Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 2nd day of September,
2017 (the “Effective Date”), is entered into by and between Jeffrey C. Ackerman
(“Executive”) and Unifi, Inc. (the “Employer” and, collectively with its
successors, subsidiaries and affiliated companies, the “Company”).

WHEREAS, the Employer desires to retain the services of Executive on the terms
and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

1.    Employment. Subject to the terms and conditions of this Agreement, the
Employer agrees to employ Executive, and Executive agrees to be employed by the
Employer, as of September 5, 2017 (the “Start Date”), pursuant to the terms of
this Agreement.

2.    Position. During the period of his employment hereunder, Executive agrees
to serve the Company, and the Employer shall employ Executive, as Executive Vice
President & Chief Financial Officer. If appointed or elected, Executive also
shall serve as an officer, director and/or manager of one or more of the
Employer’s subsidiaries and affiliated companies in such capacity or capacities
as may be determined from time to time.

3.    At-Will Employment and Duties.

       (a)    At-Will Employment. Executive and the Employer agree that
Executive’s employment by the Employer hereunder will be at-will (as defined
under applicable law), and may be terminated at any time, for any reason, at the
option of either party, subject to the provisions of this Agreement.

       (b)    Duties. During the period of his employment hereunder and except
for illness, reasonable vacation periods, and reasonable leaves of absence,
Executive shall in good faith devote all of his business time, attention, skill
and efforts to the business and affairs of the Company. Executive’s duties shall
be performed under the supervision of the Employer’s Chief Executive Officer.
The foregoing shall not be construed as prohibiting Executive from serving on
corporate, civic or charitable boards or committees or making personal
investments, so long as such activities do not materially interfere with the
performance of Executive’s obligations to the Company as set forth herein.

4.    Salary; Bonus; Reimbursement of Expenses; Other Benefits.

       (a)    Salary. In consideration of the services to be rendered by
Executive pursuant to this Agreement, the Employer shall pay, or cause to be
paid, to Executive a base salary (the “Base Salary”) as established by or
pursuant to authority granted by the Employer’s board of directors (the
“Board”). Executive’s initial Base Salary shall be $480,000 per annum. The Base
Salary shall be reviewed annually by or pursuant to authority granted by the
Board in connection with its annual review of executive compensation to
determine if such Base Salary should be increased for the following year in
recognition of services to the Company. The Base Salary shall be payable at such
intervals in conformity with the Employer’s prevailing practice as such practice
shall be established or modified from time to time.

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       (b)    Bonuses; Additional Compensation. Executive will be eligible to
receive bonuses and to participate in compensation plans of the Employer in
accordance with any plan or decision that the Board, or any committee or other
person authorized by the Board, may in its sole discretion determine from time
to time. For the Employer’s 2018 fiscal year, Executive’s bonus will be equal to
37.5%, 75% and 150% of Base Salary for threshold, target and maximum levels of
performance, respectively, and will be pro-rated for the period of Executive’s
employment with the Employer during the fiscal year.

       (c)    Initial Equity Grants. Executive will receive on the Start Date an
award of (i) options to purchase 15,000 shares of the Employer’s common stock
and (ii) restricted stock units representing 20,000 shares of the Employer’s
common stock. The options will have an exercise price equal to the mean between
the lowest and highest reported sale prices of the Employer’s common stock on
the Start Date, will vest and become fully exercisable in three substantially
equal installments beginning on the first anniversary of the Start Date, subject
to your continued employment through each vesting date, and will have a ten year
term. The restricted stock units will become vested and settled in shares of the
Employer’s common stock as follows, subject to your continued employment through
each vesting date: 25% on the first anniversary of the Start Date, 25% on the
second anniversary of the Start Date and 50% on the third anniversary of the
Start Date.

       (d)    Reimbursement of Expenses. Executive shall be paid or reimbursed
by the Employer, in accordance with and subject to the Employer’s general
expense reimbursement policies and practices, for all reasonable travel and
other business expenses incurred by Executive in performing his obligations
under this Agreement.

       (e)    Other Benefits. During the period of employment hereunder,
Executive shall be entitled to participate in all other benefits of employment
generally available to other executives of the Employer and those benefits for
which such persons are or shall become eligible, when and as he becomes eligible
therefore. All outstanding unvested equity awards issued to Executive by the
Employer shall vest in full upon a “Change of Control” (as such term is defined
in the Unifi, Inc. 2013 Incentive Compensation Plan).

5.    Termination of Employment.

       (a)    Termination as a Result of Executive’s Death or Disability.
Executive’s employment hereunder shall terminate automatically upon Executive’s
death and may be terminated by the Employer upon Executive’s “Disability” (as
hereinafter defined). If Executive’s employment hereunder is terminated by
reason of Executive’s death or Disability, Executive’s (or Executive’s estate’s)
right to benefits under this Agreement will terminate as of the date of such
termination and all of the Employer’s obligations hereunder shall immediately
cease and terminate, except that (i) Executive or Executive’s estate, as the
case may be, will be entitled to receive accrued Base Salary and benefits
through the date of termination and (ii) all outstanding unvested equity awards
issued to Executive by the Employer shall vest in full upon such termination of
employment. As used herein, Executive’s “Disability” shall have the meaning set
forth in any long-term disability plan in which Executive participates, and in
the absence thereof shall mean the determination in good faith by the Board
that, due to physical or mental illness, Executive shall have failed to perform
his duties on a full-time basis hereunder for one hundred eighty
(180) consecutive days and shall not have returned to the performance of his
duties hereunder on a full-time basis before the end of such period. If
Disability has occurred, termination of Executive’s employment hereunder shall
occur within thirty (30) days after written notice of such termination is given
(which notice may be given before the end of the one hundred eighty (180) day
period described above so as to cause termination of employment to occur as
early as the last day of such period).

 

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       (b)    Termination by Executive for Good Reason or by the Employer other
than as a Result of Executive’s Death or Disability or for Cause.

       (i)    Executive may terminate Executive’s employment hereunder for “Good
Reason” (as hereinafter defined), if Good Reason exists, upon at least five
(5) days prior written notice to the Employer, and the Employer may terminate
Executive’s employment hereunder for any reason or for no reason, other than as
a result of Executive’s death or Disability or for Cause (as hereinafter
defined), in each case with the consequences set forth in this Section 5(b).

       (ii)    If Executive’s employment hereunder is terminated by Executive
for Good Reason or by the Employer other than by reason of Executive’s death or
Disability and other than for Cause, then, subject to Executive entering into
and not revoking a release of claims in favor of the Employer and the Company
pursuant to Section 5(e) below, and Executive fully complying with the covenants
set forth in Section 6, Executive shall be entitled to the following benefits:

      (1)    Cash severance payments equal in the aggregate to twelve
(12) months of Executive’s annual Base Salary at the time of termination,
payable in twelve (12) equal monthly installments beginning at the end of the
first full month following termination of employment.

      (2)    In the event Executive elects COBRA continuation coverage for the
level of medical coverage he had in force at the time of his termination, the
Employer shall reimburse Executive for the monthly cost of such continuation
coverage until the earlier of (A) the date Executive ceases to maintain such
continuation coverage in effect or (B) twelve (12) months from the termination
of Executive’s employment.

       (iii)    For purposes of this Agreement, “Good Reason” shall mean: (1) a
material reduction (without Executive’s express written consent) in Executive’s
title or responsibilities; (2) the requirement that Executive relocate to an
employment location that is more than fifty (50) miles from his employment
location on the Start Date; (3) the Employer’s material breach (without
Executive’s express written consent) of Sections 2 or 4 of this Agreement; or
(4) following a Change of Control, Executive not being an officer of the
ultimate surviving parent business entity resulting from such Change of Control
transaction, in a substantially similar role to that performed by Executive for
the Employer prior to such Change of Control, for a period of at least twelve
(12) months thereafter; provided, that with respect to the foregoing clauses
(1), (2) and (3), Executive has provided the Employer written notice of the
event or circumstance purporting to constitute Good Reason within thirty
(30) days of the event or circumstance occurring and the Employer has not cured
such event or circumstance within fifteen (15) days following the date Executive
provides such notice. If the Employer thereafter intentionally repeats the
breach it previously cured, such breach shall no longer be deemed curable.

       (c)    Termination by Executive other than for Good Reason. Executive may
terminate his employment with the Employer other than for Good Reason upon
thirty (30) days prior written notice to the Employer, after which the Employer
shall have no further obligation hereunder to Executive, except for payment of
accrued Base Salary and benefits through the termination date. If Executive so
notifies the Employer of such termination, the Employer shall have the right to
accelerate the effective date of such termination to any date after the
Employer’s receipt of such notice, but such acceleration will not be deemed to
constitute a termination of Executive’s employment by the Employer without
Cause, and the consequences of such termination will continue to be governed by
this subsection.

 

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       (d)    Termination by the Employer for Cause. The Employer may terminate
Executive’s employment under this Agreement at any time for “Cause” (as
hereinafter defined) whereupon the Employer shall have no further obligation
hereunder to Executive, except for payment of amounts of Base Salary and
benefits accrued through the termination date. For purposes of this Agreement,
“Cause” shall mean: (i) the continued willful failure by Executive to
substantially perform his duties to the Company, (ii) the willful engaging by
Executive in gross misconduct materially and demonstrably injurious to the
Company or (iii) Executive’s material breach of Sections 3, 6 or 7 of this
Agreement; provided, that with respect to any breach that is curable by
Executive, as determined by the Board in good faith, the Employer has provided
Executive written notice of the material breach and Executive has not cured such
breach, as determined by the Board in good faith, within fifteen (15) days
following the date the Employer provides such notice.

       (e)    Waiver and Release. In consideration for and as a condition to the
payments and benefits provided and to be provided under Section 5(b)(ii) of this
Agreement other than those provided under Section 9 (indemnification), Executive
agrees that Executive will, within thirty (30) days after the termination of
Executive’s employment hereunder, deliver to the Employer a fully executed
release agreement substantially in a form then used by and agreeable to the
Employer and which shall fully and irrevocably release and discharge the
Company, its directors, officers, and employees from any and all claims,
charges, complaints, liabilities of any kind, known or unknown, owed to
Executive, other than any rights Executive may have under the terms of this
Agreement that survive such termination of employment and other than any vested
rights of Executive under any of the Company’s employee benefit plans or
programs that, by their terms, survive or are unaffected by such termination of
employment.

6.    Certain Covenants by Executive.

       (a)    Confidential Information. Executive acknowledges that in his
employment hereunder he will occupy a position of trust and confidence.
Executive shall not, except in the course of the good faith performance of his
duties hereunder or as required by applicable law, without limitation in time or
until such information shall have become public other than by Executive’s
unauthorized disclosure, disclose to others or use, whether directly or
indirectly, any Confidential Information (as hereinafter defined) regarding the
Company. For purposes of this Agreement, “Confidential Information” shall mean
information about the Company or its clients or customers that was learned by
Executive in the course of his employment by the Employer, including (without
limitation) any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists and all papers, resumes, and records
(including computer records) of the documents containing such Confidential
Information, but excludes information (i) which is in the public domain through
no unauthorized act or omission of Executive; or (ii) which becomes available to
Executive on a non-confidential basis from a source other than the Company
without breach of such source’s confidentiality or non-disclosure obligations to
the Company. Executive agrees to deliver or return to the Employer, at the
Employer’s request at any time or upon termination or expiration of his
employment or as soon thereafter as possible, (i) all documents, computer tapes
and disks, records, lists, data, drawings, prints, notes and written information
(and all copies thereof) furnished by the Company or prepared by Executive
during the term of his employment by the Employer and (ii) all notebooks and
other data relating to research or experiments or other work conducted by
Executive in the scope of such employment. Upon the date of termination of
Executive’s employment hereunder, Executive shall, as soon as possible but no
later than two (2) days after the date of termination, surrender to the Employer
all Confidential Information in Executive’s possession and return to the
Employer all Company property in Executive’s possession or control, including
but not limited to, all paper records and documents, computer disks and access
cards and keys to any Company facilities.

       (b)    Non-Competition. During the period of Executive’s employment
hereunder and for a period of twelve (12) months after the date of termination
of his employment, Executive shall not,

 

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directly or indirectly, in the “Restricted Territory” (as hereinafter defined),
without the prior written consent of the Employer, provide consultative services
or otherwise provide services to (whether as an employee or a consultant, with
or without pay) or, own, manage, operate, join, control, participate in, or be
connected with (as a shareholder, partner, or otherwise), any business,
individual, partner, firm, corporation, or other entity that is then a
competitor of the Company (each such competitor a “Competitor of the Company”);
provided, however, that the “beneficial ownership” by Executive, either
individually or as a member of a “group,” as such terms are used in Rule 13d of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), of not more than five percent (5%) of the voting
stock of any publicly held corporation shall not alone constitute a violation of
this Agreement. For purposes of this Agreement, “Restricted Territory” shall
mean: (i) the State of North Carolina, (ii) the other contiguous states of the
United States of America, and (iii) any other jurisdiction in which the Company
is doing or does business during Executive’s employment hereunder. Executive and
the Employer acknowledge and agree that the business of the Company extends
throughout the contiguous states of the United States of America and
internationally.

       (c)    Non-Solicitation of Customers and Suppliers. During the period of
Executive’s employment hereunder and for a period of twelve (12) months after
the date of termination of Executive’s employment hereunder, Executive shall
not, directly or indirectly, influence or attempt to influence customers or
suppliers of the Company to divert any of their business to any Competitor of
the Company.

       (d)    Non-Solicitation of Employees. Executive recognizes that he
possesses and will possess Confidential Information about other employees of the
Company relating to their education, experience, skills, abilities, compensation
and benefits, and inter-personal relationships with customers of the Company.
Executive recognizes that the information he possesses and will possess about
these other employees is not generally known, is of substantial value to the
Company in developing its business and in securing and retaining customers, and
has been and will be acquired by him because of his business position with the
Company. Executive agrees that, during the period of Executive’s employment
hereunder and for a period of twelve (12) months thereafter, he will not,
directly or indirectly, solicit, recruit, induce or encourage or attempt to
solicit, recruit, induce, or encourage any employee of the Company (i) for the
purpose of being employed by him or by any Competitor of the Company on whose
behalf he is acting as an agent, representative or employee or (ii) to terminate
his or her employment or any other relationship with the Company. Executive also
agrees that Executive will not convey any Confidential Information or trade
secrets about other employees of the Company to any other person.

       (e)    Post-Termination Covenants by Executive.

       (i)    Upon the termination of Executive’s employment hereunder,
regardless of (A) the date, cause, or manner of the Termination of Employment,
(B) whether the Termination of Employment is with or without Cause or is a
result of Executive’s resignation, or (C) whether the Employer provides
severance benefits to Executive under this Agreement (the “Termination of
Employment”), Executive shall resign and does resign (1) as a member of the
Board if serving on the Board at that time and (2) from all positions as an
officer, director or manager of the Company and from any other positions with
the Company, with all such resignations to be effective upon the date of the
Termination of Employment.

       (ii)    From and after the Termination of Employment, Executive agrees
not to make any statements to the Company’s employees, customers, vendors, or
suppliers or to any public or media source, whether written or oral, regarding
Executive’s employment hereunder or termination from the Employer’s employment,
except as may be approved in writing by an executive officer of the Employer in
advance. Executive further agrees not to make any statement (including to any
media source, or to the Company’s suppliers, customers or employees) or take

 

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any action that would disrupt, impair, embarrass, harm or affect adversely the
Company or any of the employees, officers, directors, or customers of the
Company or place the Company or such individuals in any negative light.

       (iii)    From and after the Termination of Employment, Executive agrees
to cooperate with and provide assistance to the Company and its legal counsel in
connection with any litigation (including arbitration or administrative
hearings) or investigation affecting the Company, in which, in the reasonable
judgment of the Company’s counsel, Executive’s assistance or cooperation is
needed. Executive shall, when requested by the Company, provide testimony or
other assistance and shall travel at the Company’s request in order to fulfill
this obligation. In connection with such litigation or investigation, the
Company shall attempt to accommodate Executive’s schedule, shall reimburse
Executive (unless prohibited by law) for any actual loss of wages in connection
therewith, shall provide Executive with reasonable notice in advance of the
times in which Executive’s cooperation or assistance is needed, and shall
reimburse Executive for any reasonable expenses incurred in connection with such
matters.

       (f)    Injunctive Relief. It is expressly agreed that the Employer will
or would suffer irreparable injury, for which a remedy in monetary damages alone
would be inadequate, if Executive were to violate any of the provisions of this
Section 6 and that the Employer would by reason of such violation be entitled to
injunctive relief in a court of appropriate jurisdiction, and Executive further
consents and stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from so violating Section 6 of this Agreement, in addition
to any and all damages or other remedies to which the Employer would be entitled
at law or in equity. Nothing herein shall be construed as prohibiting the
Employer from pursuing any other equitable or legal remedies for such breach or
threatened breach, including the recovery of monetary damages from Executive.

       (g)    Executive’s Acknowledgement. Executive acknowledges and agrees
that (i) the restrictive covenants in this Section 6 are reasonable in time,
territory and scope, and in all other respects and (ii) should any part or
provision of any covenant herein be held invalid, void or unenforceable in any
court of competent jurisdiction, such invalidity, voidness, or unenforceability
shall not render invalid, void or unenforceable any other part or provision of
this Agreement. The restrictive covenants contained herein shall be construed as
agreements independent of any other provision in this Agreement and the
existence of any claim or cause of action of Executive against the Employer,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Employer of these covenants.

       (h)    Protected Disclosures. Pursuant to the Defend Trade Secrets Act of
2016 (8 U.S.C. § 1833(b)), Executive will not be held criminally or civilly
liable under any federal or state trade secret law for the disclosure of a trade
secret of the Company that (i) is made (A) in confidence to a federal, state, or
local government official, either directly or indirectly, or to an attorney and
(B) solely for the purpose of reporting or investigating a suspected violation
of law; or (ii) is made in a complaint or other document that is filed under
seal in a lawsuit or other proceeding. If Executive files a lawsuit for
retaliation by the Company for reporting a suspected violation of law, Executive
may disclose the trade secret to Executive’s attorney and use the trade secret
information in the court proceeding, if Executive (i) files any document
containing the trade secret under seal, and (ii) does not disclose the trade
secret, except pursuant to court order. Nothing in this Agreement, is intended
to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of
trade secrets that are expressly allowed by such section. Notwithstanding any
provision in any agreement between Executive and the Company, Executive may
disclose any confidential or non-public information (i) to report possible
violations of federal law or regulation to any governmental agency or entity,
including but not limited to the Department of Justice, the Securities and
Exchange Commission, the United States Congress and any agency Inspector
General, or make other disclosures that are protected under the whistleblower
provisions of federal law or regulation or (ii) as required by law or order by a
court;

 

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provided, however, Executive agrees to notify the Company in advance if
Executive is required to provide information or testimony in connection with any
action brought by a non-governmental or non-regulatory person or entity.

       (i)    Survival of Provisions. The obligations contained in this
Section 6 shall survive the termination or expiration of Executive’s employment
hereunder and shall be fully enforceable thereafter.

7.    No Conflict. Executive represents and warrants that Executive is not
subject to any agreement, instrument, order, judgment or decree of any kind, or
any other restrictive agreement of any character, which would prevent Executive
from entering into this Agreement or would conflict with the performance of
Executive’s duties pursuant to this Agreement. Executive represents and warrants
that Executive will not engage in any activity, which would conflict with the
performance of Executive’s duties pursuant to this Agreement.

8.    Notices. Any notice, requests, demands and other communications to be
given to a party in connection with this Agreement shall be in writing addressed
to such party at such party’s “Notice Address,” which shall initially be as set
forth below:

 

If to the Company:   

Unifi, Inc.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

Attn: Secretary

      If to Executive:   

Jeffrey C. Ackerman

Most recent address reflected on

    the Company’s payroll records

     

A party’s Notice Address may be changed or supplemented from time to time by
such party by notice thereof to the other party as herein provided. Any such
notice shall be deemed effectively given to and received by a party on the first
to occur of (a) the date on which such notice is actually delivered (whether by
mail, courier, hand delivery, electronic or facsimile transmission or otherwise)
to such party’s Notice Address and addressed to such party, if such delivery
occurs on a business day, or if such delivery occurs on a day which is not a
business day, then on the next business day after the date of such delivery, or
(b) the date on which such notice is actually received by such party (or, in the
case of a party that is not an individual, actually received by the individual
designated in the Notice Address of such party). For purposes of the preceding
sentence, a “business day” is any day other than a Saturday, Sunday or U.S.
federal public legal holiday.

9.    Indemnification.

       (a)    General. Subject to the limitations set forth in this Section 9,
the Employer shall indemnify and hold harmless, to the fullest extent permitted
by applicable law as it presently exists or may hereafter be amended, Executive
if Executive was or is made or is threatened to be made a party to or is
otherwise involved in any pending, threatened or completed action, suit,
arbitration, alternative dispute resolution proceeding, investigation,
administrative hearing, or other proceeding, whether by or in the right of the
Employer, any other Company, or any other person or entity, whether civil,
criminal, administrative or investigative (a “Proceeding”) by reason of the fact
that Executive is or was a director, officer, employee or agent of the Employer
or is or was serving at the request of the Employer as a director, officer,
member, employee or agent of any other Company or other enterprise, including
service with respect to employee benefit plans, against all cost, expense,
liability and loss (including without limitation, attorneys’ fees,

 

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judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by Executive or on Executive’s
behalf in connection with any Proceeding and any appeal therefrom. Executive’s
rights under this Section 9 shall continue after Executive has ceased acting as
a director, officer, member, employee or agent of a Company and shall inure to
the benefit of the heirs, executors and administrators of Executive. The
Employer’s obligation to provide the indemnification set forth in this
Section 9(a) shall be subject to Executive having acted in good faith and in a
manner Executive reasonably believed to be in or not opposed to the best
interests of any Company, and, with respect to any criminal action or
proceeding, having had no reasonable cause to believe Executive’s conduct was
unlawful. The termination of any Proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that Executive did not act in good faith and in a
manner which Executive reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that Executive’s conduct was
unlawful.

       (b)    Advancement of Expenses. Subject to the limitations set forth in
this Section 9, the Employer shall pay the reasonable expenses (including
reasonable attorneys’ fees) incurred by Executive in defending any Proceeding in
advance of its final disposition; provided, however, that such advancement of
expenses shall be made only upon receipt of an undertaking by Executive, in a
form approved by the Employer, to repay all amounts advanced if it shall
ultimately be determined that Executive is not entitled to be indemnified
therefor. Executive agrees to reimburse the Employer for all expenses advanced
under this Section 9 in the event and only to the extent it shall ultimately be
determined by a final adjudication that Executive is not entitled to be
indemnified by the Employer for such expenses.

       (c)    Claims for Indemnification or Advancement; Determination of
Eligibility.

      (i)    Any claim by Executive for indemnification or advancement of
expenses under this Agreement shall be made in a writing delivered to the
Employer, setting forth in reasonable detail the basis for such indemnification
or advancement and the amount requested, and accompanied by appropriate
documentation to support the amount so requested (or, in the case of advancement
of expenses to be incurred, the basis on which such amount is to be determined).
A claim for advancement may include future expenses reasonably expected to be
incurred, provided they are generally described in the claim, and provided that
the Employer shall not be required to advance particular expenses covered by the
claim until it has received appropriate substantiation that those expenses have
been incurred and are appropriately included within the advances approved by the
Employer pursuant to this Section 9(c).

      (ii)    Promptly upon its receipt of a written claim for advancement of
expenses to which Executive is entitled hereunder, and within sixty (60) days
after its receipt of a written claim for indemnity to which Executive is
entitled hereunder, the Employer shall pay such advancement (and any future
related submissions for advancement of expenses as they are incurred) or such
claim for indemnity in full to or as directed by Executive. If and to the extent
it is required by law that the Employer make any particular determination as to
Executive’s eligibility to receive such advancements or indemnity, or whether
Executive has met the standards set forth in Section 9(a) hereof, the Employer
shall make such determination as promptly as practicable in good faith and in
accordance with such requirements of law, and in any event within sixty
(60) days after its receipt of the claim from Executive. In the event that the
Employer fails to make such determination as to Executive’s eligibility, or
makes a determination that Executive is ineligible for indemnification or
advancement of expenses hereunder, within such sixty (60)-day period, then
Executive may seek such determination from a court of competent jurisdiction. In
any such proceeding, the Employer shall have the burden of proving that
Executive was not entitled to the requested indemnification or advancement of
expenses, and any prior determination by the

 

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Employer to the contrary shall be to no effect and shall not be given any weight
by the court, it being the intention of the parties that any determination by
the court as to Executive’s eligibility for and entitlement to indemnification
or advancement of expenses hereunder shall be made de novo based upon the terms
of this Agreement and the evidence presented to such court.

       (d)    Limitations on Claims. In addition to the limitations on
indemnification set forth in Section 9(a) above, the Employer shall not be
obligated pursuant to this Agreement:

       (i)    To indemnify or advance expenses to Executive with respect to a
Proceeding initiated by Executive, except (i) for Proceedings authorized or
consented to by the Board; or (ii) in the event a claim for indemnification or
payment of expenses (including attorneys’ fees) made under this Agreement is not
paid in full within sixty (60) days after a written claim therefor has been
received by the Employer, Executive may file suit to recover the unpaid amount
of such claim and, if successful in whole or in part, shall be entitled to be
paid the expense of prosecuting such claim, including attorneys’ fees. In any
such action, the Employer shall have the burden of proving that Executive was
not entitled to the requested indemnification or payment of expenses under
applicable law or this Agreement.

       (ii)    To indemnify Executive for any expenses incurred by Executive
with respect to any Proceeding instituted by Executive to enforce or interpret
this Agreement, unless Executive is successful in establishing Executive’s right
to indemnification in such Proceeding, in whole or in part; provided, however,
that nothing in this Section 9(d)(ii) is intended to limit the Employer’s
obligation with respect to the advancement of expenses to Executive in
connection with any Proceeding instituted by Executive to enforce or interpret
this Agreement, as provided in Section 9(c) above.

       (iii)    To indemnify Executive in connection with proceedings or claims
involving the enforcement of the provisions of this Agreement (other than as
otherwise specifically provided for in this Section 9) or any other employment,
severance or compensation plan or agreement that Executive may be a party to, or
beneficiary of, with the Employer or any other Company.

       (iv)    To indemnify Executive on account of any proceeding with respect
to which final judgment is rendered against Executive for payment or an
accounting of profits arising from the purchase or sale by Executive of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, any similar successor statute, or similar provisions of state
statutory law or common law.

       (e)    Non-Exclusivity of Rights. The right conferred on Executive by
this Section 9 shall not be exclusive of any other rights which Executive may
have or hereafter acquire under any statute, provision of the Employer’s
articles of incorporation or bylaws, agreement, vote of shareholders or
disinterested directors or otherwise, or under any insurance maintained by the
Employer; but such rights in the aggregate shall not entitle Executive to
duplicative multiple recoveries. No amendment or alteration of the Employer’s
articles of incorporation or bylaws or any other agreement shall adversely
affect the rights provided to Executive under this Section 9.

       (f)    Savings Clause. If any provision or provisions of this Agreement
shall be invalidated on any ground by any court of competent jurisdiction, then
the Employer shall nevertheless indemnify Executive as to costs, charges and
expenses (including attorneys’ fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Employer, to the full extent

 

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permitted by any applicable portion of this Agreement that shall not have been
invalidated and to the full extent permitted by applicable law.

10.    Dispute Resolution.

       (a)    Any dispute between Executive and the Employer arising out of this
Agreement or the performance or nonperformance hereof (except with respect to
Section 9), shall, upon the demand of either Executive or the Employer, be
settled by binding arbitration in accordance with the Employment Arbitration
Rules and Mediation Procedures of the American Arbitration Association as in
effect at the time the arbitration is commenced and the provisions of this
subsection:

       (i)    The arbitration shall be conducted in Greensboro, North Carolina
by a panel of three impartial arbitrators selected in accordance with such
rules, unless the parties shall hereafter mutually agree in writing to have the
arbitration conducted by a single arbitrator.

       (ii)    In conducting the arbitration and rendering their award, the
arbitrators shall give effect to the terms of this Agreement, including the
choice of applicable law, shall give effect to any other agreement of the
parties relating to the conduct of the arbitration, and shall give effect to
applicable statutes of limitations.

       (iii)    The costs of the arbitration, including the fees and expenses of
the arbitrators and of the American Arbitration Association, shall be allocated
to such parties as, and in such proportions as, the arbitrators shall determine
to be just and equitable, which determination shall be set forth in the award.

       (iv)    Judgment upon the award of the arbitrators may be entered by any
court of competent jurisdiction.

         (b)    Nothing in this Section 10 shall preclude any party from
applying to a court of competent jurisdiction for, and obtaining if warranted,
preliminary or ancillary relief pending the conduct of such arbitration, or an
order to compel the arbitration provided for herein.

         (c)    Any claim arising out of Section 9, including a claim by
Executive for indemnification or advancement of expenses thereunder, shall be
brought before the state courts of the State of North Carolina pursuant to
Section 12.

11.    Assignment; Successors. This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder; provided that,
this Agreement shall be binding upon and, subject to the provisions hereof,
inure to the benefit of any successor of the Employer and such successor shall
be deemed substituted for the Employer under the terms of this Agreement; but
any such substitution shall not relieve the Employer of any of its obligations
under this Agreement. As used in this Agreement, the term “successor” shall
include any person, firm, corporation, or like business entity which at any
time, whether by merger, purchase or otherwise, acquires all or a controlling
interest in the assets or business of the Employer.

12.    Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by, and construed and enforced in accordance
with, the substantive laws of the State of North Carolina, without giving effect
to its principles of conflict of laws. Executive and the Employer each hereby
irrevocably consent that both parties are subject to the jurisdiction of the
state courts of the State of North Carolina for all purposes in connection with
any action or proceeding that arises out

 

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of or relates to this Agreement, and further agree that the sole and exclusive
venue for any such dispute shall be the General Court of Justice, Superior Court
Division, in Guilford County, North Carolina.

13.    Withholding. The Employer shall make such deductions and withhold such
amounts from each payment made to Executive hereunder as may be required from
time to time by law, governmental regulation or order.

14.    Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

15.    Waiver; Modification. Failure to insist upon strict compliance with any
of the terms, covenants, or conditions hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.

16.     Severability. The parties have entered into this Agreement for the
purposes herein expressed, with the intention that this Agreement be given full
effect to carry out such purposes. Therefore, consistent with the effectuation
of the purposes hereof, the invalidity or unenforceability of any provision
hereof or part thereof shall not affect the validity or enforceability of any
other provision hereof or any other part of such provision.

17.    Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes any prior
agreements between them with respect to the subject matter hereof. Without
limiting the generality of the foregoing, the obligations under this Agreement
with respect to any termination of employment of Executive, for whatever reason,
supersede any severance or related obligations of the Company in any policy,
plan or practice of the Company or any agreement between Executive and the
Company.

18.    Counterparts. This Agreement may be executed by the parties hereto in
multiple counterparts and shall be effective as of the Effective Date when each
party shall have executed and delivered a counterpart hereof, whether or not the
same counterpart is executed and delivered by each party. When so executed and
delivered, each such counterpart shall be deemed an original and all such
counterparts shall be deemed one and the same document. Transmission of images
of signed signature pages by facsimile, e-mail or other electronic means shall
have the same effect as the delivery in person of manually signed documents.

19.    Compliance with Section 409A. This Agreement is intended to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”),
to the extent applicable. Notwithstanding any provision herein to the contrary,
this Agreement shall be interpreted, operated and administered consistent with
this intent. Each separate installment under this Agreement shall be treated as
a separate payment for purposes of determining whether such payment is subject
to or exempt from compliance with the requirements of Section 409A. In addition,
in the event that Executive is a “specified employee” within the meaning of
Section 409A (as determined in accordance with the methodology established by
the Employer as in effect on the date of termination of Executive’s employment
hereunder), any payment or benefits hereunder that are nonqualified deferred
compensation subject to the requirements of Section 409A shall be provided to
Executive no earlier than six (6) months after the date of Executive’s
“separation from service” within the meaning of Section 409A.

[Signatures follow on next page]

 

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IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its
duly authorized officer, and Executive has hereunto signed this Agreement, as of
the Effective Date.

 

    “Employer”:     Unifi, Inc.     By:  

/s/ KEVIN D. HALL

      Name:   Kevin D. Hall       Title:   Chief Executive Officer    
“Executive”:    

/s/ JEFFREY C. ACKERMAN

      Name:   Jeffrey C. Ackerman        

 

[signature page to employment agreement]