Document:

EX-10.3

Exhibit 10.3

UNIFI, INC.’S

STOCK OPTION GRANTS

UNDER THE 2008 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 April 30, 2008, subject to
the approval of the shareholders of the Corporation, the 2008 Unifi, Inc. Long Term Incentive Plan
(“Plan”) which was approved by the shareholders of the Corporation at their Annual Meeting held on
October 29, 2008; 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 [insert] (“Date of
Grant”) to Optionee the right, privilege, and option to purchase [insert] 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 [insert] 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 on the date that the closing price of the Corporation’s
common stock on the New York Stock Exchange shall have been at least [insert] per share for thirty
(30) consecutive trading days. There shall be no fractional shares. After the Option becomes
exercisable as set forth above it shall continue to be exercisable with respect to the Option
Shares until the Option expires.

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     Section 4. Method of Exercise. This Option shall be exercised by written notice
directed to the Chief Financial Officer or 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 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 [insert] expiration date of the Option, to exercise such
Option to the extent exercisable by the Optionee at the

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	 	 	 	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 [insert], 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)	 	[insert], being the expiration of ten years from the grant of this Option.

     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

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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:

	 	(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. Fair Market Value. The Fair Market
Value (“FMV”) of Unifi, Inc. Common Stock on [insert] is [insert] per share,
being the average of the high and low prices of such stock on the New York
Stock Exchange on that date.

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	 	(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 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, any non-vested
and/or non-exercisable 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 [insert] 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 representative or
representatives of the estate of the last to die of the Optionee and the beneficiary.

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     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:
	 	 
 

Optionee
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 
 

	 	(Seal) 

7EX-10.111

Exhibit 10.111

December 31, 2008

Peter Karmanos, Jr.

Chairman and Chief Executive Officer

Compuware Corporation

One Campus Martius

Detroit, MI 48226

			
	     Re:	 	409A Amendment to Consulting/Employment Letter

Dear Peter:

     A new section of the Internal Revenue Code (“Code Section 409A”) classifies most compensation
that is earned in one tax year and paid in a subsequent tax year as nonqualified deferred
compensation. In particular, certain severance payments under your March 1, 2007
Consulting/Employment Letter (the “Letter Agreement”) are considered nonqualified deferred
compensation. To comply with Code Section 409A, it is necessary to amend your Letter Agreement
prior to January 1, 2009. In general, the changes provide more specificity regarding payment dates
and may require that you be reimbursed for certain benefits instead of continuing to participate in
the company’s plans. The changes are as follows:

     1. The first bullet point in Section 3 of the Letter Agreement is amended and restated in its
entirety to read as follows:

	 	•	 	The company shall pay you a total of one year’s salary at the amount in effect
on the Retirement Date in annual installments over a four year period on a monthly
basis beginning in the first month after the month of your Retirement Date (the
“Term”). In no event shall such aggregate annual payment be less than $300,000.00
per year.

     2. The second bullet point in Section 3 of the Letter Agreement is amended and restated in its
entirety to read as follows:

	 	•	 	The company shall pay you earned bonuses under the company’s executive
incentive bonus plans in accordance with their terms but no later than the
15th day of the third month following the company’s fiscal year for
which the bonus is awarded.

     3. The first bullet point of Section 4 of the Letter Agreement is amended and restated in its
entirety to read as follows:

	 	•	 	For termination by the company without cause or by you with cause, you shall
receive: (a) bonuses earned through the date of termination, payable in

 

 

	 	 	 	accordance
with the bonus plan’s terms but no later than the 15th day of the third
month following the company’s fiscal year for which the bonus is awarded; (b)
severance pay equal to the full amount of the base salary that would have been paid
to you over the unexpired portion of the Term in equal consecutive monthly
installments; (c) reimbursement for what would have been the company’s portion of
your monthly COBRA costs under the company’s medical, dental, vision and
hospitalization benefit plans through the unexpired portion of the Term of the
agreement; and (d) all stock options granted shall be fully vested and exercisable;
provided however, that if the unexpired Term exceeds the COBRA period, following
the expiration of the COBRA period, the company shall reimburse you for what would
have been the company’s portion of the monthly cost of the benefits provided under
(c); and provided further, that until the end of the Term, the company shall
provide you with disability and life insurance , which shall be through an
individual policy if the company is unable to provide the benefits under its own
life and disability plans.

     4. The second bullet point of Section 4 of the Letter Agreement is hereby amended and restated
in its entirety to read as follows:

	 	•	 	For termination by you without cause, you shall receive: (a) your salary through
the date of termination, payable on the next payroll date; (b) bonuses earned
through the date of termination, payable in accordance with the bonus plan’s terms
but no later than the 15th day of the third month following the
company’s fiscal year for which the bonus is awarded; and (c) all stock options
granted shall become vested and exercisable in accordance with the company’s option
plans.

     5. The third bullet point of Section 4 of the Letter Agreement is hereby amended and restated
in its entirety to read as follows:

	 	•	 	For termination of this Agreement due to your death or disability as defined
under the company’s disability insurance plan,: (a) you (or your estate or
beneficiary, as applicable) shall receive a sum equal to the full amount of the
base salary that would have been paid to you over the unexpired portion of the
Term, payable in equal consecutive monthly installments commencing in the first
month after the month of your employment termination; (b) you and your spouse, as
applicable, shall be reimbursed for COBRA premiums under the company’s medical,
dental, vision and hospitalization benefit plans for twenty-four (24) months from
the date of your death.

     6. A new Section 6 shall be added to the Letter Agreement to read as follows:

6. If any amounts that become due under this Agreement constitute “nonqualified
deferred compensation” within the meaning of Code Section 409A, payment of such
amounts shall not commence until you incur a
“separation from service” within the meaning of Treasury Regulation Section
1.409A-1(h). If, at the time of your separation from service, you are a
“specified employee” (within the meaning of Code Section 409A), any benefit

 

 

to
which Code Section 409A additional taxes could be assessed on account of your
separation from service (including any amounts payable pursuant to the preceding
sentence) will not be paid until after the end of the sixth calendar month
beginning after the your separation from service (the “409A Suspension
Period”) to the extent such delay may reasonably be expected to avoid Code
Section 409A additional taxes. Within fourteen (14) calendar days after the end
of the 409A Suspension Period, you shall be paid a lump sum payment in cash equal
to any payments delayed because of the preceding sentence. Thereafter, you shall
receive any remaining benefits as if there had not been an earlier delay. The
company shall have the sole discretion to interpret the requirements of the Code,
including Code Section 409A, for purposes of this Agreement.

     If you agree and accept the terms of this amendment to your Letter Agreement, please sign both
copies and return one copy for the company’s files.

	 	 	 	 	 
	 

	 	Sincerely,	 	 
	 
	 	 	 	 
	 

	 	/s/ Daniel S. Follis Jr.
 

Daniel S. Follis Jr., Secretary
	 	 
	 
	 	 	 	 
	 

	 	On behalf of William O. Grabe	 	 
	 

	 	Chairperson, Compensation Committee	 	 

I agree and accept the terms of this amendment to my Letter Agreement:

	 	 	 
	/s/ Peter Karmanos, Jr.
 

Peter Karmanos, Jr.

	 	 
	Chairman and CEO
	 	 

Dated: December 31, 2008

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