CHANGE IN CONTROL AGREEMENT
FOR
CHARLES F. MCCOY
THIS CHANGE OF
CONTROL AGREEMENT (“Agreement”) between UNIFI,
INC. , a New York Corporation (the “Company”), and
Charles F. McCoy (the “Executive”) effective the
14 th
day of August, 2009 (the
“Effective Date”).
WHEREAS,
the Vice President, Secretary, General Counsel, Chief Risk Officer
and Corporate Governance & Compliance Officer of the Company
and is considered as an integral part of the Company’s
management; and
WHEREAS,
the Company’s Board of Directors (the “Board”)
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 Board 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;
and
WHEREAS ,
the Executive and the Company have previously entered a Change in
Control Agreement which, by its own terms, expired November 1,
2008; and
WHEREAS ,
the Executive and the Company desire to enter a new Change in
Control Agreement that complies with the provisions of section 409A
of the Internal Revenue Code of 1986, as amended (the
“Code”).
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.
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Section 1. Term This Agreement shall terminate,
except to the extent that any obligation of the Company hereunder
remains unpaid as of such time, on the earliest
of:
(a) December 31,
2011 if a Change in Control of the Company has not occurred within
such period;
(b) The
termination of the Executive’s employment with the Company
for any reason prior to a Change in Control; and
(c) Two
(2) years from the date of a 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
(a) No
compensation shall be payable under this Agreement unless and
until:
(1) there shall
have been a Change in Control of the Company, while the Executive
is still an employee of the Company; and
(2) the
Executive’s employment by the Company thereafter shall have
been terminated in accordance with Section 3.
(b) For
purposes of this Agreement, a Change in Control of the Company
shall be deemed to have occurred if:
(1) There shall be
consummated
(A) any
consolidation or merger of the Company in which the Company is not
the continuing or surviving legal entity 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
(B) 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
(2) The
shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
(3) 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
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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
(4) 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 on the
subsequent termination of the Executive’s employment with the
Company by the Executive voluntarily for Good Reason or by the
Company without Cause, as such terms are defined in Subsections
(d) and (e) below. If the Executive’s employment
with the Company is terminated for any of the following reasons, no
benefits will be payable hereunder:
(1) the
Executive’s death;
(2) the
Executive’s Disability (as defined in Subsection
(b) below);
(3) the
Executive’s Retirement (as defined in Subsection
(c) below);
(4) the
Executive’s termination by the Company for Cause (as defined
in Subsection (d) below); or
(5) the
Executive’s decision to terminate employment other than for
Good Reason (as defined in Subsection (e) below).
(b)
Disability : If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive shall
have been absent from his duties with the Company on a full-time
basis for one hundred twenty (120) consecutive days or a
period of one hundred eighty (180) days within twelve
(12) consecutive months (including days before and after the
Change in 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 Executive shall have suffered a
“Disability.”
(c)
Retirement : The term “Retirement” as used in
this Agreement shall mean termination in accordance with the
Company’s retirement policy for its employees.
(d)
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
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embezzlement on
the part of the Executive or malfeasance or misfeasance by the
Executive in performing the duties of his office, as determined by
the Board. 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 Board (after at least ten
(10) days written notice to the Executive) and an opportunity
for the Executive 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 seventy-five percent (75%) of the entire
membership of the Board stating that in the good faith opinion of
the Board the Executive is guilty of conduct set forth in the
second sentence of this Subsection (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 the occurrence of any one or more of the following
without the Executive’s express written consent:
(1) The assignment
to the Executive by the Company of duties that are materially
inconsistent with the Executive’s position, duties,
responsibilities, and status with the Company immediately prior to
a Change in Control of the Company; a material 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 a Change of Control of the Company,
except in connection with the termination of his employment for
death, Disability, Retirement, or Cause or by the Executive other
than for Good Reason;
(2) A material
reduction by the Company in the 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 that 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;
(3) A failure by
the Company to continue in effect any benefit plan or arrangement
(including, without limitation, the Company’s 401(k) 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 (hereinafter referred to
as “Benefit Plan”) without the substitution of a plan
providing him with substantially similar benefits, 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 without
the substitution of a plan or fringe benefit providing him with
substantially similar benefits;
(4) A 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
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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 (a “Securities
Plan”) without the substitution of a plan or arrangement
providing him with substantially similar benefits and the taking of
any action by the Company that would adversely affect the
Executive’s participation in or materially reduce the
Executive’s benefits under any such Securities Plan without
the substitution of a plan or arrangement providing him with
substantially similar benefits;
(5) A 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 without the substitution of a plan or
arrangement providing him with substantially similar
benefits;
(6) A relocation
of the Company’s principal executive offices to a location
outside of North Carolina, or the Executive’s relocation to
any place 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;
(7) A 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;
(8) A material
breach by the Company of any provision of this
Agreement;
(9) A failure by
the Company to obtain the assumption of this Agreement by any
successor or assign of the Company; or
(10) A purported
termination of the Executive’s employment which is not made
pursuant to a Notice of Termination satisfying the requirements of
Subsection (f).
In order to
terminate his employment with the Company for Good Reason, the
Executive must also comply with the notice requirements of
Subsection (f).
(f)
Notice of Termination :
(1) Any
termination by the Company pursuant to Subsections (b), (c) or
(d) shall be communicated by a Notice of Termination. For
purposes of this Agreement, a “Notice of Termination”
shall mean a written notice that shall indicate those specific
termination provisions in this Agreement relied on 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
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such Notice of
Termination.
(2) Any
termination by the Executive pursuant to Subsection (e) shall
be communicated by a Notice of Termination. For purposes of this
Agreement, a “Notice of Termination” shall mean a
written notice that shall indicate those specific termination
provisions in this Agreement relied on 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.
(3) The
Executive’s provision of a Notice of Termination must be
within ninety (90) days following the facts and circumstances
claimed to provide a basis for termination for Good
Reason.
(g) Date
of Termination : “Date of Termination” shall
mean:
(1) If
Executive’s employment is terminated by the Company for
Disability, thirty (30) days after the 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 thirty (30) day period),
or
(2) 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 thirty (30) days after any Notice of
Termination is given to the Executive by the Company the Executive
notifies the Comp
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