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EXHIBIT (10m)
CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT ("Agreement") between UNIFI, INC., a
New York Company (the "Company"), and G. XXXXXX XXXXXXX ("Executive") effective
the 26TH day of October, 2000.
WITNESSETH:
WHEREAS, The Executive is an Executive Vice President and a member of
the Board of Directors of the Company and is considered as an integral part of
the Company's Management; and
WHEREAS, the Company's Board of Directors considers the establishment
and maintenance of a sound and vital Management to be essential in protecting
and enhancing the best interests of the Company and its Shareholders, recognizes
that the possibility of a change in control exists and that such possibility,
and the uncertainty and questions which it may raise among Management, may
result in the departure or distraction of Management personnel to the detriment
of the Company and its Shareholders; and
WHEREAS, the Executive desires that in the event of any change in
control he will continue to have the responsibility and status he has earned;
and
WHEREAS, the Company's Board of Directors has determined that it is
appropriate to reinforce and encourage the continued attention and dedication of
the Executive, as a member of the Company's Management, to his assigned duties
without distraction in potentially disturbing circumstances arising from the
possibility of a change in control of the Company.
NOW, THEREFORE, in order to induce the Executive to remain in the
employment of the Company and in consideration of the Executive agreeing to
remain in the employment of the Company, subject to the terms and conditions set
out below, the Company agrees it will pay such amount, as provided in Section 4
of this Agreement, to the Executive, if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
change in control of the Company, as herein defined.
SECTION 1. TERM: This Agreement shall terminate, except to the extent
that any obligation of the Company hereunder remains unpaid as of such time,
upon the earliest of (i) November 1, 2005 if a Change in Control of the Company
has not occurred within such period; (ii) the termination of the Executive's
employment with the Company based on Death, Disability (as defined in Section
3(b), Retirement (as defined in Section 3(c)), Cause (as defined in Section
3(d)) or by the Executive other than for Good Reason (as defined in Section
3(e)); and (iii) two years from the date of a
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Change in Control of the Company if the Executive has not voluntarily terminated
his employment for Good Reason as of such time.
SECTION 2. CHANGE IN CONTROL: No compensation shall be payable under
this Agreement unless and until (a) there shall have been a Change in Control of
the Company, while the Executive is still an employee of the Company and (b) the
Executive's employment by the Company thereafter shall have been terminated in
accordance with Section 3. For purposes of this Agreement, a Change in Control
of the Company shall be deemed to have occurred if:(i) there shall be
consummated (x) any consolidation or merger of the Company in which the Company
is not the continuing or surviving legal entity ("company") or pursuant to which
shares of the Company's Common Stock would be converted into cash, securities or
other property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock of the surviving company immediately
after the merger, or (y) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company; or (ii) the shareholders of the Company approved
any plan or proposal for the liquidation or dissolution of the Company; or (iii)
any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of twenty percent (20%) or more of the Company's outstanding Common Stock; or
(iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the entire Board of Directors shall cease
for any reason to constitute a majority thereof unless the election, or the
nomination for election by the Company's shareholders, of each new Director was
approved by a vote of at least two-thirds of the Directors then still in office
who were Directors at the beginning of the period.
SECTION 3. TERMINATION FOLLOWING CHANGE IN CONTROL: (a) If a Change in
Control of the Company shall have occurred while the Executive is still an
employee of the Company, the Executive shall be entitled to the compensation
provided in Section 4 upon the subsequent termination of the Executive's
employment with the Company by the Executive voluntarily for Good Reason or by
the Company unless such termination by the Company is as a result of (i) the
Executive's Death, (ii) the Executive's Disability (as defined in Section (3)(b)
below); (iii) the Executive's Retirement (as defined in Section 3(c) below);
(iv) the Executive's termination by the Company for Cause(as defined in Section
3(d) below); or (v) the Executive's decision to terminate employment other than
for Good Reason (as defined in Section 3(e) below).
(b) Disability: If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall
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have been absent from his duties with the Company on a full-time basis for six
months (including months before and after the change of control) and within 30
days after written notice of termination is thereafter given by the Company the
Executive shall not have returned to the full- time performance of the
Executive's duties, the Company may terminate this Agreement for "Disability."
(c) Retirement: The term "Retirement" as used in this Agreement
shall mean termination in accordance with the Company's retirement policy or any
arrangement established with the consent of the Executive.
(d) Cause: The Company may terminate the Executive's employment
for Cause. For purposes of this Agreement only, the Company shall have "Cause"
to terminate the Executive's employment hereunder only on the basis of fraud,
misappropriation or embezzlement on the part of the Executive or malfeasance or
misfeasance by said Executive in performing the duties of his office, as
determined by the Board of Directors. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been a meeting of the Company's Board of Directors (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), and the
delivery to the Executive of a resolution duly adopted by the affirmative vote
of not less than three-quarters of the entire membership of said Board of
Directors stating that in the good faith opinion of the Board the Executive was
guilty of conduct set forth in the second sentence of this Section 3(d) and
specifying the particulars thereof in detail.
(e) Good Reason: The Executive may terminate the Executive's
employment for Good Reason at any time during the term of this Agreement. For
purposes of this Agreement "Good Reason" shall mean any of the following
(without the Executive's express written consent):
(i) the assignment to the Executive by the Company
of duties inconsistent with the Executive's position, duties,
responsibilities and status with the Company immediately
prior to a Change in Control of the Company; or a change in
the Executive's titles or offices as in effect immediately
prior to a Change in Control of the Company; or any removal
of the Executive from or any failure to reelect the Executive
to any of the positions held prior to the change of control,
except in connection with the termination of his employment
for Disability, Retirement, or Cause, or as a result of the
Executive's Death; or by the Executive other than for Good
Reason;
(ii) a reduction by the Company in the
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Executive's base salary as in effect on the date hereof or as
the same may be increased from time to time during the term
of this Agreement or the Company's failure to increase
(within 12 months of the Executive's last increase in base
salary) the Executive's base salary after a Change in Control
of the Company in an amount which at least equals, on a
percentage basis, the average percentage increase in base
salary for all executive officers of the Company effected in
the preceding 12 months;
(iii) any failure by the Company to continue in
effect any benefit plan or arrangement (including, without
limitation, the Company's Profit Sharing Plan, group life
insurance plan and medical, dental, accident and disability
plans) in which the Executive is participating at the time of
a Change in Control of the Company (or any other plans
providing the Executive with substantially similar benefits)
(hereinafter referred to as "Benefit Plans"), or the taking
of any action by the Company which would adversely affect the
Executive's participation in or materially reduce the
Executive's benefits under any such Benefit Plan or deprive
the Executive of any material fringe benefit enjoyed by the
Executive at the time of a Change in Control of the Company;
(iv) any failure by the Company to continue in
effect any plan or arrangement to receive securities of the
Company (including, without limitation, Stock Option Plans or
any other plan or arrangement to receive and exercise stock
options, restricted stock or grants thereof) in which the
Executive is participating at the time of a Change in Control
of the Company (or plans or arrangements providing him with
substantially similar benefits) (hereinafter referred to as
"Securities Plans") and the taking of any action by the
Company which would adversely affect the Executive's
participation in or materially reduce the Executive's
benefits under any such Securities Plan;
(v) any failure by the Company to continue in effect
any bonus plan, automobile allowance plan, or other incentive
payment plan in which the Executive is participating at the
time of a Change in Control of the Company, or said Executive
had participated in during the previous calendar year;
(vi) a relocation of the Company's principal
executive offices to a location outside of North Carolina, or
the Executive's relocation to any place
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other than the location at which the Executive performed the
Executive's duties prior to a Change in Control of the
Company, except for required travel by the Executive on the
Company's business to an extent substantially consistent with
the Executive's business travel obligations at the time of a
Change in Control of the Company;
(vii) any failure by the Company to provide the
Executive with the number of paid vacation days to which the
Executive is entitled at the time of a Change in Control of
the Company;
(viii) any breach by the Company of any provision of
this Agreement;
(ix) any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of
the Company; or
(x) any purported termination of the Executive's
employment which is not made pursuant to a Notice of
Termination satisfying the requirements of Section 3(f).
(f) Notice of Termination: Any termination by the Company pursuant
to Section 3(b), 3(c) or 3(d) shall be communicated by a Notice of Termination.
For purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate those specific termination provisions in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. For purposes of this Agreement, no
such purported termination by the Company shall be effective without such Notice
of Termination.
(g) Date of Termination: "Date of Termination" shall mean (a) if
Executive's employment is terminated by the Company for
Disability, 30 days after Notice of Termination is given to
the Executive (provided that the Executive shall not have
returned to the performance of the Executive's duties on a
full-time basis during such 30 day period) or (b) if the
Executive's employment is terminated by the Company for any
other reason, the date on which a Notice of Termination is
given; provided that if within 30 days after any Notice of
Termination is given to the Executive by the Company the
Executive notifies the Company that a dispute exists
concerning the termination, the Date of Termination shall be
the date the dispute is finally determined, whether by mutual
agreement by the parties or upon final judgment, order or
decree of a court of competent jurisdiction (the time for
appeal therefrom
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having expired and no appeal having been perfected) or (c) the
date the Executive notifies the Company in writing that he is
terminating his employment and setting forth the Good Reason
(as defined in Section 3(e)).
SECTION 4. SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT. If
the Company shall terminate the Executive's employment other than pursuant to
Section 3(b), 3(c) or 3(d) or if the Executive shall voluntarily terminate his
employment for Good Reason, then the Company shall pay to the Executive as
severance pay in a lump sum, in cash, on the fifth day following the Date of
Termination, an amount equal to 2.99 times the annualized aggregate annual
compensation paid to the Executive by the Company or any of its subsidiaries
during the five calendar years preceding the Change in Control of the Company;
provided, however, that if the lump sum severance payment under this Section 4,
either alone or together with other payments which the Executive has the right
to receive from the Company, would constitute a "parachute payment" (as defined
in Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")),
such lump sum severance payment shall be reduced to the largest amount as will
result in no portion of the lump sum severance payment under this Section 4
being subject to the excise tax imposed by Section 4999 of the Code. The
determination of any reduction in the lump sum severance payment under this
Section 4 pursuant to the foregoing proviso shall be made by the Company's
Independent Certified Public Accountants, and their decision shall be conclusive
and binding on the Company and the Executive.
SECTION 5. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER
CONTRACTUAL RIGHTS: (a) The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Executive's rights under any employment agreement or other
contract, plan or employment arrangement with the Company.
(c) The Company shall, upon the termination of the Executive's
employment other than by Death, Disability (as defined in Section 3(b)),
Retirement (as defined in Section 3(c)) or Cause (as defined in Section 3(d)),
or the termination of the Executive's employment by the Executive without Good
Reason, maintain in full force and effect, for the Executive's continued benefit
until the earlier of
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(a) two years after the Date of Termination or (b) Executive's commencement
of full time employment with a new employer, all life insurance, medical, health
and accident, and disability plans, programs or arrangements in which he was
entitled to participate immediately prior to the Date of Termination, provided
that his continued participation is possible under the general terms and
provisions of such plans and programs. In the event the Executive is ineligible
under the terms of such plans or programs to continue to be so covered, the
Company shall provide substantially equivalent coverage through other sources.
(d) The Executive's account and rights in and under any retirement
benefit or incentive plans, shall remain subject to the terms and conditions of
the respective plans as they existed at the time of the termination of the
Executive's employment.
SECTION 6. SUCCESSOR TO THE COMPANY: (a) The Company will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement expressly, absolutely and unconditionally to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession or
assignment had taken place. Any failure of the Company to obtain such agreement
prior to the effectiveness of any such succession or assignment shall be a
material breach of this Agreement and shall entitle the Executive to terminate
the Executive's employment for Good Reason. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor or assign to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 6 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law. If at any time
during the term of this Agreement the Executive is employed by any corporation a
majority of the voting securities of which is then owned by the Company,
"Company" as used in Sections 3, 4 and 10 hereof shall in addition include such
employer. In such event, the Company agrees that it shall pay or shall cause
such employer to pay any amounts owed to the Executive pursuant to Section 4
hereof.
(b) If the Executive should die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
legatee, or other designee or, if there be no such designee, to the Executive's
estate. This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives or attorney-in-fact, executors or
administrators, heirs, distributees and legatees.
SECTION 7. NOTICE: For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be
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in writing and shall be deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt requested, postage prepaid, as
follows:
If to the Company:
Unifi, Inc.
P. O. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
ATTENTION: Xx. Xxxxxxx X. XxXxx
General Counsel
If to the Executive:
Mr. G. Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxx Xxxxx, XX 00000
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
SECTION 8. MISCELLANEOUS: (a) The invalidity or unenforceability of any
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
(b) Any payment or delivery required under this Agreement shall be
subject to all requirements of the law with regard to withholding (including
FICA tax), filing, making of reports and the like, and Company shall use its
best efforts to satisfy promptly all such requirements.
(c) Prior to the Change in Control of the Company, as herein defined,
this Agreement shall terminate if Executive shall resign, retire, become
permanently and totally disabled, or die. This Agreement shall also terminate if
Executive's employment as an executive officer of the Company shall have been
terminated for any reason by the Board of Directors of the Company as
constituted more than three (3) months prior to any Change in Control of the
Company, as defined in Section 2 of this Agreement.
SECTION 9. LEGAL FEES AND EXPENSES: The Company shall pay all legal
fees and expenses which the Executive may incur as a result of the Company's
contesting the validity, enforceability or the executive's interpretation of, or
determinations under, this Agreement.
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SECTION 10. CONFIDENTIALITY: The Executive shall retain in confidence
any and all confidential information known to the Executive concerning the
Company and its business so long as such information is not otherwise publicly
disclosed.
IN WITNESS WHEREOF, Unifi, Inc. has caused this Agreement to be signed
by a member of the Company's Compensation Committee pursuant to resolutions duly
adopted by the Board of Directors and its seal affixed hereto and the Executive
has hereunto affixed his hand and seal effective as of the date first above
written.
UNIFI, INC.
BY: Xxxxxx X. Xxx (SEAL)
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Xxxxxx X. Xxx
Compensation Committee
EXECUTIVE
G. Xxxxxx Xxxxxxx (SEAL)
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G. Xxxxxx Xxxxxxx
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