SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
UNIFI, INC.
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
CLIFFORD FRAZIER, JR.
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
1) Amount Previously Paid:
_____________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________
3) Filing Party:
_____________________________________
4) Date Filed:
_____________________________________
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 19, 1994
TO THE SHAREHOLDERS OF
UNIFI, INC.
The Annual Meeting of the Shareholders of your Company will be held at
10:00 A.M. on Thursday, October 20, 1994, at the Company's Yadkinville
Offices at Old Highway 421, Yadkinville, North Carolina. The Notice of the
Annual Meeting and the Proxy Statement containing detailed information
about the business to be transacted at the meeting, as well as a proxy, are
enclosed.
The Annual Report relating to the Company's activities and operations
for the fiscal year ended June 26, 1994 is also enclosed herewith.
You are cordially invited to attend the Annual Meeting of the
Shareholders in person. We would appreciate your signing and returning
your proxy in the enclosed postage-paid return envelope so that your shares
can be voted in the event you are unable to attend the meeting. Your proxy
will be returned to you if you are present at the meeting and so request.
Sincerely,
G. ALLEN MEBANE
G. ALLEN MEBANE
Chairman of the Board of Directors
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 20, 1994
TO THE SHAREHOLDERS OF UNIFI, INC.:
The Annual Meeting of the Shareholders of Unifi, Inc. will be held at
the Yadkinville Offices, Old Highway 421, Yadkinville, North Carolina, on
Thursday, October 20, 1994, at 10:00 A.M. Eastern Daylight Savings Time,
for the following purposes:
1. To elect as Directors of the Corporation those nominees
listed in the accompanying Proxy Statement.
2. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereof.
The Board of Directors, under the provisions of the By-Laws, has fixed
the close of business on September 12, 1994, as the record date for
determination of Shareholders entitled to notice of and to vote at the
Annual Meeting or any adjournment or adjournments thereof. The transfer
books of the Corporation will not be closed.
By Order Of The Board Of Directors:
CLIFFORD FRAZIER, JR.
C. Clifford Frazier, Jr.
Secretary
Greensboro, North Carolina
September 19, 1994
_________________________________________________________________
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND RETURN YOUR PROXY.
_________________________________________________________________
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
PROXY STATEMENT
SOLICITATION OF PROXIES
The solicitation of the enclosed proxy is made by the Board of
Directors (the "Board") of Unifi, Inc. (the "Company") for use at the
Annual Meeting of the Shareholders to be held Thursday, October 20, 1994,
at 10:00 A.M. Eastern Daylight Savings Time, at the Yadkinville Offices of
the Company, located on Old Highway 421, Yadkinville, North Carolina, or at
any adjournment or adjournments thereof (Annual Meeting). This statement
and the form proxy will first be mailed to the shareholders entitled to
notice of the annual meeting on or about September 19, 1994.
The expense of this solicitation will be borne by the Company.
Solicitations of proxies may be made in person, by mail or other telephone,
telegraph or electronic means by directors, officers and regular employees
of the Company who will not be specifically compensated in such regard. In
addition, the Company has retained D. F. King & Company to assist in the
solicitation of proxies and will pay such firm a fee estimated not to
exceed $6,000 plus reimbursement of expenses. Arrangements will be made
with brokers, nominees and fiduciaries to send proxies and proxy materials,
at the Company's expense, to their principals.
The Company's common stock, par value $.10 per share (common stock) is
the only type of stock the Company has. Shareholders of record, as of the
close of business on September 12, 1994, will be entitled to notice of and
to vote at the meeting or any adjournment thereof. The total number of
shares of common stock, outstanding and entitled to vote at the Annual
Meeting is, as of August 5, 1994, 70,452,432 shares. Each share of the
Company's common stock entitles the holder to one vote with respect to all
matters coming before the meeting and all of such shares vote as a single
class. Only stockholders of record as of the close of business on
September 12, 1994, are entitled to notice of and to vote at the Annual
Meeting.
All shares represented by valid proxies received pursuant to this
solicitation and not revoked before they are exercised will be voted in the
manner specified therein. If no specification is made with respect to the
matter to be acted upon, the shares represented by the proxies will be
voted in favor of Proposal No. 1, the election as directors those nominees
named in this proxy statement. If the enclosed form of proxy is executed
and returned it may, nevertheless, be revoked at any time before it is
voted by written notice to the secretary of the Company or by the
shareholder personally attending and voting his or her shares at the
meeting.
VOTING OF SHARES
The holders of a majority of the outstanding shares entitled to vote,
present in person or represented by proxy at this meeting, will constitute
a quorum for the transaction of business. Each share represented is
entitled to one vote on all matters properly brought before the meeting.
Directors are elected by a plurality of the votes cast by the shareholders
at a meeting in which a quorum is present. Therefore, shares not voted
(whether by abstaining or broker non-vote) do not affect the election of
directors. In instances where brokers are prohibited from exercising dis-
cretionary authority for beneficial owners who have not returned a proxy
(so-called broker non-votes) those shares will not be included in the vote
totals and therefore, will have no affect on the vote.
1
INFORMATION RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of August 5, 1994, with
respect to each person known or believed by the Company to be the benefi-
cial owner, having sole voting and/or investment power (other than as set
forth below) of more than five percent (5%) of the Company's common stock
and the Company's directors and officers as a group.
Amount
Name and Address of More Beneficially Percent of
than 5% Owners Owned Class
- - ------------------------- ------------ -----------
Bull & Co.(a) 4,462,704 6.33
Wachovia Corporation and its subsidiary
Wachovia Bank of North Carolina, N.A.
P.O. Box 3099 MC 32121
Winston-Salem, NC 27150
Dalton L. McMichael, Sr. (b) 5,262,704 7.47
505 Murphy Street
Madison, NC 27025
All directors and executive officers and 9,290,034 13.19
nominees for directors, as a group on
August 5, 1994 (c)
______________
(a) Includes 1,217,192 shares held in Trust established for the benefit
of the children of Dalton L. McMichael, Sr. with respect to which Wachovia
Bank of North Carolina, N.A. and Mr. McMichael, Sr. share voting and
investment powers as Co-Trustees, and 3,245,512 shares held under the
William Armfield III Trust for the benefit of Mr. Armfield IV and his
children.
(b) Includes 1,217,192 shares held in Trust for the benefit of the
children of Dalton L. McMichael, Sr. over which Mr. McMichael, Sr. shares
voting and investment powers as Co-Trustee and includes 3,245,512 shares
held by the Wachovia Bank of North Carolina, N.A. as Trustee under the
Trust established by William J. Armfield, III, the investment powers of
which Trust are designated to a committee consisting of four persons,
including Mr. McMichael, Sr.
(c) This amount includes the 885,979 shares of the outstanding common
stock of the Company which could be acquired through the exercise of stock
options within sixty (60) days after September 12, 1994, the record date.
Additional information regarding stock options is provided on pages 8 and
9.
Cede & Co., as of August 5, 1994, the nominee of the Depository Trust
Company, New York, New York, which provides custodial service for various
institutions such as banks and brokerage firms, was the record holder of
46,284,865 shares of the Company's common stock representing 65.70% of the
outstanding shares of said stock. The Company does not believe that any of
these shares were owned beneficially by Cede & Co.
The definition of "beneficial ownership" referred to herein is that
the owner listed has either the voting or investment power, or both, alone
or shared with others over the number of shares shown, and options
beneficially owned under Rule 13d-3.
ELECTION OF DIRECTORS
General Information -
The Company's Certificate of Incorporation, as restated and amended,
provides that the number of directors shall be fixed in the By-Laws;
however, in no case shall be less than nine, but this number may be
increased and subsequently increased or decreased from time to time by the
affirmative vote of a majority of the Board except that the number of
directors shall not be less than nine. The directors shall be divided into
three classes, designated as Class 1, Class 2 and Class 3. All classes
shall be as nearly equal in number as possible and no class shall include
less than three directors, with one class to be elected annually for a
three (3) year term. A director shall hold office until the annual
meeting for the year in which his term expires and until his successor
shall be elected and qualified, subject to his prior death, resignation,
retirement or removal from office. The term of the Class 3 Directors
expires at the Annual Meeting of the Shareholders in 1994.
2
Lord Eric Sharp died suddenly on May 3, 1994. He was a Class 2
Director whose term would have expired at the Annual Meeting of the
Shareholders in 1996. The Board of Directors amended the By-Laws by
reducing the number of directors from twelve (12) to eleven (11). Class 1
and Class 3 each consists of four (4) directors, with Class 2 consisting of
three (3) directors. The Board of Directors has nominated the following
persons as Class 3 Directors:
CLASS 3 DIRECTORS
William J. Armfield, IV
William T. Kretzer
G. Allen Mebane
George R. Perkins, Jr.
The Class 3 Directors will serve until the Annual Meeting in 1997, or
until their respective successors are elected and qualified.
All the nominees for election are incumbents and have consented to be
named in this proxy statement and to serve, if elected. If for any reason
any of the nominees should not be a candidate for election at the meeting
the proxy will be voted for substitute nominees designated by the Board of
Directors unless the Board has reduced its membership prior to the meeting.
The Board does not anticipate that any of the nominees will be unavailable.
The nominees and directors continuing in office will normally hold office
until the Annual Meeting of the Shareholders in the year indicated on this
and the following pages.
Biographical information concerning each nominee and director, his
age; the year each director and nominee was first elected to the Board of
Directors of the Company; his current principal occupation (which has
continued for the last five (5) years unless otherwise indicated); the name
and principal business of the corporation in which he is employed and all
positions and offices which he presently holds with said corporation or the
principal business of the corporation in which his occupation is carried
on; and his directorship in other publicly-held companies are set forth
below. The sole (unless otherwise indicated) and beneficial ownership of
the common stock of the Company, as defined in Rule 13d-3 promulgated under
the Exchange Act, as of September 12, 1994 for each director and nominee is
set forth in the table beginning on page 4.
VOTE REQUIRED
A plurality of votes of the shares presented in person or represented
by proxy at the annual meeting is required to elect directors.
CLASS 3 NOMINEES FOR TERM EXPIRING 1997:
WILLIAM J. ARMFIELD, IV, (59), Vice Chairman of the Board of Directors
of Unifi, Inc., Greensboro, North Carolina. He was a director and
President of Macfield, Inc., a textile company in North Carolina, from 1970
until August 8, 1991, when the merger of Macfield, Inc. with and into
Unifi, Inc. became effective. He has been a director and officer of the
Company since 1991.
WILLIAM T. KRETZER (48), President and Chief Executive Officer of
Unifi, Inc., Greensboro, North Carolina. He became an employee of the
Company in 1971, has served in various offices of the Company, and in April
1985 was elected by the Board of Directors of the Company as President and
Chief Executive Officer. He was elected a director of the Company in 1985.
G. ALLEN MEBANE (65), Chairman of the Board of Directors and Chairman
of the Executive Committee of Unifi, Inc., Greensboro, North Carolina. Mr.
Mebane was a co-founder of the Company and has been a Chief Executive
Officer and a director of the Company since 1971.
GEORGE R. PERKINS, JR. (54), Senior Vice President of Unifi, Inc.,
Greensboro, North Carolina and President and Chief Executive Officer of
Unifi Spun Yarns, Inc., a wholly-owned subsidiary of Unifi, since August
1993. He was the President and a director of Pioneer Yarn Mills, Inc.,
Pioneer Spinning, Inc. and Pioneer Cotton Mill, Inc. since each was founded
in 1988, 1991, and 1993, respectively, and of Edenton Cotton Mills, Inc.
since its acquisition in 1989 (Pioneer Corporations) until the merger of
the Pioneer Corporations with and into Unifi Spun Yarns, Inc. in August
1993. He was elected a director of the Company in 1993.
3
CLASS 1 DIRECTORS CONTINUING IN OFFICE UNTIL 1995:
DONALD F. ORR (51), is the Chairman of Sweet Pea Capital, Greensboro,
North Carolina, an investment capital firm, which firm was formed in
November 1978. He has been a director of the Company since 1988.
TIMOTHEUS R. POHL (54), President and Chief Executive Officer of
Daimler-Benz North America Corporation, New York, New York, since 1981.
DBNA is the holding company of Daimler-Benz AG's industrial holdings in the
United States and Canada. He was elected a director of the Company in
1992.
ROBERT A. WARD (54), Executive Vice President and Chief Financial
Officer of Unifi, Inc., Greensboro, North Carolina. Mr. Ward has been an
executive officer and a director of the Company since 1971.
G. ALFRED WEBSTER (46), Executive Vice President of Unifi, Inc.,
Greensboro, North Carolina. He became an employee of the Company in 1977,
has served the Company in various offices, and in April, 1985 was elected
by the Board of Directors of the Company as an Executive Vice President.
He has been a director of the Company since 1986.
CLASS 2 DIRECTORS CONTINUING IN OFFICE UNTIL 1996:
CHARLES R. CARTER (62), Minister of the Forest Hills Presbyterian
Church, High Point, North Carolina, which position he has held since 1967.
He has been a director of the Company since 1982.
JERRY W. ELLER (54), Executive Vice President of Unifi, Inc.,
Yadkinville, North Carolina. He has been employed by the Company since
1971. He has served the Company in various offices and has been an
Executive Vice President since October, 1981. He was elected a director of
the Company in 1985.
KENNETH G. LANGONE (59), Managing Director, Invemed Associates, Inc.,
an investment banking firm, New York, New York since 1974. He is a
director of The Home Depot, Inc. and Auto Finance Group, Inc. He has been
a director of the Company since 1969.
SECURITY HOLDING OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
Amount and Nature Percentage of
Directors of Beneficial Ownership(1) Ownership
- - --------- -------------------------- -------------
G. Allen Mebane(3) 2,267,718 3.22
William J. Armfield, IV(4) 3,340,114 4.74
William T. Kretzer(5) 618,077 (2)
George R. Perkins, Jr.(6) 1,596,274 2.27
Robert A. Ward(7) 464,981 (2)
Jerry W. Eller(8) 323,229 (2)
G. Alfred Webster(9) 311,869 (2)
Charles R. Carter(10) 36,501 (2)
Kenneth G. Langone(10) 148,123 (2)
Donald F. Orr(10) 168,148 (2)
Timotheus Pohl(10) 15,000 (2)
All directors and
executive officers
and Nominees for directors
[11 persons](11) 9,290,034 13.19
_______________
(1) All shares are owned directly and with sole voting and dispositive
power, except as otherwise noted. Ownership is as of August 5, 1994.
(2) Represents less than one percent (1%) of the Company's common
stock.
(3) Includes 225,000 shares that he has a right to purchase under
presently exercisable stock options granted to him by the Company, which
shares may be determined to be beneficially owned by him; 449,980 shares
owned by Mebane Enterprises, Inc. which Mr. Mebane votes; and 76,125 shares
owned by his wife over which he has voting rights but disclaims any other
beneficial ownership.
4
(4) Includes 105,000 shares owned by Charitable Remainder Trusts. Does
not include 3,245,512 shares held by the Wachovia Bank of North Carolina,
N.A. as Trustee for the benefit of Mr. Armfield, IV and his children, as to
which neither Mr. Armfield, IV nor his children have voting or investment
powers.
(5) Includes 213,668 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company and
24,750 shares owned by members of his immediate family, which shares may be
determined to be beneficially owned by him.
(6) Received 1,599,824 shares of Unifi stock in the Triangular Merger
of the Pioneer Corporations with and into a wholly-owned subsidiary of
Unifi and related real estate transactions, which were consummated on
August 18, 1993.
(7) Includes 86,540 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company, which
shares may be determined to be beneficially owned by him.
(8) Includes 172,919 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company, which
shares may be determined to be beneficially owned by him.
(9) Includes 127,852 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company and
39,357 shares held in trust for the benefit of his children, which shares
may be determined to be beneficially owned by him.
(10) Includes 15,000 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company, which
shares may be determined to be beneficially owned by him.
(11) Includes 885,979 shares that they have the right to purchase within
sixty (60) days after September 12, 1994, under presently exercisable stock
options granted to them by the Company, which shares may be determined to
be beneficially owned by them.
DIRECTORS COMPENSATION
Each director who is not an employee of the Company is paid, for
serving on the Board, a retainer at the rate of $14,000 per annum and an
additional $1,000 for each meeting of the Board of Directors attended, as
well as being reimbursed for reasonable expenses incurred in attending said
meetings. Directors who are employees of the Company are paid an
attendance fee of $1,000 for each meeting of the Board attended.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has four (4) standing committees: the
Executive Committee, the Compensation Committee, the Audit Committee, and
the Stock Option Committee. The Executive Committee (composed of Messrs.
Armfield, Eller, Kretzer, Mebane, Ward and Webster) met regularly during
the year. The Compensation Committee (composed of Messrs. Armfield,
Kretzer, Langone, Mebane, Orr and Lord Sharp, prior to his death) met twice
during the year. The Audit Committee (composed of Messrs. Carter, Pohl,
Orr, and Ward) met twice during the year. The Stock Option Committee
(composed of Messrs. Carter, Langone and Orr) met twice during the year.
The Board of Directors has no Nominating Committee; however, in
relation to nominations, the Executive Committee recommends to the Board
nominees for election as directors. The Committee will consider those
recommendations by shareholders which are submitted along with biographical
and business experience information in compliance with the Shareholders
Proposals provision, hereinafter set forth.
The Executive Committee has, except to the extent prohibited by the
Business Corporation Law of the State of New York, all the powers of the
Board in the management of the Company. All important actions taken by the
Executive Committee are required to be reported to the Board at the meeting
next succeeding such action. The Executive Committee, as noted in the
preceding paragraph, makes recommendations of nominees for directors to the
Board.
The Compensation Committee's duties include, among other things, the
review of performance and approval of salaries and other types of
compensation for senior management of the Company, advising senior
management with respect to the range of compensation to be paid other
officers of the Company, making recommendations to the full Board
concerning benefit plans for the Company's directors, officers and
employees and determines all grants of stock options under the Company's
Non-Qualified Stock Option Plans.
5
The Audit Committee's function is to be aware of the financial
reporting procedure of the Company, review with the independent auditors
the plans and results of the audit engagement, and to investigate when
called upon and recommend such changes as deemed desirable to the Board.
The control over the financial reports of the Company is the function of
Management and the object of this committee is liaison with the Board in a
recommendation capacity.
The Stock Option Committee administers the 1992 Incentive Stock Option
Plan. It has exclusive jurisdiction to select the persons to whom options
shall be granted, determine the number of shares subject to each option,
the time or times an option shall be granted, the purchase price of the
shares subject to options, which shall not be less than the fair market
value of the Company's common stock on the date the option is granted,
determine when options may be exercised, and establish such other
provisions in the Option Agreement, as the committee may deem necessary or
desirable, consistent with the terms of the plan.
The Board of Directors met four (4) times during the fiscal year 1994.
All directors attended at least seventy-five percent (75%) of the meetings
of the Board and the Committees of the Board on which they were members
during that period.
COMPENSATION AND OPTION COMMITTEES INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Mr. Langone is a director, controlling stockholder, and Chairman of
the Executive Committee of Salem National Corporation. In the fiscal year
1994, the Company paid Salem Leasing Corporation, a wholly-owned subsidiary
of Salem National Corporation, $2,473,000 on leases of tractors and
trailers, and for services thereto. The terms of the Company's lease with
Salem Leasing Corporation are, in Management's opinion, no less favorable
than the Company would have been able to negotiate with an independent
third party for similar equipment and services.
Mr. Langone is Chairman of the Board of Directors and principal
shareholder of Invemed Associates, Inc., an investment firm. During the
fiscal year 1994, such firm performed certain advisory services for the
Company. Mr. Mebane owns in excess of ten percent (10%) of said firm's
equity securities. The amount paid Invemed Associates, Inc. for services
rendered during the fiscal year ended in 1994 was $60,000. In the opinion
of management the fees that are paid to Invemed are as fair and reasonable
and as favorable to the Company as those which could have been obtained
from unrelated third parties.
6
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth information for the fiscal years ended
June 1994, 1993 and 1992, as to cash compensation paid by the Company and
its subsidiaries (for the purpose of this section, collectively referred to
as "Company") to the Chief Executive Officer ("CEO"), and the four most
highly-compensated executive officers for services rendered in all
capacities during the last three (3) fiscal years.
UNIFI, INC. SUMMARY COMPENSATION TABLE
Annual Compensation Other Annual All other
Name and Principal ------------------- Compensa- Compensa-
Position Year Salary Bonus tion(1) Options tion(2)
- - ------------------- ---- ------ ----- ----------- ------- ---------
William T. Kretzer 1994 $750,000 $200,000 ---- 20,000 $22,377
President/CEO 1993 $650,000 $400,000 ---- 30,000 $33,058
and Director 1992 $572,917 $250,000 ---- 0 ----
G. Allen Mebane, IV 1994 $800,000 $200,000 $84,353 0 $23,163
Chairman of the 1993 $800,000 $400,000 $58,566 225,000 $52,745
Board and Director 1992 $830,333 $250,000 ---- 0 ----
William J. Armfield, IV 1994 $600,000 $150,000 $87,812 0 $22,884
Vice Chairman 1993 $600,000 $150,000 $83,866 0 $572,835
and Director 1992 $529,100 $250,000 ---- 0 ----
Jerry W. Eller 1994 $400,000 $ 70,000 ---- 10,000 $22,986
Executive VP 1993 $310,000 $160,000 ---- 15,000 $33,649
and Director 1992 $194,917 $175,000 ---- 0 ----
Robert A. Ward 1994 $300,000 $ 85,000 ---- 10,000 $23,119
Executive VP 1993 $250,000 $135,000 ---- 15,000 $33,805
and Director 1992 $191,667 $135,000 ---- 0 ----
_______________
(1) As permitted by the Securities and Exchange Commission's rules
regarding disclosure of executive compensation in proxy statements, this
column excludes perquisites and other personal benefits of the named
executive officer if their total cost is less than $50,000. Pursuant to
the same rules, the Company has not calculated the amount of other annual
compensation of any of the named executive officers for 1992. Of the
amounts reported under "Other Annual Compensation" the approximate
incremental cost to the Company of their respective personal travel expense
in 1994 and 1993 respectively, amounted to: Mr. Mebane--$70,134 and
$45,279; Mr. Armfield--$75,639 and $71,680.
(2) The components of the amounts shown in this column consist of the
following: (i) a director's fee of $4,000 each paid to the CEO and named
executives; (ii) payments of the Company's portion of the premiums on the
split-dollar life insurance, as more specifically set forth under
Employment and Termination Agreements, in 1994 and 1993, respectively,
amounted to: Mr. Kretzer - $1,320 and $1,399; Mr. Mebane - $2,106 and
$21,086; Mr. Armfield - $1,827 and $7,150; Mr. Eller - $1,929 and $1,990;
Mr. Ward - $2,062 and $2,146. In addition, Mr. Armfield, upon the
termination of the Macfield Pension Plan, received $534,026 in 1993; and
(iii) allocation of the Company's contribution to the Profit Sharing Plan
for the CEO and other named executive officers, in the amounts of $17,057
and $27,659 in 1994 and 1993, respectively. No distributions were made
under the Profit Sharing Plan to any of the executive officers.
EMPLOYMENT AND TERMINATION AGREEMENTS
The Company has an Employment Agreement with Mr. Mebane which
provides that from July 1, 1990, through June 30, 2000, (the "executive
period") Mr. Mebane would receive a salary of $800,000.00 per annum, plus
such additional compensation and bonuses as may be awarded, from time to
time, by the Board of Directors of the Corporation and is entitled to
receive Directors' fees; and from July 1, 2000, until June 30, 2005, (the
"consultant period"), Mr. Mebane would receive annual compensation equal to
one-fourth (1/4) of the base compensation being paid to him during the last
year of his executive employment.
7
The Company has an Employment Agreement with Mr. Kretzer,
effective July 1, 1990 and ending June 30, 2000. The agreement was amended
in 1992 to increase Mr. Kretzer's salary from $550,000 to $750,000 per
annum, plus such additional compensation and bonuses as may be awarded,
from time to time, by the Board of Directors of the Company. The other
terms of the agreement were not amended.
The Company has Severance Employment Agreements with Messrs.
Mebane, Armfield, Kretzer, Eller, Ward and Webster. The agreements provide
that if said executive officers' employment is terminated involuntarily,
other than by death or disability or cause, or voluntarily, other than for
good reason, after a change in control of the Company, such executive
officer may receive certain benefits. The present value of the benefits
will be 2.99 times such executive officers' average annual taxable
compensation paid during the five (5) calendar years preceding the change
in control of the Company limited to the amount deductible by Unifi, Inc.
and as may be subject to excise taxes under the Internal Revenue Code, all
as determined by the Company's Independent Certified Public Accountants,
whose decision shall be binding upon the Company and the executive
officers. A change in control is deemed to occur if someone acquires
twenty percent (20%) or more of the outstanding voting stock of the
Company, or if there is a change in the majority of directors under
specified conditions within a two (2) year period. The benefits under
these contingent employment agreements are, as noted, contingent and
therefore not reported under the Summary Compensation Table.
OPTIONS GRANTED
Information concerning grants of options in 1994 is presented in the
following table. The options were granted at an exercise price equal to
the fair market value of the Company's stock on the date of grant.
OPTION GRANTS IN FISCAL YEAR 1994
Potential Realized Value
at Assumed
Annual Rates of Stock
Individual Grants Price Appreciation
---------------------------------- ------------------------
% of Total
Options Options Granted Exercise or Expir- Present
Granted to Employees in Base Price ation 5% 10% Value
Name (#) Fiscal Year(1) ($/Share) Date ($) ($) ($)(2)
- - ----- ------- --------------- ---------- ------ ------- ------- -------
Kretzer 20,000 11.33% $24.38 10/21/03 $306,586 $776,949 $218,400
Mebane 0 N/A N/A N/A $ 0 $ 0 $ 0
Armfield 0 N/A N/A N/A $ 0 $ 0 $ 0
Eller 10,000 5.67% $24.38 10/21/03 $153,293 $388,475 $109,200
Ward 10,000 5.67% $24.38 10/21/03 $153,293 $388,475 $109,200
(1) Total amount granted in FY 1994 equals 176,500.
(2) The Grant Date Present Value was calculated using the Black-
Scholes option valuation model. Assumptions used in the calculation of the
Black-Scholes values are as follows:
Option Exercise and Stock Price on date of grant: $24.375
Expected Dividend Yield: 2.2%
Risk-Free Rate: 5.72%
Term: 10 Years
Volatility: .39
8
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in 1994 of previously granted
options and the number and value of unexercised options are shown in the
following table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR
VALUES
Value of Value of
Unexercised Unexercised
Shares Value Unexercised Unexercised In-the-Money In-the-Money
Acquired Realized Options Options Options Options/SARs
on Exercise at FY-End(#) at FY-End(#) at FY-End($) at FY-End($)
Name (#) ($) Exercisable Unexercisable Exercisable(1) Unexercisable
- - ---- ----------- ------- ----------- ------------- -------------- -------------
Kretzer 0 $ 0 213,668 0 $3,101,509 0
Mebane 0 $ 0 225,000 0 $ 0 0
Armfield 0 $ 0 0 0 $ 0 0
Eller 140,267 $3,256,203 172,919 0 $2,859,315 0
Ward 0 $ 0 86,540 0 $1,166,183 0
__________
(1) All options are exercisable. The fair market value on the Company's
fiscal year end, June 26, 1994 was $23.75.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
ON EXECUTIVE COMPENSATION
This report of the Compensation Committee and the Stock Option
Committee ("Committees") of the Board of Directors of the Company sets
forth the Company's compensation policies with respect to the executives of
the Company, including the named executives for whom specific compensation
information is reported in the accompanying summary compensation tables.
The Compensation Committee was composed of three non-employee directors
(prior to Lord Sharp's death) and three employee directors of the Company.
The non-employee directors determine the compensation of the employee
directors and the full Compensation Committee determines the compensation
of other officers.
The duties of the Committees include the review of performance and
approval of salaries and other types of compensation for senior management
of the Company; advising senior management with respect to the range of
compensation to be paid to other officers of the Company; and making
recommendations to the full Board concerning benefit plans for the
Company's directors, officers and employees and the granting of stock
options under the Company's option plans.
The Stock Option Committee is composed of three non-employee directors
who determine the executives and other personnel who will receive options,
the number of shares subject to the option, the price and other terms and
conditions of the options granted under the Company's plans.
COMPENSATION PHILOSOPHY
One of the Company's primary business objectives is to maximize long-
term shareholder returns. To achieve this objective it is necessary to
attract, retain and motivate the highest quality management team possible,
that can conceptualize, strategize and technically implement business
development, product development, manufacturing technology, and service
programs to generate long-term growth.
Establishing compensation programs generally and determining the
compensation of individual executive officers can be complex matters
involving numerous issues and a variety of data. The Company's committees
and its Board of Directors believe that the compensation programs should be
flexible to allow judgment and discretion on the part of the committees
rather than utilizing a formula approach. The compensation of the
executive officers, including the CEO, is determined on a subjective
evaluation, including said officer's past, present and future value to the
Company, the performance of the Company contrasted with the economic
conditions of the textile market in particular, and the general economy in
general. The committees view the compensation in three component parts;
base salary, annual cash incentive compensation (collectively, "cash
compensation") and stock option grants.
9
BASE SALARIES
The Compensation Committee recommends to the Board of Directors base
salaries they think are fair and reasonable for the services rendered by
the respective executive officers and necessary to keep him or her from
resigning and going to work for some other corporation. Adjustments to
base salaries for executives are recommended annually by the Committee,
based on individual performances and contributions to the Company's
success. All base salary adjustments are approved by the full Board. Base
salaries for the named executives, other than the CEO, increased by 7.14%
in fiscal year 1994. Mr. Mebane's and Mr. Kretzer's base salaries are
covered by Employment Agreements.
ANNUAL CASH INCENTIVE COMPENSATION
The Company rewards executives based on each fiscal year's results and
reflects a balance between overall corporate performance and performance of
the specific areas of the Company under the individual's control. The
annual cash incentive compensation in the form of bonuses are, as
previously noted, based on subjective evaluation of the respective
executive. Bonuses, if any, recommended by the committees are subject to
the full Board.
The annual incentive compensation awarded to the named executives
in the Summary Compensation Table other than the Chief Executive Officer
averaged 24.05% of base salary compared to 43.1% of base salary in fiscal
1993. The committees recommend approval of the bonuses to the full Board,
noting exceptional performance by management for the year.
STOCK OPTIONS
The Company maintains three stock option plans which provide for the
award of stock options to key management employees: The 1992 Incentive
Stock Option Plan, the 1987 Non-Qualified Stock Option Plan and the 1982
Incentive Stock Option Plan.
Incentive stock options are granted from time to time, as approved by
the Stock Option Committee, on a completely subjective basis, as previously
noted. Options are granted with an exercise price equal to the fair market
value of the shares of the Company's common stock on the date of grant and
the optionee will realize value from the grant only if the market value of
such shares increases. Because the compensation element of options is
dependent upon increase over time in the market value of such shares, stock
options represent compensation that is tied to the Company's long-term
performance for periods of up to ten (10) years (the period during which
such option may be exercised). Compensation in the form of stock options
serves to align the interest of the executive officer directly with the
interest of the Company's shareholders.
In 1994, the stock options granted to the executive officers as a
group constituted approximately 10.94% of their total 1994 compensation
package, utilizing (for illustration purposes only) the valuation method
used in the Table of Options Granted in Fiscal Year 1994. Executive
officers will realize no value from their stock option grant unless the
market price of the shares of the Company stock rises above such price on
the date of the grant.
CEO COMPENSATION
Compensation paid to the Chief Executive Officer, Mr. Kretzer, during
the fiscal year was based on the same factors generally applicable to
compensation paid to other executives of the Company. Mr. Kretzer's base
salary was $750,000 and his annual incentive (bonus) represented 26.67% of
his base salary, compared to 61.5% for fiscal 1993. The Committee awarded
Mr. Kretzer 20,000 stock options at fair market value.
10
COMMITTEES' JUDGMENT
It is the judgment of the Committees that in 1994, and for the three
periods ending June 26, 1994, the Company had excellent results and total
compensation to the executives was appropriate for such performance and to
retain and motivate such executives in the future. The foregoing report
has been furnished by the members of the following Committees:
Compensation Committee: Stock Option Committee:
William J. Armfield, IV Charles R. Carter
William T. Kretzer Kenneth G. Langone
G. Allen Mebane Donald F. Orr
Kenneth G. Langone
Donald F. Orr
PERFORMANCE GRAPH - SHAREHOLDER RETURN ON COMMON STOCK
Comparison of Five Year Cumulative Total Return*
NOTE: Pursuant to Reg. Section 232.304(d) the Performance Graph is
omitted herein and represented by the following table:
Company June 1989 June 1990 June 1991 June 1992 June 1993 June 1994
- - -------- --------- --------- --------- --------- --------- ---------
Unifi, Inc. $100.00 $ 92.70 $198.36 $263.84 $391.39 $275.18
Media General
Textile Group $100.00 $101.56 $101.55 $148.44 $158.06 $143.94
New York Stock
Exchange Mar-
ket Value $100.00 $115.12 $122.22 $139.11 $157.76 $163.26
_____________
* Assumes $100 invested in the common stock of Unifi, Inc. and comparison
groups on June 25, 1989.
Assumes reinvestment of dividends.
11
NEW YORK STOCK EXCHANGE
Unifi, Inc.'s Common Stock now trades on the New York Stock Exchange
(NYSE) under the symbol "UFI", with the closing price of said stock on
August 22, 1994, being $24.125 per share.
INFORMATION RELATING TO THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young, the Company's Independent Certified Public Accountants
for the fiscal year ended June 26, 1994, is expected to be present at the
shareholders' meeting, at which time a representative will have an
opportunity to make a statement if he/she so desires and to answer
appropriate questions from shareholders.
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers to file reports of ownership and
changes of ownership of shares of the Company's stock with the Securities
and Exchange Commission. Directors and executive officers are required by
the Securities and Exchange Commission's regulations to furnish the Company
with copies of all 16(a) reports they file. Based on its review of the
copies of such reports received by it, or written representation from
certain reporting persons, no Form 5's were required for those persons, and
the Company believes that from July 1, 1993 through June 30, 1994, its
directors and executive officers complied with all the applicable filing
requirements.
SHAREHOLDER PROPOSALS
Any shareholder satisfying the Securities and Exchange Commission's
requirements and wishing to submit a proposal to be included in the 1995
proxy statement, should submit the proposal in writing to Secretary, Unifi,
Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410. Unifi,
Inc. must receive the proposal by May 19, 1995, in order to consider it for
inclusion in the 1995 Proxy Statement.
OTHER MATTERS
The Management of the Company is not aware of any other matters which
may be presented for action at the meeting other than those set forth
herein. However, should any other matter requiring the vote of the
shareholders arise, it is intended that shares represented by proxies in
the accompanying form will be voted by the persons named in the proxy in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
CLIFFORD FRAZIER, JR.
Secretary
Greensboro, North Carolina
September 19, 1994
12
APPENDIX "A" - FORM PROXY [PROXY CARD-SIDE ONE]
UNIFI, INC.
PROXY ANNUAL MEETING, OCTOBER 20, 1994
The undersigned hereby appoints Robert A. Ward and C. Clifford
Frazier, Jr., or either of them, with full power of substitution, as
attorneys and proxies to represent and vote all shares of Unifi, Inc.
common stock which the undersigned is entitled to vote at the Annual
Meeting of the Shareholders to be held at the Yadkinville Offices, located
on Highway 421, Yadkinville, North Carolina, on Thursday, October 20, 1994,
at 10:00 A.M. Eastern Daylight Savings Time, and any adjournment or
adjournments thereof as follows:
(1) ELECTION OF DIRECTORS
To vote FOR ____ WITHHOLD AUTHORITY ____
all nominees listed to vote for all
below (except as nominees listed
marked to the below
contrary below)
Nominees: William J. Armfield, IV, William T. Kretzer, G. Allen Mebane and
George R. Perkins, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space provided below.)
_________________________________________________________________
The undersigned hereby authorizes the proxies, in their discretion, to vote
on any other business which may properly be brought before the meeting or
any adjournment thereof.
APPENDIX "A" CONTINUED - [PROXY CARD-SIDE TWO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED FOR THE BOARD OF DIRECTORS' NOMINEES FOR DIRECTORS, UNLESS A CONTRARY
CHOICE IS SPECIFIED, IN WHICH CASE THE PROXY WILL BE VOTED AS SPECIFIED.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders, dated September 19, 1994, and the Proxy Statement
furnished therewith.
Dated this day of , 1994
________________________(SEAL)
________________________(SEAL)
NOTE: Signature should agree with name on
stock certificate as printed hereon.
Executors, administrators, trustees and
other fiduciaries should so indicate when
signing. If the signer is a corporation,
please sign in full corporate name, by
duly authorized officer.
This Proxy is Solicited on Behalf of the Board of Directors.
Please date, sign and return this Proxy. Thank you.
