vote in favor of a frequency of every “1 YEAR” for future advisory votes to approve the Company’s NEO compensation.
Unless a proxy is marked to give a different direction, the persons named in the proxy will vote in favor of a frequency of every“1 YEAR” for future advisory votes to approve the Company’s NEO compensation.
Ratification of the Appointment of
Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors has appointed KPMG LLP to serve as Unifi’sthe Company’s independent registered public accounting firm for fiscal 2018.2022. KPMG LLP has served as the Company’s independent registered public accounting firm since 2011. The Audit Committee reviewed and discussed the performance of KPMG LLP for fiscal 20172021 prior to its appointment of KPMG LLP to serve as Unifi’sthe Company’s independent registered public accounting firm for fiscal 2018.2022.
The Company expects that representatives of KPMG LLP will be present at the Annual Meeting, and the representatives will have an opportunity to make a statement if they desire to do so. The Company also expects that representatives also are expected towill be available to respond to appropriate questions from shareholders.
Shareholder ratification of the Audit Committee’s appointment of KPMG LLP to serve as Unifi’sthe Company’s independent registered public accounting firm for fiscal 2022 is not required by the Company’s Amended and Restated By-laws or otherwise. Nevertheless, the Board is submitting the appointment of KPMG LLP to the Company’s shareholders for ratification as a matter of good corporate governance. If the Company’s shareholders fail to ratify the appointment, the Audit Committee will reconsider its appointment of KPMG LLP. Even if this appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the fiscal year if the Audit Committee determines that such a change would be in the best interests of the Company and its shareholders.
The Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2018.
2022.Unless a proxy is marked to give a different direction, the persons named in the proxyotherwise specified, proxies will votebe voted “FOR” the ratification of the appointment of KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2018.2022.
Fees Paid to Independent Registered Public Accounting Firm
The following table presents fees for professional audit services rendered by KPMG LLP for the audit of the Company’s consolidated financial statements for the fiscal years ended June 25, 20172021 and June 26, 2016fiscal 2020 and fees billed for other services rendered by KPMG LLP during those periods.
| Fiscal 2017 ($) | Fiscal 2016 ($) |
| Fiscal 2021 ($) |
| Fiscal 2020 ($) | |||||||||||||||
Audit Fees(1) | 1,412,022 | 1,044,817 |
|
|
| 1,093,675 |
|
|
|
|
| 1,108,360 |
|
| ||||||
Audit-Related Fees | — | — |
|
|
| — |
|
|
|
|
| — |
|
| ||||||
Tax Fees(2) | 227,712 | 244,126 |
|
|
| 175,777 |
|
|
|
|
| 150,784 |
|
| ||||||
All Other Fees | — | — |
|
|
| — |
|
|
|
|
| — |
|
| ||||||
|
| |||||||||||||||||||
Total | 1,639,734 | 1,288,943 |
|
|
| 1,269,452 |
|
|
|
|
| 1,259,144 |
|
| ||||||
|
| |||||||||||||||||||
(1) | Audit Fees |
(2) | Tax Fees |
Audit Committee Pre-Approval of Audit and Non-Audit Services
The Audit Committee has implemented procedures under the Company’sUnifi, Inc. Audit Committee Pre-Approval Policy for Audit and Non-Audit Services (the “Pre-Approval Policy”) to ensure that all audit and permitted non-audit services to be provided to the Company have been pre-approved by the Audit Committee. Specifically, the Audit Committee pre-approves the use of the Company’s independent registered public accounting firm for specific audit and non-audit services, within pre-approved monetary limits. If a proposed service has not been pre-approved pursuant to the Pre-Approval Policy, then it must be specifically pre-approved by the Audit Committee before the service may be provided by the Company’s independent registered public accounting firm. Any pre-approved services exceeding the pre-approved monetary limits require specific approvalpre-approval by the Audit Committee. For fiscal 2017,2021, all of the audit fees were approvedpre-approved by the Audit Committee in accordance with the above procedures. All of the other fees billed by KPMG LLP to the Company for fiscal 20172021 were approvedpre-approved by the Audit Committee by means of specific pre-approvals. All non-audit services provided in fiscal 20172021 were reviewed with the Audit Committee, which concluded that the provision of such services by KPMG LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions.
Shareholder Proposals for the 20182022 Annual Meeting of Shareholders
Any shareholder proposal intended to be included in Unifi’sUNIFI’s proxy statement and form of proxy relating to the 20182022 Annual Meeting of Shareholders must be in writing and received by the Company no later than May 15, 2018.5, 2022. Any such shareholder proposal must also comply with Rule 14a-8 of the Exchange Act, which lists the requirements for the inclusion of shareholder proposals in company-sponsored proxy materials. Shareholder proposals should be addressed to the attention of the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410. Pursuant to the SEC rules, submitting a proposal will not guarantee that it will be included in the Company’s proxy materials.
In addition, notice of any shareholder proposal intended to be presented at the 20182022 Annual Meeting of Shareholders, but that will not be included in the Company’s proxy statement and form of proxy relating to the 20182022 Annual Meeting of Shareholders (i.e., a shareholderany proposal other than a proposal submitted pursuant to Rule 14a-8)14a-8 of the Exchange Act), must be in writing and received by the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410 no earlier than June 27, 201829, 2022 and no later than July 27, 2018.29, 2022. However, if the date of the 20182022 Annual Meeting of Shareholders is more than 30 days before or more than 90 days after October 25, 2018,27, 2022, then the written notice must be received by the Company’s Corporate Secretary no earlier than 120 days prior to the date of the 20182022 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) 10 days following the day on which the Company first announced publicly (or mailed notice to the shareholders of) the date of such meeting. Shareholder proposals must include the specified information concerning the proposal and the shareholder submitting the proposal as set forth in the Company’s Amended and Restated By-laws (see “Corporate Governance—Shareholder Recommendations of Director Candidates” above for a summary of such required information).By-laws. A copy of the Company’s Amended and Restated By-laws may be obtained by writing to the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410.
20172021 Annual Report to Shareholders
This Proxy Statement is accompanied by the 2017 Annual Report to Shareholders,on Form 10-K for fiscal 2021, and these materials are also available atwww.proxyvote.com and the investor relations portion of the Company’s website atwww.unifi.com. The 2017 Annual Report to Shareholders,on Form 10-K for fiscal 2021, which contains the audited consolidated financial statements and other information about the Company, is not incorporated in this Proxy Statement and is not to be deemed a part of the proxy soliciting material.
The Company also will provide without charge to each person solicited pursuant to this Proxy Statement, upon the written request of any such person, a copy of the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2017,2021, including the financial statements and the financial statement schedules, required to be filed with the SEC, or any exhibit thereto. Requests should be in writing and addressed to the attention of the Company’s Corporate Secretary at Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410.
The SEC has adopted rules permitting companies to mail one proxy statement and annual report, and proxy statement, or notice of internet availability of proxy materials, as applicable, in one envelope to all shareholders residing at the same address if certain conditions are met. This is called “householding” and can result in significant savings of paper and mailing costs. The Company has not implemented householding with respect to its shareholders of record; however, a number of brokerage firms have instituted householding that may impact certain beneficial owners of shares held in street name. If members of your household have multiple
accounts through which they hold Common Stock, you may have received a householding notification from the shareholder of record (e.g., your bank, broker, or other nominee.nominee).
Please contact your bank, broker or other nomineethe shareholder of record directly if you have any questions or wish to revoke your decision to household or to receive an additional copy of this Proxy Statement, the 2017 Annual Report to Shareholderson Form 10-K for fiscal 2021, or the Notice of Internet Availability for members of your household.
Non-GAAP Financial Performance Measures
Unifi, Inc. (the(“UNIFI” or the “Company”) prepares its consolidated financial statements and reports in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company’sUNIFI’s executive compensation program uses Adjusted EBITDA, which represents net income before net interest expense, income tax expense, and depreciation and amortization expense, adjusted to exclude certain operating or non-operating income or expense items necessary to understand and compare the underlying results of UNIFI, as a measure of the Company’sUNIFI’s financial performance for purposes of determining the annual incentive compensation earned by executives under the program. The Company’sUNIFI’s methods of determining Adjusted EBITDA may differ from the methods used by other companies. Accordingly, this non-GAAP financial performance measure may not be comparable to measures used by other companies.
In determining Adjusted EBITDA for annual incentive compensation purposes, fiscal 2017 Adjusted EBITDA presented in the Company’s Annual Report on Form 10-K for the fiscal year ended June 25, 2017 was further adjusted for strategic growth plan expenses and certain foreign currency transaction gains, both of which the Compensation Committee adjusted for as being outside of management’s control for operating results and cash generation.
The Compensation Committee uses Adjusted EBITDA as a performance measure for annual incentive compensation purposes because the Compensation Committee believes Adjusted EBITDA providesserves as a clear indicator ofhigh-level proxy for cash generation,generated from operations, which is a key performance indicator used by the Board of Directors and management to assess the Company’sUNIFI’s operating results generally. However, this financial performance measure is not calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for, net income and other financial results reported in the Company’sUNIFI’s consolidated financial statements prepared in accordance with GAAP.
The following table sets forth the reconciliation of the amountamounts reported under GAAP for net income attributable to Unifi, Inc. to Adjusted EBITDA for the fiscal year ended June 25, 20172021 (in thousands):
Net income attributable to Unifi, Inc. | $ | 32,875 | ||
Interest expense, net | 3,030 | |||
Provision for income taxes | 10,898 | |||
Depreciation and amortization expense | 19,851 | |||
|
| |||
EBITDA | $ | 66,654 | ||
Equity in earnings of Parkdale America, LLC | (2,723) | |||
|
| |||
EBITDA excluding Parkdale America, LLC | $ | 63,931 | ||
Loss on sale of business | 1,662 | |||
|
| |||
Adjusted EBITDA per Form 10-K(1) | $ | 65,593 | ||
Strategic growth plan expenses | 3,747 | |||
Certain foreign currency transaction gains | (677) | |||
|
| |||
Adjusted EBITDA per Incentive Plan(2) | $ | 68,663 | ||
|
|
Net income |
| $ | 29,073 |
|
Interest expense, net |
|
| 2,720 |
|
Provision for income taxes |
|
| 17,274 |
|
Depreciation and amortization expense(1) |
|
| 25,293 |
|
EBITDA |
|
| 74,360 |
|
Recovery of non-income taxes(2) |
|
| (9,717 | ) |
Adjusted EBITDA |
| $ | 64,643 |
|
(1) | Within this reconciliation, depreciation and amortization expense excludes the amortization of debt issuance costs, which are reflected in interest expense, net. Within the | consolidated statements of cash flows, amortization of debt issuance costs are reflected in depreciation and amortization expense. |
(2) | For fiscal 2021, the Company recorded a recovery of non-income taxes of $9,717 related to favorable litigation results for its Brazilian operations, generating overpayments that resulted from excess social program taxes paid in prior fiscal years. |
The amounts presented
EMPLOYEE STOCK PURCHASE PLAN
UNIFI, INC.
EMPLOYEE STOCK PURCHASE PLAN
Unifi, Inc. (“UNIFI” or the “Company”) and its subsidiaries (UNIFI and its subsidiary corporations are hereinafter referred to as the “Corporations”) establish the Unifi, Inc. Employee Stock Purchase Plan (the “Plan”) as of January 1, 2022 (the “Effective Date”) for the purpose of encouraging all employees of the Corporations (the “Employees”) to acquire a proprietary interest in the reconciliation abovesuccess of the Corporations and to remain in the employ of the Corporations.
It is the intent of the Company for the Plan to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (hereinafter referred to as the “Code”), and the Plan is to be administered accordingly.
ARTICLE I
STOCK
1.01 Authorized. An aggregate of 100,000 shares of UNIFI common stock (the “Stock”) have been authorized and reserved for issuance pursuant to the provisions of the Plan. The Stock shall be subject to the purchase rights granted to the Employees by the Plan during the term of the Plan but shall also be subject to the provisions of Article VI.
1.02Recapitalization. The number of shares of Stock subject to the Plan shall be proportionately adjusted for any increase or decrease in the number of issued shares of Stock resulting from a subdivision or consolidation of shares of Stock or the payment of a Stock dividend with respect to Stock (or any other increase or decrease in the number of such shares affected without receipt of consideration by UNIFI).
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01Eligibility. Each Employee shall be eligible to participate in the Plan on the first day following the date on which the Employee completes thirty (30) days of continuous employment with the Corporations. Notwithstanding the foregoing, the following Employees shall not be eligible to participate:
(i)Employees whose customary employment is less than twenty (20) hours per week or five (5) months or less in any calendar year.
(ii)Employees who immediately after the purchase of Stock pursuant to the Plan shall be considered a “Five Percent Shareholder” (as defined below) of UNIFI or any “subsidiary corporation” (as defined in Section 424(e) and (f) of the Code). “Five Percent Shareholder” means any individual who, immediately after the purchase of Stock, owns or would be deemed to own more than five percent (5%) of the total combined voting power or value of all classes of stock of UNIFI. For this purpose, (A) an individual shall be considered to own any stock owned (directly or indirectly) by or for his or her siblings, spouse, ancestors, or lineal descendants and shall be considered to own proportionately any stock owned (directly or indirectly) by or for a corporation, partnership, estate, or trust of which such individual is a shareholder, partner, or beneficiary, and (B) stock of UNIFI or any subsidiary corporation that an individual may purchase under outstanding options (whether or not granted under the Plan) shall be treated as stock owned by the individual.
(iii)Employees who are highly compensated employees (within the meaning of Section 414(q) of the Code) and who have reporting obligations pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended.
2.02Participation Upon Enrollment. Employees who have completed the eligibility requirements shall become participants (“Participants”) by enrolling in the Plan through EquityGateway, UNIFI’s plan portal, access to which is available to all eligible Employees. The enrollment shall include:
(i)designation of a regular payroll deduction of a percentage of compensation or an even dollar amount which designation shall not exceed six percent (6%) of the Participant’s Eligible Compensation (defined as compensation excluding (A) bonuses, overtime pay, and commissions; (B) deferred compensation paid in accordance with any deferred compensation plan; and (C) all contributions (other than Code Section 401(k) and Code Section 125 contributions) made by the Company for the Participant’s benefit under any employee benefit or welfare plan now or hereafter established) or be less than one-half of one percent (0.5%) of the Participant’s Eligible Compensation;
(ii)authorization to purchase Stock for the Participant on the Stock Purchase Date (as defined below) as provided in Section 3.02; and
(iii)such other information as the Benefits Committee (as defined below) shall require and deem appropriate.
Enrollment must be completed at least fifteen (15) business days before the end of the payroll period for which the Employee elects to begin participation, otherwise it will become effective for the next succeeding payroll period. An enrollment completed by an Employee shall be deemed as a continuing authorization for payroll deductions and stock purchases so long as the Plan remains in effect or until the Participant otherwise elects to cease participation or withdraws from the Plan.
2.03Amendment to Plan Enrollment. A Participant may amend his or her enrollment at any time through EquityGateway. Increases or decreases in the payroll deduction shall be effective for the payroll period in which the change was completed in EquityGateway; provided, however, in the event the change was completed in EquityGateway less than ten (10) business days before the end of a payroll period (or such other deadline as may be designated by the Plan administrator), it will not be effective until the next succeeding payroll period.
2.04Withdrawal From Participation. A Participant may withdraw from the Plan at any time through EquityGateway. Withdrawals completed at least ten (10) business days before the end of a payroll period (or such other deadline as may be designated by the Plan administrator) will be effective for that payroll period. For withdrawals completed less than ten (10) business days before the end of a payroll period (or such other deadline as my be designated by the Plan administrator), (i) the withdrawal will be effective the next succeeding payroll period and (ii) if the payroll period in which the withdrawal was completed is the last complete payroll period in a Payroll Deduction Period (as defined below), the Participant shall be deemed to have authorized the purchase of Stock as provided in Section 3.02 on the next Stock Purchase Date. Termination of employment by reason of death or for any reason shall be deemed a withdrawal by the Participant as of the date his or her employment terminates. Withdrawing Participants will be refunded the entire balance of the payroll deductions since the previous Stock Purchase Date.
2.05Participation After Withdrawal. An Employee who withdraws from the Plan may re-enter the Plan by enrolling through EquityGateway as provided in Section 2.02.
ARTICLE III
PURCHASE OF STOCK
3.01Accumulation of Funds. Amounts elected by the Participant to be contributed to the Plan (in accordance with Section 2.02 above) shall be accumulated in a record-keeping account maintained by UNIFI. The accumulated funds will be utilized only for the purchase of Stock, except for funds refunded to withdrawing Participants. Funds will accumulate in each Participant’s account over payroll deduction periods during each calendar year (“Payroll Deduction Periods”). The beginning and ending dates of Payroll
Deduction Periods will be determined by the Benefits Committee and may commence at any time, including at quarterly or semi-annual intervals. The Plan administrator will announce the date each Payroll Deduction Period will commence and the duration of that Payroll Deduction Period.
3.02Purchase of Stock. The purchase of Stock with funds accumulated during a Payroll Deduction Period shall be made on the first business day following the expiration of the Payroll Deduction Period (the “Stock Purchase Date”). Each Participant shall have purchased on his or her behalf the maximum number of whole and fractional shares of Stock that may be purchased at the purchase price established pursuant to Section 3.03 with his or her payroll deductions accumulated during the relevant Payroll Deduction Period.
3.03Price. The purchase price of the Stock as of the Stock Purchase Date shall be 85% of the average of the high and low trading prices on the New York Stock Exchange for the business day immediately preceding the Stock Purchase Date (the “Stock Pricing Date”).
3.04Limitation. In no event shall a Participant be permitted to purchase Stock under the Plan and under all other “employee stock purchase plans” (as defined in Section 423 of the Code) of UNIFI or any “subsidiary corporation” (as defined in Section 424(e) and (f) of the Code) to accrue at a rate which exceeds $25,000 of the fair market value of such Stock (determined as of the Stock Pricing Date or the time the Stock purchase right or option is granted, as applicable) for each calendar year which the Stock purchase right or option is outstanding at such time. For purposes of this Section 3.04:
(i)the right to purchase Stock under a Stock purchase right or option accrues when the right or option (or any portion thereof) first becomes exercisable during the calendar year,
(ii)the right to purchase Stock under a Stock purchase right or option accrues at a rate provided by the right or option but in no case may such rate exceed $25,000 of the fair market value of such Stock (as determined at the time such right or option is granted) for any one calendar year, and
(iii)a right to purchase Stock which has accrued pursuant to the Plan may not be consistent with amounts includedcarried over to any other Stock purchase right or option.
ARTICLE IV
ISSUANCE OF STOCK
The Company will establish in the Company’s consolidated financial statements duename of the Participant a brokerage account at a Company-designated brokerage firm. The account will be known as the ESPP Broker Account. Stock purchased pursuant to the impactPlan on behalf of a Participant shall be deposited in book-entry form into the Participant’s ESPP Broker Account. The Plan administrator may adopt such policies and procedures regarding the transfer of Stock from a Participant’s ESPP Broker Account before such Stock has been held for the requisite period necessary to avoid a disqualifying disposition of such Stock under the U.S. federal tax laws or to ensure proper reporting of a disqualifying disposition to the Company.
ARTICLE V
TRANSFER OR ASSIGNMENT OF EMPLOYEE’S RIGHT TO PURCHASE
Rights to purchase Stock granted to the Participant pursuant to the Plan shall be non-transferable and shall be exercisable only during the lifetime of the non-controllingParticipant while he or she is employed by the Corporations. A Participant’s death terminates participation in the Plan as provided in Section 2.04 and the rights to purchase may not be exercised by the Participant’s legal representative.
ARTICLE VI
TERMINATION OR AMENDMENTS
6.01Termination. The Plan and all rights to purchase Stock as above provided may be terminated at any time by action of the Board of Directors of UNIFI. If at any time any shares of Stock authorized for issuance under the Plan shall remain available for purchase, but not in sufficient number to satisfy all of the purchase requirements, the Benefits Committee shall allocate such remaining Stock on a pro rata basis among the purchasing Participants. Any excess accumulations of payroll deductions credited to the account of the Participant at the time of termination shall be refunded to the Participant.
6.02Amendments. The Board of Directors of UNIFI, acting through the Benefits Committee, may amend the Plan in any respect whatsoever except that without the approval of shareholders of UNIFI, no such revision or amendment shall change the number of shares subject to the Plan or permit the granting of rights to purchase Stock under the Plan to persons other than employees of the Corporations. Furthermore, the Plan may not, without the approval of shareholders, be amended in any manner that will cause the Plan to fail to meet the requirements of the provisions on employee stock purchase plans as set forth in Section 423 of the Code.
ARTICLE VII
REPORTING CERTAIN STOCK RESALES
There are tax consequences if a Participant disposes of any Stock within two (2) years from the Stock Purchase Date for that Stock (a “disqualifying disposition”). The Plan administrator will advise the Corporations of any disqualifying dispositions, and the recaptured purchase price discount and any other resulting income deemed to have been earned as a result of the disqualifying disposition will be reported on the Participant’s W-2 form for the year of disposition.
ARTICLE VIII
RESTRICTIONS ON INTEREST
No interest shall be paid by the Corporations for the payroll deductions which are used to purchase Stock pursuant to Section 3.01 or returned pursuant to Section 2.04.
ARTICLE IX
PLAN ADMINISTRATION
9.01Benefits Committee. The Plan shall be administered by the Unifi, Inc. Benefits Committee (the “Benefits Committee”). The Benefits Committee shall interpret and construe the provisions of the Plan and its decision shall be final unless otherwise determined by the Board of Directors of UNIFI. No member of the Board of Directors or the Benefits Committee shall be liable for any actions or determination made in Repreve Renewables, LLCgood faith with respect to the Plan or any rights to purchase granted thereunder. The Benefits Committee may be contacted through December 23, 2016,UNIFI’s Senior Vice President–Human Resources.
9.02Indemnification and Expenses. In addition to all such rights of indemnification which the dateBenefits Committee members have, the members of the Benefits Committee shall be indemnified by the Corporations against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit, or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any actions taken or failure to act under or in connection with the Plan or any right to purchase granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by legal counsel selected by the Corporations or paid by them in satisfaction of a judgment in any action, suit, or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit, or proceeding that the Benefits Committee member is liable for gross negligence and misconduct in the performance of his or her duties).
IN WITNESS WHEREOF, the Company sold its equity ownership interest in that entity.
| UNIFI, INC. | |||||||
|
| |||||||
|
|
| /s/ EDMUND M. INGLE | |||||
Name: | Edmund M. Ingle | |||||||
Title: | Chief Executive Officer | |||||||
UNIFI Logo VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Time, on October 26, 2021. Have your proxy card in hand when you access the website and then follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by Unifi, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern Time, on October 26, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. UNIFI, INC. 7201 WEST FRIENDLY AVENUE GREENSBORO, NC 27410 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E32692-P97078 KEEP THIS PORTION FOR YOUR RECORDS
| DETACH AND RETURN |
THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D59054-P60861 UNIFI, INC. For Against Abstain UNIFI's Board of Directors recommends that you vote "FOR" each of the nominees named in Proposal 1. Nominees: 1. Election of directors 1a. Emma S. Battle 1b. Robert J. Bishop 1c. Albert P. Carey. 1d. Archibald Cox, Jr. UNIFI’s Board of Directors recommends that you vote "FOR" Proposals 2, 3, and 4. 2. Advisory vote to approve UNIFI’s named executive officer compensation in fiscal 2021.3. Approval of the Unifi, Inc. Employee Stock Purchase Plan. NOTE: In their discretion, the proxy holders are authorized to vote on such other business as may properly come before the meeting or any adjournment or postponement thereof. EACH OF PROPOSALS 1, 2, 3, AND 4 HAS BEEN PROPOSED BY UNIFI, INC. 4. Ratification of the appointment of KPMG LLP to serve as UNIFI’s independent registered public accounting firm for fiscal 2022. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. 1e. Edmund M. Ingle 1f. James M. Kilts 1g. Kenneth G. Langone 1i. Rhonda L. Ramlo 1h. Suzanne M. Present 1j. Eva T. Zlotnicka For Against Abstain Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice of Annual Meeting and Proxy Statement and the Annual Report on Form 10-K are available atwww.proxyvote.com.
 FOLD AND DETACH HERE |
|