UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

Filed by the Registrant   x

(Amendment No. )Filed by a Party other than the Registrant   ¨

UNIFI, INC.

(Name of Registrant as Specified in itsIn Its Charter)

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

Payment of Filing Fee (Check the appropriate box):

MAKERS OF REPREVE®

7201 West Friendly Avenue

Greensboro, North Carolina 27410

September 4, 2015

To our Shareholders:

On behalf of the Board of Directors and management of Unifi, Inc., I invite you to the Annual Meeting of Shareholders of your company to be held at 9:00 A.M. Eastern Time on Wednesday, October 21, 2015, at the Company’s corporate headquarters at 7201 West Friendly Avenue, Greensboro, North Carolina. We look forward to greeting those shareholders who are able to attend in person.

At the Annual Meeting, we will discuss and act on each item of business described in the Notice of Annual Meeting of Shareholders and our Proxy Statement, both of which are available via the Internet as described below, along with detailed information relating to our activities and operating performance that is contained in our Annual Report on Form 10-K for the fiscal year ended June 28, 2015 (the “2015 Form 10-K”).

We are providing access to our proxy materials via the Internet, and we are mailing a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) to our shareholders of record and beneficial owners at the close of business on September 2, 2015, which is the record date for the Annual Meeting. The Internet Notice will explain how all shareholders and beneficial owners can access all of the proxy materials and the 2015 Form 10-K, free of charge, via the website described in the Internet Notice.

It is very important that your shares are represented at the Annual Meeting, whether or not you plan to attend in person. Accordingly, we request and urge you to review the proxy materials and vote your shares in advance of the meeting via the Internet. If you decide to attend the Annual Meeting and wish to vote there in person, you may do so by revoking your prior proxy at that time.

The Internet Notice also contains instructions to allow you to request paper copies of the proxy materials to be sent to you by mail. Any paper copies of the proxy materials sent to you will include a proxy card that will provide you with a telephone number you may call to cast your vote, or you may complete, sign and return the proxy card by mail. Your vote is very important and we appreciate your taking the time to vote promptly.

	(3)	Sincerely,
		William L. Jasper
		Chairman and Chief Executive Officer	Filing Party:

MAKERS OF REPREVE^®

UNIFI, INC.

Notice of Annual Meeting

and

Proxy Statement

2016 Annual Meeting of Shareholders

October 26, 2016

MAKERS OF REPREVE^®

Unifi, Inc.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

September 13, 2016

NOTICE OF ANNUAL MEETING OF SHAREHOLDERSDear Shareholder:

TO BE HELD ON OCTOBER 21, 2015On behalf of the Board of Directors and the management of Unifi, Inc., I invite you to the 2016 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m. (Eastern Time) on Wednesday, October 26, 2016 at The Roosevelt Hotel located at 45 East 45th Street & Madison Avenue, New York, New York 10017. Details regarding admission to the meeting and the business to be conducted are described in the accompanying Notice of 2016 Annual Meeting of Shareholders and Proxy Statement.

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

Thank you for your continued support.

Sincerely,

To the

Thomas H. Caudle, Jr.

President

UNIFI, INC.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

(336) 294-4410

Notice of 2016 Annual Meeting of Shareholders of Unifi, Inc.:

Notice is hereby given that the 2015The 2016 Annual Meeting of Shareholders (the “Annual Meeting”) of Unifi, Inc. (the “Company”) will be held at the Company’s corporate headquarters at 7201 West Friendly Avenue, Greensboro, North Carolina,8:30 a.m. (Eastern Time) on Wednesday, October 21, 2015,26, 2016 at 9:00 A.M. Eastern Time,The Roosevelt Hotel located at 45 East 45th Street & Madison Avenue, New York, New York 10017, for the purpose of voting on the following purposes:matters:

The Board of Directors has fixed the close of businessunanimously recommends a vote “FOR” Proposals 1, 2, 3 and 4. The persons named as proxies will use their discretion to vote on September 2, 2015, as the record date for the determination of shareholders entitled to notice of and to voteother matters that may properly arise at the Annual Meeting or any adjournment or postponement thereof. The transfer books of the Company will not be closed.

YOUR VOTE IS VERY IMPORTANT. We appreciate your taking the time to vote promptly. The Company’s 2015 Proxy Statement and a proxy solicited by the Board of Directors of the Company accompany this Notice, and the Proxy Statement explains the above items and how you can vote.

After reading the Proxy Statement, please vote at your earliest convenience via the Internet, or request that a paper copy of the proxy materials be sent to you by mail. If you request the proxy materials by mail, included in those materials will be a proxy card with a telephone number you may call to cast your vote, or you may complete, sign and return the proxy card by mail. In any such case, if you decide to attend the Annual Meeting and wish to vote in person, you may do so by revoking your prior proxy at that time.

YOUR SHARES CANNOT BE VOTED UNLESS YOU EITHER (I) VOTE VIA THE INTERNET, (II) REQUEST PROXY MATERIALS BE SENT TO YOU BY MAIL AND THEN USE THE PROXY CARD PROVIDED BY MAIL TO CAST YOUR VOTE BY CALLING THE TELEPHONE NUMBER ON THE CARD, OR COMPLETING, SIGNING AND RETURNING THE PROXY CARD BY MAIL, OR (III) ATTEND THE ANNUAL MEETING AND VOTE IN PERSON.

		By Order of the Board of Directors,
		W. Randy Eaddy
		Secretary
Greensboro, North Carolina
September 4, 2015

MAKERS OF REPREVE®

7201 West Friendly Avenue

Greensboro, North Carolina 27410

 __________________

PROXY STATEMENT

Dated September 4, 2015

For the Annual Meeting of Shareholders
To be Held on October 21, 2015

__________________

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Unifi, Inc. (the “Company”) for use at the Annual Meeting of Shareholders to be held on Wednesday, October 21, 2015, at 9:00 A.M. Eastern Time, at the Company’s corporate headquarters located at 7201 West Friendly Avenue, Greensboro, North Carolina, or at any adjournment or postponement thereof (the “Annual Meeting”).

In accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), the Company furnishes its proxy materials via the Internet instead of mailing a paper copy of its proxy materials to each shareholder of record. If you received a Notice of Internet Availability of Proxy Materials (the “Internet Notice”) by mail, you will not receive a paper copy of the proxy materials other than as described in this Proxy Statement. Instead, the Internet Notice will instruct you as to how you may access and review all of the information contained in the proxy materials. The Internet Notice also instructs you as to how you may submit your proxy via the Internet. If you received an Internet Notice by mail and would like to receive a paper copy of our proxy materials or vote by telephone, you should follow the instructions for requesting such a paper copy that is included in the Internet Notice.

It is anticipated that the Internet Notice will be sent to shareholders on or about September 4, 2015. The Proxy Statement and the form of proxy relating to the Annual Meeting will be made available to shareholders on the date that the Internet Notice is first sent.

Whether or not you received an Internet Notice, if you are a shareholder of record or a beneficial owner of our Common Stock as of the Record Date (defined below), you may request a paper copy of our proxy materials by contacting the Company at 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Office of the Secretary.

TABLEOF CONTENTS

VOTINGAND proxy SOLICITATION information

Record Date and Shares Eligible to Vote

The Company’s common stock (the “Common Stock”), par value $.10 per share, is the only class of stock of the Company, and thus only holders of shares of Common Stock are eligible to vote. Only such shareholders of record as of the close of business on September 2, 2015 (the “Record Date”),1, 2016 will be entitled to notice of and to vote at the Annual Meeting. You may obtain directions to the Annual Meeting, where you may vote in person, by calling (336) 294-4410.

Your vote is important. Whether or any adjournment or postponement thereof (“eligible shareholders”). Asnot you plan to attend the Annual Meeting, you are encouraged to vote as soon as possible to ensure that your shares are represented at the meeting. If you received a hard copy of the Record Date,proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote via the Internet; (ii) vote by telephone; or (iii) complete, sign, date and return your proxy card in the postage-paid envelope provided. If you received only a Notice of Internet Availability of Proxy Materials by mail, you may vote your shares at the Internet site address listed on your Notice. If you hold your shares through an account with a bank, broker or similar organization, please follow the instructions you receive from the holder of record to vote your shares.

By Order of the Board of Directors,

Ben Sirmons

Secretary and Assistant General Counsel

September 13, 2016

Table of Contents

i

PROXY STATEMENT

The Board of Directors (the “Board of Directors” or the “Board”) of Unifi, Inc. (“Unifi” or the “Company”) is providing these materials to you in connection with the 2016 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held at 8:30 a.m. (Eastern Time) on Wednesday, October 26, 2016 at The Roosevelt Hotel located at 45 East 45th Street & Madison Avenue, New York, New York 10017.

General Information

Why am I receiving these materials?

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

What is a proxy?

The Board is asking for your proxy. This means you authorize persons selected by the Company had outstanding 17,833,722to vote your shares of its Common Stock. Each share ofat the Common Stock entitlesAnnual Meeting in the holder to one vote with respect to each matter comingway 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 all such shares voteform of proxy), as applicable, was sent to shareholders beginning September 13, 2016, 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 shareholders and lowers the cost of the Annual Meeting. If you would like to receive a single class.paper or e-mail copy of the proxy materials, you should follow the instructions in the Notice of Internet Availability for requesting copies.

What is included in these materials?

These materials include:

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

Voting by Shareholders with Shares Held Directly in Their NamesWhat items will be voted on at the Annual Meeting?

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

Shareholders with

●

the approval of the amendment to the Company’s Restated Certificate of Incorporation to reduce the required minimum number of directors on the Board of Directors;

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

What are the Company’s stock records maintained by its transfer agent, American Stock Transfer and Trust Company (“AST”), mayBoard’s voting recommendations?

The Board unanimously recommends that you vote theiryour shares:

In addition, ballotsWho can attend the Annual Meeting?

Admission to the Annual Meeting is limited to:

Admission to the meeting will be passed outon 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.

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

The Board set September 1, 2016 as the record date. As of the record date, 18,018,445 shares of common stock, $0.10 par value per share, of the Company (the “Common Stock”) were issued and outstanding. Shareholders are entitled to one vote per share of Common Stock outstanding on the record date on any shareholder who wants to vote in personproposal presented at the Annual Meeting.

What is a shareholder of record?

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

How do I vote?

You may vote by any of the following methods:

How can I revoke my proxy card. Proxies submittedor change my vote?

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

What happens if I do not give specific voting instructions?

Shareholders of record.  If you are a shareholder of record and you vote by proxy, by phone, via the Internet or by mail or telephone as described above, must be received by 11:59 p.m., Eastern Time, on October 20, 2015. If you vote via the Internet or by telephone, you do not need to returnsigning, dating and returning a proxy card.

Votingcard, without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by Shareholders with Shares Held Throughthe 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 Bank, Brokerage Firm or Other Nominee

Shareholders who hold shares through a bank, brokerage firm or other nominee should refer to the voting instruction form forwarded by their bank or brokerage firm to see which options are available to them. In addition to voting by mail, a number of banks and brokerage firms participate in a program provided through Broadridge Financial Solutions, Inc. (“Broadridge”) that offers telephone and Internet voting options. Votes submitted by telephone or via the Internet through Broadridge’s program must be received by 11:59 p.m., Eastern Time, on October 20, 2015.

In addition, ballots will be passed out to any shareholder who wants to vote in person at the Annual Meeting.Should

Beneficial owners of shares held in street name.  If you decideare a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of various national and regional securities exchanges, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to attend the Annual Meeting and vote your shares in person, you MUST obtainon a legal proxy executed innon-routine matter, the organization that holds your favor from your bank, brokerage firm or other nominee for your ballotshares will inform the inspector of election that it does not have the authority to be counted.

Voting of Proxies

All shares represented by valid proxies received pursuant to this solicitation, and not revoked before they are exercised, will be voted in the manner specified therein. If no specification is madevote on that matter with respect to your shares. This is referred to as a “broker non-vote.”

The election of directors, the matter to be acted upon, the shares represented by the proxies will be voted (i) in favor of electing as directorsapproval of the Companyamendment to the six (6) nominees for director named in this Proxy Statement, (ii) in favorCompany’s Restated Certificate of Incorporation and the advisory vote to approve the compensation paid to the Company’s named executive compensation, (iii)officers in favor offiscal 2016 are non-routine matters. Consequently, without your voting instructions, the organization that holds your shares cannot vote your shares on these proposals. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 2017 is considered a routine matter.

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

What is the quorum for the fiscal year ending June 26, 2016Annual Meeting? How are abstentions and (iv)broker non-votes treated?

The presence, in the discretion of the proxy holder on any other matters presented at the Annual Meeting.

Revocability of Proxies

If your shares are held directly in your name, you may revoke your proxy and change your vote at any time prior to the voting of the proxy at the Annual Meeting. You may do this by (i) sending written notice of revocation to Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Office of the Secretary, (ii) submitting a subsequent proxy via the Internet,person or by mail or telephone, with a later date or (iii) voting in person at the Annual Meeting. Attendance at the Annual Meeting will not by itself revoke a proxy.

If your shares are held through a bank, brokerage firm or other nominee, you may revoke your proxy, and change your vote at any time prior to the voting of the proxy at the Annual Meeting. You may do this by sending written notice of revocation to your bank, brokerage firm or other nominee. Attendance at the Annual Meeting will not by itself revoke a proxy.Should you decide to attend the Annual Meeting and vote your shares in person, you MUST obtain a legal proxy executed in your favor from your bank, brokerage firm or other nominee for your ballot to be counted.

Quorum and Voting Requirements

Quorum and “BrokerNon-Votes”

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 or represented by proxy at the Annual Meeting, will constituteby telephone, via the Internet, or by submitting a quorum for the transaction of business. New York lawproperly executed proxy card or voting instruction form by mail. Abstentions and the Company’s Bylaws require the presence of a quorum to conduct business at annual meetings of shareholders. At the Annual Meeting, abstentions and “broker non-votes” (as described below), if any,broker non-votes are counted as present for purposesthe purpose of determining a quorum.quorum for the Annual Meeting.

UnderWith respect to Proposal 1, the ruleselection of directors, you may vote “for” or “against” each of the New York Stock Exchange, Inc. (“NYSE”), a bank,nominees for the Board, or you may “abstain” from voting for one or more nominees. Abstentions and broker or other nominee holdingnon-votes are not considered votes cast for the foregoing purpose and will therefore have no effect on the election of director nominees.

With respect to Proposals 2, 3 and 4, the approval of the amendment to the Company’s shares in “street name” for a beneficial owner has discretion (but is not required) to vote the client’s shares with respect to “routine” matters if the client does not provide voting instructions. The broker or other nominee, however, is not permitted to vote the client’s shares with respect to “non-routine” matters without voting instructions. A “broker non-vote” occurs when the broker or other nominee does not vote on a particular proposal because that broker or other nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

The proposal to elect directors andRestated Certificate of Incorporation, the advisory vote to approve the compensation paid to the Company’s named executive compensation are each considered a non-routine matter underofficers in fiscal 2016 and the NYSE rules, which means that your broker or other nominee may not use its discretion to vote your shares held in street name on these matters without your express voting instructions. The proposal to ratifyratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm is considered a “routine” matter under the NYSE rules, which means that your bank, brokerfor fiscal 2017, you may vote “for,” “against” or other nominee will have discretionary authority to vote your shares held in street name“abstain” from voting on that matter. Accordingly, if you do not instruct your broker or other nominee to vote your shares, the broker or other nominee may either: (i) vote your shares on routine matters and allow (or indicate) a “broker non-vote” on non-routine matters or (ii) leave your shares unvoted altogether.

Voting Standards

Each share represented is entitled to one vote on all matters properly brought before the Annual Meeting. Under our Bylaws, the voting standard for the election of directors is a majority voting standard in uncontested director elections, such as the election presented at the Annual Meeting, and a plurality voting standard in contested elections. A “contested” election is an election where the number of nominees exceeds the number of directors to be elected. A majority vote standard means that a nominee will be elected if he or she receives a majority of the votes cast, with shareholders being allowed to vote “for” or “against” the nominee (i.e., the number of shares voted “for” a nominee must exceed the number of shares voted “against” that director, without counting abstentions or broker non-votes). A plurality vote standard means that a nominee will be elected if he or she receives a plurality of the votes cast, with the nominees who receive the highest number of votes cast for their election being elected (up to the total number of positions being filled). In addition, see “Board of Directors Procedural Matters—Effect of Failure to be Reelected” below for a further description of the effect of a failure to receive a majority vote in an uncontested election.

The voting standard and treatment ofthese proposals. For Proposal 2, abstentions and broker non-votes will have the same effect as votes against the proposal. For Proposals 3 and 4, abstentions and broker non-votes are not considered votes cast for the mattersforegoing purposes and will therefore have no effect on the vote for these proposals.

Who are the proxy holders and how will they vote?

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

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

Solicitation Expenses and Related MattersWho pays for solicitation of proxies?

The expenseCompany is paying the cost of this solicitationsoliciting proxies and will be borne byreimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to shareholders and obtaining their votes. In addition to soliciting the Company. Solicitations of proxies may be made in person, or by mail telephone or electronic means byand the Internet, certain of the Company’s directors, officers and regular employees, of the Company who will not be specially compensated in such regard. In addition, thewithout compensation, may solicit proxies personally or by telephone, facsimile and e-mail. The Company has retained Alliance Advisors, LLC to provide certain monitoring and vote reporting services, for which the Company has paid such firm a fee of $4,500,$5,000, and may request the firm to perform proxy solicitation services, for which the Company could incur additional costs up to $10,000,of $7,500, plus, in each case, reimbursement of expenses. Arrangements

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

The Company will be made with brokers, nominees and fiduciaries to send proxies and proxy materials,announce preliminary or final voting results at the Company’s expense, to their principals.Annual Meeting and publish final results in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) within four (4) business days of the completion of the meeting.

PRINCIPALSecurity Ownership of Certain Beneficial Owners and ManagementHOLDERS OF COMMON STOCK

The following table sets forthprovides information about the beneficial ownership of the Company’s Common Stock as of August 28, 2015, with respect to23, 2016, by each person known or believed by the Company to be the beneficial owner ofbeneficially own more than five percent (5%)5% of the outstanding shares of Common Stock which isas well as each director, nominee for director, named executive officer and all directors and executive officers as a group. In computing the Company’s only classnumber of voting security. The nature of beneficialshares beneficially owned by a person and the percentage ownership of that person, (i) shares of Common Stock subject to options held by that person that are currently exercisable or exercisable within sixty (60) days of August 23, 2016 and (ii) shares of restricted stock units which vest within sixty (60) days of August 23, 2016 are deemed outstanding. These shares or units, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The percentage ownership is based on 17,995,945 shares of Common Stock outstanding as of August 23, 2016. Except as otherwise indicated is set forthbelow, each of the persons named in the notes following the table. In the case of certain holders, the most recent information availabletable has sole voting and investment power with respect to the Company is derived from an SEC filing madesecurities indicated as beneficially owned by the holder on an earlier date as indicated in the notesthem, subject to the table.community property laws where applicable. Unless otherwise indicated in the notes,footnotes below, the respective holders below have sole voting and sole investment power overaddress for each of the shares.beneficial owners is c/o Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410.

Ms. Present is a co-founder and has been a principal of Gladwyne Partners, LLC, a private partnership fund manager, since June 1998, and she is1998. She has also Executive Director (since 2014)served, since 2014, as executive director of Ken’s Krew, Inc., a non-profit organization that provides training and other support services to individuals with intellectual and developmental disabilities to assist with entering the workforce.workforce. Ms. Present currently serves on the board of directors of Anshe Chung Studios, Limited, a privately-held Chinese-based developer of content for virtual worlds. Sheworlds, and she served on the board of directors of Geeknet, Inc. from September 2008 to Julyuntil 2010. She has been a director of the Company since February 2011. Ms. Present is a member of the Board’s Audit Committee and Executive Committee (the former of which she is the Chair); Ms. Present is an audit committee financial expert.

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

Corporate Governance

Vote Required for ApprovalThe Board of Directors

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

Documents Available

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

Director Independence

The Board believes that a majority of its members are independent under both the votes cast by eligible shareholders who are present in person or represented by proxy atapplicable New York Stock Exchange rules (the “NYSE rules”) and the Annual Meeting, and who actually vote, is required forapplicable SEC rules. The NYSE rules provide that a director does not qualify as “independent” unless the electionboard of a nominee as director.

The Board recommendsdirectors affirmatively determines that the shareholders vote “FOR”director has no material relationship with the electioncompany (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). The NYSE rules recommend that a board of directors consider all of the relevant facts and circumstances in determining the materiality of a director’s relationship with a company. The Board has adopted Director Independence Standards, which incorporate the independence standards of the NYSE rules, to assist the Board in determining whether a director has a material relationship with Unifi. The Director Independence Standards are available on the investor relations portion of the Company’s website,www.unifi.com, as an attachment to the Corporate Governance Guidelines.

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

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

As a result of its director independence evaluation in July 2016, the Board determined those relationships that do exist or did exist within the last three fiscal years (except for Messrs. Caudle’s and Jasper’s) all fall below the thresholds in the Director Independence Standards. Consequently, the Board of Directors determined that each of Messrs. Bishop, Charron, Cox, Kilts, Langone and Mead and Ms. Present is an independent director under the Director Independence Standards, the NYSE rules and the SEC rules. The Board also determined that each member of the Audit, Compensation and Corporate Governance and Nominating Committees (see membership information below under “Board Committees”) is independent, including that each member of the Audit Committee is “independent” as that term is defined under Rule 10A-3(b)(1)(ii) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Board Leadership Structure

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

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

Board Committees

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

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

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

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

Director Meeting Attendance

The Board of Directors held nine (9) meetings during fiscal 2016. Each incumbent director attended 75% or more of the aggregate number of meetings of the Board and committees of the Board on which the director served during fiscal 2016. It is the Board’s policy that the directors should attend the Company’s annual meeting of shareholders absent extenuating circumstances. Six (6) of the seven (7) directors in office at the time (including all current directors who were directors at that time) attended the 2015 Annual Meeting of Shareholders.

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

Director Nomination Process

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

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

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

Shareholder Recommendations of Director Candidates

Recommendations by shareholders for director candidates to be considered for the 2017 Annual Meeting of Shareholders must be delivered to, or mailed and received by, the Company’s Secretary at Unifi, Inc. c/o Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410 not earlier than June 28, 2017 and not later than July 28, 2017. If the date of the annual meeting is advanced or delayed by more than thirty (30) days from October 26, 2017, notice by the shareholder to be timely must be so delivered or received not later than the later of (i) ninety (90) days prior to the date of the 2017 Annual Meeting of Shareholders and (ii) ten (10) days following the day on which the Company first announced publicly, or mailed notice to the shareholders of, the date of such meeting.

Notice of a director nomination must be submitted in accordance with the requirements set forth in the Company’s Restated By-laws (available atwww.unifi.comor upon request from the Company), which include requirements to identify specifically, and provide reasonably detailed personal and professional biographical information about, each proposed nominee as well as to provide (i) a written statement, signed by the proposed nominee, with respect to the background and qualifications of the proposed nominee; (ii) an undertaking by the proposed nominee to complete and sign a copy of the standard questionnaire then being used by the Company to gather or update information with respect to its directors and executive officers; (iii) a description of all arrangements or understandings between the shareholder making the recommendation and the proposed nominee; and (iv) a consent signed by the proposed nominee agreeing to serve as a director if elected. Such information

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

Annual Evaluation of Directors and Board Committee Members

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

No Hedging, Pledging or Short Selling

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

Related Person Transactions

Pursuant to the Company’s Related Persons Transactions Policy, which is available on the investor relations portion of the Company’s website atwww.unifi.com, the Company reviews relationships and transactions in which the Company and its directors and executive officers or their immediate family members are participants to determine whether such related persons have a direct or indirect material interest in the relationship or transaction. The Company’s executive management is primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether a related person has a direct or indirect material interest in the 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 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 approval or ratification of a disclosable related person transaction, the Audit Committee considers the relevant facts and circumstances, including the material terms of the transactions, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence.

Transactions with Salem Holding Company

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

Transactions with Cupron, Inc.

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

Transactions and Agreements with the Company’s Named Executive Officers

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

The Board’s Role in Risk Oversight

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

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

Compensation Committee Advisors

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

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

Communications with the Board of Directors

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

Director Compensation

The table below sets forth the compensation paid to each non-employee director who served on the Board in fiscal 2016. Directors who are also employees of Unifi (during fiscal 2016, Messrs. R. Roger Berrier, Jr., Thomas H. Caudle, Jr. and William L. Jasper) do not receive compensation (other than their compensation as employees of Unifi) for their service on the Board of Directors.

2016 Director Compensation Table

Name		Stock Awards ($)(1)					All Other Compensation ($)					Total         ($)
William J. Armfield, IV(2)				125,000					—					125,000
Robert J. Bishop(3)				50,000					—					50,000
Paul R. Charron(4)				62,500					—					62,500
Archibald Cox, Jr.				125,000					—					125,000
James M. Kilts(3)				50,000					—					50,000
Kenneth G. Langone				125,000					—					125,000
James D. Mead(5)				95,000					100,000	(6)				195,000
Suzanne M. Present				150,000					—					150,000
G. Alfred Webster(7)				—					—					—

 

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(1)

Represents the full grant date fair value of restricted stock unit awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”). Generally, the full grant date fair value is the amount that the Company would expense in the financial statements over the award’s vesting schedule. For additional information regarding the assumptions made in calculating these amounts, see Note 16 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016. These amounts reflect the accounting expense and do not correspond to the actual value that will be recognized by the directors.

The following table shows the number of unexercised options to purchase shares of Common Stock held by each non-employee director as of June 26, 2016; no non-employee director held any unvested restricted stock units:

 

		Shares Underlying Unexercised Stock Options
Name		(#)
William J. Armfield, IV				6,666
Robert J. Bishop				—
Paul R. Charron				—
Archibald Cox, Jr.				6,666
James M. Kilts				—
Kenneth G. Langone				6,666
James D. Mead				—
Suzanne M. Present				—

COMPENSATIONDISCUSSION AND ANALYSIS

(2)	Mr. Armfield passed away on July 11, 2016.

(3)	Messrs. Bishop and Kilts were elected to the Board on April 27, 2016.

(4)	Mr. Charron was elected to the Board on February 4, 2016.

(5)	Mr. Mead was elected to the Board on December 2, 2015.

(6)	Represents a one-time payment for consulting services provided to the Company in connection with Mr. Mead’s recruitment of persons to serve as independent directors on the Board.

(7)	Mr. Webster served as a director until the expiration of his term on October 21, 2015. He did not receive any restricted stock units in fiscal 2016.

The Compensation Committee reviews the form and amount of director compensation and makes recommendations to the Board for its consideration and approval.

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

On October 21, 2015, the Board of Directors approved and the Company granted restricted stock units to each non-employee director who had been elected at the 2015 Annual Meeting of Shareholders as an annual retainer for service in fiscal 2016 and until the Company’s 2016 Annual Meeting of Shareholders. These grants were made pursuant to the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Incentive Compensation Plan”). Each non-employee director received a grant of 4,335 restricted stock units, and Ms. Present received an additional grant of 867 restricted stock units (for a total of 5,202 restricted stock units) for her service as Lead Independent Director. These restricted stock units represent the right to receive shares of Common Stock, and convey no rights of ownership in shares of Common Stock until such restricted stock units have been distributed in the form of Common Stock. The restricted stock units became fully vested on the grant date of October 21, 2015, and will be converted into an equivalent number of shares of Common Stock and distributed to the non-employee director following such director’s termination of services as a member of the Board. A director may elect to defer receipt of such shares of Common Stock pursuant to the Unifi, Inc. Director Deferred Compensation Plan.

Compensation Discussion 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 our named executive officers (“NEOs”) for fiscal year 2015;2016;

 

●

the material elements of the Company’s 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; andprogram.

Executive Summary

Leadership Changes; NEOs for 2016

The Company experienced a transition of its senior leadership team during fiscal 2016. The transition began with the resignation of James M. Otterberg as Vice President and Chief Financial Officer in November 2015 and the appointment of Christopher A. Smosna as the Company’s Interim Chief Financial and Chief Accounting Officer, who served in that capacity until the Company appointed Sean D. Goodman as Vice President and Chief Financial Officer of the Company effective in January 2016. In April 2016, William L. Jasper retired as the Chairman and Chief Executive Officer of the Company, R. Roger Berrier, Jr. resigned as President and Chief Operating Officer, and the Board of Directors appointed Thomas H. Caudle, Jr. as President. Mr. Caudle is a long-term executive employee of the Company and served as Vice President of Manufacturing prior to his promotion to President.

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

 

●

information about the fiscal year 2015 compensation earned by each of our NEOs, who are listed below:

William L. Jasper	Chairman and Chief Executive Officer
R. Roger Berrier, Jr.	President and Chief Operating Officer
Thomas H. Caudle, Jr.	Vice	President of Manufacturing
James M. Otterberg Sean D. Goodman		Vice President and Chief Financial Officer
Christopher A. Smosna		Vice President and Treasurer; Interim Chief Financial and Chief Accounting Officer from November 2, 2015 to January 6, 2016
William L. Jasper		Chairman and Chief Executive Officer until his retirement on April 27, 2016
R. Roger Berrier, Jr.		President and Chief Operating Officer until his resignation on April 27, 2016
James M. Otterberg		Vice President and Chief Financial Officer until his resignation on November 2, 2015

Company Performance Highlights

The Company had no other executive officers duringproduced solid results in fiscal year 2015.

Executive Summary

The2016 despite the challenges presented by the Company experienced continued improvements in its businessleadership changes and financial results during fiscal year 2015.the ongoing macro-economic challenges for the textile industry. The Company achieved adjusted EBITDA¹ (as hereinafter defined) results (as described below)of $68.6 million, slightly above the target level set for fiscal year 2015 as the basis for2016 under the Company’s annual cash bonus incentive program. The Company reported netalso achieved a $3.7 million increase in its operating income and a gross margin of 14.5% (an increase from 13.2% for fiscal year 2015 of $42.2 million, or $2.32 per basic share, an increase from $28.8 million, or $1.52 per basic share, for fiscal year 2014. The Company also continued strategic repurchases under its stock repurchase program, pursuant to which it repurchased approximately 349,000 shares of Common Stock during fiscal year 2015.2015). These achievements

 

1	Adjusted EBITDA is a non-GAAP financial performance measure. A reconciliation of net income attributable to Unifi, Inc., which is the most directly comparable GAAP measure, to adjusted EBITDA is presented in Appendix A to this Proxy Statement.

As in the prior fiscal year,

were primarily attributable to the Company’s ability to perform successfully was due, in large part, tointernational operations and the leadership and performance of its executive team. In addition to guiding the Company through the continuing challengesteam’s continued focus on sales of the economic environment for the textile industry in fiscal year 2015, the executive team also helped drive increased demand for the Company’s premierpremium value-added yarns, and strong operating results from its international businesses, and continued to expand the profitability and brand recognition of REPREVE®including REPREVE^®, the Company’s recycled performance fibers and most successful branded product.

Executive Compensation Highlights

As described in greater detail below, the Company believes its executive compensation program should attract top executive talent, pay for performance and link executive retention to long-term shareholder value. Accordingly, our NEOs were compensated as follows for fiscal year 2015:2016:

 

●

BaseIncreased base salaries for the NEOs for fiscal year 2015 were2016 after leaving them unchanged from base salaries for fiscal year 2014, except for Mr. Otterberg’s salary, which was increased for his first full fiscal year after becoming our Chief Financial Officer.in 2015.

 

	●		The NEOs receivedAwarded cash bonus payments to Messrs. Caudle, Goodman and Smosna based on the Company’s adjusted EBITDA performance for fiscal year 2015 performance at the amount payable under the annual cash incentive plan, which was established at the beginning of the fiscal year, due to the level of the Company’s achievement of the fiscal year 2015 adjusted EBITDA target, as described below.2016.

●

Long-term

Granted long-term incentives were granted in the form of 3-yearthree (3)-year installment vesting stock options to promote executive retention and further align executive pay with long-term shareholder value. In contrast to prior years, the Compensation Committee did not grant to the NEOs any restricted stock units because the Committee has determined that stock options are a preferable form of equity incentive awards for grants to Company employees at this time. The Committee may determine, however, to resume using restricted stock units (which it has used in the past) or to use other forms of equity-based awards as incentive compensation in the future.

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Compensation Philosophy, Principles and Policies

The Company’s executive compensation philosophy is to:

 

Attract Top Executive Talent		Follow a Pay for Performance Compensation Model		Link Executive Retention to Long-Term Shareholder Value
The Company’s executive compensation program should attract high-quality executives who possess the skills and talent necessary to support and achieve our strategic objectives.		Executives should be rewarded for their achievement of near-term and long-term operating performance goals established by the Board.		The Company seeks to promote executives’ loyalty and retention by utilizing a stock ownership policy and other arrangements that further link executive compensation to sustained shareholder value and consistent Company performance.

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

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

 

●

all components of executive compensation should be set so that the Company can continue to attract, retain, reward and motivate talented and experienced executives;

 

●

ensure alignment of executive compensation with the Company’s corporate strategies and business objectives and the long-term interests of the shareholders;

 

●

increase the incentive to achieve key strategic and financial performance measures by linking incentive award opportunities to the achievement of performance goals in those areas; and

 

●

enhance the NEOs’ incentive to increase the Company’s long-term value, as well as promote 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.

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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 Element		Description		Objectives
Base Salary
Base Salary		Fixed compensation that is reviewed annually based on performance.		●•        Provide a base level of compensation that fairly accounts for the job and scope of the role being performed. ● •        Attract, retain, reward and motivate qualified and experienced executives.
Annual Incentives
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 return tovalue for shareholders.
Long-Term Incentives		“At-risk” variable compensation in the form of equity awards whose value fluctuates according to shareholder value and that vest based on continued service.   Supplemental retirement contributions based on executives’ respective base salaries that executives may earnearned over time based on continued service.		●•        Align the economic interests of the executives with the shareholders by rewarding executives for stock price improvement.   ●•        Promote retention (through time-based and performance vesting schedules).
Other Personal Benefits
Other Personal Benefits		Broad-based benefits provided to all the Company’s employees (e.g., health and group term life insurance), a retirement savings plan, and certain perquisites.		●•        Provide a competitive total compensation package to attract and retain key executives.

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Compensation Mix

Consistent with the philosophy, objectives and principles of the executive compensation program, the program places a substantial amountapproximately 60% of the total executive compensation “at risk” based on the performance of the Company and the executive through an annual cash bonus incentive program and equity-based long-term incentive awards. The Company uses the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Incentive Compensation Plan”) in order to provide those awards.

The following charts illustrate We believe the mixsubstantial weighting of “at-risk”performance-based compensation for the Chief Executive Officer and the other NEOs that was achieved for fiscal year 2015 by illustrating the mix of total direct compensation, using fiscal year 2015 base salaries, annual cash bonus incentive payments based on fiscal year 2015 performance and the grant-date fair value of long-term equity awards granted in fiscal year 2015*:

Chief Executive Officer	All Other NEOs

The above results reflect the type of mix that we target for our Chief Executive Officer’s and other NEOs’ compensation, which is for a substantial portion of their compensation to come in the form of annual and long-term incentives, which we believe encourages our executives to achieve near-term and long-term performance goals designed to create or enhance shareholder value. Moreover, our long-term incentive programs provide retention incentives designed to promote stability among the Company’s executive team. We also provide our executives a fixed base salary, which provides them with a base level of economic security.

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 Chief Executive Officerprincipal executive officer for NEOs other than the Chief Executive Officer)principal executive officer), and sets each NEO’s compensation level based on this evaluation and consultation. The Compensation Committee also advises senior management with respect to the range of compensation to be paid to other employees of the Company, administers and makes recommendations to the Board concerning benefit plans for the Company’s directors, officers and employees and recommends benefit programs and future objectives and goals for the Company.

As in the past, the Compensation Committee continued to consider a wide range of factors in making its fiscal year 20152016 compensation decisions for our 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’s performance and contribution to the Company’s success; budget guidelines established by the Board; and assessment of the Company’s financial condition. Additionally, the Compensation Committee considered the Company’s operating results,and adjusted EBITDA andresults, along with the current economic climate. Based on this information and these factors, the Compensation Committee set executive compensation for fiscal year 2015.

2016.

During fiscal year 2013, the Compensation Committee engaged Frederick W. Cook & Co., Inc. (“Cook & Co.”) as an independent advisor to assist the Compensation Committee with developing a peer group for compensation comparison purposes and to prepare a competitive market assessment of total compensation for the NEOs. Cook & Co. performs no other services for the Company, and its work for the Compensation Committee has not raised any conflict of interests.

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While the Compensation Committee believes the information in the Cook & Co. report remains valuable, the Compensation Committee did not use or otherwise consider the Cook & Co. analysis for any particular purpose for fiscal year 2015.2016. The Compensation Committee also did not use any other report as a benchmark or otherwise in setting executive compensation for fiscal year 2015.2016. The Compensation Committee does not believe it is appropriate to tie executive compensation directly to the compensation awarded by other companies or to a particular survey or group of surveys. Instead, the purpose of the Cook & Co. report obtained by the Compensation Committee was to provide a general understanding of compensation practices and trends of similarly situated companies. The Compensation Committee members use that knowledge as a tool in considering the overall compensation of the Company’s executives. No specific compensation decision for any individual was based on or justified by any market comparison reports or information.

Detailed Review of Compensation Components

Base Salaries

The Compensation Committee believes in maintaining a close relationship between the Company’s performance and the base salary component of the compensation for each NEO. As in prior years, no formula-based salary increases were provided to the NEOs during fiscal year 2015.2016. The factors considered by the Compensation Committee in setting the NEOs’ base salaries for fiscal year 20152016 included:

 

●

the executive’s leadership and advancement of the Company’s long-term strategy, plans and objectives;

●

the executive’s individual performance and contribution to the Company’s success and budget guidelines; 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, objectives and principles. Therefore, the Compensation Committee consults with the Chief Executive Officerprincipal executive officer and reviews his recommendations regarding the compensation of all NEOs (other than the Chief Executive Officer)principal executive officer) before making its final compensation decisions. Periodically, the Chief Executive Officerprincipal executive officer meets with the other NEOs regarding their performance. The Compensation Committee reviews the overall performance of each NEO annually, and then approves the actual base salary for each NEO.

Upon completing this process, based on the Company’s performance in fiscal year 20142015 as well as other factors, including each NEO’s individual performance, the Compensation Committee determined to maintainapproved the base salaries set forth in the table below for each of the NEOs at theirwho were employed as of the beginning of fiscal year 2014 levels, except for the base salary of Mr. Otterberg, whose2016.

NEO		Fiscal 2016     Base Salary      ($)		Fiscal 2015     Base Salary      ($)		Percentage     Change
Thomas H. Caudle, Jr.		350,000(1)		335,000		4.5%
Christopher A. Smosna		190,000(2)		190,000		0.0%
William L. Jasper		750,000		710,000		5.6%
R. Roger Berrier, Jr.		540,000		475,000		13.7%
James M. Otterberg		300,000		300,000		0.0%

(1)	Mr. Caudle’s base salary was increased to $475,000 effective upon his promotion to President of the Company on April 27, 2016.

(2)	Mr. Smosna’s base salary was increased to $210,000 in May 2016 in recognition of his performance while serving as Interim Chief Financial and Chief Accounting Officer.

Mr. Otterberg did not receive a base salary increase because his base salary was increased during fiscal 2015 to reflect his full year of service as Vice President and Chief Financial Officer. TheMr. Goodman’s base salaries forsalary was set at $450,000 when he joined the NEOs for fiscal years 2014Company as Vice President and 2015 are listed in the table below.

NEO		Fiscal Year 2015 Base Salary ($)					Fiscal Year 2014 Base Salary ($)					Percentage Change
William L. Jasper			710,000					710,000					0.0	%
R. Roger Berrier, Jr.			475,000					475,000					0.0	%
Thomas H. Caudle, Jr.			335,000					335,000					0.0	%
James M. Otterberg			300,000					275,000					+9.1	%

Chief Financial Officer on January 6, 2016.

Annual Incentive Compensation

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

For fiscal year 2015,2016, the Compensation Committee established a performance target of $62.9$68.0 million of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), adjusted to exclude certain items such as equity in earnings of Parkdale America, LLC, non-cash compensation expense, gains or losses on extinguishment of debt, loss on previously held equity interest, operating expenses for Repreve Renewables, restructuring charges and start-up costs, gains or losses on sales or disposals of property, plant and equipment, currency and derivative gains or losses, and other operating or non-operating income or expense items necessary to understand and compare the underlying results of the Company (“adjusted EBITDA”). The Compensation Committee uses adjusted EBITDA as a measure for annual incentive compensation purposes because the Compensation Committee believes adjusted EBITDA provides a clear indicator of cash generation, which is a key performance indicator used by the Board and

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management to assess the Company’s operating results generally. The Compensation Committee also believes that a Company-wide performance metric, such as 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 performance.

The annual incentive bonus awarded to NEOs may be increased or 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. Each

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

For fiscal year 2015,2016, the Compensation Committee set the threshold, target and maximum performance levels and corresponding potential annual incentive payments to the NEOs, based on percentages of base salary, as set forth in the table below. AnA 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 itsthe adjusted EBITDA target. The Compensation Committee set the percentage of base salary for each NEO at its July 20142015 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 Year 20152016

NEO		Threshold: $50.3million adjusted EBITDA ($) (% of base salary)				Target: $62.9million adjusted EBITDA($) (% of base salary)				Maximum: $75.5million adjusted EBITDA($) (% of base salary)
William L. Jasper			355,000	(50%)			710,000	(100%)			1,420,000	(200%)
R. Roger Berrier, Jr.			190,000	(40%)			380,000	(80%)			760,000	(160%)
Thomas H. Caudle, Jr.			125,625	(37.5%)			251,250	(75%)			502,500	(150%)
James M. Otterberg			112,500	(37.5%)			225,000	(75%)			450,000	(150%)

 

NEO		Threshold: $54.4 million Adjusted EBITDA ($)(% of base salary)					Target: $68.0 million Adjusted EBITDA ($)(% of base salary)					Maximum: $81.7 million Adjusted EBITDA ($)(% of base salary)
Thomas H. Caudle, Jr.				131,250 (37.5%)					262,500   (75.0%)					525,000 (150.0%)
Christopher A. Smosna				38,000 (20.0%)					66,500   (35.0%)					95,000   (50.0%)
William L. Jasper				375,000 (50.0%)					750,000 (100.0%)					1,500,000 (200.0%)
R. Roger Berrier, Jr.				216,000 (40.0%)					432,000   (80.0%)					864,000 (160.0%)
James M. Otterberg				112,500 (37.5%)					225,000   (75.0%)					450,000 (150.0%)

As a resultUpon Mr. Goodman’s employment, he became eligible for an annual incentive bonus between $168,750 (37.5% of his base salary) and $675,000 (150% of his base salary) based on the Company’sadjusted EBITDA performance during fiscal year 2015, thelevels shown above.

The Company achieved, for plan purposes, 101.5%100.9% of itsthe adjusted EBITDA target, and thus each NEO was tentatively entitled totarget. Based on that level of performance, the Compensation Committee approved annual incentive bonus compensation based on a percentage of his fiscal year 2015 base salary, equal$274,312 to approximately 107.5% (Mr. Jasper), 86% (Mr. Berrier),Mr. Caudle, $352,688 to Mr. Goodman and 80.6% (Messrs. Caudle and Otterberg). At its July 2015 meeting,$67,795 to Mr. Smosna. In addition, the Compensation Committee approvedawarded a $108,449 discretionary bonus to Mr. Caudle in August 2016 in recognition of his promotion to President in April 2016 and his leadership and performance for the paymentremainder of bonusesfiscal 2016.

Messrs. Jasper, Berrier and Otterberg were not eligible for an annual incentive bonus for fiscal year 2015 at those levels; no amount of discretionary additional cash bonus (whether pursuant2016 as their employment terminated prior to the annual incentive plan or otherwise) was paid to any NEO for fiscal year 2015.

end of the year.

Long-Term Incentive Compensation

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

determination, in fiscal year 2015,2016, the Compensation Committee awarded stock options to each NEO, which have the attributes set forth below.

 

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		Stock Options
Align NEO and shareholder interests		●•        Each option is an ISO and entitles the recipient to purchase a share of Common Stock (at an exercise price equal to at least the stock price on the date of grant). ● •        Only have value if the price of a share of Common Stock exceeds the option exercise price.
Promote NEO retention		●•        Vest in equal installments over three (3) years, contingent upon continued service. ● •        Subject to accelerated vesting upon a change in control, termination due to death or disability, and approved retirement.

The number of these stock options is listed in the table below. When determining the number of stock options to award each NEO, the Compensation Committee considered the difference between the base salary and bonus actually paid for fiscal year 2014and2015 and the total compensation that the Compensation Committee sought to award to the NEO based on the Company’s performance in fiscal year 2014.2015. The options are exercisable at a price of $27.38$32.36 per share, a third of which options vested on July 22, 2015,2016, and the remaining of which vest in equal installments at each of July 22, 20162017 and July 22, 2017.2018. As “incentive stock options” (to the applicable maximum permitted under the 2013 Incentive Compensation Plan), these stock options offer the NEO the opportunity to receive favorable tax treatment if they retain the shares acquired upon exercise for at least one (1) year. For additional information on the stock options granted in fiscal year 2015,2016, see “Grants of Plan-Based Awards” below.

 

NEO		Number ofStock Options
William L. JasperNEO			37,500
R. Roger Berrier, Jr.			30,000
					Number of Stock Options (#)
Thomas H. Caudle, Jr.		7,500
11,000 Christopher A. Smosna		5,000
William L. Jasper		15,000
R. Roger Berrier, Jr.			12,500
James M. Otterberg			17,000		7,500

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

Perquisites and Other Benefits

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

Retirement Benefits.  In order to provide employees at all levels with greater incentives, the Company makes available to all employees, including the NEOs, the opportunity to make contributions to the Company’s Retirement Savings Plan (“401(k)(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 year 2015,2016, the Company matched contributions equal to 100% of the employee’s first 3% of compensation contributed to the 401(k) Plan and 50% of the next 2% of compensation contributed to the 401(k) Plan.

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

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

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Change in Control Agreements.  The Company has 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 us in attracting and retaining executive talent and reduces the personal uncertainty that executives may feel when considering such a corporate transaction. As a result, our 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. We have a Change in Control Agreement with each of our NEOs. The terms of the individual agreements, and a calculation of the estimated severance payments and benefits payable to each NEO, are set forth elsewhere in this Proxy Statement under “Executive Compensation – Tables—Potential Payments Upon Termination of Employment or Change in Control.”Control” beginning on page 35.

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

Policy on Executive Officer and Employee Incentive Compensation Recoupment Policy

The Company maintainshas a written policy addressingto address the potential recoveryrecoupment of incentiveperformance-based compensation in the event of a material restatement of the Company’s financial results. This policy, also known as a “clawback” policy, appliesawarded to all of the Company’s executive officers. Under the policy, the Company is entitled to recover any incentive compensation paid to a current or formerearned by an executive officer of the Company as a result of material noncompliance with financial reporting requirements that results inif there is a restatement of the Company’s financial results due to material noncompliance of the Company with any financial reporting requirement under the federal securities laws. In the event of a restatement, the Board shall review the performance-based compensation awarded to or earned by the executive officers for the three (3)-year period prior to the extent that such compensation is attributable to the erroneous financial datarestatement event and, is in excess of what would have been paid under the accounting restatement. The recovery period pursuant to the policy is up to three years preceding the date on which the Company is required to prepare such an accounting restatement. In addition, 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 hasif such employee engaged in certain misconduct (e.g., embezzlement, fraud or certaintheft or unethical behavior that harms the Company’s business, reputation or other specified misconduct,employees). In such event, the Board may require reimbursement of all compensation granted, earned or paid under any Company annual incentive andor 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.

awards held by such employee at any time during the three (3)-year period ending on the date on which such misconduct is discovered.

Officers Stock Ownership Policy

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

The stock ownership expectation, calculation of shares counted toward the expectation, and valuation of the shares for purposes of the policy are as set forth below. All NEOs are 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		Value of Shares of Common Stock
●•        NEOs: At least three times (3x) annual base annual salary.   ●•        VP-Level Personnel (non-NEOs): At least one and one-half times (1.5x) annual base annual salary.   ●•        Other designated covered officers: In the discretion of the Compensation Committee, at least one times (1x) annual base annual salary.		●•        Shares owned directly by the officer, his or her spouse or minor children, or a trust for the exclusive benefit of one or more such persons.   ●•        Shares covered by the portion of stock options or restricted stock units that are vested or not subject to forfeiture. ●    Shares subject to pledges, calls or short-sell arrangements arenot counted toward the stock ownership expectation.		●•        Greater of (a)(i) the closing price on the last trading day of the applicable fiscal period or (b)(ii) the 30-day average closing price ending on such last trading day.   ●•        Shares underlying vested stock options, restricted stock units and other stock awards are calculated as if they were net exercised using the deemed current market price on the applicable measurement date.date and assuming shares are immediately sold to pay the exercise price and applicable taxes.

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Tax Impact on Compensation

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

Risk Analysis of Compensation Policies and Practices

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

compensation programs and practices are appropriately balanced between value created indirectly by the performance of the Company’s 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- and long-term focus.

 

●

The overall compensation of our NEOs is not overly-weighted towards the achievement of performance criteria in a particular fiscal year, and an appropriate portion of compensation is awarded in the form of equity awards that vest over a multi-year period, subject to continued service by the recipient. This further aligns the interests of the NEOs to long-term shareholder value and helps retain management.

 

●

Payouts under the Company’s annual incentive compensation and other long-term incentive programs are based on performance criteria that the Compensation Committee believes to be challenging, yet reasonable and attainable without excessive risk-taking.

 

●

The Company has a compensation recoupment policy that allows the Company to recover certain compensation in the event of a restatement of its financial statements due to the material noncompliance of the Company with 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 our other shareholders.

 

●

The Compensation Committee maintains an open dialogue with management regarding executive compensation policies and practices and the appropriate incentives to use in achieving near-term and long-term performance goals.

Shareholder Say-on-Pay Vote

At the 2014 annual meeting2015 Annual Meeting of shareholders,Shareholders, our shareholders had the opportunity to vote, on a non-bindingan advisory basis, on a proposal to approve the compensation of the NEOs for fiscal year 2014.2015. This is referred to as a “say-on-pay” proposal. ApproximatelyMore than 95% of the votes cast at the 2015 Annual Meeting of Shareholders on last year’sthe say-on-pay proposal were voted in favor of the proposal. The Compensation Committee believes this vote result reflects the general concurrence by the shareholders in the Company’s philosophy and approach to executive compensation. Therefore, the Company has continued its philosophy and approach to executive compensation as discussed above.

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The Board has determined that the Company’s shareholders should vote on a say-on-pay proposal each year, consistent with the preference expressed by the shareholders at the 2011 annual meetingAnnual Meeting of shareholders.Shareholders. Accordingly, at the Annual Meeting, shareholders will again have the opportunity to indicate their views on NEO compensation. For additional information, see “Proposal 2:3: Advisory Vote onto Approve Named Executive Compensation” in this Proxy Statement.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 our NEOs.

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COMPENSATIONExecutive Compensation TablesCOMMITTEE REPORT

The Compensation Committee has reviewedfollowing tables, narratives and discussed with managementfootnotes describe the Company’s Compensation Discussiontotal compensation and Analysis, which is set forth above. Based on that review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement, which is incorporated by reference in the Company’s Annual Report on Form 10-Kbenefits for the NEOs for fiscal year ended June 28, 2015.

Submitted by2016, as well as total compensation and benefits for the Compensation Committee ofNEOs for the Board:

G. Alfred Webster, Chair
William J. Armfield, IV
Archibald Cox, Jr.

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EXECUTIVECOMPENSATION

two preceding fiscal years.

Summary Compensation Table

 

The following table is a summary of all compensation awarded or paid to (or earned by) our NEOs for services rendered in all capacities to the Company (including its subsidiaries) for each of the fiscal years indicated. Mr. Otterberg became an executive officer in fiscal year 2014, and accordingly no compensation information is provided for him for fiscal year 2013.

Name and Principal Position		Year		Salary ($)				Stock Awards(1) ($)					Option Awards(1) ($)					Non-Equity Incentive Plan Compensation(2) ($)					All Other Compensation(3) ($)				Total ($)
William L. Jasper		2015			710,000				—					649,301					763,250					98,323				2,220,874
Chairman and		2014			710,000				220,800					327,665					1,065,000					96,564				2,420,029
Chief Executive Officer		2013			700,212				126,281					163,832					819,117					91,644				1,901,086
R. Roger Berrier, Jr.		2015			475,000				—					519,441					408,500					55,241				1,458,182
President and		2014			475,000				165,600					254,851					570,000					54,725				1,520,176
Chief Operating Officer		2013			470,885				98,219					127,425					550,847					54,178				1,301,554
Thomas H. Caudle, Jr.		2015			335,000				—					190,462					270,094					54,907				850,463
Vice President,		2014			335,000				66,240					87,377					376,875					54,160				919,652
Manufacturing		2013			323,096				16,838					21,844					377,962					53,358				793,098
James M. Otterberg		2015			300,000				—					294,350					241,875					35,938				872,163
Vice President and		2014			265,654				—					145,629					309,375					32,237				752,895
Chief Financial Officer

Name		Position		Year					Salary ($)					Bonus       ($)					Stock Awards ($)(2)					Option Awards ($)(2)					Non-Equity Incentive Plan Compensation ($)(3)					All Other Compensation ($)(4)					Total ($)
Thomas H. Caudle, Jr.		President				2016 2015 2014					370,785 335,000 335,000					108,449 — —	(1)				— — 66,240					152,036 190,462 87,377					274,312 270,094 376,875					58,543 54,907 54,160					964,125 850,463 919,652
Sean D. Goodman		Vice President and Chief Financial Officer				2016					212,885					—					549,200					—					352,688					52,255					1,167,028
Christopher A. Smosna		Vice President and Treasurer (Former Interim Chief Financial and Chief Accounting Officer)				2016					191,571					—					—					101,357					67,795					21,073					381,796
William L. Jasper		Former Chairman and Chief Executive Officer				2016 2015 2014					634,615 710,000 710,000					— — —					— — 220,800					304,072 649,301 327,665					— 763,250 1,065,000					299,345 98,323 96,564					1,238,032 2,220,874 2,420,029
R. Roger Berrier, Jr.		Former President and Chief Operating Officer				2016 2015 2014					443,077 475,000 475,000					— — —					— — 165,600					253,393 519,441 254,851					— 408,500 570,000					228,488 55,241 54,725					924,958 1,458,182 1,520,176
James M. Otterberg		Former Vice President and Chief Financial Officer				2016 2015 2014					105,000 300,000 265,654					— — —					— — —					152,036 294,350 145,629					— 241,875 309,375					325,221 35,938 32,237					582,257 872,163 752,895

 

(1)	(1)Discretionary bonus awarded to Mr. Caudle in August 2016 in recognition of his promotion to President in April 2016 and his leadership and performance for the remainder of fiscal 2016.

(2)

Amounts reflect the grant date fair value computed in accordance with FASB ASC Topic 718, related to option and stock awards granted in the fiscal year noted. See Note 16 to the consolidated financial statements included in the 2015Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016 for more information about the value of equity awards.

 

(3)

(2)

Amounts are attributable to cash bonus payments paidearned under the annual incentive plan for the applicable fiscal year, as described above under “Compensation Discussion and Analysis” with respect to fiscal year 20152016 and as previously disclosed with respect to prior fiscal years.

 

(4)

(3)

All Other Compensation for each of the NEOs for fiscal year 20152016 consists of the following:

 

		William L. Jasper				R. Roger Berrier, Jr.					Thomas H. Caudle, Jr.				James M. Otterberg
Life Insurance ($)			27,173				4,466					16,032				600
Matching 401(k) Contribution ($)			10,800				10,400					10,400				10,900
Contributions to Supplemental Key Employee Retirement Plan ($)			60,350				40,375					28,475				24,438
Total			98,323				55,241					54,907				35,938

		Thomas H. Caudle, Jr.				Sean D. Goodman				Christopher A. Smosna				William L. Jasper				R. Roger Berrier, Jr.				James M. Otterberg
Life Insurance ($)			18,530				178				212				25,723				4,298				208
Matching 401(k) Plan Contribution ($)			10,900				9,718				10,409				10,385				8,577				4,600
Contributions to SERP ($)			29,113				—				10,452				62,050				41,961				—
Relocation Assistance Benefits ($)			—				26,050				—				—				—				—
Tax Gross-Up on Relocation Assistance Benefits ($)			—				16,309				—				—				—				—
Transition and Consulting Fees ($)			—				—				—				126,187				121,729				—
Severance ($)			—				—				—				—				—				300,000
Accrued Vacation Payout ($)			—				—				—				75,000				51,923				20,413
Total ($)			58,543				52,255				21,073				299,345				228,488				325,221

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Grants of Plan-Based Awards

 

The fiscal year 2015 grants of plan-based performance cash bonus awards and plan-based long-term equity incentive awards to the NEOs, as well as estimated possible payouts under non-equity incentive plan awards, are set forth below.

				Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)												All Other Stock Awards: Number of Shares of Stock or				All Other Option Awards: Number of Securities Underlying				Exercise or Base Price of Option				Grant Date Fair Value of Stock and Option
	Grant Type	Grant Date		Threshold ($)				Target ($)				Maximum ($)				Units (#)				Options(2) (#)				Awards ($ / Share)				Awards(3) ($)
Name																																Grant Type		Grant Date					Date of Committee Action (if different from Grant Date)					Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)															All Other Stock Awards: Number of Shares of Stock or Units (#)(2)					All Other Option Awards: Number of Securities Underlying Options (#)(3)					Exercise or Base Price of Option Awards ($ / Share)					Grant Date Fair Value of Stock and Option Awards ($)(4)
																																						Threshold ($)								Target ($)					Maximum ($)
Thomas H. Caudle, Jr.																																Annual Cash Incentive Stock Options		07/22/2015												131,250					262,500					525,000										7,500					32.36					152,036
Sean D. Goodman																																Annual Cash Incentive Restricted Stock Units		01/06/2016					11/19/2015							168,750					337,500					675,000					20,000															549,200
Christopher A. Smosna																																Annual Cash Incentive Stock Options		07/22/2015												38,000					66,500					95,000										5,000					32.36					101,357
William L. Jasper	Annual Cash Incentive	7/22/14			355,000				710,000				1,420,000				—				—				—				—			Annual Cash Incentive Stock Options		07/22/2015												375,000					750,000					1,500,000										15,000					32.36					304,072
	Stock Options	7/22/14			—				—				—				—				37,500				27.38				649,301
R. Roger Berrier, Jr.	Annual Cash Incentive	7/22/14			190,000				380,000				760,000				—				—				—				—			Annual Cash Incentive Stock Options		07/22/2015												216,000					432,000					864,000										12,500					32.36					253,393
	Stock Options	7/22/14			—				—				—				—				30,000				27.38				519,441
Thomas H. Caudle, Jr.	Annual Cash Incentive	7/22/14			125,625				251,250				502,500				—				—				—				—
	Stock Options	7/22/14			—				—				—				—				11,000				27.38				190,462
James M. Otterberg	Annual Cash Incentive	7/22/14			112,500				225,000				450,000				—				—				—				—			Annual Cash Incentive Stock Options		07/22/2015												112,500					225,000					450,000										7,500					32.36					152,036
	Stock Options	7/22/14			—				—				—				—				17,000				27.38				294,350

 

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(1)

(1)

Represents the threshold, target and maximum payments the NEOs were eligible to earn pursuant to the Company’s fiscal year 20152016 annual cash incentive plan. The threshold, target and maximum payout amounts represent 37.5%, 75% and 150%, respectively, of Mr. Caudle’s, Mr. Goodman’s and Mr. Otterberg’s fiscal 2016 base salary; 20%, 35% and 50%, respectively, of Mr. Smosna’s fiscal 2016 base salary; 50%, 100% and 200%, respectively, of Mr. Jasper’s fiscal year 20152016 base salary; and 40%, 80% and 160%, respectively, of Mr. Berrier’s fiscal year 20152016 base salary;salary.

The threshold, target and maximum payout amounts were based on the Company achieving $54.4 million, $68.0 million and $81.7 million, respectively, of adjusted EBITDA for fiscal 2016. Based on the Company’s actual fiscal 2016 adjusted EBITDA of $68.6 million, each NEO received a payment under the Company’s annual cash incentive plan, based on a percentage of fiscal 2016 base salary, equal to approximately 78.4% (Messrs. Caudle and Goodman) and 35.7% (Mr. Smosna). Messrs. Jasper, Berrier and Otterberg were not eligible to earn an incentive payment under the 2016 annual cash incentive plan because their employment terminated prior to the end of fiscal 2016.

(2)

Represents restricted stock units granted to Mr. Goodman in connection with his recruitment by the Company. The restricted stock units become vested in three substantially equal installments on February 6, 2017, January 6, 2018 and 37.5%, 75% and 150% of the fiscal year 2015 base salaries of Mr. Caudle and Mr. Otterberg. The threshold, target and maximum amounts were based on the Company achieving $50.3 million, $62.9 million and $75.5 million, respectively, of adjusted EBITDA for fiscal year 2015. Based on the Company’s actual fiscal year 2015 adjusted EBITDA, each NEO received a payment under the Company’s annual cash incentive plan, based on a percentage of fiscal year 2015 base salary, equal to approximately 107.5% (Mr. Jasper), 86% (Mr. Berrier) and 80.6% (Messrs. Caudle and Otterberg). January 6, 2019.

 

(3)

(2)

Represents stock options granted to the NEOs pursuant to the 2013 Incentive Compensation Plan during fiscal year 2015. The stock options arebecome vested and exercisable at a price of $27.38 per share, one third of which options vested on July 22, 2015 and the remaining of which vest in three substantially equal installments commencing on eachthe first anniversary of July 22, 2016the grant date. Messrs. Berrier and July 22, 2017. Upon vesting, each stock option entitlesOtterberg forfeited the holderoptions awarded to acquire one sharethem upon their termination of Common Stock. employment during fiscal 2016.

 

(4)

(3)

The amounts in this column do not represent amounts the NEOs received or are entitled to receive. As required by the SEC rule,rules, this column represents the full grant date fair value of the stock options granted to the NEOs during fiscal year 2015.2016. The full grant date fair value is the amount that the Company will recognize in its financial statements over the award’s vesting schedule, subject to any forfeitures. The grant date fair value was determined under FASB ASC Topic 718. See Note 16 to the consolidated financial statements included in the 2015Company’s Annual Report on Form 10-K. 10-K for the fiscal year ended June 26, 2016.

Employment Agreements and Other Individual Agreements

None of our NEOs are employed pursuant to employment agreements; however, the Company has entered into a Change in Control Agreement with each of our NEOs. In general, the Change in Control Agreements provide our NEOs with severance benefits upon their involuntary termination without “cause” (or resignation for “good reason”) following a change in control of the Company. Please refer to “Potential Payments Upon Termination or Change in Control” below for detailed information concerning these agreements.

We have also granted various long-term incentive awards to each of our NEOs. The material terms of these awards are discussed in the “Compensation Discussion and Analysis” section and are set forth in the “Grants of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal Year End” tables in this section.

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Outstanding Equity Awards at Fiscal Year End

 

The following table provides information concerning the outstanding equity awards for each of the NEOs as of the end of fiscal year 2015.

Outstanding Equity Awards at 2015 Fiscal Year-End

		Option Awards(1)																			Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable					Number of Securities Underlying Unexercised Options (#) Unexercisable					Option Exercise Price ($)					Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested (#)					Market Value of Shares or Units of Stock That Have Not Vested ($)
William L. Jasper			150,000					—					5.73				7/28/2019					—					—
			45,000					—					12.47				7/27/2021					—					—
			15,000					7,500					11.23				7/25/2022					—					—
			7,500					15,000					22.08				7/24/2023(2)					—					—
			—					37,500					27.38				7/22/2024(3)					—					—
			—					—					—				—					3,750					127,275	(4)
			—					—					—				—					6,667					226,278	(5)
R. Roger Berrier, Jr.			120,000					—					5.73				7/28/2019					—					—
			35,000					—					12.47				7/27/2021					—					—
			11,666					5,834					11.23				7/25/2022					—					—
			5,833					11,667					22.08				7/24/2023(2)					—					—
			—					30,000					27.38				7/22/2024(3)					—					—
			—					—					—				—					2,916					98,969	(4)
			—					—					—				—					5,000					169,700	(5)
Thomas H. Caudle, Jr.			36,666					—					5.73				7/28/2019					—					—
			6,000					—					12.47				7/27/2021					—					—
			2,000					1,000					11.23				7/25/2022					—					—
			2,000					4,000					22.08				7/24/2023(2)					—					—
			—					11,000					27.38				7/22/2024(3)					—					—
			—					—					—				—					500					16,970	(4)
			—					—					—				—					2,000					67,880	(5)
James M. Otterberg			6,666					3,334					11.09				7/27/2022					—					—
			3,333					6,667					22.08				7/24/2023(2)					—					—
			—					17,000					27.38				7/22/2024(3)					—					—

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(1)

Unless otherwise noted, outstanding stock options are fully vested as of June 28, 2015.

		Option Awards																				Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable					Number of Securities Underlying Unexercised Options (#) Unexercisable					Option Exercise Price ($)					Option Expiration Date					Number of Shares or Units of Stock That Have Not Vested (#)					Market Value of Shares or Units of Stock That Have Not Vested ($)
Thomas H. Caudle, Jr.				36,666					—					5.73					07/28/2019					—					—
				6,000					—					12.47					07/27/2021					—					—
				3,000					—					11.23					07/25/2022					—					—
				4,000					2,000					22.08					07/24/2023	(1)				—					—
				3,666					7,334					27.38					07/22/2024	(2)				—					—
				—					7,500					32.36					07/22/2025	(3)				—					—
				—					—					—					—					1,000	(4)				26,290
Sean D. Goodman				—					—					—					—					20,000	(5)				525,800
Christopher A. Smosna				5,000					—					11.09					07/27/2022					—					—
				3,333					1,667					22.08					07/24/2023	(1)				—					—
				1,666					3,334					27.38					07/22/2024	(2)				—					—
				—					5,000					32.36					07/22/2025	(3)				—					—
William L. Jasper				150,000					—					5.73					07/28/2019					—					—
				45,000					—					12.47					07/27/2021					—					—
				22,500					—					11.23					07/25/2022					—					—
				22,500					—					22.08					07/24/2023	(1)				—					—
				37,500					—					27.38					07/22/2024	(2)				—					—
				15,000					—					32.36					07/22/2025	(3)				—					—

 

(1)

(2)

Represents stock options granted on July 23,24, 2013, scheduled to vest in one-third increments on each of July 24, 2014, July 24, 2015 and July 24, 2016, contingent upon the NEO’s continued service through the applicable vesting date.

 

(2)

(3)

Represents stock options granted on July 22, 2014, scheduled to vest in one-third increments on each of July 22, 2015, July 22, 2016 and July 22, 2017, contingent upon the NEO’s continued service through the applicable vesting date.

(3)

(4)

Represents restricted stock unitsoptions granted on July 25, 2012 that vested22, 2015, scheduled to vest in one-third increments on each of August 25, 2013, July 25, 201422, 2016, July 22, 2017 and July 25, 2015. 22, 2018, contingent upon the NEO’s continued service through the applicable vesting date.

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(4)

(5)

Represents restricted stock units granted on July 24, 2013, scheduled to vest in one-third increments on each of AugustJuly 24, 2014, July 24, 2015 and July 24, 2016, contingent upon the NEO’sMr. Caudle’s continued service through the applicable vesting date.

 

(5)	Represents restricted stock units granted on January 6, 2016, scheduled to vest in one-third increments on each of February 5, 2017, January 6, 2018 and January 6, 2019, contingent upon Mr. Goodman’s continued service through the applicable vesting date.

Option Exercises and Stock Vested

 

The following table provides information with respect to the vesting of stock awards issued to the NEOs during fiscal year 2015 on an aggregated basis. No stock options were exercised by the NEOs during fiscal year 2015.

		Option Awards				Stock Awards
Name		Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)(1)		Number of Shares Acquired on Vesting (#)(2)		Value Realized on Vesting ($)(3)
Thomas H. Caudle, Jr.		—		—		1,500		45,615
Sean D. Goodman		—		—		—		—
Christopher A. Smosna		—		—		—		—
William L. Jasper		—		—		10,416		305,602
R. Roger Berrier, Jr.		—		—		5,416		164,701
James M. Otterberg		22,335		229,407		—		—

 

		Stock Awards
Name		Number of Shares Acquired onVesting(1) (#)					Value Realized on Vesting(2) ($)
William L. Jasper			14,583					429,643
R. Roger Berrier, Jr.			11,251					331,628
Thomas H. Caudle, Jr.			2,500					72,743
James M. Otterberg			—					—

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(1)	(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 the shares of Common Stock underlying restricted stock units that vested during fiscal year 2015.2016. Each NEO elected to defer receipt of these shares until 30 days following the NEO’s separation from service.

 

(3)

(2)

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 date of vesting.

Pension Benefits

The Company does not sponsor, maintain or contribute to any retirement plans that provide for a specified level of retirement benefits (i.e., defined benefit retirement plans).

Non-QualifiedNonqualified Deferred Compensation

The Company maintains the SERP to provide additional retirement benefits to a select group of management or highly-compensated employees, including each of our NEOs. On an annual basis, the Company credits to the participant’s account an amount equal to 8½%8.5% for executive officers, or 5½%5.5% for non-executive officers, multiplied by the participant’s base salary. 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 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. 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 ($)
Thomas H. Caudle, Jr.		—		29,113		(5,047)		—		523,220
Sean D. Goodman		—		—		—		—		—
Christopher A. Smosna		—		10,452		(433)		—		58,087
William L. Jasper		—		62,050		(8,358)		—		889,337
R. Roger Berrier, Jr.		—		41,961		(5,508)		—		587,826
James M. Otterberg		—		—		598		84,102		—

 

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(1)	Amounts represent Company contributions to the SERP on behalf of the NEOs during fiscal 2016. These amounts are reported in the Summary Compensation Table under “All Other Compensation.”

The following table provides information with respect to the Company’s non-tax qualified compensation deferral plans for each of the NEOs.

		Non-Qualified Deferred Compensation for Fiscal Year 2015
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 ($)
William L. Jasper			—				60,350				67,068					—				835,645
R. Roger Berrier, Jr.			—				40,375				44,222					—				551,373
Thomas H. Caudle, Jr.			—				28,475				40,491					—				499,154
James M. Otterberg			—				24,438				5,660					—				83,504

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⁽¹⁾ Amounts represent Company contributions to the SERP on behalf of the NEOs during fiscal year 2015. These amounts are reported in the Summary Compensation Table under “All Other Compensation.”

Potential Payments Upon Termination of Employment or Change in Control

Change in Control Agreements.  The Company is a party to aentered into Change in Control Agreement with each of its NEOs (collectively, as amended, the “Change in Control Agreements”). The Company entered into these agreementsAgreements in August 2009 with Messrs. Caudle, Jasper Berrier and CaudleBerrier and amended those agreements effective December 31, 2014, and entered into thea similar agreement with Mr. Otterberg effective December 31, 2014. The primary purpose of the Change in Control Agreements is to promote stability and continuity within management in the event of a “change in control” (as defined below) transaction that might otherwise be distracting or disruptive to management’s continued performance of its responsibilities. The substantive terms are the same in each of the Change in Control Agreements. The Change in Control Agreements with Messrs. Jasper, Berrier and Otterberg expired upon the termination of their employment with the Company. 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 they areit is extended or renewed, or unless a change in control occurs prior to that date; in the latter event, theMr. Caudle’s Change in Control AgreementsAgreement would extend past December 31, 2017 and expire on the two-yearsecond anniversary of the change in control event. An NEO’s Change in Control Agreement will expire earlier upon his termination of employment with the Company.

The Change in Control Agreement for each NEO provideswith Mr. Caudle will provide for the severance benefits described below, if the NEO’sMr. Caudle’s employment with the Company is terminated under certain circumstanceswithout “cause” or if he resigns for “good reason” within two (2) years following a change“change in control:control” of the Company (as such terms are defined in the Change in Control Agreement):

 

●

2.99 times the average total compensation paid to the NEO by the CompanyMr. Caudle during the five (5) calendar years (or less if the NEO has been employed by the Company for fewer than five years) preceding the change in control. This amount is paid in 24twenty-four (24) equal monthly installments without interest.

 

●

Continued participation in Company-sponsored life insurance, medical, health and accident and disability plans and programs until the earlier of the second anniversary of the NEO’sMr. Caudle’s termination of employment or the NEO’shis commencement of full-time employment with a new employer.

The NEO will receive the severance benefits if he is terminated without “cause” or if he resigns for “good reason” within two years following the change in control. “Cause” is defined to mean essentially fraud, misappropriation or embezzlement or the NEO’s malfeasance or misfeasance in performing his duties owed to the Company. “Good reason” is defined to mean essentially the assignment to the NEO of duties materially inconsistent with his duties immediately prior to the change in control, a material change in the NEO’s titles or offices, a material reduction in the NEO’s base salary or a failure to increase the NEO’s base salary similar to those of other executive officers, the Company’s failure to continue certain benefit or bonus plans or arrangements previously available to the NEO, certain relocations of the Company’s principal executive offices or the relocation of the NEO’s office, and other similar specified reasons involving a material adverse consequence to the NEO.

TheMr. Caudle’s Change in Control Agreements doAgreement 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.

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A “change in control” under the Change in Control Agreements includes any of the following significant changes to the ownership or control of the Company:

●

Any person (as defined in Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial owner of more than 50% of the total fair market value of the Company’s stock or total voting power of the Company’s stock, excluding certain acquisitions;

●

A change in the composition of the Board such that the directors of the Company as of October 23, 2014 (“incumbent directors”) cease to constitute at least a majority of the Board, provided that (a) a change resulting from director elections by shareholders pursuant to a proxy or election contest that occurs at a single meeting of shareholders will not constitute a change of control, (b) any director elected after being nominated or approved by at least a majority of incumbent directors will be considered an “incumbent director” and (c) directors elected by shareholders shall be considered incumbent directors after serving for two years.

●

A merger, consolidation or other transaction involving an acquisition or corporate restructuring of the Company or the acquisition of assets of the Company or any subsidiary where (a) the underlying assets involved are equal to or greater than 50% of the gross fair market value of the assets prior to such transaction and (b) the beneficial owners of the fair market value of the Company and total voting power of the Company’s stock prior to such transaction do not beneficially own at least 50.1% of the combined fair market value of the outstanding equity and voting power of the Company after the transaction in substantially the same proportions as prior to such transaction.

Terms of Outstanding Equity Awards.  Upon a “change in control” asof the Company (as defined for their purposes,in the Company’s incentive compensation plans), all outstanding stock options and other stock awards under the 2013 Incentive Compensation Plan, the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”) and the Unifi, Inc. 1999 Long-Term Incentive Plan (the “1999 LTIP”),plans will become fully vested and/or will be immediately exercisable.

The 2013 Incentive Compensation Plan and 2008 LTIP both generally define a change in control as:

●

The acquisition of more than 50% of the total fair market value or total voting power of the Company’s stock (with certain exceptions such as an acquisition by a person, entity or group that already owns more than 50% of the total fair market value or total voting power before the acquisition);

●

The acquisition of 30% (under the 2013 Incentive Compensation Plan), or 20% (under the 2008 LTIP), or more of the total voting power of the Company within a 12-month period by any person (with the same exceptions as referred to above);

●

The replacement of a majority of the members of the Board (and with respect to the 2008 LTIP, during any 24 month period) by directors whose appointment or election is not endorsed by two-thirds of the incumbent members of the Board; or

●

The acquisition of 40% or more of the total gross fair market value of the Company’s assets by any person.

The 1999 LTIP defines a change in control as:

●

A consolidation or merger in which the Company is not the surviving corporation or pursuant to which shares of Common Stock would be converted into consideration (other than a merger in which holders of Common Stock have the same proportionate ownership of Common Stock immediately after the merger);

●

Any sale, lease, exchange or other transfer to any person (other than to a subsidiary) of all or substantially all of the assets of the Company;

●

The approval by the Company’s shareholders of a plan or proposal for the liquidation or dissolution of the Company;

●

The acquisition of 20% or more of the outstanding Common Stock by any person; or

●

The replacement of a majority of the members of the Board during any 24-month period by directors whose appointment or election is not endorsed by two-thirds of the incumbent members of the Board.

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Our 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 year 2015,2016, upon their retirement with approval by the Compensation Committee after attaining age 57 and upon a termination of employment due to death or disability. In addition, all of our unvested restricted stock unit awards granted to NEOs in prior fiscal years provide for accelerated vesting of all unvested restricted stock units upon the Company’s termination of ana NEO’s employment without cause.

Accrued and Vested Benefits. Each of the NEOs has accrued various benefits under the Company’s equity compensation programs, such as the 2013 Incentive Compensation Plan, the 2008 LTIP and the 1999 LTIP; retirement plans such as the SERP; and other broad-based employee benefit plans. Many of these benefits and awards are fully vested, and each NEO would receive all of his vested benefits and awards if his employment with the Company ends for any reason.

Hypothetical Payments Table.The table below summarizes the potential severance payments and benefits payable to Mr. Caudle under his Change in Control Agreement and the value of the accelerated vesting of the NEOs’ equity awards upon termination of employment or a change in control of the Company as calculated pursuant to SEC rules and regulations, as of June 28, 2015the end of fiscal 2016 for each NEO.NEO (other than Messrs. Jasper, Berrier and Otterberg whose employment terminated during the year).

Name		Type of Payment or Benefit		Change in Control ($)		Termination for Any Reason ($)		Termination without Cause ($)		Termination Due to Death or Disability ($)		Termination Due to Approved Retirement ($)		Termination without Cause or Resignation for Good Reason within 2 Years After Change in Control ($)(1)
Thomas H. Caudle, Jr.		Severance and Benefit Continuation(2)		—		—		—		—		—		1,909,290
		Accelerated Equity Awards(3)(4)		34,710		—		26,290		34,710		34,710		34,710
		Total		34,710		—		26,290		34,710		34,710		1,944,000
Sean D. Goodman		Accelerated Equity Awards(3)(4)		525,800		—		525,800		525,800		—		525,800
Christopher A. Smosna		Accelerated Equity Awards(3)(4)		7,018		—		—		7,018		—		7,018

 

Hypothetical Payments Upon Termination of Employment or Change in Control

NEO		Type of Payment or Benefit		Change in Control ($)					Termination For Any Reason ($)					Termination without Cause ($)					Termination Due to Death or Disability					Termination Due to Approved Retirement ($)					Termination without Cause or Resignation for Good Reason within 2 years After Change in Control(1) ($)
Jasper		Severance and Benefit Continuation(2)			—					—					—					—					—					4,166,927
		Accelerated Equity Awards(3) (4)			947,778					—					353,553					947,778					594,225					947,778
		Accrued and Vested Benefits(4)			—					7,594,217					7,594,217					7,594,217					7,594,217					7,594,217
		Total			947,778					7,594,217					7,947,770					8,541,995					8,188,442					12,708,922
Berrier		Severance and Benefit Continuation(2)			—					—					—					—					—					2,603,974
		Accelerated Equity Awards(3) (4)			736,330					—					268,669					736,330					—					736,330
		Accrued and Vested Benefits(4)			—					5,898,943					5,898,943					5,898,943					5,898,943					5,898,943
		Total			736,330					5,898,943					6,167,612					6,635,273					5,898,943					9,239,247
Caudle		Severance and Benefit Continuation(2)			—					—					—					—					—					1,891,909
		Accelerated Equity Awards(3) (4)			227,160					—					84,850					227,160					142,310					227,160
		Accrued and Vested Benefits(4)			—					1,901,162					1,901,162					1,901,162					1,901,162					1,901,162
		Total			227,160					1,901,162					1,986,012					2,128,322					2,043,472					4,020,231
Otterberg		Severance and Benefit Continuation(2)			—					—					—					—					—					1,263,716
		Accelerated Equity Awards(3) (4)			266,773					—					—					266,773					—					266,773
		Accrued and Vested Benefits(4)			—					275,351					275,351					275,351					275,351					275,351
		Total			266,773					275,351					275,351					542,124					275,351					1,805,840

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(1)

(1)

Amounts shown assume the Company experienced a change in control and the NEO was terminated without cause or resigned for good reason on June 28, 2015. 26, 2016.

 

(2)

(2)

Consists of severance benefits and health and welfare benefits. Health and welfare benefits represents the aggregate estimated net cost to the Company of health and welfare benefits provided to each NEO under the terms of theMr. Caudle’s Change in Control Agreements. Agreement.

 

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(3)

(3)

As described above, all outstanding and unvested stock options and restricted stock units will become vested upon a change in control of the Company. In addition, upon ana NEO’s termination of employment due to approved retirement, the unvested stock options that vest solely based on the NEO’s continued service (“time-based options”) are subject to accelerated vesting; upon ana NEO’s termination of employment due to death or disability, all unvested time-based options and all unvested restricted stock units are subject to accelerated vesting; and upon ana NEO’s termination of employment without cause (as defined in the applicable award agreements) after specified dates, all unvested restricted stock units are subject to accelerated vesting. Stock options that vest based on ana NEO’s continued service and the Company’s achievement of a specified share price do not provide for such accelerated vesting upon termination due to death, disability or approved retirement or upon termination without cause.

 

(4)

(4)

For purposes of this table, it is assumed that: (a)(i) all vested stock options are exercised on the last business day before June 28, 2015,26, 2016, and the value of such vested stock options is calculated by multiplying the number of stock options by the difference between the exercise price and the closing market price; and (b)(ii) as of the date of termination or change in control, as applicable, each vested restricted stock unit is converted into one share of Common Stock and the aggregate value of such vested restricted stock units is calculated by multiplying the number of restricted stock units by the closing market price on the last business day before June 28, 2015. 26, 2016.

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EQUITYEquity Compensation Plan InformationCOMPENSATION PLAN INFORMATION

The following table below presentsprovides information as of June 28, 2015 regarding26, 2016, with respect to the number of shares of Common Stock that may be issuedsecurities authorized for issuance to the Company’s employees and directors under the 2013 Incentive Compensation Plan. The 2013 Incentive Compensation Plan, which was approved by the Company’s shareholders at the 2013 Annual Meeting of Shareholders, replaced the 2008 LTIPUnifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”) for purposes of all incentive awards issued to the Company’s personnel after October 22, 2013. As a result, no further awards were made or will be made under the 2008 LTIP. Any option or restricted stock unit previously granted under the 2008 LTIP that is forfeited or canceledcancelled may be reissued under 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 approved by its shareholders.

 

Equity Compensation Plan Information
Plan category		Number of securities to be issued upon exercise of outstanding options, warrants and rights					Weighted average exercise price of outstanding options, warrants and rights					Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
		(a)					(b)					(c)
Equity compensation plans approved by shareholders			1,121,051				$	10.52					803,914
Equity compensation plans not approved by shareholders			—					—					—
Total			1,121,051				$	10.52					803,914

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BENEFICIALOWNERSHIP OF COMMON STOCK
BY DIRECTORS AND EXECUTIVE OFFICERS

The following table presents information regarding the beneficial ownership of the Common Stock, within the meaning of applicable securities regulations, of each current director and nominee for director of the Company, each of the NEOs, and of all current directors and executive officers of the Company as a group, as of August 28, 2015. 

Name of Beneficial Owner		Amount and Nature of Beneficial Ownership(1)					Percent of Class (%)
William J. Armfield, IV(2)			302,518					1.69
R. Roger Berrier, Jr. (3)			233,312					1.29
Thomas H. Caudle, Jr. (4)			61,373					°
Archibald Cox, Jr. (5)			164,465					°
William L. Jasper(6)			291,415					1.61
Kenneth G. Langone(7)			1,201,666					6.73
James M. Otterberg(8)			22,333					°
Suzanne M. Present(9)			15,033					°
G. Alfred Webster(10)			72,662					°
All current directors and executive officers as a group (9 persons) (11)			2,364,777					12.74

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°	Represents less than one percent (1%) of the outstanding shares of Common Stock.

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		902,892(1)		14.32		961,956
Equity compensation plans not approved by security holders		—		—		—
Total		902,892(1)		14.32		961,956

 

(1)

(1)

All shares (and underlying shares that the person has a right to receive) are owned or will be owned directlyIncludes securities issuable upon exercise of outstanding options and with sole voting and investment power by the person indicated above, except as otherwise noted below. The information presented in this table is based upon Company information, information furnished to the Company by the named persons or information contained in filings with the SEC.

(2)

Mr. Armfield’s beneficial ownership includes: 25,000 shares owned by Mr. Armfield’s wife,lapse of which he has shared voting and investment power; 18,633 shares that Mr. Armfield has the right to receive pursuant toservice-based vesting restrictions under restricted stock units that will automatically convert into shares of Common Stock following termination of services as a director; and 6,666 shares that Mr. Armfield has the right to purchasewere issued pursuant to stockthe 2013 Incentive Compensation Plan or the 2008 LTIP. As of June 26, 2016, (i) an aggregate of approximately 719,741 options that are currently exercisable. Of the shares owned by Mr. Armfield, 241,979 shares are pledgedremained outstanding as collateral.

(3)

Mr. Berrier’s beneficial ownership includes: 7,066 shares owned by the Julie Beamer Berrier Revocable Trust, as to which he does not have any voting or investment power; 31,250 shares that Mr. Berrier has the right to receive pursuant toof such date; and (ii) an aggregate of approximately 183,151 restricted stock units that will automatically convertremained outstanding as of such date. The weighted-average exercise price does not take into shares of Common Stock following termination of employment with the Company; and 194,165 shares that Mr. Berrier has the right to purchase pursuant to stock options that are currently exercisable.

(4)

Mr. Caudle’s beneficial ownership includes: 6,500 shares that Mr. Caudle has the right to receive pursuant toaccount restricted stock units, that will automatically convert into shares of Common Stock following termination of employment with the Company; and 53,333 shares that Mr. Caudle has the right to purchase pursuant to stock options that are currently exercisable. which do not have an exercise price.

(5)

Mr. Cox’s beneficial ownership includes: 18,633 shares that Mr. Cox has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of services as director; and 6,666 shares that Mr. Coxhas the right to purchase pursuant to stock options that are currently exercisable.

(6)

Mr. Jasper’s beneficial ownership includes: 40,416 shares that Mr. Jasper has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of employment with the Company; and 244,999 shares that Mr. Jasper has the right to purchase pursuant to stock options that are currently exercisable.

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(7)

Mr. Langone’s beneficial ownership includes: 130,000 shares owned by Invemed Associates, LLC, in which Mr. Langone owns an 81% interest, and of which Mr. Langone has shared voting and investment power; 26,000 shares owned by Mr. Langone’s wife, as to which he has shared voting and investment power and of which Mr. Langone disclaims beneficial ownership; 18,633 shares that Mr. Langone has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of his services as director; and 6,666 shares that Mr. Langone has the right to purchase pursuant to stock options that are currently exercisable.

(8)

Mr. Otterberg’s beneficial ownership consists of 22,333 shares that Mr. Otterberg has the right to purchase pursuant to stock options that are currently exercisable.

(9)

Ms. Present’s beneficial ownership consists of 15,033 shares that Ms. Present has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of services as director.

(10)

Mr. Webster’s beneficial ownership includes: 34,283 shares that Mr. Webster owns jointly with his wife, as to which he has shared voting and investment power; 31,713 shares that Mr. Webster has the right to receive pursuant to restricted stock units that will automatically convert into shares of Common Stock following termination of services as director; and 6,666 shares that Mr. Webster has the right to purchase pursuant to stock options that are currently exercisable.

(11)

Includes all current directors, nominees for directors, and current executive officers of the Company.

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DIRECTORS’COMPENSATIONSection 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 Company’s 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 Unifi’s Common Stock. Based solely on a review of such reports and written representations made by Unifi’s executive officers and directors that no other reports were required, the Company believes that the reporting persons complied with all applicable filing requirements on a timely basis during fiscal 2016.

Compensation Committee Interlocks and Insider Participation

William J. Armfield, IV, Archibald Cox, Jr., Kenneth G. Langone, James D. Mead and G. Alfred Webster (until the expiration of his term on October 21, 2015) served on the Compensation Committee in fiscal 2016. With the exception of Mr. Webster, who served as an Executive Vice President of Unifi until 2003, none of the directors who served on the Compensation Committee in fiscal 2016 has ever served as one of the Company’s officers or employees or had any relationship with the Company or any of its subsidiaries during fiscal 2016 pursuant to which disclosure would be required under the SEC rules pertaining to the disclosure of transactions with related persons. During fiscal 2016, none of the Company’s executive officers served as a director or member of the compensation committee (or other committee performing similar functions) of any other entity of which an executive officer of such other entity served on the Board or its Compensation Committee.

Compensation Committee Report

The Company does not pay any meeting fees or annual cash retainers to its directors, althoughCompensation Committee has reviewed and discussed the Company may reimburse each director for reasonable expenses incurred in attending meetings. The Company’s practice for compensating its outside directors over the years has been to grant them awards of stock options and/or restricted stock units, on an annual basis, in amounts that have varied from time to time. The Company does not compensate Messrs. BerrierCompensation Discussion and Jasper for their service as directors; their compensation as executive officers is discussed elsewhereAnalysis included in this Proxy Statement under “Executive Compensation”.

On October 22, 2014,with management and, based on such review and discussions, recommended to the Board approvedthat the Compensation Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016.

Respectfully submitted by the Compensation Committee of the Board,

Archibald Cox, Jr., Chair

James M. Kilts

Kenneth G. Langone

Audit Committee 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, granted restricted stock units to each outside director who had been elected at the 2014 annual meeting of shareholders as an annual retainer for service in fiscal year 2015 and until the Company’s 2015 annual meeting of shareholders. These grants were made pursuant to the 2013 Incentive Compensation Plan. Each outside director received a grant of 2,625 restricted stock units, and Mr. Webster received an additional grant of 1,749 (for a total of 4,374 restricted stock units) for his service as Lead Independent Director. These restricted stock unitsrepresent the right to receive shares of Common Stock, and convey no rights of ownership in shares of Common Stock until such restricted stock unitshave been distributed in the form of Common Stock. The restricted stock unitsbecame fully vested on the grant date of October 22, 2014, and will be converted into an equivalent number of shares of Common Stock and distributed to the outside director following such director’s termination of services as a memberincluding its compliance with Section 404 of the Board. A director may elect to defer deliverySarbanes-Oxley Act of such shares of Common Stock pursuant to the Unifi, Inc. Director Deferred Compensation Plan.

The following table shows compensation information2002. Management has primary responsibility for the Company’s non-employee (or outside) directorsconsolidated 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 and expressing an opinion on the conformity of those audited consolidated financial statements with generally accepted accounting principles.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year 2015ended June 26, 2016. This review 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 discussed with the Company’s independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees,” as adopted by the Public Company Accounting Oversight Board. 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 Board 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 reflect the awardsaudited consolidated financial statements of restricted stock units discussed above.the Company for the fiscal year ended June 26, 2016 be included in its Annual Report on Form 10-K for such fiscal year.

Respectfully submitted by the Audit Committee of the Board,

Name		Stock Awards(1)($)					Total($)
William J. Armfield, IV			75,023					75,023
Archibald Cox, Jr.			75,023					75,023
Kenneth G. Langone			75,023					75,023
George R. Perkins(2)			—					—
Suzanne M. Present			75,023					75,023
G. Alfred Webster			125,009					125,009
Mitchel Weinberger(3)			75,023					75,023

Suzanne M. Present, Chair

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Robert J. Bishop Archibald Cox, Jr. (1)

Amounts reflect the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, related to restricted stock unitsgranted in fiscal year 2015. See Note 16 to the consolidated financial statements included in the 2015 Form 10-K for more information about the value of restricted stock unit awards. At June 28, 2015, our outside directors had the following unexercised options to purchase shares of Common Stock; no outside director held any unvested restricted stock units.

		Shares Underlying Unexercised Stock Options
William J. Armfield, IV			6,666
Archibald Cox, Jr.			6,666
Kenneth G. Langone			6,666
Suzanne M. Present			—
G. Alfred Webster			6,666

Proposal 2: Approval of the Amendment to

(2)

Mr. Perkins served as a director during fiscal year 2015 until the Company’s 2014 annual meeting of shareholders. He did not receive any restricted stock units in fiscal year 2015.

the Company’s Restated Certificate of Incorporation

(3)

Mr. Weinberger served as a director during fiscal year 2015 until he resigned from the Board on April 24, 2015.

to Reduce the Required Minimum Number of Directors

on the Board of Directors

On August 23, 2016, the Board of Directors approved, and recommended for approval by the shareholders at the Annual Meeting, an amendment to the Company’s Restated Certificate of Incorporation (the “Restated Certificate of Incorporation”) to reduce the required minimum number of directors on the Board of Directors from seven (7) directors to three (3) directors, with the exact number of directors to be fixed by the Company’s Restated By-laws (the “Proposed Amendment”). The Board of Directors currently consists of nine (9) directors. By allowing the Board of Directors to consider a smaller board size, the Proposed Amendment provides the Board with additional flexibility to determine the optimal board size. In addition, the Proposed Amendment allows the Board to avoid potential situations in which it would be required to quickly fill unexpected vacancies in order to meet the existing minimum size requirements, enabling the Company to conduct a thorough and organized search for the most qualified director candidates.

The compensation for outside directorsfull text of Article SEVENTH of the Restated Certificate of Incorporation, as proposed to be amended, is periodically reviewed for adjustmentas follows:

“SEVENTH: The number of Directors shall be fixed in the By-laws but in no case shall be less than three (3), but this number may be increased and subsequently increased or decreased from time to time by the Corporate Governanceaffirmative vote of the majority of the Board, except that the number of Directors shall not be less than three (3). A Director shall hold office until his or her successor shall be elected and Nominating Committee.qualified, subject to prior death, resignation, retirement or removal from office.

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Newly created directorships resulting from an increase in the number of Directors and vacancies caused by death, resignation, retirement or removal from office, may be filled by the vote of a majority of the Directors remaining in office. Any Director elected by the Board to fill a vacancy shall serve until the next meeting of the Shareholders, at which the election of Directors is in the regular order of business, and until his or her successor is elected and qualified. In no case will a decrease in the number of Directors shorten the term of an incumbent Director.”

The Board of Directors will also amend the Company’s Restated By-laws to the extent necessary to make them consistent with the Proposed Amendment.

PROPOSAL2:The Board of Directors unanimously recommends that you vote “FOR” the approval of the amendment to the Restated Certificate of Incorporation to reduce the required minimum number of directors on the Board of Directors.

Unless a proxy is marked to give a different direction, the persons named in the proxy will vote“FOR” the approval of the amendment to the Restated Certificate of Incorporation to reduce the required minimum number of directors on the Board of Directors.

Proposal 3: Advisory Vote to Approve

ADVISORY VOTE ON EXECUTIVE COMPENSATIONNamed Executive Officer Compensation

In accordance with SEC rules and asAs required by Section 14A of the Exchange Act, we are askingthis proposal, commonly known as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to vote to approve or not approve, on a non-bindingan advisory basis, the following advisory resolution at the Annual Meeting:

“RESOLVED, that the compensation paid toof the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in the Company’s Proxy Statement for its2015annual meeting of shareholders, including in the “Compensation Discussion and Analysis” and “Executive Compensation” sections and the compensation tables therein, is hereby approved.”

NEOs. This advisory vote is not intended to address any specific elementitem of executive compensation or the compensation of any particular officer, but instead is intended to addressrather the overall compensation of the Company’s NEOs as disclosed in this Proxy Statement.The Company includes suchand its compensation philosophy, policies and practices. At the Company’s 2011 Annual Meeting of Shareholders, a majority of the shareholders voted to hold an advisory vote annually,to approve the Company’s NEO compensation every year, as a regular part of each annual meeting of shareholders ofrecommended by the Company, and the next such advisory vote will occur at the 2016 annual meeting of shareholders.

Board.

The Company’s executive compensation program is designed not only to retainattract and attractretain highly qualified and effective 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 BoardCompensation Committee and Compensation Committeethe 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. The Company also maintains other policies that help further align executive compensation with the long-term interests of shareholders, such as our Officers Stock Ownership Policy.

In keeping with its overall compensation philosophy, the compensation received by ourUnifi’s executives during fiscal year 20152016 reflects the Company’s overall performance:

 

●

BaseIncreased base salaries for ourthe NEOs werefor fiscal 2016 after leaving them unchanged from fiscal year 2014 (except for an increase for Mr. Otterberg in recognition of his first full year of service as our Chief Financial Officer), despite strong Company and individual performances during the prior year;2015.

 

●

AnnualAwarded cash incentive compensation wasbonus payments to Messrs. Caudle, Goodman and Smosna based on the level of achievement of theCompany’s adjusted EBITDA target; andperformance for fiscal 2016.

 

●

Long-term equityGranted long-term incentives were awarded to ensure that executive compensation is closely aligned within the creationform of shareholder value andthree (3)-year installment vesting stock options to promote executive retention.retention and further align executive pay with long-term shareholder value.

The Company’s NEO compensation received the approval of more than 95% of the votes cast at the 2015 Annual Meeting of Shareholders.

We urge youAccordingly, the Company is asking shareholders to read vote“FOR”the “Compensationfollowing resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis” and the “Executive Compensation” sections andAnalysis, compensation tables therein,and related narrative discussion, is hereby approved.”

The vote is advisory, which provide detailed information onmeans that the Company’s compensation philosophy, policies and practices and the compensation of our NEOs.

Effect of the Proposal

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is not binding on the Company, the Board or the Compensation Committee. Theshareholder vote on this proposal will therefore, not affect any compensation already paidbe binding on Unifi, the Compensation Committee or awarded to any NEO and will not overrule any decisions made by the Board orof Directors. However, the Compensation Committee. However, because weCommittee and the Board value highly the opinions of ourthe Company’s shareholders the Board and the Compensation Committee will carefully consider the resultsoutcome of this advisorythe vote when making future executive compensation decisions.

Vote Requireddecisions for Approval

Unifi’s NEOs. The affirmativenext say-on-pay vote of a majority of the votes cast by eligible shareholders who are present in person or represented by proxywill occur at the 2017 Annual Meeting and who actually vote, is required to approve this proposal.

of Shareholders.

The Board of Directors unanimously recommends that the shareholdersyou vote “FOR” the resolution to approveapproval, on an advisory basis, of the compensation of the Company’s named executive officersNEOs as disclosed in thethis Proxy Statement.

Unless a proxy is marked to give a different direction, the persons named in the proxy will vote“FOR” the approval, on an advisory basis, of the compensation of the Company’s NEOs as disclosed in this Proxy Statement.

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PROPOSAL3:Proposal 4: Ratification of the Appointment of

RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMIndependent Registered Public Accounting Firm

Pursuant to its authority delegated byThe Audit Committee of the Board the Company’s Audit Committeeof Directors has appointed and retained KPMG LLP (“KPMG”) to serve as Unifi’s independent registered public accounting firm for fiscal 2017. KPMG has served as the Company’s independent registered public accounting firm for the fiscal year ending June 26, 2016. Although thesince 2011. The Audit Committee hasreviewed and discussed the sole authorityperformance of KPMG for fiscal 2016 prior to select and appoint theits appointment of KPMG to serve as Unifi’s independent registered public accounting firm the Board deems it advisable to obtain your ratification of this appointment.In retaining KPMG as the Company’s independent registered public accounting firm, the Audit Committee considered whether the provision of certain non-audit services by KPMG was compatible with maintaining KPMG’s independence, and concludedfor fiscal 2017.

The Company expects that it was.

KPMG has been the Company’s independent auditors since March 2011. Representativesrepresentatives of KPMG are expected towill be present at the Annual Meeting. TheyMeeting, and the representatives will have thean opportunity to make a statement if they so desire and to answerdo so. The representatives are also expected to be available to respond to appropriate questions from shareholders.

Shareholder ratification of the Audit Fees

The fees for professional servicesCommittee’s appointment of KPMG as Unifi’s independent registered public accounting firm is not required. Nevertheless, the Board is submitting the appointment of KPMG to the shareholders for ratification as a matter of good corporate practice. If the shareholders fail to ratify the appointment, the Audit Committee will reconsider its appointment of KPMG. 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 interest of the Company byand its shareholders.

The Board of Directors unanimously recommends that you vote “FOR” the ratification of the appointment of KPMG as the Company’s independent registered public accounting firm for the fiscal years indicated below were as follows:

		Fiscal Year Ended ($)
		June 28, 2015					June 29, 2014
Audit Fees(1)			857,214					819,738
Audit-Related Fees			—					—
Tax Fees(2)			628,027					495,918
All Other Fees			—					—

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(1)2017.

Audit fees are those billed or expected to be billed for audit services related to each fiscal year.

(2)

Consists of aggregate fees billed for tax compliance, consultation and related tax matters.

Audit Committee Pre-Approval Policies and Procedures

The Audit CommitteeUnless a proxy is responsible formarked to give a different direction, the appointment, compensation and oversight ofpersons named in the work of the independent registered public accounting firm. The Audit Committee has adopted a policy governing the provision of all audit and non-audit services by the Company’s independent registered public accounting firm. Pursuant to this policy, the Audit Committee considers and approves, if appropriate, the provision of audit services (including audit review and attest services) and certain specific defined permitted non-audit services (“pre-approved services”) by the Company’s independent registered public accounting firm. It may also consider on a case-by-case basis and, if appropriate, approve specific engagements that do not fit within the definition of pre-approved services.

The policy provides that any proposed engagement that does not fit within the definition of a pre-approved service must be presented to and approved by the Audit Committee or pre-approved by the Chair or another member of the Audit Committee pending presentation to the Audit Committee. If permissible non-audit services are pre-approved by the Chair or another member of the Audit Committee, that decision is required to be presented at the next meeting of the Audit Committee for approval by the Audit Committee. The Audit Committee regularly reviews summary reports detailing all services (and related fees and expenses) being provided to the Company by the independent registered public accounting firm. All of the fees paid to KPMG in fiscal year 2015 were pre-approved by the Audit Committee.

Vote Required for Approval

The affirmativeproxy will vote of a majority of the votes cast by eligible shareholders who are present in person or represented by proxy at the Annual Meeting, and who actually vote, is required to approve this proposal.

Ifthe shareholders do not ratify the appointment of KPMG, the Audit Committee will consider a change inindependent registered public accounting firm for the next fiscal year.

The Board recommends that the shareholders vote “FOR”“FOR” the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for fiscal 2017.

Fees Paid to Independent Registered Public Accounting Firm

The following table presents fees for professional audit services rendered by KPMG for the audit of the Company’s consolidated financial statements for the fiscal year endingyears ended June 26, 2016.2016 and June 28, 2015 and fees billed for other services rendered by KPMG during those periods.

 

		Fiscal 2016 ($)				Fiscal 2015 ($)
Audit Fees(1)			1,044,817				857,214
Audit-Related Fees			—				—
Tax Fees(2)			244,126				628,027
All Other Fees			—				—
Total			1,288,943				1,485,241

 

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(1)

Audit Fees consist of fees billed for the respective year for professional services associated with the annual financial statements audit and quarterly financial statement reviews, services related to compliance with Section 404 of the Sarbanes-Oxley Act of 2002 and consultations in connection with statutory and regulatory filings or engagements.

 

(2)	Tax Fees consist of fees billed for the respective year for tax compliance, consultation and related matters.

BOARDOF DIRECTORS PROCEDURAL MATTERSAudit Committee Pre-Approval of Audit and Non-Audit Services

The Audit Committee has implemented procedures under the Company’s 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

In

Committee pre-approves the use of the Company’s independent registered public accounting firm for specific audit and non-audit services, within 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 approval by the Audit Committee. For fiscal 2016, all of the audit fees were approved by the Audit Committee in accordance with New York law and the Company’s Articlesabove procedures. All of Incorporation and Bylaws, the Board is charged with governingother fees billed by KPMG to the Company and supervisingfor fiscal 2016 were approved by the Audit Committee by means of specific pre-approvals. All non-audit services provided in fiscal 2016 were reviewed with the Audit Committee, which concluded that the provision of such services by KPMG was compatible with the maintenance of that firm’s independence in the conduct of its business by management. In discharging its duties under thoseauditing functions.

Additional Information

Shareholder Proposals for the 2017 Annual Meeting

Shareholder proposals to be considered for inclusion in the proxy statement and other legal and regulatory requirements, the Board has adopted and adheres to several corporate governance policies, guidelines and protocols that have been designed to help ensure that the Company operates in compliance with applicable laws and regulations, in accordance with high ethical standards and in pursuitform of the interests of the shareholders to enhance the value of the Company. Information about the current members of the Board, several of the corporate governance guidelines and protocols followed by the Board, and other mattersproxy relating to the operations of the Board is provided in other sections of this Proxy Statement. The rest of this section contains information about committees of the Board, the process for selection of nominees for election to the Board, directors’ attendance at meetings and other procedural matters.

Committees of the Board of Directors

The Board has four standing committees: the Compensation Committee, the Audit Committee, the Corporate Governance and Nominating Committee (the “Governance Committee”) and the Executive Committee. During fiscal year 2015, the Compensation Committee met three (3) times and acted by written consent two (2) times; the Audit Committee met nine (9) times; the Governance Committee met three (3) times and acted by written consent one (1) time; and the Executive Committee met four (4) times and acted by written consent two (2) times.

TheCompensation Committee operates under a written charter, adopted in April 2003 and most recently amended in June 2013. The Compensation Committee discharges the Board’s responsibilities relating to compensation of the Company’s executive officers. At least annually, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of each executive officer of the Company (including the Chief Executive Officer), evaluates each executive officer’s performance in light of these goals and objectives, and sets each executive officer’s compensation level based on this evaluation. The Compensation Committee annually determines whether the Chief Executive Officer and other executive officers will participate in any annual or long-term incentive plans established for the Company’s executive officers or employees. The Compensation Committee also advises senior management with respect to the range of compensation to be paid to other employees of the Company and administers and grants stock options and other equity-based awards to the Company’s officers, employees and consultants pursuant to the Company’s equity-based plans.

The Compensation Committee has the authority to retain or obtain the advice of any compensation consultant, independent legal counsel or other advisor it determines, in its sole discretion, to be useful to performing its duties. Prior to selecting or receiving advice from any such advisor, the Compensation Committee considers factors relevant to the independence of such advisor under applicable regulations or the NYSE Corporate Governance Standards. Each member of the Compensation Committee is an independent director, in accordance with the independence requirements of the Exchange Act and the NYSE Corporate Governance Standards applicable to members of compensation committees. The current members of the Compensation Committee are Messrs. Webster (Chair), Armfield and Cox.

TheAudit Committee operates under a written charter, adopted in April 2000 and most recently amended in July 2015. The Audit Committee was established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee discharges the Board’s responsibility relating to the oversight of: (i) the integrity of the financial statements of the Company, (ii) the independent auditor’s qualifications, independence, appointment and performance, (iii) the performance of the Company’s internal audit function, and (iv) the compliance by the Company with accounting, legal, regulatory and ethical conduct requirements and protocols. As a result, the Audit Committee, among other things, is responsible for the appointment, compensation, retention and oversight of the Company’s independent auditors, and it reviews the Company’s financial statements, audit reports, internal controls and internal audit procedures. Each member of the Audit Committee is an independent director, in accordance with the independence requirements of the Exchange Act and the NYSE Corporate Governance Standards applicable to members of audit committees. The current members of the Audit Committee are Ms. Present (Chair) and Messrs. Armfield and Webster.

TheGovernance Committee operates under a written charter, adopted in April 2003 and most recently amended in April 2015. The Governance Committee is responsible, among other things, for identifying candidates to serve as directors of the Company, consistent with criteria approved by the Board, and for making recommendations to the Board of qualified nominees for election or reelection as directors of the Company. The Governance Committee is also responsible for recommending to the Board, for the Board’s approval, all members and chairs of the Board’s standing committees. The Governance Committee is responsible for establishing a system for, and monitoring the process of, performance reviews of 

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the Board, its committees and key management personnel. The Governance Committee reviews the Corporate Governance Guidelines and Policies (the “Corporate Governance Guidelines”) from time to time and recommends possible changes to the Board.

The Governance Committee also monitors compliance with the Company’s Ethical Business Conduct Policy Statement (the “Ethical Policy Statement”), reviews the Ethical Policy Statement from time to time and provides recommendations for possible changes to the Board. The Governance Committee also oversees the administration of the Company’s Related Persons Transactions Policy (the “Related Persons Transactions Policy”) and may from time to time recommend possible changes to the Board. Each member of the Governance Committee is an independent director, in accordance with the independence requirements of the NYSE Corporate Governance Standards. The current members of the Governance Committee are Messrs. Cox (Chair), Langone and Webster.

TheExecutive Committee operates under a written charter adopted in September 2007. The Executive Committee may exercise all of the authority of the Board in the management of the Company, subject to limitations under New York law. The current members of the Executive Committee are Messrs. Jasper (Chair), Berrier and Webster and Ms. Present.

Board Leadership Structure

Mr. Jasper, the Company’s Chief Executive Officer, is the Chairman of the Board. The Company also has a Lead Independent Director who acts as a liaison between the non-management directors and the Company’s management, chairs the executive sessions of non-management directors, and consults with the Chairman of the Board regarding agendas for Board meetings and other matters pertinent to the Company and the Board.

The Board has determined that Mr. Jasper’s service as both Chairman of the Board and Chief Executive Officer is in the best interests of the Company and its shareholders because Mr. Jasper possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company and its business and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most important matters. Combining the positions helps to provide a unified leadership and direction for the Company, enables decisive leadership, ensures clear accountability, and enhances the Company’s ability to communicate its message and strategy clearly and consistently to the Company’s shareholders, employees, customers and suppliers. The Board believes that this structure enhances Mr. Jasper’s ability to provide insight and direction on important strategic initiatives simultaneously to both management and the independent directors. The Board also believes its current leadership structure is appropriate in light of the fact that it has designated a Lead Independent Director, and the Compensation Committee, Governance Committee and Audit Committee are each comprised solely of independent directors.

Audit Committee Financial Experts

The Board has determined that at least two members of the Audit Committee, Mr. Armfield and Ms. Present, are audit committee financial experts, as defined by SEC rules, and a third director who does not serve on the Audit Committee, Mr. Cox, would qualify as an audit committee financial expert if appointed to the Audit Committee. Messrs. Armfield and Cox and Ms. Present are each “independent” as that term is defined in the NYSE Corporate Governance Standards.

Attendance at Board and Committee Meetings

The Board met seven (7) times during fiscal year 2015. All directors attended at least 75% of the aggregate number of meetings of the Board and meetings held by all committees of the Board on which they serve during the period in which they served as a director or a committee member during fiscal year 2015, except for Mr. Armfield, who attended 14 of 19 Board and committee meetings (for 74%) during fiscal year 2015. Mr. Armfield would have exceeded 75% by attending just one additional meeting, which he would have done but for the fact that he missed a specially called Board meeting because of a serious temporary medical illness. Mr. Armfield has attended at least 75% of the aggregate number of meetings of the Board and all committees of the Board on which he served for at least the five years prior to fiscal year 2015, and the Board believes that his absences from a few meetings during fiscal year 2015 did not compromise the strong contributions he otherwise made during fiscal year 2015, or his ability to continue making such contributions if he is reelected at the Annual Meeting.

Attendance at Annual Meetings

At the 2014 annual meeting of shareholders, all members of the Board were in attendance. The Company believes that the2017 Annual Meeting is an opportunity for shareholders to communicate directly with our directors. Directors are encouraged to attend each annual meeting of shareholders.  

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Selection of Nominees for Election to the Board

Nomination Process

The Governance Committee is responsible for identifying and recommending to the Board persons for nomination to be elected as directors by our shareholders, as well as candidates to fill vacancies on the Board that may arise from time to time. The Governance Committee is also responsible for considering any nominees for director who are properly submitted by our shareholders, as described later below. The Board makes the final nomination decisions after considering the recommendations from the Governance Committee.

Identification and Evaluation of Nominees

The objective of the Governance Committee is to structure a Board that brings to the Company a variety of skills and perspectives developed through high-quality business and professional experiences. All nominees for directorShareholders must demonstrate integrity, accountability, informed judgment, financial literacy, passion, creativity and vision. The Governance Committee identifies nominees by first evaluating the current members of the Board willing to continue to serve. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining new perspectives. If any member of the Board does not wish to continue in service, or if the Governance Committee decides not to recommend a member for reelection, the Governance Committee will identify and recommend a new nominee with the desired skills and experience as outlined above, unless the Board determines not to fill the resulting vacancy. Historically, the Governance Committee has not engaged outside advisors or consultants to identify or evaluate (or otherwise assist in identifying) potential nominees, although it has authority and is willing to do so if it or the Board believes such assistance would be beneficial.

The Governance Committee reviews the background and qualifications of each nominee to determine his or her experience, competence and character, and assesses such nominee’s potential contribution to the Board. Other than the foregoing, there are no stated minimum criteria for director nominees. The Governance Committee may, however, consider such other factors it believes to be in the best interest of the Company and the shareholders. The Governance Committee and the Board do not have a specific diversity policy, but they believe that diversity is a critical aspect of a well-functioning board, and that having directors of different ages, races, genders, and ethnic and cultural backgrounds can contribute different, useful perspectives, and can work effectively together to further the Company’s objectives.

Pursuant to its charter, the Governance Committee periodically reviews the criteria for the selection of Board members to ensure that the criteria, including diversity, are adequate for the Company and are being addressed appropriately.

Shareholder Nominations

Shareholder nominees will be analyzed by the Governance Committee and considered for possible recommendation to the Board in the same manner as nominees that are otherwise considered by the Governance Committee. Any recommendation submitted by a shareholder to the Governance Committee must comply in all respects with Section 1.13 of our Bylaws, which generally requires that such recommendation be in writing and include the shareholder’s name and address; number of shares of Common Stock and other securities of the Company owned by the shareholder; any material interest that the shareholder may have in the election of the proposed nominee to the Board; any other information that would be required to be disclosed in a proxy or information statement of the Company; and information related to the proposed nominee, including a written statement signed by the proposed nominee as to his or her background and qualifications and a description of arrangements and understandings between the shareholder proponent and the proposed nominee. Section 1.13 of our Bylaws also requires that any such shareholder recommendation be received by the Company no later than May 16, 2017. Such proposals must also comply with Rule 14a-8 of the Exchange Act, which lists the requirements for the inclusion of shareholder proposals in accordance withcompany-sponsored proxy materials. Shareholder proposals should be addressed to the timeframe that is described under the caption “Shareholder Proposals”.

A copyattention of the Company’s Bylaws is available onSecretary at Unifi, Inc. c/o Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410.

In addition, notice of any shareholder proposal intended to be presented at the 2017 Annual Meeting of Shareholders, but that will not be included in the Company’s websiteproxy statement and form of proxy relating to the 2017 Annual Meeting of Shareholders, must be delivered to, or mailed and received by, the Company’s Secretary atwww.unifi.comunder the “Investor Relations” section, and may also be obtained upon request to: Unifi, Inc., c/o Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410 Attention: Officenot earlier than June 28, 2017 and not later than July 28, 2017. The notice must contain the information required by the Company’s Restated By-laws. If the date of the Secretary. Informationannual meeting is advanced or delayed by more than thirty (30) days from October 26, 2017, the notice must be delivered or received not later than the later of (i) ninety (90) days prior to the date of the 2017 Annual Meeting of Shareholders and (ii) ten (10) days following the day on which the Company first announced publicly, or mailed notice to the shareholders of, the date of such meeting.

2016 Annual Report to Shareholders

This Proxy Statement is accompanied by the 2016 Annual Report to Shareholders, and these materials are also available atwww.proxyvote.com and the investor relations portion of the Company’s website, referenced above or elsewherewww.unifi.com. The 2016 Annual Report to Shareholders, which contains the audited consolidated financial statements and other information about the Company, is not incorporated in this Proxy Statement does not constitute part of this Proxy Statement.

Effect of Failure to be Reelected

A director nominee who fails to receive sufficient votes for reelection in an uncontested election shall be deemed to have tendered to the Board his or her resignation as a director, with the Board having authority to determine the timing of accepting the resignation in light of potential governance or other considerations pending the election of his or her successor, if there is to be a successor. 

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CORPORATEGOVERNANCE MATTERS

Corporate Governance Guidelines and Committee Charters

In furtherance of its longstanding goal of providing effective governance of the Company’s business for the benefit of shareholders, the Board has adopted the Corporate Governance Guidelines, which were revised in July 2014. Each of the Audit Committee, the Compensation Committee and the Governance Committee operate under written charters that have been adopted by the Board. The Corporate Governance Guidelines and the committee charters are available on the Company’s website atwww.unifi.com under the “Investor Relations” section. In addition, a paper copy of the Corporate Governance Guidelines and the committee charters is available to any shareholder upon request to the Office of the Secretary.

Director Independence

For a director to be considered independent under the NYSE Corporate Governance Standards, the Board must affirmatively determine that the director has no direct or indirect “material relationship” with the Company, other than as a director of the Company. As permitted by the NYSE Corporate Governance Standards, the Board has adopted its Director Independence Standards to assist it in making its independence determinations. These standards are listed in Exhibit A to the Corporate Governance Guidelines available on the Company’s websitewww.unifi.comunder the “Investor Relations” section.

After considering the Director Independence Standards, the NYSE Corporate Governance Standards, all other applicable independence standards and requirements (including those set forth in Sections 10A-3 and 10C-1 of the Exchange Act, and the SEC’s regulations thereunder), and all other relevant facts and circumstances, including the existence of any commercial or charitable relationships between the directors and the Company, as well as the transactions described in the “Transactions with Related Parties and Certain Other Persons” section below, the Board has determined that all of its current members, other than Messrs. Berrier and Jasper, meet the Company’s categorical standards, meet the independence requirements of the NYSE and are independent.

In making its independence determinations with respect to Mr. Langone, the Board considered specifically the relationship between the Company and Invemed Associates, LLC (“Invemed”). Mr. Langone is President and Chief Executive Officer of, and owns an 81% interest in, Invemed. In fiscal year 2015, the Company paid $2,970 in commissions to Invemed as the Company’s broker to execute open-market stock purchase transactions under the Company’s share repurchase program. Invemed does not provide any professional services for the Company, nor does it provide investment banking or other substantive financial or business advice or services in executing the Company’s instructions. The Company’s management makes all decisions regarding the stock repurchase program and does not confer any discretion with respect to the program on Invemed. The Board views the brokerage services provided by Invemed as administrative and ministerial in nature, and in any event does not view the Invemed services as a “material” transactional relationship.

Executive Sessions of Non-Management Directors

Non-management directors meet without management present in executive sessions at all regularly scheduled Board meetings. To the extent that there are non-management directors who are not independent, there is an executive session including only independent directors at least once a year. The Board’s Lead Independent Director presides over the executive sessions of the independent and non-management directors.

Shareholder and Interested Party Communications with Directors

Shareholders and other interested parties may communicate directly with the entire Board, any committee of the Board, the Chair of any Board committee, any individual director, the Lead Independent Director, the independent or non-management directors as a group, or any other group of directors by writing to: Unifi, Inc. Board of Directors, 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Office of the Secretary. Any correspondence sent in this manner and directed to the Lead Independent Director, any particular director, or any particular committee or group of directors will be forwarded accordingly. If no specific addressee is provided, the communication will be forwarded to the Chairman of the Board.

Code of Business Conduct and Ethics; Ethical Business Conduct Policy Statement

The Company has adopted a written Code of Business Conduct and Ethics, which was revised in July 2014, applicable to members of the Board and executive officers, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer (the “Code of Ethics”). The Company has also adopted the Ethical Policy Statement, which was revised in July 2014, that applies to all Company personnel. The Code of Ethics and the Ethical Policy Statement are  

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available on the Company’s website atwww.unifi.comunder the “Investor Relations” section, and paper copies of each are available to any shareholder upon request to the Office of the Secretary. Any amendments to or waiver of the Code of Ethics applicable to the Company’s Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer will be disclosed on the Company’s website promptly following the date of such amendment or waiver.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

None of the individuals who served as a member of the Compensation Committee during fiscal year 2015 were at any time an officer or employee of the Company or any of its subsidiaries or had any relationship with the Company requiring disclosure under SEC regulations.

Board’s Role in Risk Oversight

As the Company’s principal governing body, the Board has the ultimate responsibility for overseeing the Company’s risk management practices. Certain risk management functions have been delegated to committees of the Board, and in particular to the Audit Committee and Executive Committee.

Pursuant to the Audit Committee Charter, one of the primary roles and responsibilities of the Audit Committee is the supervision of the integrity of the financial statements of the Company, the compliance by the Company with legal and regulatory requirements, and the oversight of the performance of the Company's internal audit function and outside auditors. Under the Audit Committee Charter, the Audit Committee, among other responsibilities and duties:

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Reviews with the outside auditor and management, as appropriate, significant financial reporting issues and judgments identified by management or the outside auditor and made in connection with the preparation of the Company's financial statements;

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Reviews with the outside auditor and management, major issues identified by management or the outside auditor regarding the Company's accounting and auditing principles and practices, including critical accounting policies, and major changes in auditing and accounting principles and practices suggested by the outside auditor, internal auditor or management; and

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In consultation with management and the outside auditor, (i) considers the integrity of the Company’s financial reporting processes and internal controls and (ii) consults concerning the Company’s internal controls, including any significant deficiencies and significant changes in internal controls.

In addition, the Company performs an enterprise risk management (“ERM”) risk assessment that is presented to and evaluated by the Audit Committee. On a quarterly basis, the Company’s ERM Steering Committee meets to review the Company’s “critical risks” to make sure there have been no changes in any critical risk that would require immediate action by the Company. The ERM Steering Committee is a non-Board committee that is comprised of several members of the Company’s senior and middle management teams. The ERM Steering Committee also reviews “emerging risks” to determine if there are any such risks that could affect the Company and to take appropriate actions should an emerging risk be identified. The Company’s Internal Audit Manager serves as the Company’s Chief Risk Officer and prepares quarterly reports to the Audit Committee, which is the Board committee with primary oversight responsibility for the Company’s ERM function, that include an update on the Company’s ERM actions. The Audit Committee then updates the Board as appropriate.

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TRANSACTIONSWITH RELATED PARTIES AND CERTAIN OTHER PERSONS

Policies and Procedures with Respect to Related Party Transactions

The Board is committed to upholding the highest legal and ethical conduct in fulfilling its responsibilities, and it recognizes that related party transactions can present a heightened risk of potential or actual conflicts of interests. Accordingly, as a general matter, it is the Board’s preference to avoid related party transactions.

Pursuant to the Code of Ethics, all executive officers and directors are required to discuss with the Company’s General Counsel any transaction or relationship that does or may conflict with the interests of the Company, prior to the entry into of such transaction. Pursuant to the Related Persons Transactions Policy, the Company’s General Counsel must submit any potential or actual conflict of interests involving an officer, director or related person to the Governance Committee, the Audit Committee or another committee specified by the Board comprised solely of independent directors (the “RPT Committee”) for review and approval. Under this policy, the RPT Committee will determine an appropriate resolution on a case-by-case basis, including approval, ratification, amendment, termination or rescission of the transaction or submission of the transaction for consideration or action by the Board. All directors must excuse themselves from any discussion or decision affecting their personal, business or professional interests.

All related party transactions are disclosed in the Company’s applicable filings with the SEC, as required under SEC rules.

Transactions with Dillon Yarn Corporation

In fiscal year 2015, the Company purchased approximately $2 million of products from Dillon Yarn Corporation (“Dillon”), of which Mitchel Weinberger, who served as a director of the Company during fiscal year 2015 until his resignation on April 24, 2015, is the President and Chief Operating Officer. The terms of the purchases from Dillon 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.

On June 18, 2015, pursuant to approval by the Board, the Company purchased 200,000 shares of its Common Stock owned by Dillon at a negotiated price of $31.00 per share, for an aggregate purchase price of $6.2 million. The purchase price constituted an approximately 3% discount to the closing price of the Common Stock on June 17, 2015. Mr. Weinberger was not a director at the time of the transaction or its negotiation, but the Board nonetheless considered the transaction in light of criteria that would have been applicable under the Related Persons Transactions Policy.

Transactions with Salem Holding Company

In fiscal year 2015, the Company paid Salem Leasing Corporation, a wholly owned subsidiary of Salem Holding Company, approximately $3.6 million in connection with leases of tractors and trailers, and for related services. In addition, the Company earned income from Salem Global Logistics, Inc., a wholly owned subsidiary of Salem Holding Company, of approximately $179,000 in connection with providing for-hire freight services for Salem Global Logistics, Inc. Mr. Langone owns a non-controlling 33% equity interest in, is a director and is the non-executive Chairman of the Board of Salem Holding Company. Mr. Langone is not an employee of Salem Holding Company or its subsidiaries and is not involved into be deemed a part of the day-to-day operationsproxy soliciting material.

Annual Report on Form 10-K

The Company also will provide without charge to each person solicited pursuant to this Proxy Statement, upon the written request of any such company. The termsperson, a copy of the Company’s leases with Salem Leasing Corporation are, in the Company’s opinion, no less favorable than the terms the Company would have been able to negotiate with an independent third party for similar equipment and services. The terms of payment to the Company by Salem Global Logistics, Inc. for the freight services were no less favorable than terms the Company could have received from an independent third party.

Transactions with Cupron, Inc.

In fiscal year 2015, the Company recorded approximately $925,000 of sales to Cupron, Inc. and recorded approximately $281,000 of yarn purchases from Cupron Inc. Mr. Armfield is a director (and non-executive chairman) of, and holds an indirect minority equity interest in, Cupron, Inc. The terms of the Company’s sales to and purchases from Cupron, Inc. are, in the Company’s opinion, no less favorable than the Company would have been able to negotiate with an independent third party.

Transactions and Agreements with the Company’s NEOs

For a discussion of compensation and severance agreements with the Company’s NEOs, see “Executive Compensation – Potential Payments Upon Termination of Employment or Change in Control”.

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AUDITCOMMITTEE REPORT

The Company’s management is responsible for the Company’s financial statements and reporting process and for establishing and maintaining an adequate system of internal control over financial reporting. KPMG, the Company’s independent registered public accounting firm, is responsible for auditing the Company’s consolidated financial statements, and for assessing the effectiveness of the Company’s internal control over financial reporting. The Audit Committee monitors and oversees these processes and is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm.

To fulfill its responsibilities, the Audit Committee has:

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reviewed and discussed with the Company’s management and the independent registered public accounting firm the Company’s audited consolidated financial statements for the fiscal year ended June 28, 2015 and Management’s Report on Internal Control over Financial Reporting for the fiscal year ended June 28, 2015;

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reviewed management’s representations to the Audit Committee that those audited consolidated financial statements were prepared in accordance with generally accepted accounting principles;

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discussed with the independent registered public accounting firm the matters required to be discussed under applicable standards of the Public Company Accounting Oversight Board; and

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received the written disclosures and the letter from the independent registered public accounting firm required by the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with KPMG its independence from the Company.

Based on its review and discussions with management and the independent registered public accounting firm, the representations of management and the report of the independent registered public accounting firm, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements for fiscal year 2015 be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 2015 for filing with26, 2016, including the SEC.

Submitted byfinancial statements and the Audit Committee of the Board:

Suzanne M. Present, Chair
William J. Armfield, IV

G. Alfred Webster

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SECTION16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and any person who owns more than ten percent of our Common Stock,financial statement schedules required to filebe filed with the SEC, initial reports of beneficial ownershipor any exhibit thereto. Requests should be in writing and reports of changes in beneficial ownershipaddressed to the attention of the Common Stock. Such persons are required by the SEC’s regulations to furnish the Company with copies of all Section 16(a) reports they filed.

To the Company’s knowledge, based solely on its review of the copies of such reports furnished to the Company and written representations that no other reports were required, all persons subject to Section 16 of the Exchange Act filed on a timely basis all Section 16(a) filings during fiscal year 2015.

SHAREHOLDERPROPOSALS

Shareholder proposals, including director nominations, submitted for inclusion in the Company’s proxy statement for our 2016 annual meeting of shareholders must comply with applicable requirements or conditions established by the SEC, including Rule 14a-8 under the Exchange Act, and must be received by our Corporate Secretary at Unifi, Inc. c/o Secretary, 7201 West Friendly Avenue, Greensboro, North Carolina 27410, no later than May 7, 2016 (120 days before the first anniversary of the date of this Proxy Statement).

If you would like to submit a matter for consideration at our 2016 annual meeting of shareholders (including any shareholder proposal or director nomination) that will not be included in the proxy statement for that meeting, Section 1.13 of our Bylaws provides that you must submit your matter no earlier than June 23, 2016 (120 days before the first anniversary of this year’s meeting) and no later than July 23, 2016 (90 days before the first anniversary of this year’s meeting), which assumes we do not change the date of the 2016 meeting by more than 30 days from the date of this year’s meeting. Any shareholder proposal to be considered at the 2016 annual meeting of shareholders must also comply with the other requirements of Section 1.13 of the Company’s Bylaws (including, with respect to director nominations, the requirements as described above under “Board of Directors Procedural Matters—Selection of Nominees for Election to the Board—Shareholder Nominations”) and be submitted in writing to the Office of the Secretary at the address above. The person or persons named in the proxies solicited by us may exercise discretionary voting authority over any shareholder proposal if the Company does not receive the notice of such proposal within the time frames described above; or, where a notice is received within these time frames, if the shareholder delivering the notice fails to satisfy the requirements of Rule 14a-4 under the Exchange Act.

HOUSEHOLDINGOF ANNUAL MEETING MATERIALS27410.

Householding

The SEC has adopted rules permitting registrantscompanies to send a single set of themail one annual report and proxy statement, or notice of internet availability of proxy materials, as applicable, in one envelope to any householdall shareholders residing at which two or more shareholders reside if the registrant believes they are members of the same family.address if certain conditions are met. This procedure, referred to asis called “householding”, reduces the volume and can result in significant savings of duplicate information shareholders receivepaper and reduces the expense to the registrant.mailing costs. The Company has not implemented these householding rules with respect to its record holders;shareholders of record; however, a number of brokerage firms have instituted householding rules that may impact certain beneficial owners of our Common Stock.shares held in street name. If members of your family hashousehold have multiple accounts bythrough which youthey hold our Common Stock, you may have received a householding notification from your broker.bank, broker or other nominee. Please contact your bank, broker or other nominee directly if you have any questions or wish to revoke your decision to household.

ANNUALREPORT

The Company filed the 2015 Form 10-K with the SEC on September 3, 2015. The Company makes available through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendmentshousehold or to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. Shareholders may also obtain areceive an additional copy of these reports, without charge, upon requestthis Proxy Statement, the 2016 Annual Report to the Company at 7201 West Friendly Avenue, Greensboro, North Carolina, 27410, Attention: Office of the Secretary.

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OTHERMATTERS

The Board does not intend to present any items of business other than those stated in theShareholders or Notice of Annual MeetingInternet Availability for members of Shareholders. If other matters are properly brought before the Annual Meeting, the person or persons named in the accompanying proxy will vote the shares represented by ityour household.

Appendix A

Non-GAAP Financial Performance Measures

Unifi, Inc. (the “Company”) prepares its financial statements and reports in accordance with their best judgment. Discretionary authorityU.S. generally accepted accounting principles (“GAAP”). The Company’s executive compensation program uses adjusted EBITDA as a measure of the Company’s financial performance for purposes of determining the incentive compensation earned by executives under the program.

The Compensation Committee uses adjusted EBITDA as a measure for annual incentive compensation purposes because the Compensation Committee believes adjusted EBITDA provides a clear indicator of cash generation, which is a key performance indicator used by the Board of Directors and management to vote on suchassess the Company’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 matters isfinancial results reported in the Company’s financial statements prepared in accordance with GAAP.

The Company’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.

The following table sets forth the reconciliation of the amount reported under GAAP for net income attributable to Unifi, Inc. to adjusted EBITDA for the fiscal year ended June 26, 2016 (in thousands):

Net income attributable to Unifi, Inc.		$	34,415
Interest expense, net			2,884
Provision for income taxes			15,073
Depreciation and amortization expense			16,893
EBITDA		$	69,265
Equity in earnings of Parkdale America, LLC			(6,074)
EBITDA excluding Parkdale America, LLC		$	63,191
Key employee transition costs			2,166
Non-cash compensation expense			2,501
Foreign currency transaction losses			397
Net loss on sale of disposal of assets			(13)
Other, net			399
Adjusted EBITDA		$	68,641

The amounts presented in the reconciliation above may not be consistent with amounts included in the proxy.Company’s consolidated financial statements due to the impact of the non-controlling interest in Repreve Renewables, LLC. In the fourth quarter of fiscal 2016, the Company simplified the calculation of adjusted EBITDA by eliminating certain adjustments. Most notably, the Company will no longer include an adjustment for non-cash compensation expenses. This simplification is intended to improve the transparency and consistency of management’s primary non-GAAP performance metric. The reconciliation shown above has reconciled adjusted EBITDA under the previous definition, because the performance targets under the annual incentive plan for fiscal 2016 were established prior to the Company’s adoption of the new definition.

PRELIMINARY COPY – SUBJECT TO COMPLETION UNIFI, INC. 7201 WEST FRIENDLY AVENUE GREENSBORO, NC 27410 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m., Eastern Time, on October 25, 2016. 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 25, 2016. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E13387-P82618 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. UNIFI, INC. Uni?’s Board of Directors recommends that you vote “FOR” each of the nominees named in Proposal 1. 1. Election of directors Nominees: For Against Abstain 1a. Robert J. Bishop 1b. Thomas H. Caudle, Jr. 1c. Paul R. Charron 1d. Archibald Cox, Jr. 1e. James M. Kilts 1f. Kenneth G. Langone 1g. James D. Mead 1h. Suzanne M. Present Unifi’s Board of Directors recommends that you vote “FOR” Proposals 2, 3 and 4. 2. Approval of the amendment to Unifi’s Restated Certificate of Incorporation to reduce the required minimum number of directors on Unifi’s Board of Directors. 3. Advisory approval of the compensation paid to Unifi’s named executive officers in fiscal 2016. 4. Ratification of the appointment of KPMG LLP as Unifi’s independent registered public accounting firm for fiscal 2017. NOTE: In their discretion, the proxy holders are authorized to vote upon 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. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator or other ?duciary, 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 of?cer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

		BY ORDER OF THE BOARD OF DIRECTORS,
		W. Randy Eaddy
		Secretary
Greensboro, North Carolina
September 4, 2015

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UNIFI, INC. 7201 WEST FRIENDLY AVENUE GREENSBORO, NC 27410	VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our Companyin 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 until11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
M96089-P69223                        KEEP THIS PORTION FOR YOUR RECORDS
	DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

UNIFI, INC.

The Board of Directors recommends that you vote FOR each of the following nominees:

PROPOSAL NO. 1 –To elect as Directors the six (6) nominees listed below to serve until the next Annual Meeting of Shareholders or until their respective successors (if there is to be one) are duly elected and qualified:

Nominees:

For

Against

Abstain

1a.

William J. Armfield, IV .......................................................................................................................................................

☐

☐

☐

1b.

R. Roger Berrier, Jr.  .............................................................................................................................................................

☐

☐

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1c.

Archibald Cox, Jr.  ................................................................................................................................................................

☐

☐

☐

1d.

William L. Jasper  .................................................................................................................................................................

☐

☐

☐

1e.

Kenneth G. Langone  ..........................................................................................................................................................

☐

☐

☐

1f.

Suzanne M. Present  ...........................................................................................................................................................

☐

☐

☐

The Board of Directors recommends that you vote FOR the following proposal:

PROPOSAL NO. 2 –An advisory (non-binding) vote to approve executive compensation.

☐

☐

☐

The Board of Directors recommends that you vote FOR the following proposal:

PROPOSAL NO. 3–Ratification of the appointment of KPMG LLP as the Company's independent registered publicaccounting firm for the fiscal year ending June 26, 2016.

☐

☐

☐

NOTE:Signature should agree with name on stock certificate as printed hereon. Executors, administrators, trustees and other fiduciaries should so indicate when signing. If the signer is a corporation, please sign in full corporate name by duly authorized officer.

In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting of Shareholders.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

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Table Of Contents

Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting:

The Notice of Annual Meeting and Proxy Statement and Annual Report are available atwww.proxyvote.com. www.proxyvote.com. FOLD AND DETACH HERE E13388-P82618 UNIFI, INC. 2016 Annual Meeting of Shareholders October 26, 2016 This proxy is solicited by Unifi’s Board of Directors. The undersigned hereby appoint(s) Thomas H. Caudle, Jr. and Sean D. Goodman, and each of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) each of them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Uni?, Inc. that the undersigned is/are entitled to vote at the 2016 Annual Meeting of Shareholders to be held at 8:30 a.m., Eastern Time, on Wednesday, October 26, 2016 at The Roosevelt Hotel located at 45 East 45th Street & Madison Avenue, New York, NY 10017, and any adjournment or postponement thereof. The proxy holders are authorized to vote on such other business as may properly come before the meeting or any adjournment or postponement thereof, exercising their discretion as set forth in the Notice of Annual Meeting and Proxy Statement. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED “FOR” EACH OF THE NOMINEES NAMED IN PROPOSAL 1, “FOR” PROPOSALS 2, 3 AND 4, AND IN THE DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. PLEASE MARK, SIGN AND DATE ON THE REVERSE SIDE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE, OR FOLLOW THE INSTRUCTIONS TO VOTE BY INTERNET OR PHONE. (Continued and to be signed on reverse side)

FOLD AND DETACH HERE

M96090-P69223

	UNIFI, INC. ANNUAL MEETING, OCTOBER 21, 2015 PLEASE COMPLETE, DATE, SIGN AND DETACH THE PROXY CARD AS INSTRUCTED AND RETURN IT IN THE ENCLOSED BUSINESS REPLY ENVELOPE TO: UNIFI, INC. C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NY 11717 The undersigned hereby appoints each of W. Randy Eaddy and James M. Otterberg, with full power of substitution, as attorney and proxy to represent and vote all shares of Unifi, Inc.'s Common Stock that the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held at the Company's corporate headquarters at 7201 West Friendly Avenue, in Greensboro, North Carolina, on Wednesday, October 21, 2015, at9:00 AM Eastern Time, and any adjournment or postponement thereof as indicated on the reverse side. The undersigned hereby also authorizes the proxy, in his discretion, to vote on any other business that may properly be brought before the meeting or any adjournment or postponement thereof to the extent authorized by Rule 14a-4(c) promulgated by the Securities and Exchange Commission. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTEDFOREACH OF THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTOR SPECIFIED IN PROPOSAL NO. 1, ANDFOR PROPOSALS NO. 2 AND 3 UNLESS A CONTRARY CHOICE IS SPECIFIED, IN WHICH CASE THE PROXY WILL BE VOTED AS SPECIFIED. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders, dated September 4, 2015, and theProxy Statement furnished therewith.