Document:

EX-10.5

 Exhibit 10.5 

ZEKELMAN INDUSTRIES, INC. 

EXECUTIVE SEVERANCE PLAN 

1.    Purpose. The purpose of the Plan is to provide reasonable severance protection to certain executives and
other key employees of the Company and its Affiliates who are expected to make substantial contributions to the success of the Company and its Affiliates and thereby provide for stability and continuity of management. 

2.    Term. The Plan is effective as of
[                    ], 2018 (the “Effective Date”) and shall continue until terminated in accordance with Section 23. 

3.    Definitions. For purposes of the Plan, the following terms have the meanings set forth below: 

3.1    “Accrued Benefits” means (i) the portion of the Participant’s Base Salary earned through the date
of the Qualifying Termination, to the extent not yet paid; (ii) the amount of any compensation under the Annual Incentive Plan applicable to the Participant that has been earned by or awarded to the Participant for a completed fiscal year
preceding the date of the Qualifying Termination, but has not yet been paid to the Participant; (iii) any paid time-off accrued during the year of termination through the date of the Qualifying
Termination (or end of the Participant’s statutory notice period, if applicable), to the extent not used or theretofore paid (and except as otherwise required by law) and (iv) any other amounts or benefits owed or due to the Participant as
of the date of the Qualifying Termination pursuant to the terms and conditions of any employee benefit plans, programs or arrangements. 

3.2    “Affiliate” means any entity that, directly or indirectly, is controlled by the Company and any entity in
which the Company or any of the foregoing has a significant equity interest, as determined by the Board or the Plan Administrator. 

3.3    “Annual Incentive Plan” means the Company’s Management Incentive Plan or any successor annual cash
incentive compensation plan or program implemented by the Company. 
 3.4    “Base Salary” means the
Participant’s annual base salary as in effect immediately prior to the Participant’s termination, without regard to any reduction that would constitute Good Reason. 

3.5    “Beneficial Owner” has the meaning ascribed to such term in Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934 (the “Exchange Act”). 

3.6    “Board” means the board of directors of Zekelman Industries, Inc. 

3.7    “Business” means any business, other than the Company or its Affiliates, directly engaged in, or with
significant shareholdings in operations that are engaged in, the manufacture of steel pipe or tube products with substantial manufacturing operations in North America. 

3.8    “Cause” means any one or more of the following, in each case as determined in good faith by the Board or the
Plan Administrator, (i) gross negligence or willful misconduct of a material nature in connection with the performance of the Participant’s duties and responsibilities as an 

 
employee, which actions, if capable of being cured, are not cured within fifteen (15) days after written notice thereof from the Board or the Plan Administrator (or, in the case of any
Participant other than the chief executive officer, written notice from the chief executive officer), (ii) a conviction for (or pleading guilty or nolo contendere to) a felony or crime involving moral turpitude for which a pardon has not been
granted as of the date of the termination, (iii) an act of fraud or embezzlement or misappropriation of the Company’s or any of its Affiliates’ funds or property; (iv) unlawful use (including being under the influence) or
possession of illegal drugs on the premises of the Company or any of its Affiliates or while the Participant is performing the duties and responsibilities of his or her employment; (v) a violation of Section 9 hereof or any similar
agreement between the Participant and the Company and the Board shall have determined that such act is harmful to the Company or its Affiliates; (vi) the Participant’s breach of any of material obligations in his or her employment
agreement, offer letter or other terms of employment, which breach, if capable of being cured, is not cured within fifteen (15) days after written notice thereof; (vii) the Participant’s breach of his or her fiduciary duties as an
officer or director of the Company or any of its Affiliates, which breach, if capable of being cured, is not cured within fifteen (15) days after written notice thereof; or (viii) the Participant’s continued failure or refusal after
written notice from the Board (or, in the case of any Participant other than the chief executive officer, written notice from the chief executive officer) to implement or follow the lawful and reasonable direction of the Board (or the chief
executive officer, as applicable) that is consistent with the duties and responsibilities of the Participant. 

3.9    “Change of Control” means any one of the following: 

(i)    any Person (other than any Permitted Holder as defined in the Company’s Amended and Restated
Certificate of Incorporation) becomes the Beneficial Owner (except that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of
conversion rights, warrants or options or otherwise, without regard to the sixty (60) day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company,
representing thirty percent (30%) or more of the combined voting power of such entity’s then outstanding securities; 

(ii)    during any twelve (12) month period, a majority of the members of the Board is replaced by
individuals who were not members of the Board at the beginning of such twelve (12) month period and whose election by the Board or nomination for election by the Company’s shareholders was not approved by a vote of at least a majority of
the directors then still in office who either were directors at the beginning of such twelve (12) month period or whose election or nomination for election was previously so approved; 

(iii)    the consummation of a merger or consolidation of the Company with any other entity, other than a
merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or
resulting entity) fifty percent (50%) or more of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation; or 

 (iv)    the consummation of a sale or disposition of all or
substantially all of the assets of the Company, other than such a sale or disposition that would result in the voting securities of the Company outstanding immediately prior thereto representing fifty percent (50%) or more of the combined voting
power of the acquiring entity outstanding immediately after such a sale or disposition. 
 3.10    “Change of Control
Protection Period” means the twenty-four (24) month period beginning on the date of the Change of Control. 

3.11    “Code” means the Internal Revenue Code of 1986, as amended. 

3.12    “Committee” means the Compensation Committee of the Board. 

3.13    “Company” means Zekelman Industries, Inc. and any successor thereto. 

3.14    “Company Group Health Benefit Plans” means those Company group health benefit plans the Participant and any
dependents were eligible to participate in as of immediately prior to the Qualifying Termination. 
 3.15    “Confidential
Information” shall mean information or material of the Company or any of its Affiliates which is not generally available to or used by others, or the utility or value of which is not generally known or recognized as standard practice,
whether or not the underlying details are in the public domain, including: (i) information or material relating to the Company and its business as conducted or anticipated to be conducted; business plans; operations; past, current or
anticipated services, products or software; customers or prospective customers; relations with business partners or prospective business partners; or research, engineering, development, manufacturing, purchasing, accounting, or marketing activities;
(ii) information or material relating to the Company’s inventions, improvements, discoveries, “know-how,” technological developments, or unpublished writings or other works of authorship,
or to the materials, apparatus, processes, formulae, plans or methods used in the development, manufacture or marketing of the Company’s services, products or software; (iii) information on or material relating to the Company which when
received is marked as “proprietary,” “private,” or “confidential”; (iv) trade secrets of the Company; (v) software of the Company in various stages of development, software designs, web-based solutions, specifications, programming aids, programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases of the Company; and (vi) any similar
information of the type described above which the Company obtained from another party and which the Company treats as or designates as being proprietary, private or confidential, whether or not owned or developed by the Company. Notwithstanding the
foregoing, Confidential Information does not include any information which is properly published or in the public domain; provided, however, that information which is published by or with the aid of the Participant outside the scope of employment or
contrary to the requirements of the Plan will not be considered to have been properly published, and therefore will not be in the public domain for purposes of the Plan. 

3.16    “Disability” means the Participant’s physical or mental incapacity that renders him or her unable,
with or without accommodation, for a period of 90 (ninety) consecutive days or an aggregate of one hundred and twenty (120) days in any three hundred and sixty-five (365) consecutive calendar day period to perform his or her duties to the
Company or any Affiliate. 

 3.17    “Employee” means an employee of the Company or any of its
Affiliates. 
 3.18    “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

3.19    “Executive Participant” means an executive the Company who has been designated by the Board or the Plan
Administrator (defined below) to participate in the Plan as an Executive Participant. 
 3.20    “Good Reason”
means any one or more of the following (i) a material diminution in the nature and scope of the Participant’s responsibilities, duties or authority (for the avoidance of doubt, any diminution of the business of the Company due to economic,
industry or market conditions shall not constitute Good Reason); (ii) a material diminution by the Company in the Participant’s current base salary and/or annual bonus potential , other than as part of an across-the-board reduction that results in a proportional reduction to the Participant substantially equivalent to that of other senior executives that are designated at the same level of participation as the
Participant hereunder and that does not occur during a Change of Control Protection Period; (iii) any requirement by the Company or its Affiliates that the Participant take any action or omit to take any action, which if taken or omitted to be
taken would violate applicable law; or (iv) an actual relocation of the Participant’s principal office to another location more than fifty (50) miles from the Participant’s current office location and such office relocation
results in an increase in the Participant’s length of commute; provided that no finding of Good Reason shall be effective unless and until the Participant has provided the Company, within sixty (60) calendar days of the date when the
Participant became aware, or should have become aware, of the facts and circumstances underlying the finding of Good Reason, with written notice thereof stating with specificity all of the facts and circumstances underlying the finding of Good
Reason and that the Participant intends to terminate his or her employment for Good Reason no later than the sixtieth (60th) day following the delivery of such notice to the Company and, if the
basis for such finding of Good Reason is capable of being cured by the Company, providing the Company with an opportunity to cure the same within thirty (30) calendar days after receipt of such notice. If the Company does not cure the same
within such thirty (30) calendar day cure period, no finding of Good Reason shall be effective unless the Participant terminates employment within thirty (30) calendar days of the expiration of such cure period. 

3.21    “Key Employee Participant” means an Employee who has been designated by the Board or the Plan Administrator
to participate in the Plan as a Key Employee Participant. 
 3.22    “Participant” means any Employee who is
designated as a Participant at either the Executive Participant level or the Key Employee Participant level in accordance with Section 4: 

3.23     “Person” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, including “group” as defined in Section 13(d) thereof. 

3.24    “Plan” means the Zekelman Industries, Inc. Executive Severance Plan, as set forth in this document, and as
hereafter amended from time to time. 

 3.25    “Plan Administrator” means the Board or any duly constituted
committee of members of the Board, or any person to whom the Board or such duly constituted committee has delegated any authority or responsibility pursuant to Section 7, but only to the extent of such delegation. Until and unless the Board
determines otherwise, the Committee shall be the Plan Administrator, and may further delegate any authority or responsibility pursuant to Section 7. 

3.26    “Qualifying Termination” means the Participant’s termination of service by the Company without Cause
or due to death or Disability, or by the Participant for Good Reason. 
 3.27    “Release” means the waiver and
release of claims described in Section 8 and required of the Participant prior to receipt of certain payments under the Plan in Section 5 herein. 

3.28    “Restricted Period” means the period of the Participant’s employment by the Company or its Affiliates
and one (1) year following termination of such employment for any reason 
 4.    Eligibility. The Plan
applies to any Employee who has been designated as a Participant by the Board or the Plan Administrator and who has received written notice from the Company of his or her status as a Participant, which status has not been revoked pursuant to
Section 23. 
 5.    Severance Pay and Benefits. Subject to the eligibility requirements of the Plan
and compliance with all other applicable provisions of the Plan, including, without limitation, the Release and the Restrictive Covenants in Section 9, in the event of a Qualifying Termination with respect to a Participant, such Participant
will be entitled to receive severance pay and benefits in accordance with the terms as set forth below. Any obligation of the Company to provide severance pay and/or other benefits pursuant to the Plan shall immediately terminate if it is determined
by the Company that the Participant has breached any obligation under his or her Release, the Restrictive Covenants and/or any other obligation to the Company. 

5.1    Cash Severance - Qualifying Termination during Change of Control Protection Period: If a Qualifying
Termination (other than a termination due to death or Disability) occurs during a Change of Control Protection Period, the Participant shall receive cash severance at such Participant’s designated level of participation, as follows: 

(i)    Executive Participant: A Participant shall be entitled to a severance payment, payable in a
lump sum within sixty (60) days of the date of the Qualifying Termination, equal to two times (2x) the following: the sum of the Participant’s Base Salary plus the Participant’s target bonus, without proration, under the Annual
Incentive Plan for the fiscal year in which the Qualifying Termination occurs; provided, however, that if either the Participant’s Base Salary or target bonus was higher as of the date of the Change of Control than it was at the date of the
Qualifying Termination, the payments will be calculated based on such higher amount(s). 
 (ii)    Key
Employee Participant: A Participant shall be entitled to a severance payment, payable in a lump sum within sixty (60) days of the date of the Qualifying Termination, equal to one and one-half times
(1.5x) the following: the sum of the Participant’s Base Salary plus the Participant’s target bonus, without proration, under the Annual Incentive Plan for the fiscal year in which the Qualifying Termination occurs; provided, however, that
if either the Participant’s Base Salary or target bonus was higher as of the date of the Change of Control than at the date of the Qualifying Termination, the payments will be calculated based on such higher amount(s). 

 5.2    Cash Severance - Qualifying Termination outside of Change of Control
Protection Period: If Qualifying Termination occurs outside of a Change of Control Protection Period or is due to death or Disability at any time, the Participant shall receive cash severance at such Participant’s designated level of
participation, as follows: 
 (i)    Executive Participant: A Participant shall be entitled to
(i) a severance payment, payable in a lump sum within sixty (60) days of the date of the Qualifying Termination, equal to one and one-half times (1.5x) the following: the sum of the
Participant’s Base Salary plus the Participant’s target bonus, without proration, under the Annual Incentive Plan for the fiscal year in which the Qualifying Termination occurs. 

(ii)    Key Employee Participant: A Participant shall be entitled to a severance payment, payable in
a lump sum within sixty (60) days of the date of the Qualifying Termination, equal to one times (1.0x) the following: the sum of the Participant’s Base Salary plus the Participant’s target bonus, without proration, under the Annual
Incentive Plan for the fiscal year in which the Qualifying Termination occurs. 
 5.3    Other Benefits - Any Qualifying
Termination: In the event of any Qualifying Termination, all Participants shall also be entitled to (i) the Accrued Benefits and (ii) a monthly cash payment equal to the Company’s then current share of the premium cost
for coverage of the Participant (and any dependents) under the Company Group Health Benefit Plans for twelve (12) months following the Qualifying Termination. Such payments shall be made regardless of the Participant’s election of
continuation benefits under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”). As of the date the Qualifying Termination, the Participant shall, if applicable, be eligible to elect to receive “COBRA”
continuation coverage to the extent permitted by Section 601 et seq. of ERISA. 
 6.    Impact of
Section 4999 Excise Tax: Maximum After-Tax Benefit Following a Change of Control. 

6.1    In the event that part or all of the consideration, compensation or benefits to be paid to a Participant under this Plan
together with the aggregate present value of payments, consideration, compensation and benefits under all other plans, arrangements and agreements applicable to such Participant, constitute “excess parachute payments” under
Section 280G(b) of the Code subject to an excise tax under Section 4999 of the Code (collectively, the “Parachute Amount”) the amount of excess parachute payments which would otherwise be payable to such Participant or for such
Participant’s benefit under the Plan shall be reduced to the extent necessary so that no amount of the Parachute Amount is subject to an excise tax under Section 4999 (the “Reduced Amount”); provided that such amounts shall not
be so reduced if, without such reduction, such Participant would be entitled to receive and retain, on a net after-tax basis (including, without limitation, after any excise taxes payable under
Section 4999), an amount of the Parachute Amount which is greater than the amount, on a net after-tax basis, that such Participant would be entitled to retain upon receipt of the Reduced Amount. For
purposes of determining such net after-tax amount, all taxes 

 
as would be imposed on such Participant with respect thereto under Sections 1, 3101 and 4999 of the Code and under applicable state and local laws, shall be taken into account and determined by
applying the highest marginal rate under Section 1 of the Code and under state and local laws that applied to such Participant. The determination of such net after-tax amount shall be made by a
nationally recognized certified public accounting firm that is selected by the Company and reasonably acceptable to such Participant, which firm shall not, without such Participant’s consent, be a firm serving as accountant or auditor
for the individual, entity or group effecting the Change of Control. 
 6.2    If the determination made pursuant
to Section 6(a) results in a reduction of the payments (to the Reduced Amount) that would otherwise be paid to such Participant except for the application of Section 6(a), such payments due under this Agreement shall be
reduced in the order in which they appear in Section 5; provided, however, (A) if the value of any payment for purposes of Code Section 280G can be calculated under the special rule in Treasury Regulation §1.280G-1, Q/A 24(c), then such payment shall be reduced after all other payments in Section 5 and (B) if any payment in Section 5 is not considered a parachute payment, then such payment
shall not be subject to reduction and shall be ignored for purposes of this reduction provision. Accordingly, the cash severance payments payable under Section 5 shall be reduced first (if necessary, to zero), and then each other
category of severance payments and benefits payable under Section 5 shall be reduced as necessary, with each being reduced in order (if necessary, to zero) before reducing a subsequent category. Within ten days following such determination, but
not later than thirty days following the date of the event under Section 280G(b)(2)(A)(i), the Company shall pay or distribute to such Participant or for such Participant’s benefit such amounts as are then due to such Participant under the
Plan (in accordance with the provisions of Section 5 above) and shall promptly pay or distribute to such Participant or for his or her benefit in the future such amounts as become due to such Participant under the Plan. 

7.    Plan Administration and Interpretation. The Plan Administrator shall have the sole authority in the
exercise of its discretion to interpret, apply, and administer the terms of the Plan and to determine eligibility for benefits of the Plan and the amount of any benefits under the Plan, and its determination of any such matters shall be final and
binding and be given the maximum deference allowed by law. Benefits under the Plan will be paid only if the Plan Administrator determines in its discretion that a Participant or beneficiary is entitled to them. The Plan Administrator may delegate in
writing to any other person all or any portion of its authority or responsibility with respect to the Plan. 

8.    Release. The severance compensation and benefits to be provided under Section 5 which exceed the
Participant’s minimum entitlements under applicable employment standards legislation, if applicable, shall be provided only if the Participant timely executes and does not timely revoke a waiver and release of all claims arising out of the
Participant’s employment with the Company or any of its Affiliates to the extent permitted by applicable law, in a form that is reasonably acceptable to the General Counsel, which becomes effective and irrevocable no later than sixty
(60) days following the date of the Participant’s Qualifying Termination. If the Release does not become effective and irrevocable by sixty (60) days following the date of the Participant’s Qualifying Termination, the Participant
will not be entitled to any payment or benefit under the Plan. 

 9.    Restrictive Covenants. 

9.1    The severance compensation and benefits to be provided under Section 5 are subject to the Participant’s compliance
with the covenants as set forth below or, with respect to any Participant serving as an employee in Canada, alternative restrictive covenants to be established at the time of designation of such employee as a Participant. 

(i)    Non-Competition: During the Restricted
Period, the Participant agrees not to directly or indirectly engage in the Business or manage, operate or perform services for, or have any equity interest in, any person, firm, corporation, partnership or business (whether as director, officer,
employee, agent, representative, partner, security holder, consultant or otherwise) engaged in the Business; provided, however, the Participant shall be permitted to acquire a passive stock or equity interest of not more than five percent (5%) of
the outstanding interest in such a person, firm, corporation, partnership or business. 
 (ii)    Non-Solicitation: During the Restricted Period, the Participant agrees not to directly or indirectly, recruit or otherwise solicit or induce any employee, customer or supplier of the Company or any of
its Affiliates to terminate its employment or arrangement with the Company or any of its Affiliates or otherwise change its relationship with the Company or any of its Affiliates or to establish any relationship with any Business or with the
Participant for any purpose reasonably deemed competitive with the Company or any of its Affiliates. 

(iii)    Confidentiality: The Participant will not at any time (whether during or
after the Participant’s employment with the Company or its Affiliates) disclose, divulge, transfer or provide access to, or use for the benefit of, any third party outside of the Company (other than as necessary to perform the
Participant’s employment duties) any Confidential Information without prior authorization of the Company. Upon termination of the Participant’s employment for any reason, the Participant shall return any and all Confidential Information
and other property of the Company or its Affiliates then in the Participant’s possession. 

(iv)    Non-Disparagement: The Participant
agrees that the Participant will not make disparaging statements, in any form, about the Company or its Affiliates, officers, directors, agents, Employees, products or services which the Participant knows, or has reason to believe, are false or
misleading. 
 9.2    In the event the terms of this Section 9 shall be determined by any court of competent jurisdiction to
be unenforceable by reason of extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for
which it may be enforceable, over the maximum geographical area as to which it may be enforceable and the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 

9.3    Notwithstanding anything to the contrary in the foregoing, nothing in this Section 9 or elsewhere in the Plan is
intended to prevent or in any way limit the Participant from reporting possible violations of federal, provincial or state law to a governmental agency, such as the Equal Employment Opportunity Commission or the Securities and Exchange Commission,
communicating with such agency or participating in any proceeding before such agency as provided for, protected under or warranted by applicable law. 

 10.    No Mitigation. In no event shall the Participant be
obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Participant under any of the provisions of the Plan and such amounts shall not be reduced whether or not the Participant obtains other
employment. 
 11.    Plan Effect. Except to the extent expressly set forth herein, any benefit or
compensation to which a Participant is entitled under any written agreement between the Participant and the Company or any of its Affiliates or under any plan maintained by the Company or any of its Affiliates in which the Participant participates
or participated shall not be modified or lessened in any way as a consequence of the Participant’s participation in this Plan, but shall remain payable or provided according to the terms of the applicable plan or agreement; provided that, if no
such written agreement or plan exists, the payments and benefits outlined herein shall be in full and final satisfaction of all of the Participant’s entitlements upon termination of the Participant’s employment (pursuant to statute, common
law or otherwise) and the Participant agrees that the Participant shall not be entitled to reasonable notice at common law or other payments or benefits upon termination of his or her employment with the Company or any of its Affiliates. Nothing in
this Plan shall be construed as giving the Participant the right to remain in the employ of, or continue to provide services to, the Company or any Affiliate. Further, the Company or any Affiliate may at any time dismiss a Participant, free from any
liability or any claim under the Plan, unless otherwise expressly provided herein or in any other agreement binding on the parties. Designation of an Employee as a Participant in the Plan is not intended to confer any rights on the Participant
except as set forth herein. The Plan shall constitute an “employee welfare benefit plan” within the meaning of ERISA. Notwithstanding the foregoing or any term of the Plan, in the event that the minimum standards set out in the applicable
employment standards legislation (as may be amended from time to time) are more favourable to the Participant in any respect than a term or provision provided for in this Agreement, the statutory provisions will apply in respect and in lieu of that
term or provision. Under no circumstances will the Participant receive less than the Participant’s minimum entitlements under applicable employment standards legislation upon termination of employment. 

12.    Claims Procedure. 

12.1    Severance benefits will be provided to each Participant as provided in the Plan. If a Participant believes that he or she
has not been provided with the severance benefits to which he or she is entitled under the Plan, then the Participant must file a request for review within ninety (90) days after the date he or she should have received such benefits under the
Plan. The request for review must be made in writing and submitted to the Plan Administrator. The Plan Administrator will respond to the request for review within ninety (90) days after it is received setting forth, in writing, the reasons for
the determination. If the Participant’s request for review is denied, the Participant may, within sixty (60) days after receiving written notice of such denial, file an appeal to the General Counsel of the Company, setting forth the reason
why the Participant disagrees with the initial determination. The General Counsel shall respond to this request for reconsideration within sixty (60) days after it is received setting forth, in writing, the reasons for the determination. A
Participant who fails to file an appeal within the sixty (60) day period set forth in this Section 12 shall be prohibited from doing so at a later date or from bringing an action under ERISA. 

 12.2    If the Participant subsequently wishes to submit an arbitration claim under
the Plan pursuant to Section 15 hereof, the demand for arbitration must be made within ninety (90) days after the General Counsel’s final decision. No demand for arbitration shall be brought to recover benefits under the Plan unless
and until the claims procedure rights herein provided have been exhausted and the Plan benefits requested in such claims process have been finally denied in whole or in part. 

13.    Acceptance Deemed. By accepting any payment or benefit under the Plan, each Participant and each person
claiming under or through any such Participant shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Plan Administrator
or the Company or its Affiliates, in any case in accordance with the terms and conditions of the Plan. 
 14.    Successors.

 14.1    The Plan shall bind any successor of the Company, its assets or its businesses (whether direct or indirect, by
purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under the Plan if no succession had taken place. In the case of a Change of Control or any transaction in which a successor
would not by the foregoing provision or by operation of law be bound by this Plan, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under the Plan in the same manner
and to the same extent that the Company would be required to perform if no such succession had taken place. 
 14.2    The Plan
shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributes, and/or legatees. The rights under the Plan are personal in nature and neither
the Company nor any Participant shall, without the consent of the other, assign, transfer or delegate any rights or obligations hereunder except as expressly provided in this Section. Without limiting the generality of the foregoing, the
Participant’s right to receive any benefits hereunder shall not be assignable, transferable or delegable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by his or her will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary to this Section, the Company shall have no liability to pay any amount so attempted to be assigned, transferred or delegated. 

15.    Resolutions of Disputes. 

15.1    Any and all controversies arising out of or relating to the validity, interpretation, enforceability, or performance of the
Plan, including any claim by a Participant for benefits hereunder, will be solely and finally settled by means of binding arbitration in Chicago, Illinois. The arbitration shall be conducted in accordance with the applicable employment dispute
resolution rules of the American Arbitration Association. The arbitration will be final, conclusive and binding upon the parties. All arbitrator’s fees and related expenses shall be divided equally between the parties. 

 15.2    The arbitrator may award reasonable attorneys’ fees and expenses to the
prevailing party, including attorneys’ fees the prevailing party incurs in connection with the appeal or the enforcement of an arbitration award. Any award of attorneys’ fees and expenses to the prevailing party shall be paid within sixty
(60) days following the award of such fees and costs by the arbitrator. 
 16.    Withholding. The
Company shall have the right to deduct and withhold from any amounts payable under the Plan such federal, state, local or other taxes as are required to be withheld pursuant to any applicable law or regulation. 

17.    Notice. For the purpose of the Plan, notices and all other communications provided for in this Plan
shall be in writing and shall be deemed to have been duly given when actually delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the General Counsel (or, in the case of an initial request
for review pursuant to Section 12 hereof, to the Plan Administrator) at the Company’s corporate headquarters address, and to the Participant (at the last address of the Participant on the Company’s books and records). 

18.    Governing Law. Except to the extent preempted by federal law, the provisions of the Plan shall be
governed and construed in accordance with the laws of the State of Delaware without regard to the conflict of law provisions thereof. 

19.    Validity and Severability. The invalidity or unenforceability of any provision of the Plan shall not
affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect, and any prohibition or unenforceability in any jurisdiction, shall not invalidate or render unenforceable such provision in any
other jurisdiction. 
 20.    Headings; Interpretation. Headings in the Plan are inserted for convenience of
reference only and are not to be considered in the construction of the provisions hereof. Unless the context clearly requires otherwise, the masculine pronoun wherever used herein shall be construed to include the feminine pronoun. 

21.    Section 409A. 

21.1    It is intended that the payments and benefits provided under the Plan shall be exempt from the application of the
requirements of Section 409A of the Code. The Plan shall be construed, administered and governed in a manner that effects such intent, and the Plan Administrator shall not take any action that would be inconsistent with such intent.
Specifically, any taxable benefits or payments provided under this Plan are intended to be separate payments that qualify for the “short-term deferral” exception to Section 409A of the Code to the maximum extent possible, and to the
extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A of the Code, to the maximum extent possible. To the extent that none of these exceptions (or any other available exception) applies, then
notwithstanding anything contained herein to the contrary, and to the extent required to comply with Section 409A of the Code, if a Participant is a “specified employee,” as determined under the Company’s policy for identifying
specified employees on the date of his or her Qualifying Termination, then all amounts due under 

 
the Plan that constitute a “deferral of compensation” within the meaning of Section 409A of the Code, that are provided as a result of a separation from service within the meaning
of Section 409A of the Code, and that would otherwise be paid or provided during the first six months following the date of termination, shall be accumulated through and paid or provided on the first business day that is more than six months
after the date of the date of termination (or, if the Participant dies during such six-month period, within 90 days after the Participant’s death). 

21.2    With regard to any provision herein that provides for reimbursement of costs and expenses or
in-kind benefits, except as permitted by Section 409A of the Code: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any calendar year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; and (iii) such payments shall be made on or before the last day of the Participant’s calendar year following the calendar year in which the
expense occurred, or such earlier date as required hereunder. 
 21.3    The payments and benefits provided under this Plan may
not be deferred, accelerated, extended, paid out or modified in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon Participants. The tax treatment of the benefits provided under this Plan is
not warranted or guaranteed to the Participants. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by a
Participant (or any other individual claiming a benefit through the Participant) as a result of this Plan. 

22.    Unfunded Plan Status. The Plan shall be unfunded and is intended to provide benefits to a select group
of management and highly compensated employees. All payments pursuant to the Plan shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure payment. No
Participant or other person shall have under any circumstances any interest in any particular property or assets of the Company as a result of participating in the Plan. 

23.    Plan Termination and Amendment. The Board reserves the right to amend or terminate the Plan at any
time, in its sole discretion, without prior notice to Participants except to the extent required by this Section 23. Any such amendment or termination shall be made by the Board or by action of a person or persons duly authorized by the Board.
All Participants shall receive any benefits to which they have become entitled under the Plan on or before the date the Plan terminates. Notwithstanding the foregoing, (i) an amendment or termination that eliminates any Participant or reduces
benefits payable under the Plan will not be effective until one (1) year after written notice is provided to the Participants affected by such amendment or termination, (ii) an amendment or termination that eliminates any Participant or
reduces benefits payable under the Plan will not be effective if a Change of Control occurs during the one (1) year notice period, and (iii) an amendment or termination that eliminates any Participant or reduces benefits payable under the
Plan will not be effective if it is adopted during a Change of Control Protection Period.ufi-ex101_6.htm

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 5th day of September, 2018 (the “Effective Date”), is entered into by and between Thomas H. Caudle, Jr. (“Executive”) and Unifi, Inc. (the “Employer” and, collectively with its successors, subsidiaries and affiliated companies, the “Company”).

WHEREAS, Executive has heretofore been employed by the Employer, up to and through the Effective Date, and, understanding and accepting the terms and conditions of Executive’s employment, and the additional benefits being provided to Executive, as set forth herein, desires to continue employment with the Employer under the terms and restrictions as set forth herein; and 

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; Previous Agreements or Arrangements; Release of Claims.  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 the Effective Date, pursuant to the terms of this Agreement. This Agreement supersedes and replaces in its entirety any employment agreement, oral or in writing, or comparable arrangements between the Employer or any subsidiary of the Employer and Executive in effect prior to the Effective Date, and any such agreements or arrangements shall be null and void.  Executive hereby relinquishes and unconditionally forfeits any claim or entitlement to any severance pay or other post-termination benefits pursuant to any agreement or arrangement other than as contemplated herein.

2.Position.  During the period of his employment hereunder, Executive agrees to serve the Company, and the Employer shall employ Executive, as President & Chief Operating 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 $770,000 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.

(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.

(c)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.

(d)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 Effective 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.

(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 

3

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, 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 

4

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 any action that would disrupt, impair, embarrass, harm or affect adversely the Company or any of 

5

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) Executive is receiving additional benefits under this Agreement, to which he was not entitled prior to signing this Agreement, including but not limited to the severance benefits provided for in Section 5(b) (ii)(1), which serve as additional consideration for the covenants contained in this Agreement, (ii) the restrictive covenants in this Section 6 are reasonable in time, territory and scope, and in all other respects and (iii) 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, 

6

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; 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:
	
 
	
Tomas H. Caudle, Jr.

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 

7

benefit plans, against all cost, expense, liability and loss (including without limitation, attorneys’ fees, 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 

8

requested indemnification or advancement of expenses, and any prior determination by the 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 

9

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 

10

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]

 

11

 

 

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/ Thomas H. Caudle, Jr.

	
Name:
	
Thomas H. Caudle, Jr.

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