EXHIBIT (10p)
DEFERRAL AGREEMENT
THIS DEFERRAL AGREEMENT ("Agreement"), effective the 21st day of November,
1997, between Unifi, Inc., a New York Corporation, ("Unifi"), and Xxxxxxx X.
Xxxxxxx (hereinafter referred to a the "Executive");
W I T N E S S E T H :
WHEREAS, the Executive is the President and Chief Executive Officer as well
as Chairman of the Executive Committee of Unifi; and,
WHEREAS, the Executive was granted stock options to purchase 163,668 shares
of Unifi Common stock at an option price of $4.80 per share (as adjusted for
stock splits and stock dividends) on January 21, 1988 (the "Stock Option") under
the Unifi, Inc. 1982 Incentive Stock Option Plan ("ISOP"); and,
WHEREAS, the exercise of the Stock Option would result in the Executive
recognizing taxable compensation; and,
WHEREAS, the Executive and Unifi desire to enter into this Deferral
Agreement to defer such taxable compensation as provided herein.
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, it is agreed as follows:
1. DEFERRAL. Pursuant to the second paragraph of Section 3 of
his Incentive Stock Option Agreement dated January 21, 1988
with Unifi as amended effective November 21, 1997 ("ISOP"
Agreement), the Executive will tender on or before January 20,
1998, to Unifi such number of his previously acquired
outstanding shares of Unifi common stock that has been held
for at least six (6) months and that has a fair market value
equal to the exercise price of the Stock Option in exchange
for an equivalent number of shares of Unifi common stock (the
"Exchange Shares") and the right to receive 163,668 shares less
the amount of Exchange Shares of Unifi common stock in the
future ("Deferral Shares") under the terms of this Agreement.
Unifi shall issue the Deferral Shares to the Trustee of the
Unifi, Inc. Trust for Deferred Compensation Arrangements
("Trust").
2. INCOME ON SHARES. Any and all dividends paid on the Deferral
Shares shall be held as additional deferral compensation for
the Executive's account and distributed as provided in
paragraph 3 hereof. Additionally, as of each January 1st and
July 1st until all accumulated dividends are fully and finally
paid out, Unifi shall pay to the Trust as additional deferral
compensation for the Executive, interest on any accumulated
dividends as heretofore provided in such amounts after
considering the income generated by the Trusts on said
accumulated dividends as is necessary to provide a rate of
return equal to the Prime Rate as hereinafter described for
the last business day preceding the applicable January 1st and
July 1st plus three (3) percentage points (such sum being
referred to as the "Interest Factor"), multiplied by the
balance of said accumulated dividends, including the amount of
Interest previously credited on such accumulated dividends as
of the previous day (i.e., December 31st or June 30th). Said
accumulated dividends and the interest thereon are hereafter
referred to herein as "Accumulated Dividends".
The term "Prime Rate" used in this Agreement shall be the
base rate on the Corporate loans posted by at least seventy-
five (75%) percent of the nation's thirty (30) largest banks
as reported in the Wall Street Journal or, if no longer
published, a similar publication for the last business day
preceding the applicable January 1st and July 1st.
3. DEFERRAL PERIOD. Ten (10) years from the date hereof the
Executive or his designated beneficiary, if the Executive
should die before the expiration of said ten (10) year period,
will be entitled to receive the Deferral Shares and
Accumulated Income in the form of equal annual distributions
over a period of five (5) years.
4. DEATH OF EXECUTIVE. If the Executive should die prior to the
time that all of his Deferral Shares and Accumulated Dividends
(cumulatively referred to as "Deferral Compensation") have been
completely distributed to him, the Executive's designated
beneficiary will be entitled to receive the amount he was
entitled to receive under paragraph 3 in the manner specified
therein.
5. BENEFICIARIES. The Executive shall have the right at any
time to name any person or persons (including his estate or
any trust) as his beneficiary hereunder by filing written
notice with the Compensation Committee. The Executive's last
written designation to the Compensation Committee shall be
deemed his last designated beneficiary. The Executive may
name a contingent beneficiary or beneficiaries to receive
payment in the event of the death of his primary beneficiary.
If the Executive has not designated a beneficiary or his
designated beneficiary is not alive when payments are due
hereunder, the Executive's designated beneficiary shall be
deemed his estate. All designations of the Executive's
beneficiary shall not be effective unless countersigned by a
member of the Compensation Committee.
6. ASSIGNMENT. Except as specifically provided in paragraph 5
herein, relating to the designation of a beneficiary, neither
the Executive nor his designated beneficiary may assign,
transfer, pledge, encumber, or hypothecate this Agreement, or
any rights hereunder, or any part hereof (whether by operation
of law or otherwise), and this Agreement shall not be subject
to the execution, attachment, or similar proceeding. Any
attempted assignment, transfer, pledge, encumbrance,
hypothecation, or other disposition of this agreement,
contrary to the provisions hereof, and the levy of any
attachment or similar proceedings upon this Agreement, shall
be null and void and without effect.
7. NO VESTED BENEFIT. Nothing contained herein shall be deemed
to give the Executive any vested interest in any specific
assets of Unifi and no benefits to which the Executive or his
beneficiary is entitled hereunder shall give the Executive any
greater right to receive payment from Unifi than the right of
an unsecured general creditor of Unifi.
8. TERMINATION BY BOARD. The Board of Directors ("Board") of
Unifi, excluding the Executive if he is a member of the Board,
may at any time, in its sole discretion, terminate this
agreement and distribute to the Executive the balance of his
Deferral Compensation at one time.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the Executive and Unifi, and may not be
altered, modified, amended, or rescinded except in writing,
signed by the parties hereto. It is further understood that
this Agreement shall inure to the benefit of the parties,
their successors or assigns.
10. GOVERNING LAW. This Agreement, and the interpretation
thereof, shall be governed by the laws of the State of North
Carolina and shall be deemed to have been made in the State of
North Carolina.
IN WITNESS WHEREOF, the parties have executed this Agreement, on the day
and year first above written.
UNIFI, INC.
____________11/21/97____________ By:_________Willis X. Xxxxx, III___
Date Xxxxxx X. Xxxxx, III
Senior Vice-President and
Chief Financial Officer
____________11/21/97_____________ _________William T. Kretzer________
Date Xxxxxxx X. Xxxxxxx
