UNIFI, INC.’S
STOCK OPTION GRANTS
UNDER THE 1999 UNIFI, INC. LONG TERM INCENTIVE PLAN
     THIS OPTION GRANT (“Agreement”) effective the                      day of
                    , by and between UNIFI, INC., a New York corporation,
(hereinafter called the “Corporation”), and                     , a key employee
(hereinafter called the “Optionee”) of the Corporation.
WITNESSETH:
     WHEREAS, the Board of Directors of Unifi, Inc. adopted, effective July 1,
1999, subject to the approval of the shareholders of the Corporation, the 1999
Unifi, Inc. Long Term Incentive Plan (“Plan”) which was approved by the
shareholders of the Corporation at their Annual Meeting held on October 21,
1999; and
     WHEREAS, the Plan is incorporated into and forms a part of this Agreement
and the Optionee has been selected by the Compensation Committee of the Board of
Directors (“Committee”), consisting of three directors who satisfy the
requirements of an outside director, as set forth in the Plan, to receive a
stock option (“Option”) under the Plan;
     NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, and for other good and valuable consideration, it is agreed by and
between the parties as follows:
     Section 1. Grant of Option. The Corporation granted effective
                     (“Date of Grant”) to Optionee the right, privilege, and
option to purchase                      shares of Unifi, Inc. Common Stock, $.10
par value (“Option Shares”) in the manner and subject to the conditions
hereinafter set forth. The Option is intended to constitute an incentive stock
option as that term is used in Code §422. If, as a result of the Option granted
hereunder, the aggregate fair market value (“FMV”) (determined as of the time
the Option is granted) of the stock, with respect to which the incentive stock
options are exercisable for the first time by the Optionee during any calendar
year under this and all other incentive stock option plans (as defined by §422
of the Code, as amended) of the Corporation, would exceed $100,000.00 any excess
amount will be treated as non-qualified stock options.
     Section 2. Exercise Price. The exercise price for the Option granted under
Section 1 of this Agreement shall be                      per share, the FMV of
said stock on the Date of Grant, as defined in Section 12 of this Agreement.
     Section 3. Time of Exercise. The Option Shares granted under Section 1 of
this Agreement shall vest and become exercisable according to the following
schedule:

 

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As of the Following Anniversary of the Date of this Agreement:
  The Option Shall Become Exercisable with Respect to the Following Percentage
of the Option Shares:

[Insert Information]
     There shall be no fractional shares vested under this vesting schedule. If
the vesting schedule would entitle the participant to an option in a fractional
share, such option shall be rounded up to the next whole number. The Option
shall not become exercisable in accordance with the foregoing vesting schedule
as of any Anniversary if the Optionee’s Date of Termination, as defined in
Section 12 (D), occurs before such anniversary. Exercisability under this
vesting schedule is cumulative, and after the Option becomes exercisable under
the above schedule with respect to any portion of the Option Shares, it shall
continue to be exercisable with respect to that portion of the Option Shares
until the Option expires. Notwithstanding the foregoing provisions of this
Section 3, the Option shall become exercisable with respect to all of the Option
Shares as follows:

  (A)   The Option shall become fully vested and exercisable upon the date of
the Optionee’s Date of Termination by reason of the Optionee’s death, disability
or retirement with the approval of the Committee.     (B)   The Option shall
become fully vested and exercisable upon the date of a Change of Control, if the
Change in Control occurs prior to an exercise date determined in accordance with
the vesting schedule set forth above, and the Optionee’s Date of Termination
does not occur before the Change in Control.

     Section 4. Method of Exercise. This Option shall be exercised by written
notice directed to Mr. William M. Lowe, Jr., Vice President, Chief Operating
Officer and Chief Financial Officer of the Corporation, or Charles F. McCoy,
Vice President, Secretary & General Counsel of the Corporation or other Officer
as hereafter designated by the Committee (“Designated Officer”) at the
Corporation’s principal office in Greensboro, North Carolina, or at such other
office as the Corporation may designate. Such notice shall (a) set forth the
number of full shares which are being exercised, (b) be signed by the person
exercising the Option, (c) be accompanied by a certified or other check
acceptable to the Corporation made payable to the order of the Corporation for
the full purchase price of such shares or by a certificate or certificates of
Unifi, Inc. common stock acceptable to the Designated Officer, the fair market
value of which on the New York Stock Exchange at the close of business on the
date said notice is received by the Corporation, shall equal or exceed the
Option price, said certificate or certificates being duly endorsed, and (d) be
accompanied by a signed investment representation letter as provided in
Section 9 hereof. Such exercise shall be effective only when said properly
executed notice accompanied by check or stock certificates, as referred to
above, are received by the Designated Officer. The certificate or certificates
for the shares issued upon the exercise of

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an Option or part thereof and any shares delivered to the Corporation under
subparagraph (c) of this Section 4, in excess of the Option price shall be
issued or reissued, as the case may be, with or without restrictive legend, as
determined by the Designated Officer, in the name of the person exercising the
Option, and shall be delivered to such person. All shares issued as provided
herein, will be fully paid and non-assessable.
     Section 5. Withholding. Optionee, upon the exercise of an Option granted to
him under this Agreement, shall pay to the Corporation in cash the amount of any
tax or other amount required by any governmental authority to be withheld and
paid over by the Corporation to such authority for the account of such Optionee.
Notwithstanding the foregoing, the Optionee may satisfy this obligation in whole
or in part, and any other local, state or federal income tax obligations
resulting from the exercise or the surrender of an Option, by electing to
deliver to the Corporation shares owned by the Optionee at the time of the
exercise or surrender, or to have the Corporation withhold shares from the
shares to which the Optionee is entitled. The number of shares to be delivered
or withheld shall have a fair market value as of the date the amount of tax to
be withheld is determined, those being withheld being as nearly equal to (but
not exceeding) the amount of such obligation being satisfied as possible.
     Section 6. Termination of Option. Except as herein otherwise stated, the
Option to the extent not heretofore exercised shall terminate upon the first to
occur of the following dates:

  (A)   The expiration of three months from the Optionee’s date of termination
with the Corporation, except if such termination be by reason of death or
permanent and total disability, or cause;     (B)   In the event of the death of
the Optionee, the Administrator of the deceased Optionee’s estate, the Executor
under his Last Will and Testament, or the person or persons to whom the stock
option shall have been validly transferred by such Executor or Administrator
pursuant to the Last Will and Testament or the Intestacy Succession Laws shall
have the right within twelve (12) months of the date of the Optionee’s death,
but not beyond the                      expiration date of the Option, to
exercise such Option to the extent exercisable by the Optionee at the date of
his death;     (C)   In the event of the termination of the Optionee’s
employment due to retirement with the consent of the Board of Directors, or
permanent and total disability, the Optionee shall have the right within twelve
(12) months from his date of termination, but not beyond                     ,
the expiration date of such Option, to exercise such Option to the extent
exercisable on such date of termination;     (D)   In the event the Optionee’s
employment with the Corporation is terminated for cause, the Optionee’s date of
termination.     (E)                       , being the expiration of ten years
from the grant of this Option.

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     Section 7. Reclassification, Consolidation, or Merger. If and to the extent
that the number of issued shares of common stock of the Corporation shall be
increased or reduced by change in par value, split, reclassification,
distribution of a dividend payable in stock, or the like, the number of shares
subject to Option and the Option Price per share shall be proportionately
adjusted.
     If the Corporation is reorganized or consolidated or merged with another
corporation, Optionee shall be entitled to receive Options covering shares of
such reorganized, consolidated, or merged company in the same proportion, at an
equivalent price, and subject to the same conditions. For purposes of the
preceding sentence, the excess of the aggregate fair market value of the shares
subject to the Option immediately after the reorganization, consolidation, or
merger over the aggregate Option Price of such shares shall not be more than the
excess of the aggregate fair market value of all shares subject to the Option
immediately before such reorganization, consolidation, or merger over the
aggregate Option Price of such shares, and the new Option or assumption of the
old Option shall not give Optionee additional benefits which he did not have
under the old Option, or deprive him of benefits which he had under the old
option.
     Section 8. Restrictive Legend. At the sole and absolute discretion of the
Designated Officer, the certificates issued under this Option, upon exercise
thereof by the Optionee, may carry such restrictive legend as the Designated
Officer shall determine to be appropriate.
     Section 9. Purchase For Investment. By accepting this Option, the Optionee
agrees that any shares of common stock purchased upon the exercise of this
Option shall be acquired for investment and not for distribution, and that each
notice of exercise of any portion of this Option shall be accompanied by the
following representation in writing signed by him or such other person as may be
exercising this Option under the provisions of Section 6 hereof:
I hereby warrant and represent that the shares being acquired by me pursuant
hereto are being acquired by me with my own funds for investment for my own
account and not with a view to offer for sale, or for sale in connection with,
the distribution or transfer thereof. I further warrant and represent that I am
not participating in or have a direct or indirect participation in the
distribution or transfer of such shares, nor am I participating in or have a
participation in the direct or indirect underwriting of any such distribution or
transfer of the shares.
     Section 10. Listing of Shares. The Optionee acknowledges and represents
that Optionee has been advised by the Corporation that the shares issued under
this Option may be restricted shares (not registered under the Securities and
Exchange Act of 1933, as amended), and the Optionee covenants, agrees, warrants
and represents that prior to any proposed sale, pledge, hypothecation, gift or
transfer, for value or otherwise, of any or all of the shares or any interest
therein (Transfer), the Optionee shall:

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  (A)   give written notice to the Corporation expressing his or her desire to
affect a Transfer and describe in detail such proposed Transfer;     (B)  
furnish the Corporation with written opinion of counsel reasonably acceptable to
the Designated Offer that the proposed Transfer may be effected without
registration under the Federal Securities Act of 1933 as then in force or any
similar statute then in force (“the ‘33 Act”) and applicable State Security
laws;     (C)   deliver to the Corporation such other information in relation to
the proposed Transfer as the Corporation may request.

The Corporation thereafter, if, in the opinion of its general counsel, such
proposed transfer can be made without registration under the ‘33 Act and
applicable State law, shall notify its transfer agent to reissue said stock in
accordance with the requested transfer without a restrictive legend.
     If, in the opinion of the Corporation’s general counsel, the transfer
cannot be made without registration under the Act and/or applicable State
securities law, the Corporation shall promptly notify Optionee in writing, and
the transfer shall not be made unless such registration is then in effect.
     Section 11. Rights Prior to Exercise of the Option. This Option is
non-transferable by the Optionee, except in the event of his death, as provided
in Section 6 above, and during his or her lifetime is exercisable only by the
Optionee. Optionee shall have no right as a Shareholder with respect to the
Option Shares until payment of the Exercise Price, and delivery to the Optionee
of such shares as herein provided.
     Section 12. Definitions. For purposes of this Agreement, the terms listed
below shall be defined as follows:

  (A)   Fair Market Value. The Fair Market Value (“FMV”) of Unifi, Inc. Common
Stock on                      is                      per share, being the
average of the high and low prices of such stock on the New York Stock Exchange
on that date.     (B)   Cause. The term “Cause” means, except as provided in an
individual agreement or by the Committee, a vote of the Board resolving that the
Optionee should be dismissed as a result of (i) any material breach by the
Optionee of any agreement to which the Optionee and the Corporation are parties,
(ii) any act (other than Retirement) or omission to act by the

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      Optionee which may have a material and adverse effect on the business of
the Corporation or any related company or on the Optionee’s ability to perform
services for the Corporation or any related company, including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (iii) any material misconduct or neglect of duties by the
Optionee in connection with the business or affairs of the Corporation or any
related company.     (C)   Change in Control. In the event of a change in
control of the Corporation while the Optionee is still an employee of the
Corporation, prior to                     , any non-vested increments of the
option, as provided in Section 3 hereof, shall immediately vest and be
exercisable. For purposes of this Agreement, a change in control of the
Corporation shall be deemed to have occurred if:(i) there shall be consummated
(x) any consolidation or merger of the Corporation in which the Corporation is
not the continuing or surviving corporation or pursuant to which shares of the
Corporation’s Common Stock would be converted into cash, securities or other
property, other than a merger of the Corporation in which the holders of the
Corporation’s Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger, or (y) any sale, lease, exchange or other transfer other than
to a subsidiary (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Corporation; or (ii) the Shareholders
of the Corporation approved any plan or proposal for the liquidation or
dissolution of the Corporation; 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
Corporation’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
Corporation’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.     (D)   Date of Termination. The Optionee’s “Date of
Termination” shall be the first day occurring on or after                     
on which the Optionee’s employment with the Corporation and all related
companies terminates for any reason; provided that a termination of employment
shall not be deemed to occur by reason of a transfer of the Optionee between the
Corporation and a related company or between two related companies; and further
provided that the Optionee’s employment shall not be considered terminated while
the Optionee is on a leave of absence from the

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      Corporation or a related company approved by the Optionee’s employer. If,
as a result of a sale or other transaction, the Optionee’s employer ceases to be
a related company (and the Optionee’s employer is or becomes an entity that is
separate from the Corporation), the occurrence of such transaction shall be
treated as the Optionee’s Date of Termination caused by the Optionee being
discharged by the employer.     (E)   Disability. Except as otherwise provided
by the Committee, the Optionee shall be considered to have a “Disability” during
the period in which the Optionee is unable, by reason of a medically
determinable physical or mental impairment, to engage in any substantial gainful
activity, which condition, in the opinion of a physician selected by the
Committee, is expected to have a duration of not less than 120 days.     (F)  
Retirement. “Retirement” of the Optionee shall mean the occurrence of the
Optionee’s Date of Termination after age 57 with the approval of the Committee.
    (G)   Plan Definitions. Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Agreement.

     Section 13. SEC Rules and Regulations. The Option granted to the Optionee,
by the Board of Directors under this Agreement, is intended to meet the
eligibility requirements of the Securities and Exchange Commission’s (“SEC”)
proposed new Rule 16b-3 issued October 1995, entitled “Transactions Between an
Issuer and its Directors or Officers”. Dependent upon future actions of the SEC,
the Option may not be exempt under Rule 16b-3 and, therefore, may be subject to
Rule 16b, the so-called “Short Swing Profit Rule”, which provides for the
disgorgement of any profits realized by the Optionee, as an insider, from the
purchase and sale (or sale and purchase) of any of the Corporation’s common
stock within a six month period. The Corporation recommends that the Optionee
consult with counsel prior to exercising an Option.
     Section 14. Heirs and Successors. This Agreement shall be binding upon, and
inure to the benefit of, the Corporation and its successors and assigns, and
upon any person acquiring, whether by merger, consolidation, purchase of assets
or otherwise, all or substantially all of the Corporation’s assets and business.
Subject to the terms of the Plan, any benefits distributable to the Optionee
under this Agreement that are not distributed at the time of the Optionee’s
death shall be distributed at the time and in the form determined in accordance
with the provisions of this Agreement and the Plan, to the beneficiary
designated by the Optionee in writing filed with the Committee in such form and
at such time as the Committee shall require. If a deceased Optionee fails to
designate a beneficiary, or if the designated beneficiary of the deceased
Optionee dies before the Optionee or before complete distribution of the
benefits due under this Agreement, the amounts to be distributed under this
Agreement shall be distributed to the legal

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representative or representatives of the estate of the last to die of the
Optionee and the beneficiary.
     Section 15. Amendments. The Board of Directors of the Corporation, or the
Committee, may at any time, prior to the termination date, amend this Agreement
provided that no amendment may, in the absence of written consent of change by
the Optionee, adversely affect the rights of the Optionee under any Option
granted prior to the date such amendment is adopted.
     Section 16. Administration. The authority to manage and control the
operation and administration of this Agreement shall be vested in the Committee,
and the Committee shall have all powers with respect to this Agreement as it has
with respect to the Plan. Any interpretation of the Agreement by the Committee
and any decision made by it with respect to the Agreement are final and binding.
     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed by its Officers, and the Optionee has hereunto set his hand and seal.

             
 
                UNIFI, INC.    
 
           
 
  BY:        
 
           
 
      Name:    
 
      Title:    
 
           
 
      Optionee    
 
               
                                                                 (Seal)    

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