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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
UNIFI, INC.
- --------------------------------------------------------------------------------
(Name of the Registrant as Specified In Its Charter)
CHARLES F. MCCOY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of the transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify 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 23, 1997
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 23, 1997, at the Company's
Plant T-5 facility located at 1641 Shacktown Road, in 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 29, 1997 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, IV
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 23, 1997
To The Shareholders of Unifi, Inc.:
The Annual Meeting of the Shareholders of Unifi, Inc. will be
held at the corporation's Plant T-5 facility at 1641 Shacktown
Road, in Yadkinville, North Carolina, on Thursday, October 23,
1997, 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; and
2. To transact any other business that may be properly
brought 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 15, 1997, as the
record date for determination of Shareholders entitled to notice of
and to vote at the Annual Meeting or any adjournment or
adjournments thereof. The transfer books of the Corporation will
not be closed.
YOUR VOTE IS IMPORTANT and the Board of Directors would
appreciate your signing and returning the accompanying proxy card
promptly. A proxy may be revoked by the Shareholder at any time
before it is exercised.
By Order of the Board of Directors:
CLIFFORD FRAZIER, JR.
Clifford Frazier, Jr.
Secretary
Greensboro, North Carolina
September 23, 1997
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
PROXY STATEMENT
SOLICITATION OF PROXIES
This solicitation of the enclosed proxy is made by the Board
of Directors (the "Board") of Unifi, Inc. (the "Company") for use
at the Annual Meeting of the Shareholders to be held Thursday,
October 23, 1997, at 10:00 A.M. Eastern Daylight Savings Time, at
the Company's Plant T-5 facility located at 1641 Shacktown Road in
Yadkinville, North Carolina, or at any adjournment or adjournments
thereof. This statement and the form proxy will first be mailed to
the shareholders entitled to notice of the Annual Meeting on or
about September 23, 1997.
The expense of this solicitation will be borne by the Company.
Solicitations of proxies may be made in person, by mail or other
telephone, telegraph or electronic means by directors, officers and
regular employees of the Company who will not be specifically
compensated in such regard. In addition, the Company has retained
D. F. King & Company to assist in the solicitation of proxies and
will pay such firm a fee estimated not to exceed $6,500 plus
reimbursement of expenses. Arrangements will be made with brokers,
nominees and fiduciaries to send proxies and proxy materials, at
the Company's expense, to their principals.
The Company's common stock, par value $.10 per share (common
stock) is the only type of stock issued by the Company.
Shareholders of record, as of the close of business on September
15, 1997, will be entitled to notice of and to vote at the meeting
or any adjournment thereof. As of August 5, 1997, the total number
of shares of common stock outstanding and entitled to vote at the
Annual Meeting was 61,143,838 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.
All shares represented by valid proxies received pursuant to
this solicitation and not revoked before they are exercised will be
voted in the manner specified therein. If no specification is made
with respect to the matter to be acted upon, the shares represented
by the proxies will be voted in favor of Proposal No. 1, the
election as directors of those nominees named in this proxy
statement. IF THE ENCLOSED FORM OF PROXY IS EXECUTED AND RETURNED
IT MAY, NEVERTHELESS, BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY
WRITTEN NOTICE TO THE SECRETARY OF THE COMPANY OR BY THE SHAREHOLDER
PERSONALLY ATTENDING AND VOTING HIS OR HER SHARES AT THE MEETING.
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. Please specify your choice by
marking the appropriate boxes on the enclosed proxy card and sign-
ing it. Directors shall be elected by a plurality of the votes
cast by the shareholders at a meeting in which a quorum was
present. Therefore, shares not voted and broker non-votes will
have no effect on the election of directors. Broker non-votes,
which occur when brokers do not receive voting instructions from
their customers on non-routine items and consequently have no
direction to vote on such items, are not counted for purposes of
determining a quorum.
1
INFORMATION RELATING TO PRINCIPAL SECURITY HOLDERS
The following table sets forth information, as of August 5,
1997, with respect to each person known or believed by the Company
to be the beneficial owner, having sole voting and/or investment
power (other than as set forth below) of more than five percent
(5%) of the Company's common stock and the Company's directors and
officers as a group.
Name and Address of More Amount and Nature Percent of
than 5% Owners Beneficially Owned Class
FMR Corp. (a) 9,762,750 15.13%
82 Devonshire Street
Boston, MA 02109
Wachovia Corporation (b) 4,632,817 7.20%
P.O. Box 3099 MC 32121
Winston-Salem, NC 27150
All Directors and Executive 3,483,435 5.50%
Officers and Nominees for Di-
rectors, as a group on August 5,
1997 (c)
(a) As indicated in its Schedule 13G, dated February 14, 1997, by
FMR Corp, a holding company and its subsidiaries, held sole
power to dispose or to direct the disposition of 9,762,750
shares and sole voting power with respect to 216,100 shares.
(b) As indicated in its Schedule 13G, dated February 14, 1997,
Wachovia Corporation and its wholly-owned subsidiaries Wachovia
Bank of North Carolina, N.A., Wachovia Bank of Georgia, N.A.,
and Wachovia Bank of South Carolina, N.A., as Trustees, may be
deemed to beneficially own 4,632,817 shares by virtue of having
sole voting power over 3,330,525 shares, shared voting power
over 1,176,867 shares, sole dispositive power over 4,575,398
shares, and shared dispositive power over 1,862 shares.
(c) This amount includes the 1,721,101 shares of the common stock
of the Company which could be acquired through the exercise of
stock options within sixty (60) days after August 5, 1997.
Additional information regarding stock options is provided on
pages 8-11.
Cede & Co., as of August 5, 1997, 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 51,500,185 shares of the Company's common stock
representing 84.23% 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 Board of Directors at its regular meeting on April 17,
1997, amended the bylaws of the Company to increase the number of
directors from nine (9) to ten (10), with the directors being
divided into three classes; Class 1 and Class 2 consisting of three
(3) members each and Class 3 having four (4) members; and elected
Mr. R. Wiley Bourne, Jr., to serve as a Class 3 Director, effective
July 16, 1997, until the 1997 Annual Meeting of the Shareholders.
The term of each class is staggered so that the term of one class
expires at each Annual Meeting of the Shareholders. A director
shall hold office 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 Board of Directors has nominated the following persons as
CLASS 3 DIRECTORS - William T. Kretzer, G. Allen Mebane, IV, J.B.
Davis and R. Wiley Bourne, Jr. - to serve until the Annual Meeting
in 2000, or until their respective successors are elected and
qualified.
2
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. 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.
Biographical information concerning each nominee and director,
his age; the year each director and nominee was first elected to the
Board of Directors; 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
publicly-held companies, other than Unifi, Inc., 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 August 5, 1997 for
each director and nominee are set forth in the table beginning on
page 4.
NOMINEES FOR ELECTION AS DIRECTORS
CLASS 3 NOMINEES TO TERMS EXPIRING 2000:
WILLIAM T. KRETZER, (51), President and Chief Executive Officer
of Unifi, Inc., Greensboro, North Carolina. He became an employee
of the Company in 1971, served in various offices until 1985 when he
was elected President and Chief Executive Officer, as well as a
Director of the Company. He is a member of the Executive Committee
(Chair).
G. ALLEN MEBANE, (68), is Chairman of the Board of Directors of
Unifi, Inc., Greensboro, North Carolina. He was co-founder of the
Company in 1971, has been a member of the Board of Directors since
said date and became Chairman of the Board in 1977. He served as
President and Chief Executive Officer of the Company from 1971 until
1985. He is a member of the Executive Committee and an ex-officio
member of the Compensation Committee.
J. B. DAVIS, (53), is President and Chief Executive Officer of
Klaussner Furniture Industries, Inc., Asheboro, North Carolina. He
has been an Executive Officer and Director of Klaussner Furniture
Industries, Inc. since February 1970 and was elected as President
and Chief Executive Officer in 1981. He was elected by the Board of
Directors of this Company as a director on July 18, 1996, and by the
shareholders of the Company at their Annual Meeting on October 24,
1996, and is a member of the Incentive Stock Option Committee.
R. WILEY BOURNE, JR., (60), Vice-Chairman and Executive Vice
President of Eastman Chemical Company, Kingsport, Tennessee. He has
been an Executive Vice President of Eastman Chemical Company since
1989. He is a member of the Board of Trustees and Executive
Committee of the United States Council for International Business.
He serves on the boards of the American Industrial Health Council,
East Tennessee State University Foundation, Massachusetts Institute
of Technology Society of Sloan Fellows, Tennessee Wesleyan College,
the advisory board of First Tennessee Bank, the Visiting Committee
of the James H. Quillen College of Medicine, and the Board of
Visitors of North Carolina A & T University. He is also a member of
the Society of Chemical Industry. He was elected a director of the
Company by its Board of Directors, effective July 16, 1997.
CLASS 1 DIRECTORS SERVING UNTIL THE 1998 ANNUAL MEETING:
DONALD F. ORR, (54), is Chairman of Sweet Pea Capital,
Greensboro, North Carolina, an investment capital firm, which was
formed in November, 1978. He has been a Director of the Company
since 1988, and is a member of the Company's Audit Committee
(Chair), the Compensation Committee, and the Incentive Stock Option
Committee.
ROBERT A. WARD, (57), Senior Advisor to President of Unifi,
Inc., Greensboro, North Carolina. He was an Executive Officer from
1971 to 1996, and has been a Director of the Company since 1971. He
is a member of the Audit Committee and the Compensation Committee.
G. ALFRED WEBSTER, (49), Executive Vice President of Unifi,
Inc., Greensboro, North Carolina. He has been an Executive Officer
of the Company since 1985, a Director since 1986, and is a member of
the Executive Committee.
3
CLASS 2 DIRECTORS SERVING UNTIL THE 1999 ANNUAL MEETING:
CHARLES R. CARTER, (65), Retired as Minister of the Forest
Hills Presbyterian Church, High Point, North Carolina, and now
resides in Blowing Rock, North Carolina. He was Minister of the
Forest Hills Presbyterian Church from 1967 to 1997. He has been a
Director of the Company since 1982, and is a member of the Audit
Committee, the Compensation Committee and the Incentive Stock Option
Committee (Chair).
JERRY W. ELLER, (57), Executive Vice President of Unifi, Inc.,
Yadkinville, North Carolina. He has been an Executive Officer of
the Company since 1981, a Director of the Company since 1985, and is
a member of the Executive Committee.
KENNETH G. LANGONE, (62), an Investment Banker and Managing
Director of Invemed Associates, Inc., an investment banking firm,
New York, New York, since 1974. He is a Director of DBT Online,
Inc., St. Jude Medical, The Home Depot, Inc., and United States
Satellite Broadcasting Company, Inc. He has been a Director of the
Company since 1969 and is a member of the Audit Committee and the
Compensation Committee (Chair).
SECURITY HOLDINGS OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
Directors Amount and Nature of Percentage of
Beneficial Ownership(1) Ownership
G. Allen Mebane(3) 823,325 1.30
William T. Kretzer(4) 874,993 1.38
Jerry W. Eller(5) 277,227 (2)
G. Alfred Webster(6) 399,536 (2)
Charles R. Carter(7) 51,167 (2)
Kenneth G. Langone(8) 165,000 (2)
Donald F. Orr(9) 176,653 (2)
Robert A. Ward(10) 343,146 (2)
R. Wiley Bourne, Jr.(11) 3,333 (2)
J. B. Davis(12) 10,333 (2)
Raymond Maynard(13) 303,389 (2)
Willis C. Moore, III(14) 55,333 (2)
All Directors and 3,483,435 5.50
Executive Officers
and Nominees for
Directors [12 persons](15)
- --------------------------
(1) All shares are owned directly and with sole voting and
dispositive power, except as otherwise noted. Ownership is as
of August 5, 1997.
(2) Represents less than one percent (1%) of the Company's common
stock.
(3) Includes 534,856 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; and 76,125 shares owned by his wife over which he
has voting rights but disclaims any other beneficial ownership.
(4) Includes 471,334 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.
(5) Includes 116,145 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.
(6) Includes 216,832 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.
(7) Includes 29,666 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 25,000 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.
4
(9) Includes 25,000 shares that he has the right to purchase under
presently exercisable stock options granted to him by the
Company and 3,950 shares owned by the Orr Family Trust over
which he has voting power, which shares may be determined to be
beneficially owned by him.
(10) Includes 115,906 shares that he has the right to purchase under
presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially
owned by him, and 100,229 shares owned by a trust of which his
wife, Margaret Ann Ward, is Trustee, in which he disclaims all
beneficial interest.
(11) Includes 3,333 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.
(12) Includes 3,333 shares that he has the right to purchase under
presently exercisable stock options granted to him by the
Company and 7,000 shares owned by North Carolina Trust Company
over which he has sole voting and dispositive power, which
shares may be determined to be beneficially owned by him.
(13) Includes 124,363 shares that he has the right to purchase under
presently exercisable stock options granted to him by the
Company, which shares may be determined to be beneficially
owned by him.
(14) Includes 55,333 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.
(15) Includes 1,721,101 shares that they have the right to purchase
within sixty (60) days after August 5, 1997, 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 was paid for
serving on the Board during fiscal year ended June 29, 1997, a
retainer at the rate of $24,000 per annum and an additional $1,000
for each meeting of the Board of Directors attended, as well as
being reimbursed for reasonable expenses incurred in attending said
meetings. 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 Incentive Stock Option Committee. The Executive
Committee (composed of Messrs. Mebane, Kretzer, Eller, and Webster)
met regularly during the year. The Compensation Committee (composed
of Messrs. Carter, Langone, Ward, Orr and Mebane, as an ex-officio
member) met twice during the year. The Audit Committee (composed of
Messrs. Orr, Carter, Langone and Ward) met twice during the year.
The Incentive Stock Option Committee (composed of Messrs. Carter,
Orr and Davis) met three times 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 Executive Committee
will consider those recommendations by shareholders which are
submitted with biographical and business experience information to
the Secretary, in compliance with the Shareholder Proposals
provision, hereinafter set forth.
The Executive Committee has, except to the extent prohibited by
the Business Corporation Law of the State of New York, all the
powers of the Board in the management of the Company. All important
actions taken by the Executive Committee are required to be reported
to the Board at the meeting next succeeding such action. The
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 grants of stock options under the
Company's 1987 Non-Qualified Stock Option Plan.
The Audit Committee's function is to be aware of the financial
reporting procedures of the Company, review with the independent
auditors the plans and results of the audit engagement, and to
investigate when called upon and recommend such changes as deemed
5
desirable to the Board. The control over the financial reports of
the Company is the function of Management and the objective of this
committee is to act as liaison with the Board in a recommendation
capacity.
The Incentive Stock Option Committee administers the 1992
Incentive Stock Option Plan and 1996 Incentive Stock Option Plan.
It has exclusive authority 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 exercise
price of the shares subject to option, which shall not be less than
the price per share of the Company's common stock at the close of
business on the New York Stock Exchange 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 fiscal year 1997.
All directors attended at least seventy-five percent (75%) of the
meetings of the Board and the Committees of the Board during the
period in which they served as a director or a committee member.
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 fiscal
year 1997, the Company paid Salem Leasing Corporation, a
wholly-owned subsidiary of Salem National Corporation, $3,655,815 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
fiscal year 1997, such firm performed certain advisory services for
the Company and acted on behalf of the Company in connection with
its repurchase of shares of its common stock. 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 1997 was as follows: (a) Advisory Services
- - $60,000; (b) Fee as Dealer/Manager for the Company's Tender Offer
(pursuant to Section 13(e)(1) of the Securities and Exchange Act of 1934)
and as Broker/Commissions on the repurchase of the Company's shares
on the NYSE - $156,000. In the opinion of Management, the fees and
commissions paid to Invemed are as fair and reasonable and as
favorable to the Company as the fees that could have been obtained
from unrelated third parties.
6
EXECUTIVE OFFICERS AND THEIR COMPENSATION
The following table sets forth information for fiscal years ended
June 1997, 1996 and 1995, as to compensation paid by the Company and
its subsidiaries (for the purpose of this section, collectively
referred to as "Company") to the Chief Executive Officer ("CEO"),
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
Name and Principal ------------------- Other Annual All Other
Position Year Salary Bonus Compensation(1) Options Comp.(2)
- -----------------------------------------------------------------------------
William T. Kretzer 1997 $750,000 $450,000 $ 55,735 20,000(3) $ 28,360
President/CEO 1996 $750,000 $250,000 $ 53,577 20,000 $ 27,884
and Director 1995 $750,000 $250,000 $ 52,070 231,000 $ 26,650
G. Allen Mebane, IV 1997 $800,000 $300,000 $128,672 20,000(3) $ 40,964
Chairman of the 1996 $800,000 $250,000 $ 67,823 20,000 $ 42,157
Board and Director 1995 $800,000 $250,000 $ 88,850 283,190 $ 39,040
Jerry W. Eller 1997 $400,000 $135,000 - 15,000(3) $ 27,845
Exec Vice President 1996 $400,000 $110,000 - 15,000 $ 28,890
and Director 1995 $400,000 $100,000 - 71,145 $ 26,642
Raymond W. Maynard 1997 $250,000 $150,000 - 15,000(3) $ 21,205
Senior Vice 1996 $250,000 $125,000 - 15,000 $ 22,198
President 1995 $250,000 $100,000 - 50,000 $ 21,169
Willis C. Moore,III 1997 $275,000 $140,000 - 25,000(3) $ 19,267
Vice President & 1996 $275,000 $100,000 - 15,000 $ 20,481
Chief Financial
Officer
- ----------------------------------------------------------------
Footnotes:
(1) As permitted by the Securities and Exchange Commission's rules regarding
disclosure of executive compensation in proxy statements, this column
excludes perquisites and other personal benefits of the named executive
officer if their total cost is less than $50,000. The amounts reported under
"Other Annual Compensation" are the approximate incremental cost to the Company
of their respective personal travel expense, where applicable.
(2) 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, Mr. Mebane and Mr. Eller; (ii) payments of the Company's portion of the
premiums on the split-dollar life insurance in 1997, 1996 and 1995,
respectively, amounted to: Mr. Kretzer - $5,036, $3,367 and $2,940; Mr.
Mebane - $17,640, $17,640 and $15,330; Mr. Eller - $4,521, $4,373 and $2,932;
Mr. Maynard $1,881, $1,681 and $1,459; and Mr. Moore - $788 and $826; and
(iii) allocation of the Company's contributions to the Profit Sharing Plan
in 1997, 1996, and 1995 respectively, for the CEO and other named executive
officers amounted to: Mr. Kretzer - $19,324, $20,517 and $19,710; Mr. Mebane
- - $19,324, $20,517 and $19,710; Mr. Eller - $19,324, $20,517 and $19,710;
Mr. Maynard - $19,324, $20,517 and $19,710; and Mr. Moore - $18,479 and
$19,655. No distributions were made under the Profit Sharing Plan to any of
the executive officers.
(3) Non-Qualified Stock Options - granted under the 1996 Plan which vest in
three approximately equal annual increments.
7
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
per annum, plus such additional compensation and bonuses as may be
awarded, from time to time, by the Board of Directors of the
Company 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.
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 and is entitled to receive Directors'
Fees. The other terms of the agreement were not amended.
The Company has Severance Employment Agreements with Messrs.
Mebane, Kretzer, Eller, 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 officer's
average annual taxable compensation paid during the five (5)
calendar years preceding the change in control of the Company
limited to the amount deductible by Unifi, Inc. and as may be
subject to excise taxes under the Internal Revenue Code, all as
determined by the Company's Independent Certified Public
Accountants, whose decision shall be binding upon the Company and
the 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-year
(2) 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 1997 is presented in the
following table. The options were granted on April 17, 1997, under the 1996
Non-Qualified Stock Option Plan at an exercise price equal to the closing
price per share of the Company's common stock on the New York Stock Exchange
as of the date of grant and vest over a two-year period. One-third of the
options vested as of April 17, 1997; an additional one-third will vest on
April 17, 1998; and the final one-third will vest on April 17, 1999.
OPTION GRANTS IN FISCAL YEAR 1997
Potential Realized Value at
Individual Grants Assumed Annual Rates of Stock
Price Appreciation
------------------------------------ -----------------------------
% of Total
Options Options Granted Exercise or Present
Granted to Employees Base Price Expiration 5% 10% Value
Name (#) in Fiscal Year(1) ($/Share) Date ($) ($) ($)(2)
- ------ ------- --------------- --------- ---------- --------- ----------- ---------
Kretzer(3) 20,000 7.4% $31.000 04/17/07 $390,000 $ 988,200 $266,400
Mebane(3) 20,000 7.4% $31.000 04/17/07 $390,000 $ 988,200 $266,400
Eller(3) 15,000 5.5% $31.000 04/17/07 $292,500 $ 741,150 $199,800
Maynard(3) 15,000 5.5% $31.000 04/17/07 $292,500 $ 741,150 $199,800
Moore(3) 25,000 9.2% $31.000 04/17/07 $487,500 $1,235,250 $333,000
- -------------------------------------------------------------------------
Footnotes:
1) Total amount granted in FY 1997 equals 270,500 NQSO.
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: Stock price on date of grant and exercise
price: 04/17/97 $31.00 --- Expected Dividend Yield: 1.72% --- Risk-Free
Rate: 6.18% --- Term: 10 Years --- Volatility: .31.
3) Non-Qualified Stock Options - granted under the 1996 Plan which vest in
three approximately equal annual increments.
8
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in fiscal year 1997 of previously
granted options and the number and value of unexercised options are shown in
the following table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
Shares Number of Unexercised Value of Unexercised
Acquired Value Options/SARS In-the-Money Options/SARs
on Exercise Realized at Year End at Year End (1)
------------------------- --------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
(2) (2)
- ----- ------------ ------- ----------- ------------- ------------ ------------
Kretzer 0 $ 0 471,334 13,334 $8,931,804 $78,337
Mebane 0 $ 0 534,856 13,334 $6,091,333 $78,337
Eller 147,918 $3,889,514 116,145 10,000 $1,366,130 $58,750
Maynard 0 $ 0 124,363 10,000 $1,472,964 $58,750
Moore 0 $ 0 55,333 16,667 $ 598,706 $97,919
- ----------------
Footnotes:
1) The fair market value of the Company's common stock at its fiscal year end,
June 29, 1997 was $36.875.
2) Non-Qualified Stock Options - granted under the 1996 Plan on April 17,
1997. The options are subject to a two-year vesting schedule; one-third were
vested at the time of grant; an additional one-third vests on April 17,
1998; and, the final one-third vests on April 17, 1999.
REPORT OF THE COMPENSATION AND INCENTIVE STOCK OPTION COMMITTEES
ON EXECUTIVE COMPENSATION
This report of the Compensation Committee and the Incentive Stock
Option Committee ("Committees") of the Board of Directors sets
forth the Company's compensation policies with respect to the
executives of the Company, including the named executives for whom
specific compensation information is reported in the accompanying
summary compensation tables.
The Compensation Committee during fiscal year 1997 was composed
of three non-employee directors and one employee director 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 Committee's
duties 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 1987 Non-Qualified
Stock Option Plan.
The Incentive 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 1992 Incentive Stock Option Plan and
the 1996 Incentive Stock Option Plan. The members of the Incentive
Stock Option Committee cannot be granted options under the
Incentive Stock Option 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 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
9
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 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.
BASE SALARIES
The Compensation Committee recommends to the Board of Directors
base salaries it thinks 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, including the CEO, did not increase in
fiscal year 1997. 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
approval of the full Board.
The annual incentive compensation awarded to the named executives
in the Summary Compensation Table other than the Chief Executive
Officer averaged 42.03% of base salary compared to 33.91% of base
salary in fiscal 1996. The Committees recommended approval of the
bonuses to the full Board, noting exceptional performance by
Management for the year.
STOCK OPTIONS
The Company has six stock option plans: the 1996 Incentive Stock
Option Plan; the 1996 Non-Qualified Stock Option Plan; the 1992
Incentive Stock Option Plan; the 1987 Non-Qualified Stock Option
Plan under which options can not be granted after October 21, 1997;
the 1982 Incentive Stock Option Plan; and the Unifi Spun Yarn's 1992 Employee
Stock Option Plan (this Plan was acquired in the Vintage Yarns, Inc.
merger). Options can no longer be granted under the 1982 Plan or
the USY Plan.
Incentive stock options are granted from time to time to key
management employees, as approved by the Incentive Stock Option
Committee. 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. Non-Qualified Stock Options are granted from
time to time to directors who are not employees of the Company
(outside directors), officers and other key employees by the Board
of Directors on the recommendation of the Compensation Committee or
other committees as the Board of Directors may designate. Non-
Qualified Stock Options may be granted at such exercise price as
the Board of Directors deems appropriate however, to date all
options have been 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.
The optionee will receive value from the grants only if the
market value of such shares increase. 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 optionee directly with the interest of
the Company's shareholders.
In 1997, the stock options granted to the executive officers as
a group constituted approximately 24.16% of their total 1997
compensation package, utilizing (for illustration purposes only)
the valuation method used in the Table of Option Grants in Fiscal
Year 1997, as provided on page 8. 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.
10
1997 COMPENSATION FOR CHIEF EXECUTIVE OFFICER
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 (as provided in his
Employment Agreement) and his annual cash incentive compensation
(bonus) represented 60% of his base salary as compared to 33.33%
for fiscal 1996. The Board of Directors granted Mr. Kretzer
options for 20,000 shares at a per share exercise price of $31.00,
the closing price per share on the New York Stock Exchange as of
the date of grant, under the 1996 Non-Qualified Stock Option Plan.
COMMITTEES' JUDGMENT
It is the judgment of the Committees that in 1997, and for the
three periods ending June 29, 1997, 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: Incentive Stock Option Committee:
Donald F. Orr Charles R. Carter
Charles R. Carter Donald F. Orr
Kenneth G. Langone J. B. Davis
Robert A. Ward
PERFORMANCE GRAPH - SHAREHOLDER RETURN ON COMMON STOCK
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG UNIFI, INC.,
NYSE MARKET INDEX AND MG GROUP INDEX
NOTE: PURSUANT TO REG. SECTION 232.304 (d) THE PERFORMANCE GRAPH IS OMITTED
HEREIN AND REPRESENTED BY THE FOLLOWING TABLE:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN* AMONG UNIFI, INC., MEDIA
GENERAL TEXTILE AND THE NEW YORK STOCK EXCHANGE MARKET VALUE INDICES
Company June 1992 June 1993 June 1994 June 1995 June 1996 June 1997
- --------------- -------- --------- --------- --------- -------- ----------
Unifi, Inc. $100.00 $148.34 $104.30 $108.74 $130.20 $173.22
Media General
Textile Group $100.00 $106.48 $ 96.97 $ 96.18 $105.39 $130.50
New York Stock
Exchange Market
Value $100.00 $113.41 $117.36 $140.09 $175.27 $228.94
- ----------------
* Assumes $100 invested in the common stock of Unifi, Inc. and comparison
groups on June 28, 1992. 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 September 16, 1997, being $41.06 per share.
INFORMATION RELATING TO THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Ernst & Young LLP, the Company's Independent Certified Public
Accountants for fiscal year ended June 29, 1997, is expected to be
present at the shareholders' meeting, at which time a represent-
ative 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, and any person who
owns more than ten percent of the Company's stock, to file with the
Securities and Exchange Commission ("SEC") initial reports of
ownership and reports of changes in ownership of common stock.
Such persons are required by the SEC's regulations to furnish the
Company with copies of all Section 16(a) reports they filed.
To the Company's knowledge, based solely on its review of the
copies of such reports furnished to the Company and written
representation that no other reports were required during fiscal
year ended June 29, 1997, all such Section 16(a) filing
requirements were met.
SHAREHOLDER PROPOSALS
Any shareholder satisfying the Securities and Exchange
Commission's requirements and wishing to submit a proposal to be
included in the 1998 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 22, 1998, in order to consider it for inclusion in
the 1998 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 23, 1997
12
APPENDIX "A" FORM PROXY [PROXY CARD-SIDE ONE]
UNIFI, INC.
PROXY
Annual Meeting October 23, 1997
The undersigned hereby appoints Willis C. Moore, III and C. Clifford
Frazier, Jr., or either of them with full power of substitution, as attorneys
and proxies to represent and vote all shares of Unifi, Inc. Common Stock which
the undersigned is entitled to vote at the Annual Meeting of the Shareholders
to be held at the corporation's Plant T-5 facility at 1641 Shacktown Road, in
Yadkinville, North Carolina, on Thursday, October 23, 1997, at 10:00 A.M.
Eastern Daylight Savings Time, and any adjournment or adjournments thereof as
follows:
(1) PROPOSAL NO. 1 - Election of Directors
To vote FOR [ ] WITHHOLD AUTHORITY [ ]
all nominees listed below (except as marked to vote for all
to the contrary below) nominees listed below
Nominees: G. Allen Mebane, William T. Kretzer, J.B. Davis and
R. Wiley Bourne, Jr.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
______________________________________________________________________
APPENDIX "A" CONTINUED [PROXY CARD-SIDE TWO]
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.
THE 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 23, 1997, and the Proxy Statement furnished
therewith.
Dated this day of , 1997.
------------------------------(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.