Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Appointment of Edmund M. Ingle as Chief Executive Officer and Election as a
Director
On April 15, 2020, the Board of Directors (the "Board") of Unifi, Inc. (the
"Company") appointed Edmund M. Ingle as Chief Executive Officer of the Company
and elected him as a director, both effective as of July 1, 2020 (the "Start
Date"). As an employee of the Company, Mr. Ingle will not serve on any Board
committees. Effective as of the Start Date, the Company has deemed that Mr.
Ingle shall be the principal executive officer of the Company for purposes of
all documents and certifications to be filed with or submitted to the Securities
and Exchange Commission or the New York Stock Exchange and for all other similar
or related purposes.
Mr. Ingle, age 55, has served as Chief Executive Officer of the Recycling group
of Indorama Ventures ("Indorama"), a world-class chemicals company and a global
integrated leader in PET and fibers serving major customers in diversified
end-use markets, since May 2019. From May 2018 to May 2019, he was Chairperson
and Chief Executive Officer of Indorama's Wellman International division. Prior
to that, Mr. Ingle was with the Company for approximately 30 years, during which
time he held various key leadership positions, including: VP Global Corporate
Sustainability, VP Supply Chain, General Manager of the Company's Flake and Chip
business, VP and General Manager of Repreve® Polymers, General Manager of the
Company's Nylon business, and Director of Global Procurement. He holds a
Bachelor of Science in mechanical engineering. Mr. Ingle currently serves as a
director of Wellman France Recyclage (France), Wellman International Ltd.
(Ireland), Wellman Neufchateau Recyclage (France) and Wellman Recycling
(Netherlands), each a subsidiary of Indorama. Mr. Ingle's qualifications to
serve on the Board include his experience serving as a director of other
corporations and business entities, executive leadership and strategic
management skills, and his extensive experience in the textile industry.
On April 16, 2020, in connection with his appointment as Chief Executive Officer
of the Company, Mr. Ingle entered into an Employment Agreement with the Company
(the "Employment Agreement"), pursuant to which the Company agreed to employ Mr.
Ingle as Chief Executive Officer of the Company, to appoint Mr. Ingle to serve
as a member of the Board effective on the Start Date, and to nominate Mr. Ingle
to serve on the Board at each annual meeting of shareholders thereafter during
his employment by the Company subject to approval by the Company's
shareholders. The Employment Agreement provides that Mr. Ingle will (i) receive
an annual base salary of $675,000, which base salary shall be reviewed annually
by the Board to determine if such base salary should be increased, (ii) be
eligible to receive bonuses and to participate in compensation plans of the
Company in accordance with any plan or decision that the Board may determine
from time to time, (iii) be paid or reimbursed for business expenses and (iv) be
entitled to participate in other employment benefits generally available to
other executives of the Company.
The Employment Agreement also provides that Mr. Ingle will receive on the Start
Date an award of (i) options to purchase shares of the Company's common stock
having a grant date fair value of $330,000 and (ii) restricted stock units
having a grant date fair value of $670,000. The options will have a 10-year term
and, subject to Mr. Ingle's continued employment through each vesting date, will
vest and become fully exercisable as follows: 25% on the first anniversary of
the Start Date, 25% on the second anniversary of the Start Date and 50% on the
third anniversary of the Start Date. Subject to Mr. Ingle's continued employment
through each vesting date, the
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restricted stock units will become vested and settled in shares of the Company's
common stock as follows: 25% 30 days after the first anniversary of the Start
Date, 25% on the second anniversary of the Start Date and 50% on the third
anniversary of the Start Date.
The Employment Agreement contains provisions regarding the termination of Mr.
Ingle's employment and related severance obligations. If the Company terminates
Mr. Ingle's employment for "Cause" or if Mr. Ingle resigns without "Good Reason"
(as each term is defined in the Employment Agreement), the Company will pay Mr.
Ingle all accrued and unpaid base salary and any accrued and unpaid benefits
through the date of termination, after which the Company will have no further
obligation under the Employment Agreement to Mr. Ingle. If Mr. Ingle's
employment terminates due to his death or "Disability" (as defined in the
Employment Agreement), Mr. Ingle or his estate will receive all accrued and
unpaid base salary and any accrued and unpaid benefits through the date of
termination, after which all rights to benefits will terminate and the Company
will have no further obligation under the Employment Agreement to Mr. Ingle. If
Mr. Ingle is terminated for any reason other than death, Disability or Cause, or
if Mr. Ingle resigns with Good Reason, Mr. Ingle will be entitled to (i) cash
severance payments equal to 12 months of Mr. Ingle's annual base salary at the
time of termination, payable in equal monthly installments, (ii) if such
termination or resignation occurs within 12 months of the Start Date, a lump sum
cash payment equal to the value of the restricted stock units that would have
vested on the first anniversary of the Start Date, calculated on the date of
such termination or resignation, and (iii) if Mr. Ingle elects COBRA
continuation coverage, reimbursement for the monthly cost of such continuation
coverage for Mr. Ingle's medical and health insurance benefits until the earlier
of (a) the date Mr. Ingle ceases to maintain such continuation coverage in
effect or (b) 12 months from the termination of Mr. Ingle's employment. The
foregoing severance benefits are subject to Mr. Ingle entering into and not
revoking a release of claims in favor of the Company and its affiliated
entities. The severance benefits payable upon termination for any reason other
than death, Disability or Cause, or resignation with Good Reason also are
subject to Mr. Ingle abiding by certain restrictive covenants, which are
described below. Also, upon Mr. Ingle's death or Disability or a "Change of
Control" (as defined in the Unifi, Inc. Amended and Restated 2013 Incentive
Compensation Plan), all outstanding unvested equity awards issued to Mr. Ingle
by the Company shall vest in full.
Mr. Ingle is also subject to certain confidentiality provisions and
non-competition and non-solicitation covenants. Pursuant to the Employment
Agreement, Mr. Ingle has agreed to neither compete with the Company or its
affiliated entities nor solicit their respective customers, suppliers or
employees for the 12 months immediately following termination of
employment. Under the Employment Agreement, Mr. Ingle also has agreed upon
termination of his employment with the Company (i) to resign as a member of the
Board, if serving on the Board at the time, (ii) to resign from all positions
with the Company and its affiliated entities, (iii) not to disparage the Company
and its affiliated entities, (iv) to provide litigation support to the Company
and its affiliated entities and (v) to return all of the Company's and its
affiliated entities' property to the Company.
The Employment Agreement also provides that the Company will indemnify and hold
harmless Mr. Ingle if Mr. Ingle is made a party to or is otherwise involved in
certain legal proceedings as a result of actions related to Mr. Ingle's service
as a director, officer, employee or agent of the Company or in a similar
capacity for another enterprise at the Company's request. Such indemnification
includes all expenses (including attorneys' fees), judgments, fines and other
amounts paid in settlement, provided that Mr. Ingle acted in good faith and in a
manner Mr. Ingle reasonably believed to be in the best interests of the Company,
and with respect to any criminal action, if Mr. Ingle had no reasonable cause to
believe such conduct was unlawful. The Employment Agreement requires the Company
to advance the expenses incurred by Mr. Ingle in
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defending against any such proceeding; however, Mr. Ingle must deliver an
undertaking to the Company to repay all amounts advanced if it is ultimately
determined that Mr. Ingle is not entitled to be indemnified. The rights of Mr.
Ingle to indemnification under the Employment Agreement are not exclusive and
are in addition to the rights under the Company's Restated Certificate of
Incorporation and Amended and Restated By-laws and under applicable law.
The foregoing description of the Employment Agreement does not purport to be
complete and is qualified in its entirety by the contents of the Employment
Agreement, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
There are no arrangements or understandings between Mr. Ingle and any other
persons pursuant to which he was selected as an officer and a director. Mr.
Ingle has no family relationships with any of the Company's executive officers
or directors. There are no transactions involving the Company and Mr. Ingle that
the Company would be required to report pursuant to Item 404(a) of Regulation
S-K.
Retirement of Thomas H. Caudle, Jr. as President and Chief Operating Officer and
as a Member of the Board
On April 20, 2020, Thomas H. Caudle, Jr., the Company's President and Chief
Operating Officer, informed the Board that he will retire from such position and
as a director of the Company on June 27, 2021. Mr. Caudle's retirement is not a
result of any disagreement with the Company on any matter relating to the
Company's operations, policies or practices.
A copy of the press release announcing the events described above is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
The following exhibits are filed herewith:
Exhibit
No. Description
10.1 Employment Agreement by and between Unifi, Inc. and Edmund M. Ingle,
dated as of April 16, 2020.
99.1 Press Release of Unifi, Inc., dated April 21, 2020.
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