Exhibit 10.3

 

[FORM OF RSU AGREEMENT FOR EMPLOYEES]

 

RESTRICTED STOCK UNIT AGREEMENT

 

This Restricted Stock Unit Agreement (this “Agreement”) is made by and between
Unifi, Inc., a New York corporation (the “Company”), and ______________________,
a key employee (the “Grantee”) of the Company.

 

WITNESSETH:

 

WHEREAS, the Company has adopted the Unifi, Inc. 2013 Incentive Compensation
Plan (the “Plan”), which became effective on October 23, 2013; and

 

WHEREAS, the Compensation Committee (the “Committee”) of the Board of Directors
(the “Board”) of the Company has determined that it is desirable and in the best
interests of the Company to grant to the Grantee restricted stock units (“RSUs”)
as an incentive for the Grantee to advance the interests of the Company;

 

NOW, THEREFORE, the parties agree as follows:

 

Section 1.        Incorporation of Plan. The Plan is incorporated by reference
and made a part of this Agreement, and this Agreement shall be subject to the
terms of the Plan, as the Plan may be amended from time to time, provided that
any such amendment of the Plan must be made in accordance with Section 15 of the
Plan. Unless otherwise defined herein, capitalized terms used in this Agreement
shall have the meanings ascribed to them in the Plan.

 

Section 2.        Grant of RSU; Notice of Grant. Pursuant to the Plan and
subject to the terms and conditions set forth herein and therein, the Company
has granted to the “Grantee,” and effective as of the “Grant Date,” a certain
number of RSUs, all as set forth on the Notice of Grant attached hereto as Annex
A, which Notice of Grant is incorporated by reference herein.

 

Section 3.        Terms of Restricted Stock Units. The RSUs granted under this
Agreement are subject to the following terms, conditions and restrictions:

 

(a)     No Ownership. The Grantee shall not possess any incidents of ownership
(including, without limitation, dividend and voting rights) in shares of the
Company Stock in respect of the RSUs until such RSUs have been converted into
shares of Company Stock and such shares have been distributed to the Grantee in
the form of shares of Company Stock.

 

(b)     Transfer of RSUs. Except as provided in this Section 3(b), the RSUs and
any interest therein may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of descent and
distribution and subject to the conditions set forth in the Plan and this
Agreement. Any attempt to transfer RSUs in contravention of this Section is void
ab initio. RSUs shall not be subject to execution, attachment or other process.

  

 
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(c)     Vesting and Conversion of RSUs. If the Grantee remains in the continuous
employment of the Company from the Date of Grant through the applicable “Vesting
Date” listed below, the last of which is the “Final Vesting Date”, the
corresponding percentage of the total number of RSUs awarded under this
Agreement will become fully vested.

 

Vesting Date

Percentage of RSUs

Vested

[DATE]

33.33%

[DATE]

33.33%

[DATE]

33.34%

 

There shall be no vesting of the RSUs to result in a fraction under this vesting
schedule. If the vesting schedule would otherwise result in a fractional RSU,
such RSU shall be rounded up to the next whole number, subject to the next
sentence with respect to the Final Vesting Date. If the number of vested RSUs is
rounded up on any Vesting Date prior to the Final Vesting Date, the number of
RSUs in which the Grantee becomes vested on the Final Vesting Date shall be
adjusted so that the total number of vested RSUs equals the number of RSUs set
forth in the Notice of Grant. For example, if the Grantee was awarded 100 RSUs
under this Agreement, the Grantee would become vested in 34, 34 and 32 RSUs on
the respective Vesting Dates listed above.

 

On each Vesting Date, the vested RSUs shall be converted into an equivalent
number of shares of Company Stock, and all such shares of Company Stock will be
distributed to the Grantee within 30 days following the applicable Vesting Date,
subject to following possible deferral election by the Grantee. The Grantee may
irrevocably elect, on or before the “Deferral Election Date” indicated on Annex
A, to instead receive distributions of shares of Company Stock upon the
Grantee’s “separation from service” (as such term is defined in Section 409A and
described in Section 7, a “Separation from Service”), in either a single
distribution or substantially equal annual distributions over a period of up to
five years following the Grantee’s Separation from Service. Such an election
must be made by completing and submitting to the Company a Deferral Election
Form in substantially the form included as part of Annex B hereto.

 

Upon any distribution of shares of Company Stock in respect of the RSUs, the
Company shall (i) issue (or make available via electronic means) to the Grantee
or the Grantee’s personal representative a stock certificate representing such
shares of Company Stock, or (ii) cause such number of shares to be registered in
the name of the Grantee or the Grantee’s personal representative via a
book-entry or other share registry process that is effective to constitute the
uncertificated delivery thereof, in either case free of any restrictions.

  

 
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(d)     Additional Vesting Provisions.

 

(i)      If, prior to the Final Vesting Date, the Grantee dies or has a
Separation from Service as a result of Disability, all RSUs shall become fully
vested, converted into an equivalent number of shares of Company Stock and
distributed to the Grantee in a single distribution within 30 days following the
Grantee’s death or such Separation from Service, as the case may be, in either
case without regard to any distribution deferral election.

 

(ii)     If, thirteen months after the Grant Date and prior to the Final Vesting
Date, the Grantee has a Separation from Service by the Company without Cause (as
defined below), all remaining unvested RSUs shall become fully vested, and all
RSUs shall be converted into an equivalent number of shares of Company Stock and
distributed to the Grantee in a single distribution within 30 days following
such Separation from Service, without regard to any distribution deferral
election.

 

(iii)    If, prior to the Final Vesting Date, Grantee has a Separation from
Service for any reason not covered in Section 3(d)(i) or Section 3(d)(ii) above,
then the Grantee shall forfeit any unvested RSUs and shall not be entitled to
receive any shares of Company Stock under this Agreement with respect to such
forfeited RSUs.

 

(iv)    Notwithstanding the foregoing, the Grantee shall immediately forfeit all
RSUs (whether or not vested) and any underlying shares of Company Stock for
which distribution has been deferred pursuant to Section 3(c) upon the Grantee’s
Separation from Service for Cause, whether before or after the Final Vesting
Date.

 

(v)     In the event of a Change in Control (as defined in the Plan), all RSUs
shall become fully vested, be converted into shares of Company Stock and be
immediately distributed to the Grantee in a single distribution within 30 days
following the Change in Control, without regard to any distribution deferral
election.

 

(vi)     For purposes of this Agreement, “Cause” means any of the following, as
determined in good faith by the Committee: (A) an act of embezzlement, theft or
misappropriation by the Grantee of any property of the Company or any Related
Company; (B) any breach by the Grantee of any material provision of any material
agreement to which the Grantee is a party with the Company or any Related
Company that is not cured, to the extent the breach is susceptible to being
cured, within fourteen (14) days after the Company gives express notice to the
Grantee describing such breach; (C) gross negligence by the Grantee in the
discharge of his or her lawful duties to the Company or any Related Company
(after receiving express notice from the Company specifying the manner in which
he or she is alleged to have been grossly negligent and having had the
opportunity to cure the same within thirty (30) days from receipt of such
notice); (D) any act by the Grantee constituting a felony or a crime that
otherwise involves dishonesty or misrepresentation; (E) the Grantee’s breach of
any fiduciary duty, under applicable law, to the Company or any Related Company,
regardless of whether such conduct constitutes gross negligence; or (F) any
chemical or alcohol dependence by the Grantee that materially and adversely
affects the performance of his or her duties or responsibilities to the Company
or any Related Company.

  

 
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Section 4.        Equitable Adjustment. The aggregate number of shares of
Company Stock subject to the RSUs shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Company
Stock resulting from a subdivision or consolidation of shares or other capital
adjustment, or the payment of a stock dividend or other increase or decrease in
such shares, effected without the receipt of consideration by the Company, or
other change in corporate or capital structure. The Committee shall make the
foregoing changes and any other changes, including changes in the classes of
securities available, to the extent reasonably necessary or desirable to
preserve the intended benefits under this Agreement in the event of any other
reorganization, recapitalization, merger, consolidation, spin-off, extraordinary
dividend or other distribution or similar transaction involving the Company.

 

Section 5.        Taxes. Distributions with respect to RSUs may be subject to
Applicable Withholding Taxes as provided in the Plan.

 

Section 6.        No Right to Continued Employment. Nothing contained herein
shall be deemed to confer upon the Grantee any right to continue in the
employment of the Company.

 

Section 7.     Section 409A.

 

(a)     It is intended that this Agreement comply in all respects with the
requirements of Section 409A of the Code and applicable Treasury Regulations and
other generally applicable guidance issued thereunder (collectively, “Section
409A”), and this Agreement shall be interpreted for all purposes in accordance
with this intent.

 

(b)     Notwithstanding any other term or provision of this Agreement (including
any term or provision of the Plan incorporated herein by reference), the parties
hereto agree that, from time to time, the Company may, without prior notice to
or consent of the Grantee, amend this Agreement to the extent determined by the
Company, in the exercise of its discretion in good faith, to be necessary or
advisable to prevent the inclusion in the Grantee’s gross income pursuant to the
applicable Treasury Regulations of any compensation intended to be deferred
hereunder. The Company shall notify the Grantee as soon as reasonably
practicable of any such amendment affecting the Grantee.

 

 
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(c)     If the amounts payable under this Agreement are subject to any taxes,
penalties or interest under Section 409A, the Grantee shall be solely liable for
the payment of any such taxes, penalties or interest.

 

(d)     Except as otherwise specifically provided herein, the time and method
for payment of the RSUs as provided in Section 3 and the Deferral Election Form
shall not be accelerated or delayed for any reason, unless to the extent
necessary to comply with, or as may be permitted under, Section 409A.

 

(e)     If the Grantee is deemed on the date of a Separation from Service to be
a “specified employee” (within the meaning of that term under Section
409A(a)(2)(B) of the Code and determined using any identification methodology
and procedure selected by the Company from time to time, or the default
methodology and procedure specified under Code Section 409A, if none has been
selected by the Company), then with regard to any payment or the provision of
any benefit that is “nonqualified deferred compensation” within the meaning of
Section 409A and that is paid as a result of the Grantee’s Separation from
Service, such payment or benefit shall not be made or provided prior to the date
that is the earlier of (i) the expiration of the six (6)-month period measured
from the date of such Separation from Service of the Grantee, and (ii) the date
of the Grantee’s death (the “Delay Period”). Upon the expiration of the Delay
Period, all payments and benefits delayed pursuant to this provision (whether
they would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Grantee in a lump sum,
and any remaining payments and benefits due under this Agreement shall be paid
or provided in accordance with the normal payment dates specified for them
herein. For purposes of Section 409A, a distribution of shares of Company Stock
following conversion of an RSU shall constitute a “payment” thereof.

 

Section 8.        Recoupment of RSUs/Shares of Stock. Notwithstanding any
provision in the Plan or this Agreement to the contrary, all RSUs and underlying
shares of Company Stock awarded pursuant to this Agreement shall be subject to
recoupment by the Company pursuant to the Company’s Compensation Recoupment
Policy, as it may be amended from time to time (or any successor policy thereto)
(the “Recoupment Policy”). The terms of the Recoupment Policy are hereby
incorporated by reference into this Agreement.

 

Section 9.        General Matters.

 

(a)     Heirs and Successors. This Agreement shall be binding upon, and inure to
the benefit of, the Company 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 Company’s assets and business. Subject to the
terms of the Plan, any benefits distributable to the Grantee under this
Agreement that are not distributed at the time of the Grantee’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
Grantee in writing filed with the Company in such form and at such time as the
Committee shall require. If a deceased Grantee failed to designate a
beneficiary, or if the designated beneficiary of the deceased Grantee dies
before the Grantee 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 representative or representatives of the estate of the
last to die of the Grantee and any designated beneficiary.

 

 
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(b)     Amendments by the Committee. The Committee may, at any time prior to the
Final Vesting Date, amend this Agreement, provided that no amendment may, in the
absence of written consent by the Grantee, adversely affect the rights of the
Grantee under this Agreement prior to the date of such amendment.

 

(c)     Administration. The authority to manage and control the operation and
administration of this Agreement has been vested in the Committee, and the
Committee shall have all powers with respect to this Agreement that 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.

 

(d)     Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of North Carolina without
reference to principles of conflict of laws.

 

(e)     Resolution of Disputes. Any disputes arising under or in connection with
this Agreement shall be resolved by binding arbitration before a single
arbitrator, to be held in North Carolina in accordance with the commercial rules
and procedures of the American Arbitration Association. Judgment upon the award
by the arbitrator shall be final and subject to appeal only to the extent
permitted by law. Each party shall bear such party’s own expenses incurred in
connection with any arbitration; provided, however, that the cost of the
arbitration to the Grantee, including, without limitation, reasonable attorneys’
fees of the Grantee, shall be borne by the Company if the Grantee is the
prevailing party in the arbitration. Anything to the contrary notwithstanding,
each party hereto has the right to proceed with a court action for injunctive
relief or relief from violations of law not within the jurisdiction of an
arbitrator. If any costs of the arbitration borne by the Company in accordance
herewith would constitute compensation to the Grantee for Federal tax purposes,
then (i) the amount of any such costs reimbursed to the Grantee in one taxable
year shall not affect the amount of such costs reimbursable to the Grantee in
any other taxable year, (ii) the Grantee’s right to reimbursement of any such
costs shall not be subject to liquidation or exchange for any other benefit, and
(iii) the reimbursement of any such costs incurred by the Grantee shall be made
as soon as administratively practicable, but in any event within ten (10) days,
after the date the Grantee is determined to be the prevailing party in the
arbitration. The Grantee shall be responsible for submitting claims for
reimbursement in a timely manner to enable payment within the timeframe provided
herein. 

 

 
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(f)     Notices. Any notice or other communication required or permitted under
this Agreement, to be effective, shall be in writing and, unless otherwise
expressly provided herein, shall be deemed to have been duly given (i) on the
date delivered in person, (ii) on the date indicated on the return receipt if
mailed postage prepaid, by certified or registered U.S. Mail, with return
receipt requested, (iii) on the date transmitted by facsimile or e-mail, if sent
by 5:00 P.M., Eastern Time, and confirmation of receipt thereof is reflected or
obtained, or (iv) if sent by Federal Express, UPS or other nationally recognized
overnight courier service or overnight express U.S. Mail, with service charges
or postage prepaid, then on the next business day after delivery to the courier
service or U.S. Mail (in time for and specifying next day delivery). In each
case (except for personal delivery), any such notice or other communication
shall be sent, as appropriate, (v) to the Grantee at the last address or
facsimile number specified in the Grantee’s records with the Company, or such
other address or facsimile number as the Grantee may designate in writing to the
Company, or (vi) to the Company, Attention: General Counsel, at its corporate
headquarters address or main facsimile number at such address or such other
address as the Company may designate in writing to the Grantee.

 

(g)     Failure to Enforce Not a Waiver. The failure of either party hereto to
enforce at any time any provision of this Agreement shall in no way be construed
to be a waiver of such provision or of any other provision hereof.

 

(h)     Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original but all of which together shall represent one
and the same agreement.

 

(i)      Modifications; Entire Agreement; Headings. This Agreement cannot be
changed or terminated orally. This Agreement and the Plan contain the entire
agreement between the parties relating to the subject matter hereof. The section
headings herein are intended for reference only and shall not affect the
interpretation hereof.

 

IN WITNESS WHEREOF, the parties have executed this Agreement, including the
Notice of Grant attached hereto as Annex A, effective as of the Grant Date set
forth on Annex A.  

 

 

 

 

 

Grantee 

 

 

 

 

 

 

 

 

 

UNIFI, INC. 

 

 

 

 

 

 

 

By:_________________________________________

 

 

 

Name:_______________________________________

 

 

 

Title:________________________________________

 

 
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Annex A

 

NOTICE OF GRANT OF

RESTRICTED STOCK UNITS

 

The following employee of Unifi, Inc. has been granted Restricted Stock Units
pursuant to the Unifi, Inc. 2013 Incentive Compensation Plan in accordance with
terms as set forth in this Notice of Grant and the Restricted Stock Unit
Agreement to which this Notice of Grant is attached.

 

The terms below shall have the following meanings when used in the Restricted
Stock Unit Agreement.

 

 

Grantee

 

 

 

Address of Grantee

 

 

 

Grant Date

 

 

 

Deferral Election Date

 

 

 

Aggregate Number of RSUs Granted

 

 

 

 
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Annex B

 

DEFERRAL ELECTION FORM AND INSTRUCTIONS

 

* * * INSTRUCTIONS * * *

 

You have been granted Restricted Stock Units (“RSUs”) pursuant to a the
Restricted Stock Unit Award Agreement to which this Annex B is attached as a
part thereof (the “Agreement”). Unless otherwise defined herein or in the
attached Deferral Election Form, capitalized terms have the meanings given them
in the Agreement, which also includes Annex A attached thereto.

 

Payment of RSUs is made in shares of Company Stock after the vesting of the RSUs
as described in the Agreement. You are taxed at ordinary income rates on the
value of the shares of Company Stock at the time of such payment, which is the
time that shares are distributed to you pursuant to the Agreement. Following
such a distribution, you can sell some or all the shares at any time, subject to
any applicable securities law restrictions. Or, in connection with a
distribution, you can choose to have the Company withhold an appropriate number
of the shares to satisfy your tax obligation.

 

As a general rule, your vested RSUs under the Agreement will be converted to
shares of Company Stock that will be distributed to you in a single distribution
within 30 days following the applicable Vesting Date. However, under Section
3(c) of the Agreement, you may elect instead to defer receipt of such shares of
Company Stock until your Separation from Service, and then have the shares
distributed to you in either a single distribution or substantially equal annual
distributions over a period of up to five years following your Separation from
Service. Such an election must be made by completing and submitting to the
Company, the attached Deferral Election Form on or before the Deferral Election
Date.

 

However, if you become vested in your RSUs prior to a Vesting Date due to
certain Separation from Service events as described in Section 3(d) of this
Agreement or a Change in Control of the Company, you will receive your shares of
Company Stock in a single distribution within 30 days following the date of such
event, regardless of any deferral election that you may have made.

 

There may be advantages and disadvantages to making a deferral election,
depending on your individual situation and future events, including future tax
rates. You should consider your particular tax and financial situation before
making a deferral election. You are encouraged to consult your personal tax or
financial planning advisor in making a decision.

 

For a Deferral Election to be effective,

you must complete and return the attached form

NO LATER THAN THE DEFERRAL ELECTION DATE

TO W. RANDY EADDY

 

 
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UNIFI, INC. RESTRICTED STOCK UNITS

 

DEFERRAL ELECTION FORM

 

 

Name of Grantee: _________________________________

 

Complete the information below if you wish to receive your shares of Company
Stock at a time and in a form other than a single distribution within 30 days
following the applicable Vesting Date. All capitalized terms not defined herein
have the meanings assigned to them in your [DATE] Restricted Stock Unit
Agreement.

 

I hereby elect to receive distribution of my shares of Company Stock pursuant to
my [DATE] Restricted Stock Unit Agreement, in payment of my vested RSUs
thereunder, as follows (check and initial the one option being elected):

 

EITHER

 

___________ single distribution within 30 days following the date of my
Separation from Service

OR

 

___________ ____ (maximum of 5) equal annual installment distributions,
commencing within 30 days following my Separation from Service for the first
installment and with each subsequent distribution on the respective anniversary
dates of my Separation from Service.

 

I understand and acknowledge that:

 

 

●

If I become vested in all or a portion of my RSUs prior to the applicable
Vesting Date due to certain events as described in Section 3(d) of my Restricted
Stock Units Agreement or a Change in Control of the Company, my shares of
Company Stock will be distributed to me in a single distribution within 30 days
following the date of such event.

 

 

●

If at any time I have a Separation from Service for Cause, I will forfeit all
RSUs (whether or not vested) and all underlying shares of Company Stock that
have not been distributed to me, including those deferred under this Deferral
Election Form.

 

 

●

My deferrals will be subject to all requirements of Section 409A of the Internal
Revenue Code and provisions of the Plan as amended to comply with Section 409A.

 

I understand that this election is irrevocable. I also understand that I am
making this election in accordance with the terms of the Plan and that the terms
of the Plan will be used to resolve any ambiguity or inconsistency that may
arise in connection with this election.

 

 

 

 

 

Signature of Grantee                          

 

Date 

 

 

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