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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
[ ] 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 º240.14a-11(c) or
º240.14a-12
UNIFI, INC.
__________________________________________________________________
(Name of Registrant as Specified In Its Charter)
CHARLES F. MCCOY
________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
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 transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
UNIFI
QUALITY THROUGH PRIDE
7201 West Friendly Avenue
Greensboro, North Carolina 27410
September 22, 1998
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 22, 1998, 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 28, 1998 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 22, 1998
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 22, 1998, 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 14, 1998, 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 22, 1998
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 22, 1998, at 10:00 A.M. Eastern
Daylight Savings Time, at the Company's Plant T-5 facility located on 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 22, 1998.
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 of the Company. Shareholders of record, as of the close of
business on September 14, 1998, will be entitled to notice of and to vote at
the meeting or any adjournment thereof. As of August 14, 1998, the total
number of shares of common stock outstanding and entitled to vote at the
Annual Meeting was 61,355,386 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 signing 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 14, 1998, 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) 8,371,900 13.76%
82 Devonshire Street
Boston, MA 02109
Wachovia Corporation (b) 3,822,270 6.30%
P.O. Box 3099 MC 32121
Winston-Salem, NC 27150
AMBESCAT, PLC 5,247,625 8.60%
11 Devonshire Square
London, EC2M 4YR (c)
All Directors and Executive 2,841,177 4.49%
Officers and Nominees for Di-
rectors, as a group on August 14,
1998 (d)
______________________________________________
(a) As indicated in its Schedule 13G, dated February 14, 1998, by FMR
Corp, a holding company and its subsidiaries, held sole power to dispose or to
direct the disposition of 8,371,900 shares and sole voting power with respect
to 599,100 shares.
(b) As indicated in its Schedule 13G, dated February 11, 1998, 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 3,822,270 shares by
virtue of having sole voting power over 2,551,603 shares, shared voting power
over 1,171,867 shares, sole dispositive power over 3,807,943 shares, and
shared dispositive power over 4,737 shares.
(c) As indicated in its Schedule 13G, dated February 9, 1998, AMBESCAT,
PLC, a holding company and its subsidiaries, held shared voting power over
5,247,625 shares and shared dispositive power over 5,247,625 shares.
(d) This amount includes the 1,462,843 shares of the common stock of the
Company which could be acquired through the exercise of stock options within
sixty (60) days after August 14, 1998. Additional information regarding stock
options is provided on pages 8-11.
Cede & Co. , as of August 14, 1998, 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
54,076,036 shares of the Company's common stock representing 88.14% 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 presently consists of ten (10) members divided into
three (3) classes; Class 1 consisting of three (3) members; Class 2 consisting
of three (3) members; and Class 3 consisting of four (4) members. 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. Class 1 Directors stand for election at this Annual
Meeting.
2
The Board of Directors has nominated the following persons as CLASS 1
DIRECTORS - Donald F. Orr, Robert A. Ward and G. Alfred Webster; to serve
until the Annual Meeting in 2001, 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. 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 by 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 14, 1998 for each director and nominee are set forth in the table
beginning on page 4.
NOMINEES FOR ELECTION AS DIRECTORS
CLASS 1 NOMINEES TO TERMS EXPIRING 2001:
DONALD F. ORR, (55), 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), Compensation Committee, and of the
Incentive Stock Option Committee.
ROBERT A. WARD, (58), 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 Compensation Committee.
G. ALFRED WEBSTER, (50), 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.
CLASS 2 DIRECTORS SERVING UNTIL THE 1999 ANNUAL MEETING:
CHARLES R. CARTER, (66), Retired Minister of the Forest Hills Presbyterian
Church, High Point, North Carolina, which position he held from 1967 to
1997. He has been a Director of the Company since 1982, and is a member of the
Audit Committee, Compensation Committee and Incentive Stock Option Committee
(Chair).
JERRY W. ELLER, (58), 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, (63), an Investment Banker, President and Chief Executive
Officer of Invemed Associates, Inc., an investment banking firm, New York,
New York, since 1974. He is a Director of DBT Online, Inc., The Home Depot,
Inc., and TRICON Global Restaurants. He has been a Director of the Company
since 1969, and is a member of the Compensation Committee (Chair).
CLASS 3 DIRECTORS SERVING UNTIL THE 2000 ANNUAL MEETING:
WILLIAM T. KRETZER, (52), 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, (69), 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.
3
J.B. DAVIS, (54), 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., (61), Vice-Chairman and Executive Vice President of
Eastman Chemical Company, Kingsport, Tennessee. 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, and is a member of the Audit Committee and
Incentive Stock Option Committee.
SECURITY HOLDING OF DIRECTORS,
NOMINEES AND EXECUTIVE OFFICERS
Directors Amount and Nature of Percentage of
Beneficial Ownership(1) Ownership
- ------------------- ----------------------- --------------
G. Allen Mebane(3) 825,472 1.30
William T. Kretzer(4) 729,041 1.15
Jerry W. Eller(5) 132,226 (2)
G. Alfred Webster(6) 263,766 (2)
Charles R. Carter(7) 45,501 (2)
Kenneth G. Langone 175,000 (2)
Donald F. Orr(8) 176,364 (2)
Robert A. Ward(9) 243,146 (2)
R. Wiley Bourne, Jr.10) 7,986 (2)
J. B. Davis(11) 16,666 (2)
Raymond Maynard(12) 177,262 (2)
Willis C. Moore, III(13) 48,747 (2)
All Directors and 2,841,177 4.49
Executive Officers
and Nominees for
Directors [12 persons](14)
_______________________________
(1) All shares are owned directly and with sole voting and dispositive
power, except as otherwise noted. Ownership is as of August 14, 1998.
(2) Represents less than one percent (1%) of the Company's common stock.
(3) Includes 541,523 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 314,333 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company, 24,750
shares owned by members of his immediate family, and 144,507 shares in the
Unifi, Inc. Trust for Deferred Compensation Agreements, which shares may be
determined to be beneficially owned by him.
(5) Includes 121,144 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 128,496 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 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
(8) 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.
(9) 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.
(10) Includes 6,666 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.
(11) Includes 6,666 shares that he has the right to purchase under
presently exercisable stock options granted to him by the Company and 10,000
shares held 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.
(12) Includes 129,362 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.
(13) Includes 48,747 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 1,462,843 shares that they have the right to purchase
within sixty (60) days after August 14, 1998, 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 28, 1998, 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, and Orr)
met twice during the year. The Audit Committee (composed of Messrs. Orr,
Carter, Ward and Bourne) met twice during the year. The Incentive Stock
Option Committee (composed of Messrs. Carter, Orr, Davis and Bourne) 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 Committee Chairman, 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.
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 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.
5
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 1998. 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 1998, the
Company paid Salem Leasing Corporation, a wholly-owned subsidiary of Salem
National Corporation, $3,556,827 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, principal shareholder,
President and Chief Executive Officer of Invemed Associates, Inc., an
investment firm. During fiscal year 1998, such firm performed certain
advisory services for the Company, acted as broker on the repurchase of the
Company's shares on the NYSE, and was a dealer/manager for the Company's 6
1/2% Notes Due 2008, Series B. Mr. Mebane owns in excess of ten percent
(10%) of said firm's equity securities. The fees and commissions paid Invemed
Associates, Inc. during the fiscal year ended in 1998 were, in the opinion of
Management, fair and reasonable and as favorable to the Company as could have
been obtained from unrelated third parties.
Mr. Eller's son, C.W. Eller, is a controlling stockholder in Advantage
Machinery Services, Inc. In fiscal year 1998, the Company paid Advantage
Machinery Services, Inc. $3,259,849 for services rendered in moving
machinery, erecting said machinery, and for contract labor. In the opinion of
Management, the amount paid Advantage Machinery Services, Inc. for the work
performed is fair and reasonable and as favorable to the Company as 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 1998,
1997 and 1996, 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 Compen- Options Compen-
sation(1) sation(2)
- ------------------ ---- -------- -------- ---------- ------- ----------
William T. Kretzer 1998 $750,000 $450,000 $ 57,688 - $30,634
President/CEO 1997 $750,000 $450,000 $ 55,735 20,000(3) $28,360
and Director 1996 $750,000 $250,000 $ 53,577 20,000 $27,884
G. Allen Mebane,IV 1998 $800,000 $100,000 $140,376 - $43,031
Chairman of the 1997 $800,000 $300,000 $128,672 20,000(3) $40,964
Board and Director 1996 $800,000 $250,000 $ 67,823 20,000 $42,157
Jerry W. Eller 1998 $400,000 $160,000 $ 14,621 - $30,206
Executive Vice
President 1997 $400,000 $135,000 - 15,000(3) $27,845
and Director 1996 $400,000 $110,000 - 15,000 $28,890
Raymond W. Maynard 1998 $250,000 $160,000 $ 14,286 - $23,421
Senior Vice 1997 $250,000 $150,000 - 15,000(3) $21,205
President 1996 $250,000 $125,000 - 15,000 $22,198
Willis C.
Moore, III 1998 $300,000 $155,000 $ 21,917 - $21,642
Senior Vice
President/ 1997 $275,000 $140,000 - 25,000(3) $19,267
Chief Financial
Officer 1996 $275,000 $100,000 - 15,000 $20,481
__________________________________
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 1998, 1997 and 1996, respectively, amounted
to: Mr. Kretzer - $5,243, $5,036 and $3,367; Mr. Mebane - $17,640, $17,640 and
$17,640; Mr. Eller - $4,815, $4,521 and $4,373; Mr. Maynard $2,030, $1,881
and $1,681; and Mr. Moore - $1,129, $788 and $826; and (iii) allocation of the
Company's contributions to the Profit Sharing Plan in 1998, 1997, and 1996
respectively, for the CEO and other named executive officers amounted to: Mr.
Kretzer - $21,391, $19,324 and $20,517; Mr. Mebane - $21,391, $19,324 and
$20,517; Mr. Eller - $21,391, $19,324 and $20,517; Mr. Maynard - $21,391,
$19,324 and $20,517; and Mr. Moore - $20,513, $18,479 and $19,655. No
distributions were made under the Profit Sharing Plan to any of the executive
officers.
(3) Non-Qualified Stock Option - 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, Webster, Moore, Huggins, Maynard, Brown, Little and Mayes. The
agreements provide that if said 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
officer may receive certain benefits. The present value of the benefits will
be 2.99 times such 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 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
No options were granted during fiscal year 1998.
OPTION EXERCISES AND OPTION/SAR VALUES
The net value realized upon the exercise in fiscal year 1998 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
Number of Unexercised Value of Unexercised
Shares Acquired Value Options/SARS In-the-Money Options/SARs
on Exercise Realized at Year End at Year End(1)
Name (#) ($) -------------------- ------------------------
Exercisable Unexerc- Exercisable Unexerc-
isable(2) isable(2)
- ------- ---------- ----------- ------- ------- ---------- ---------
Kretzer 163,668 $5,924,782 314,333 6,667 $2,896,197 $21,668
Mebane 0 $0 541,523 6,667 $4,709,004 $21,668
Eller 0 $0 121,144 5,000 $1,077,499 $16,250
Maynard 0 $0 129,362 5,000 $1,162,761 $16,250
Moore 14,919 $ 206,393 48,747 8,334 $ 344,079 $27,086
- ------------------------------------------------------------------------
Footnotes:
1) The fair market value of the Company's common stock at its fiscal year
end, June 28, 1998 was $34.25.
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 vested on April 17,
1998; and the final one-third vests on April 17, 1999.
8
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 1998 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 nonemployee
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 can not 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
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
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, including the CEO, except for Mr. Moore, did not increase in
fiscal year 1998. 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
32.86% of base salary compared to 42.03% of base salary in fiscal 1997. The
Committees' recommended approval of the bonuses to the full Board, noting
exceptional performance by Management for the year.
9
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 ("1987 Plan"); the 1982
Incentive Stock option Plan ("1982 Plan"); and the Unifi Employee Stock
Option Plan (this Plan was acquired in the Vintage Yarns, Inc. merger) ("USY
Plan"). Options can no longer be granted under the 1982 Plan, 1987 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 1998, no stock options were granted to executive officers.
1998 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, the same
percentage as for fiscal 1997.
COMMITTEES' JUDGMENT
It is the judgment of the Committees that in 1998, and for the three fiscal
years ending June 28, 1998, 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 R. Wiley Bourne, Jr.
10
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 1993 June 1994 June 1995 June 1996 June 1997 June 1998
- ------------ -------- --------- -------- -------- --------- ---------
Unifi, Inc. $100.00 $ 70.31 $ 73.30 $ 87.77 $116.77 $110.03
Media General
Textile Group $100.00 $ 91.07 $ 90.33 $ 98.97 $122.55 $125.79
New York Stock
Exchange $100.00 $103.48 $123.53 $154.54 $201.87 $257.25
Market Value
___________________________
* Assumes $100 invested in the common stock of Unifi, Inc. and comparison
groups on June 25, 1993. Assumes reinvestment of dividends.
NEW YORK STOCK EXCHANGE
Unifi, Inc.'s Common Stock trades on the New York Stock Exchange (NYSE) under
the symbol "UFI", with the closing price of said stock on September 15, 1998,
being $21.88 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 28, 1998, 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.
11
COMPLIANCE WITH SECTION 16(a)
OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
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, all such Section 16(a) filing requirements have been
made during fiscal year ended June 28, 1998, except Mr. Stewart Little, Vice
President, was late filing one report reflecting six transactions (cashless
exercise of stock options and sale) and Mr. Donald Orr was late filing a
report on a gift of stock to a charitable foundation.
SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the Company's 1999 Annual
Meeting of the Shareholders pursuant to Rule 14a-8 promulgated under the
Securities and Exchange Act of 1934, as amended, and wish to have included in
the Company's proxy materials must be received by the Company no later than
May 21, 1999. If a proponent fails to notify the Company by August 8,
1999 of a non-Rule 14a-8 shareholder proposal which it intends to submit at the
Company's 1999 Annual Meeting of the Shareholders, the proxy solicited by the
Board of Directors with respect to such meeting may grant discretionary
authority to the proxies named therein to vote with respect to such matter.
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.
CLIFFORD FRAZIER, JR.
Secretary
Greensboro, North Carolina
September 22, 1998
12
APPENDIX "A" FORM PROXY [PROXY CARD - SIDE ONE]
UNIFI, INC.
PROXY
Annual Meeting, October 22, 1998
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 22, 1998, at 10:00 A.M.
Eastern Daylight Savings Time, and any adjournment or adjournments thereof as
follows:
PROPOSAL NO. 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: Donald F. Orr, Robert A. Ward and G. Alfred Webster.
(INSTRUCTION: To withhold authority to vote for any
individual nominee, write that nominee's name in 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 to the extent authorized by Rule 14a-4(c) promulgated by
the Securities and Exchange Commission
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE 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 22, 1998, and the Proxy Statement furnished
therewith.
Dated this day of , 1998.
_____________________________________(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.