INTERFACE INC, DEF 14A, 1994-04-18

INTERFACE INC
DEF 14A, 1994-04-18
CARPETS & RUGS

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<PAGE> 1

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement

/X/ Definitive Proxy Statement

/ / Definitive Additional Materials

/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12

Interface, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)

Interface, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), 14a-6(i)(2) or
14a-6(j)(2).

/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).

/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(1):

(4) Proposed maximum aggregate value of transaction:

(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

[INTERFACE(R) LOGO]

INTERFACE, INC.
P.O. BOX 1503, ORCHARD HILL ROAD
LAGRANGE, GEORGIA 30241

-----------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 17, 1994

-----------------------------

The annual meeting of shareholders of Interface, Inc. (the "Company") will
be held on Tuesday, May 17, 1994, at 10:00 a.m., at the corporate offices of the
Company, Orchard Hill Road, LaGrange, Georgia, for the purpose of considering
and voting upon:

1. The election of 13 members of the Board of Directors, six directors to
be elected by the holders of the Company's Class A Common Stock and seven
directors to be elected by the holders of the Company's Class B Common
Stock.

2. A proposal to amend the Company's Key Employee Stock Option Plan
(1993)to increase the number of shares authorized to be issued thereunder
from 550,000 to 1,050,000, an increase of 500,000 shares.

3. If presented, a proposal submitted by a shareholder requesting
implementation of the MacBride Principles concerning employment practices
of the Company's subsidiary that has a facility in Northern Ireland.

4. Such other matters as may properly come before the meeting or any
adjournment thereof.

Only shareholders of record at the close of business on March 23, 1994,
will be entitled to notice of and to vote at the meeting or any adjournment
thereof.

A Proxy Statement and Proxy solicited by the Board of Directors are
enclosed herewith. Please complete, sign and date the Proxy, and return it
promptly in the enclosed business reply envelope. If you attend the meeting, you
may, if you wish, withdraw your Proxy and vote in person.

Also enclosed is a copy of the Company's 1993 Annual Report to
Shareholders.

By order of the Board of Directors

/s/ DAVID W. PORTER

DAVID W. PORTER
Secretary

April 11, 1994

PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
<PAGE> 3

INTERFACE INC.

P.O. BOX 1503, ORCHARD HILL ROAD
LAGRANGE, GEORGIA 30241

---------------------

PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS
---------------------

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
Proxies for Class A Common Stock and Class B Common Stock by the Board of
Directors of Interface, Inc. (the "Company") for use at the annual meeting of
shareholders of the Company to be held on May 17, 1994, and any adjournment
thereof, for the purposes set forth in the accompanying notice of the meeting.
It is anticipated that this Proxy Statement and the accompanying Proxy will
first be mailed to shareholders on April 15, 1994.

The record of shareholders entitled to vote at the annual meeting was taken
as of the close of business on March 23, 1994. On that date, the Company had
outstanding and entitled to vote 14,362,849 shares of Class A Common Stock and
3,106,885 shares of Class B Common Stock. Except for (i) the election and
removal of directors, and (ii) class votes as required by law or the Company's
Articles of Incorporation, holders of both classes of Common Stock vote as a
single class. In all cases, holders of Common Stock (of either class) are
entitled to cast one vote per share.

Each Proxy for Class A Common Stock ("Class A Proxy") or Class B Common
Stock ("Class B Proxy") that is properly executed and returned by a shareholder
will be voted as specified thereon by the shareholder (except that all Class B
shares subject to a certain voting agreement, described on page 7 below, will be
voted as directed by the proxy appointed under such agreement). If no
specification is made, the Proxy will be voted FOR the election of the nominees
(Class A or Class B, as the case may be) listed below under the caption
"Nomination and Election of Directors", FOR the proposal relating to the Key
Employee Stock Option Plan, and AGAINST the proposal, if presented, to implement
the MacBride Principles, as described in this Proxy Statement. A Proxy given
pursuant to this solicitation may be revoked by a shareholder who attends the
meeting and gives oral notice of his or her election to vote in person, without
compliance with any other formalities. In addition, a Proxy given pursuant to
this solicitation may be revoked prior to the meeting by delivering to the
Secretary of the Company either an instrument revoking it or a duly executed
Proxy for the same shares bearing a later date.

An automated system administered by the Company's transfer agent tabulates
the votes. Abstentions and broker non-votes are included in the determination of
the number of shares present and entitled to vote (to establish a quorum).
Abstentions are the equivalent of a non-vote since directors are elected by a
plurality of the votes cast and each other proposal would be approved if the
affirmative votes cast exceed the negative votes cast. Broker non-votes are not
counted for purposes of determining whether a proposal has been approved.

The expense of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by the Company. Copies of
solicitation material may be furnished to banks, brokerage houses and other
custodians, nominees and fiduciaries for forwarding to the beneficial owners of
shares of the Company's Common Stock, and normal handling charges may be paid
for the forwarding service. In addition to solicitations by mail, directors and
regular employees of the Company may solicit Proxies in person or by telephone
or telegraph. The Company also has retained Georgeson & Company, Inc., a proxy
solicitation firm, to assist in soliciting Proxies from beneficial owners of
shares of the Company's Common Stock. The cost of such assistance will be
approximately $5,000.
<PAGE> 4

NOMINATION AND ELECTION OF DIRECTORS
(ITEM 1)

The Bylaws of the Company provide that the Board of Directors shall consist
of a maximum of 15 directors, the exact number of directors being established by
action of the Board taken from time to time. The Board of Directors has set the
number of directors at 13. The holders of Class B Common Stock are entitled to
elect a majority (seven) of the Board members. The holders of Class A Common
Stock are entitled to elect the remaining (six) directors. The term of office
for each director continues until the next annual meeting of shareholders and
until his or her successor, if there is to be one, has been elected and has
qualified.

In the event that any nominee for director withdraws or for any reason is
not able to serve as a director, each Proxy that is properly executed and
returned will be voted for such other person as may be designated as a
substitute nominee by the Board of Directors, but in no event will any Class A
Proxy be voted for more than six nominees or Class B Proxy be voted for more
than seven nominees. All of the nominees (except Mr. DeMoura, who is the most
recent addition to the Company's senior management team) are currently directors
of the Company, and management of the Company has no reason to believe that any
nominee will not serve if elected.

Certain information relating to the nominees proposed by the Board,
including their principal occupation for the past five years, is set forth
below.

CLASS A NOMINEES

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Carl I. Gable (54)............. Mr. Gable, a director since March 1984, is an
attorney-at-law in the Atlanta law firm of Booth, Wade &
Campbell. Mr. Gable was a private investor and business
consultant from January 1991 until joining Booth, Wade &
Campbell in September 1992. From June 1985 to December 1990
he served as Vice Chairman of Intermet Corporation, a
multinational iron castings manufacturer.
Arie Glimmerveen (71).......... Mr. Glimmerveen has been a director since October 1988. From
1986 to 1989 he served as Chairman of the management board
of Ballast Nedam Groep, N.V., a construction contracting and
dredging company located in the Netherlands, and from 1989
through 1992 served as a non-executive director on the
supervisory board of that company. In January 1993, Mr.
Glimmerveen resumed the position of Chairman of the
management board of Ballast Nedam on an interim basis,
serving until November 1993. He has served on the
supervisory board of Interface Europe B.V. (formerly
Interface Heuga B.V.), the Company's modular carpet
subsidiary based in the Netherlands, since 1987.
J. Smith Lanier, II (66)....... Mr. Lanier has been a director since 1973. He is Chairman
and Chief Executive Officer of J. Smith Lanier & Co., a
general insurance agency based in West Point, Georgia. Mr.
Lanier also serves as a director of Intercel, Inc., a
cellular telephone company based in West Point, and National
Vision Associates, Ltd., a Lawrenceville, Georgia based
operator of retail optical centers. He also serves on the
Boards of numerous non-profit organizations.
</TABLE>

<PAGE> 5

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Leonard G. Saulter (67)........ Mr. Saulter has been a director since July 1987. He served
as a Senior Vice President of the Company from October 1987
until June 1991. He served as President of Guilford of
Maine, Inc., the Company's interior fabrics subsidiary,
until January 1990, and as Guilford's Chairman from January
1990 until his retirement in June 1991. In October 1993, Mr.
Saulter resumed the position of President of Guilford on an
interim basis, serving until March 1994.
David G. Thomas (68)........... Mr. Thomas, a director since February 1991, is Chairman of
The Fleming Enterprise Investment Trust PLC, an investment
company located in the United Kingdom. Mr. Thomas has served
as a director of the Company's modular carpet subsidiary in
the U.K., Interface Europe Ltd. (formerly Interface Flooring
Systems Ltd.), since October 1985. Mr. Thomas also serves as
a director of Dover Corporation and Carlisle Companies,
Inc., two U.S. based companies involved in the industrial
equipment business.
Clarinus C. Th. van Andel Mr. van Andel, who has been a director since October 1988,
(64)......................... is a partner in the law firm of Schut & Grosheide,
Amsterdam. He has served as Chairman of the supervisory
board of Interface Europe B.V. since 1984.
</TABLE>

CLASS B NOMINEES

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Ray C. Anderson (59)........... Mr. Anderson, Chairman of the Board, President and Chief
Executive Officer, has served as Chairman and Chief
Executive Officer of the Company since its founding in 1973.
Mr. Anderson also serves as a director of Bank South
Corporation.
Brian L. DeMoura (48).......... Mr. DeMoura became a Senior Vice President of the Company
and President and Chief Executive Officer of Guilford of
Maine, Inc. in March 1994. From August 1990 until joining
the Company, Mr. DeMoura served as President and CEO of
Fashion Fabrics of America, Inc., an Orangeburg, South
Carolina based producer of fabrics for the upscale men's and
women's apparel markets. (Mr. DeMoura plans to devote a
portion of his time to Fashion Fabrics until May 31, 1994,
to facilitate a smooth transition with his successor.) From
December 1988 until January 1990, he served as Vice
President and General Manager of the Yarn Sales Division of
Doran Textiles, Inc., a Shelby, North Carolina based
producer of novelty yarns for the apparel and home
furnishing markets.
</TABLE>

<PAGE> 6

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Charles R. Eitel (44).......... Mr. Eitel joined the Company in November 1993 as President
of Interface Flooring Systems, Inc. (the Company's principal
U.S. modular carpet subsidiary, based in LaGrange, Georgia)
and Interface Americas, Inc. (a wholly-owned U.S. holding
company), thereby assuming principal responsibility for the
Company's modular carpet operations throughout the Americas.
He was elected as a director in February 1994 to fill a
vacancy on the Board, and he became a Senior Vice President
of the Company at that time. From July 1987 to November
1993, Mr. Eitel served as President of the Floor Coverings
Division (based in Dalton, Georgia) of Collins & Aikman
Corporation. Collins & Aikman is a diversified textile
producer, headquartered in New York.
David Milton (58).............. Mr. Milton has been a director since February 1992. He
joined the Company in January 1992 as a Senior Vice
President. Upon joining the Company, Mr. Milton also became
President of Interface Asia-Pacific, Inc. (a wholly-owned
U.S. holding company) and assumed responsibility for the
Company's operations in Japan, China, Southeast Asia,
Australia, New Zealand and the Pacific Islands. Prior to
joining the Company, Mr. Milton was an independent
management consultant.
Royce R. Renfroe (47).......... Mr. Renfroe has served, for the past five years, as a senior
executive of Bentley Mills, Inc. (a California based
producer of broadloom and modular carpet for commercial and
institutional applications), becoming President and Chief
Executive Officer in June 1990. The Company acquired Bentley
in June 1993, and Mr. Renfroe continues to serve as
President and CEO of this subsidiary. Mr. Renfroe was
elected as a director in February 1994 to fill a vacancy on
the Board, and he became a Senior Vice President of the
Company at that time.
Don E. Russell (56)............ Mr. Russell has been a director since 1974. He was Vice
President - Marketing until 1986 when he became a Senior
Vice President. Mr. Russell assumed responsibility for the
Company's European operations in 1991 when he became
President of Interface Europe, Inc. (the Company's U.S.
holding company for its subsidiaries in Europe). Mr. Russell
has served as Managing Director of the Company's United
Kingdom modular carpet subsidiary since 1989. In November
1991, he became President and Chief Executive Officer of
Interface Europe B.V., and relocated his base of operations
to the Netherlands.
C. Edward Terry (59)........... Mr. Terry has been a director since February 1989 and a
Senior Vice President since 1987. He became President of
Rockland React-Rite, Inc. in 1987 and has been President of
Interface Research Corporation since 1988. (Rockland
React-Rite, Inc. is the Company's chemical producing
subsidiary, and Interface Research Corporation provides
research and development services to the Company's carpet,
interior fabrics and chemical businesses.) Mr. Terry also
has served, since 1990, as President of Pandel, Inc., a
subsidiary of the Company producing vinyl carpet tile
backing and specialty mat and foam products. He served as
President of Interface Flooring Systems, Inc. and Interface
Americas, Inc. from February 1991 until November 1993.
</TABLE>

4
<PAGE> 7

VOTE REQUIRED AND RECOMMENDATION OF BOARD

Under the Company's Bylaws, election of each of the six Class A nominees
requires a plurality of the votes cast by the Company's outstanding Class A
Common Stock entitled to vote and represented (in person or by proxy) at the
meeting. Election of each of the seven Class B nominees requires a plurality of
the votes cast by the Company's outstanding Class B Common Stock entitled to
vote and represented (in person or by proxy) at the meeting. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE CLASS A NOMINEES
AND CLASS B NOMINEES LISTED ABOVE, AND PROXIES EXECUTED AND RETURNED WILL BE
VOTED FOR EACH OF THE NOMINEES (CLASS A OR CLASS B, AS APPLICABLE) UNLESS
CONTRARY INSTRUCTIONS ARE INDICATED THEREON.

PRINCIPAL HOLDERS OF COMMON STOCK

The following table sets forth, as of February 1, 1994 (unless otherwise
indicated), beneficial ownership of each class of the Company's Common Stock by:
(i) each person, including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, known by the Company to be the
beneficial owner of more than 5% of any class of the Company's voting
securities, (ii) each nominee for director, (iii) the Company's Chief Executive
Officer and four other most highly compensated executive officers, and (iv) all
executive officers and directors of the Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF
BENEFICIAL OWNER TITLE NATURE OF PERCENT CLASS A
(AND BUSINESS ADDRESS OF OF BENEFICIAL OF AFTER
5% OWNERS) CLASS OWNERSHIP(1) CLASS(1) CONVERSION(2)
- --------------------------------------- -------- -------------------- -------- -------------
<S> <C> <C> <C> <C> <C>
Ray C. Anderson Class A 18,838 (3) * 10.3%
Orchard Hill Road Class B 1,621,503 (4) 52.2%
P.O. Box 1503
LaGrange, Georgia 30241
Ariel Capital Management, Inc. Class A 3,232,860 (5)(6) 22.6%
307 N. Michigan Avenue
Chicago, Illinois 60601
Trimark Investment Management, Inc. Class A 1,458,000 (5)(7) 10.2%
One First Canadian Place
Suite 5600, P.O. Box 487
Toronto, Ontario M5X 1E5
FMR Corp. Class A 1,002,639 (5)(8) 6.9%
82 Devonshire Street
Boston, Massachusetts 02109
David L. Babson & Company, Inc. Class A 894,500 (5)(9) 6.2%
One Memorial Drive
Cambridge, Massachusetts 02142
Brian L. DeMoura None
Charles R. Eitel Class A 25,000 (10) *
Carl I. Gable Class A 5,983 (10) * *
Class B 20,622 (11) *
Arie Glimmerveen None
J. Smith Lanier, II Class A 500 (12) * 1.0%
Class B 148,824 (12) 4.8%
David Milton Class A 5,913 (13) * *
Class B 40,000 (13) 1.3%
Royce R. Renfroe Class A 11,834 (14) *
Don E. Russell Class A 1,692 * *
Class B 84,732 2.7%
Leonard G. Saulter Class A 2,000 (15) *
C. Edward Terry Class A 86,720 (16) * *
David G. Thomas Class A 5,000 *
Grant E. Todd Class A 45,304 (17) * *
Class B 17,304 *
Clarinus C. Th. van Andel Class A 50,000 (18) *
All executive officers and directors Class A 324,784 (19) 2.3% 13.7%
as a group (15 persons) Class B 1,932,985 (20) 61.4%

- ---------------

* Less than 1%.

(1) Shares of Class B Common Stock are convertible, on a share-for-share basis,
into shares of Class A Common Stock. The number of Class A shares indicated
as beneficially owned by each person or group does not include Class A
shares such person or group could acquire upon conversion of Class B
shares. The Percent of Class is calculated assuming that the beneficial
owner has exercised any conversion rights, options or other rights to
subscribe held by such beneficial owner that are exercisable within 60 days
(not including Class A shares that could be acquired upon conversion of
Class B shares), and that no other conversion rights, options or rights to
subscribe have been exercised by anyone else.

(2) Represents the percent of Class A shares the named person or group would
beneficially own if such person or group, and only such person or group,
converted all Class B shares he or they own into Class A shares.

(3) Includes 1,100 shares held by Mr. Anderson's wife and 17,738 shares
issuable upon conversion of Interface, Inc. 8% Convertible Subordinated
Debentures ("Debentures") held by The Ray C. Anderson Foundation, Inc. (a
non-profit corporation of which Mr. Anderson is a director). Mr. Anderson
disclaims beneficial ownership of the shares owned by his wife.

(4) Does not include shares of Class B Common Stock subject to the voting
agreement described below that are not owned of record by Mr. Anderson.

(5) Based upon information included in statements provided to the Company by
such beneficial owners. Information is as of December 31, 1993.

(6) All such shares are held by Ariel Capital Management, Inc. ("Ariel") for
the accounts of clients, and Ariel disclaims beneficial ownership of such
shares. Ariel, in its capacity as investment advisor, has sole voting power
with respect to 2,217,360 shares and shared voting power with respect to
331,825 shares. Ariel has sole investment power with respect to all such
shares. (John W. Rogers, Jr., President and a controlling person of Ariel,
may be deemed to beneficially own all such shares, but he disclaims such
beneficial ownership.)

(7) Trimark Investment Management Inc., as sole manager and trustee of two
Canadian mutual funds holding such shares, has sole voting power and
investment power with respect to such shares.

(8) Includes 242,539 shares issuable upon conversion of Debentures. Fidelity
Management & Research Company and Fidelity Management Trust Company,
wholly-owned subsidiaries of FMR Corp. ("FMR"), beneficially own such
shares in their respective capacities as investment advisor and investment
manager to several investment companies and institutional investors. FMR
has sole voting power with respect to 98,556 shares. FMR has sole
investment power with respect to 1,002,639 shares. (Edward C. Johnson, III,
Chairman and a controlling person of FMR, may be deemed to have sole
investment power with respect to 1,002,639 shares as well.)

(9) David L. Babson & Company, Inc. ("Babson"), in its capacity as investment
advisor, has sole voting power with respect to 662,900 shares and shared
voting power with respect to 231,600 shares. Babson has sole investment
power with respect to all such shares.

(10) All such shares may be acquired by Mr. Eitel pursuant to exercisable stock
options.

(11) Includes 5,913 shares that Mr. Gable has the right to acquire upon
conversion of Debentures, and 70 shares held by Mr. Gable as custodian for
his son.

(12) Includes 200 Class A shares and 78,502 Class B shares held by Mr. Lanier's
wife. Mr. Lanier disclaims beneficial ownership of the shares owned by his
wife.

(13) Mr. Milton has the right to acquire such Class A shares upon conversion of
Debentures and such Class B shares pursuant to exercisable stock options.

(14) All such shares may be acquired by Mr. Renfroe upon conversion of 1,750
shares of Interface, Inc. Series A Cumulative Convertible Preferred Stock
("Series A Preferred Stock").

(15) All such shares are held by Mr. Saulter's wife, and Mr. Saulter disclaims
beneficial ownership of such shares.

(16) Includes 2,228 shares held by Mr. Terry as custodian for his daughter, 427
shares held by Mr. Terry's wife and 40,000 shares that Mr. Terry has the
right to acquire pursuant to exercisable stock options. Mr. Terry disclaims
beneficial ownership of the shares owned by his wife.

(17) Includes 15,304 shares held by Mr. Todd's wife and 30,000 shares that Mr.
Todd has the right to acquire pursuant to exercisable stock options. Mr.
Todd disclaims beneficial ownership of the shares owned by his wife.

(18) All such shares may be acquired by Mr. van Andel pursuant to exercisable
stock options.

(19) Includes an aggregate of 251,498 shares that all executive officers and
directors as a group have the right to acquire pursuant to exercisable
stock options (209,000 shares) and upon conversion of Series A Preferred
Stock (11,834 shares) and Debentures (30,664 shares).

(20) Includes 40,000 shares that an executive officer/director has the right to
acquire pursuant to exercisable stock options.

</TABLE>

VOTING AGREEMENT

Certain holders of Class B Common Stock of the Company have entered into a
voting agreement providing for certain of their Class B shares to be voted as a
block in the manner determined by the record owners of a majority of the shares
subject to the agreement. The voting agreement expires on April 13, 1998. The
shares of Class B Common Stock subject to the agreement exceed a majority of the
outstanding shares of Class B Common Stock. Ray C. Anderson owns a majority of
the shares subject to the agreement, and thus can direct the voting of the
entire block. (The voting agreement gives Mr. Anderson the right of first
refusal to purchase any shares subject to the agreement that are proposed to be
sold in the public market or in a private transaction.) The parties to the
voting agreement irrevocably appointed Mr. Anderson their proxy and
attorney-in-fact to vote the shares subject to the agreement; thus all Class B
Proxies received by the Company

5
<PAGE> 8

relating to shares subject to the voting agreement shall be voted as directed by
Mr. Anderson, regardless of the instructions reflected on such Proxies. Mr.
Anderson has indicated that he intends to direct the voting of all shares
subject to the voting agreement in favor of the nominees listed above under the
heading "Nomination and Election of Directors -- Class B Nominees", and thus
their election is assured. Mr. Anderson also has indicated that he intends to
direct the voting of such shares in favor of the proposal relating to the Key
Employee Stock Option Plan and against the proposal (if presented) to implement
the MacBride Principles, which are described below.

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning compensation
paid by the Company and its subsidiaries to the Company's Chief Executive
Officer and each of the four other most highly compensated executive officers of
the Company (based on salary/bonus earned in fiscal 1993) for each of the last
three fiscal years of the Company.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation ---------------
Awards
- ---------------------------------------------------------------------------------------
Other
Annual All Other
Compen- Compen-
Name and Principal Salary Bonus sation Options sation
Position Year ($) ($) ($) (#) ($)
- ---------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ray C. Anderson, Chairman 1993 250,000 149,015 N/A(1) -0- 1,799(3)
----------------------------------------------------------------
of the Board, President 1992 242,500 110,144 N/A(1) -0- 1,746
----------------------------------------------------------------
and Chief Executive Officer 1991 235,000 113,145 * -0- *
- ---------------------------------------------------------------------------------------------------
Grant E. Todd, Senior 1993 185,000 84,469 N/A(1) -0- 1,799(3)
----------------------------------------------------------------
Vice President 1992 180,000 133,974 N/A(1) -0- 1,746
----------------------------------------------------------------
1991 170,000 108,795 * -0- *
- ---------------------------------------------------------------------------------------------------
C. Edward Terry, Senior 1993 230,000 36,139 N/A(1) -0- 1,799(3)
----------------------------------------------------------------
Vice President 1992 222,500 87,109 N/A(1) -0- 1,746
----------------------------------------------------------------
1991 206,667 92,811 * -0- *
- ---------------------------------------------------------------------------------------------------
Don E. Russell, Senior 1993 200,000 50,490 N/A(1) -0- 1,799(3)
----------------------------------------------------------------
Vice President 1992 195,000 50,000 N/A(1) -0- 1,746
----------------------------------------------------------------
1991 170,000 67,301 * -0- *
- ---------------------------------------------------------------------------------------------------
David Milton, Senior 1993 150,000 67,548 N/A(1) -0- 1,425(3)
----------------------------------------------------------------
Vice President 1992 150,000 30,000 N/A(1) 100,000 -0-
----------------------------------------------------------------
1991 N/A(2) N/A(2) N/A(2) N/A(2) N/A(2)
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------

* Omitted pursuant to Securities and Exchange Commission transition rule.

(1) Amount does not exceed 10% of the salary/bonus paid to such individual.

(2) Mr. Milton joined the Company in January 1992.

(3) Represents the Company's matching contribution (made in the form of Class A
Common Stock) under the Company's 401(k) Savings and Investment Plan.
</TABLE>

6
<PAGE> 9

COMPENSATION PURSUANT TO PLANS

Pension Plan. The Company maintains a tax-qualified, non-contributory
pension plan (the "Pension Plan") for the benefit of its employees and the
employees of all U.S. subsidiaries except Guilford of Maine, Inc. and Bentley
Mills, Inc. The Pension Plan provides for the payment of a fixed monthly payment
upon an employee's normal retirement at age 65, or early retirement at age 57.
The monthly amount payable under the Pension Plan is based on the participant's
final average earnings, covered compensation under Social Security and years of
participation in the Pension Plan. Final average earnings means the average
annual earnings (salary and bonus) for the five consecutive years of highest
compensation in the 10 years prior to retirement or other termination of
employment. All U.S. based employees of the Company and adopting subsidiaries
are entitled to participate in the Pension Plan after serving one year and
attaining age 21. Benefits are vested under the Pension Plan as follows: for
participants who entered the Pension Plan prior to August 1, 1989, 40% vested
after four years of service, and 100% vested after five years of service; for
participants who entered the Pension Plan on or after August 1, 1989, 100%
vested after five years of service.

The table set forth below illustrates the estimated annual benefits payable
upon retirement under the Pension Plan to persons in specified final average
earnings and years-of-participation categories. The benefits shown are
straight-life annuities and are based upon an assumed retirement on July 31,
1993. The benefits are not subject to any deduction for Social Security
compensation or other offsets. Credited years of participation for each of the
individuals named in the Summary Compensation Table that participate in the
Pension Plan are as follows: Messrs. Anderson and Russell -- 21 years, Mr.
Todd -- 17 years, Mr. Terry 10 years, and Mr. Milton -- 1 year.

PENSION PLAN TABLE

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
Years of Participation in Plan
----------------------------------------------------------------
Final Average Earnings ($)(1)
15 20 25 30 35
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
125,000.............................. 25,000 25,000 28,400 34,080 39,760
----------------------------------------------------------------
150,000.............................. 30,000 30,000 34,650 41,580 48,510
----------------------------------------------------------------
175,000.............................. 35,000 35,000 40,900 49,080 57,260
----------------------------------------------------------------
200,000.............................. 40,000 40,000 47,150 56,580 66,010
----------------------------------------------------------------
225,000.............................. 45,000 45,000 53,400 64,080 74,760
----------------------------------------------------------------
250,000.............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
300,000.............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
350,000.............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
400,000.............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
450,000.............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------

(1) For the plan year beginning August 1, 1990, only the first $200,000 of
compensation (subject to indexing, $235,480 for 1993) is considered for
plan purposes. Such limit will be $150,000 for the plan year beginning in
1994. Further, the annual benefit cannot exceed $90,000 (subject to
indexing, $115,641 for 1993).
</TABLE>

Salary Continuation Plan. The Company maintains a salary continuation plan
(the "Salary Continuation Plan") which is designed to induce selected officers
of the Company to remain in the employ of the Company by providing them with
retirement, disability and death benefits in addition to those which they may
receive under the Pension Plan. The Salary Continuation Plan entitles
participants to (i) retirement benefits upon retirement at age 65 after
completing at least 15 years of service with the Company (unless otherwise
provided in the plan), payable for the remainder of their lives and in no event
for less than 10 years;

7
<PAGE> 10

(ii) disability benefits payable for the period of any pre-retirement total
disability; and (iii) death benefits payable to the designated beneficiary of
the participant for a period of 10 years if the participant dies before
retirement. Benefits are determined according to one of three formulas as
follows: 40% of the participant's average monthly cash compensation (salary and
bonus) during the three highest paid years of the participant's last five years
of employment; 30% of such average monthly compensation; or 30% of the average
monthly commissions for the three highest paid years during the last five years
of employment. The monthly benefit under the second and third formulas cannot
exceed $8,334. The Salary Continuation Plan is administered by the Compensation
Committee, which has full discretion in choosing participants and the benefit
formula applicable to each. Benefits are not subject to any deduction for Social
Security compensation or other offsets. Benefits are forfeitable in several
events, including termination of a participant's employment with the Company. Of
the executive officers named in the Summary Compensation Table above, Messrs.
Anderson, Russell and Todd participate in the Salary Continuation Plan, and each
such participant has his benefits determined under the first benefit formula.
Credited years of service for such participants are 21 years for Messrs.
Anderson and Russell, and 17 years for Mr. Todd.

Assuming a 5% annual increase in compensation over 1993 levels, the Company
estimates the annual benefits receivable upon retirement at age 65 (or as
otherwise provided) under the Salary Continuation Plan by the following persons
to be as follows: Mr. Anderson -- $180,000; Mr. Todd -- $140,500; and Mr.
Russell -- $140,000.

Key Employee Stock Option Plan. In March 1993, the Company adopted the
Interface, Inc. Key Employee Stock Option Plan (1993) (the "Option Plan"). The
Option Plan provides for the grant of incentive stock options (which qualify for
certain favorable tax treatment, as described below) and nonqualified options to
key employees of the Company and its subsidiaries. (The Option Plan also allows
the issuance of stock appreciation rights, but only in tandem with options
granted under the plan.) A maximum of 550,000 shares of Common Stock were
originally authorized for issuance with respect to options (and stock
appreciation rights) granted under the Option Plan. The Company is proposing to
increase the number of shares available for issuance under the Option Plan. (See
Item 2, "Amendment of Key Employee Stock Option Plan", below.) The material
features of the Option Plan are described below.

The purpose of the Option Plan is to promote the long-term success of the
Company and its subsidiaries by providing financial incentives to key employees
who are in positions to make significant contributions toward such success. The
plan is designed to attract individuals of outstanding ability to employment
with the Company and its subsidiaries, to provide key employees with a
proprietary interest in the Company, and to encourage such employees to continue
their employment with the Company or its subsidiaries and to render superior
performance during such employment.

The Option Plan is administered by the Compensation Committee of the Board
of Directors, which has authority to determine the employees to whom awards will
be granted, the form and amount of the awards (including whether the grant is
for Class A or Class B Common Stock), the dates of grant, vesting periods,
option prices and other terms of each award. All employees of the Company and
its subsidiaries worldwide (approximately 4,425 employees) are eligible for
consideration as participants under the Option Plan. (Generally, awards under
the Option Plan are limited to U.S. personnel; the Company maintains a separate
"offshore" stock option plan pursuant to which nonqualified options may be
granted to key employees of the Company's subsidiaries located outside of the
U.S.) No member of the Compensation Committee is currently eligible to receive
an award under the Option Plan. Directors who are not officers or employees of
the Company also are not eligible to participate in the Option Plan.

The Option Plan provides for both incentive stock options, as defined in
Section 422 of the Internal Revenue Code, and nonqualified stock options. All
options are granted at an exercise price per share equal to not less than 100%
of the fair market value of the Class A Common Stock on the date the option is
granted. The Company receives no consideration upon the granting of an option.
Full payment of the option exercise price must be made by the optionee when an
option is exercised. The exercise price may be paid in cash or in such other
form as the Company may approve, including shares of Common Stock valued at
their fair market value on the date of option exercise. The proceeds received by
the Company from the sale of shares under the

8
<PAGE> 11

Option Plan are used for general corporate purposes. Options granted under the
plan generally are not exercisable sooner than 12 months after the date of
grant, vest incrementally over a five-year period, and are not exercisable later
than 10 years after the date of grant. Options are not transferable by the
holder other than by will or applicable laws of descent and distribution.

The Compensation Committee may also grant a stock appreciation right with
respect to each share of Common Stock that may be purchased upon the exercise of
an option. Upon exercise of a stock appreciation right, the Company will pay the
amount by which the fair market value of a share of Class A Common Stock on the
date of exercise exceeds the fair market value on the date of grant, up to a
maximum of 200% of the fair market value of a share of Common Stock on the date
of grant. Payment will be made, in the discretion of the Compensation Committee,
wholly in cash or in shares of Common Stock, or partly in cash and partly in
shares of Common Stock. A stock appreciation right granted in relation to an
option will be exercisable only to the extent the option is exercisable and will
expire or otherwise terminate upon the same terms as the option. Exercise of an
option or stock appreciation right will terminate (or, in the case of a partial
exercise, reduce by a corresponding amount) any stock appreciation right or
option issued in tandem therewith, as the case may be.

There are no federal income tax consequences to the optionee or the Company
on the granting of options under the Option Plan. The federal tax consequences
upon exercise will vary depending on whether the option is an incentive stock
option or a nonqualified stock option.

When an optionee exercises an incentive stock option, the optionee will not
at that time recognize any income, nor will the Company be entitled to a
deduction. The optionee will recognize capital gain or loss at the time of
disposition of the shares acquired through the exercise of an incentive stock
option if the disposition of shares occurs at least two years after the option
was granted and one year after it was exercised. The Company will not be
entitled to a tax deduction if the optionee satisfies these holding
requirements. The net federal income tax effect to the holder of an incentive
stock option is to defer, until the acquired stock is sold, taxation of any
increase in the stock's value from the time of grant of the option to the time
of its exercise, and to tax such gain, at the time of sale, at capital gains
rates (currently a maximum marginal rate of 28%) rather than at ordinary income
rates.

If the holding requirements are not met, then upon sale of the shares the
optionee generally recognizes as ordinary income the excess of the fair market
value of the shares at the date of exercise over the exercise price; any
increase in the value of the option stock subsequent to exercise is long or
short-term capital gain to the optionee depending on the optionee's holding
period for the stock. However, if the sale is for a price less than the value of
the shares on the date of exercise, the optionee might recognize ordinary income
only to the extent the actual sales price exceeded the option exercise price. In
either case, the Company is entitled to a compensation expense deduction to the
extent of ordinary income recognized by the optionee.

When an optionee exercises a nonqualified stock option, the optionee
recognizes ordinary income in an amount equal to the excess of the fair market
value of the shares received upon exercise over the aggregate exercise price
paid for those shares, and the Company may deduct as an expense the amount of
income so recognized by the optionee. For capital gains purposes, the holding
period of the shares begins upon the exercise of the option, and the optionee's
basis in the shares is equal to the fair market value of the shares on the date
of exercise.

The closing price of the Company's Class A Common Stock as reported on the
NASDAQ National Market System on March 28, 1994 was $14.125 per share. There is
no market for the Class B Common Stock (but Class B shares are convertible, on a
share-for-share basis, into Class A shares).

At January 2, 1994 (the end of the Company's 1993 fiscal year), options
were outstanding under the Option Plan to purchase an aggregate of 175,000
shares of Class A Common Stock and 100,000 shares of Class B Common Stock. No
stock appreciation rights have ever been granted under the Option Plan.

OPTION GRANTS IN LAST FISCAL YEAR

No executive officer named in the Summary Compensation Table received any
options under the Option Plan during fiscal 1993.

9
<PAGE> 12

The following table sets forth, for each of the executive officers named in
the Summary Compensation Table, (i) the number of shares of Common Stock
received upon the exercise of options during fiscal 1993, (ii) the aggregate
dollar value realized upon exercise, (iii) the number of options held at fiscal
year-end, and (iv) the value of such options at fiscal year-end. All such
options exercised during the year or held at year-end, other than Mr. Milton's,
were issued under the Company's key employee stock option plan adopted in 1983.
(The time period for awarding options under the 1983 plan expired as of February
28, 1993.) Mr. Milton's options were issued under the Company's offshore stock
option plan.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------

Number of Value of
Unexercised Unexercised
Options In-the-Money
at Fiscal Options
Shares Year-End (#) at Fiscal
Acquired on Value -------------- Year-End ($)
Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------

(A) (B) (C) (D) (E)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Ray C. Anderson 0 0 0/0 N/A
- ------------------------------------------------------------------------------------------------------
Grant E. Todd 10,000 35,000 (1) 30,000/0 232,500/0(2)
- ------------------------------------------------------------------------------------------------------
C. Edward Terry 0 0 40,000/0 0/0(3)
- ------------------------------------------------------------------------------------------------------
Don E. Russell 40,000 150,000 (1) 0/0 0/0
- ------------------------------------------------------------------------------------------------------
David Milton 0 0 40,000/60,000 150,000/225,000(2)
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------

(1) Value is based on the difference between the exercise price paid and the
closing market price for Class A Common Stock on the date of exercise.

(2) Aggregate market value of the shares issuable upon exercise of the options
(based on December 31, 1993 closing price for Class A Common Stock of
$15.25 per share), less the aggregate exercise price payable by the named
executive officer.

(3) Exercise price of options exceeds market price of Class A Common Stock at
fiscal year-end.
</TABLE>

COMPENSATION OF DIRECTORS

The Company does not have any standard arrangement pursuant to which each
director of the Company is compensated for his services as a director or as a
member of any committee of the Board of Directors.

During fiscal 1993, the Company paid Carl I. Gable approximately $15,000
for consulting services rendered on corporate finance and general business
matters. The Company paid Clarinus van Andel and Arie Glimmerveen a total of
$36,950 and $34,250, respectively, for consulting services related to the
Company's operations in Continental Europe and for serving on the supervisory
board of Interface Europe B.V. The Company paid David Thomas $25,525 for
consulting services related to the Company's operations in the United Kingdom
and for serving as a director of the Company's modular carpet subsidiary in the
U.K., Interface Europe Ltd.

The Company has agreed to pay Leonard G. Saulter, who previously served as
an executive officer of the Company, $15,000 per year for the remainder of his
life, and the Company made the payment due for 1993.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following persons served on the Compensation Committee of the Board of
Directors during fiscal 1993: Ray C. Anderson, Carl I. Gable and J. Smith
Lanier, II. Mr. Anderson is the Chairman, President and Chief Executive Officer
of the Company, and served in those capacities during fiscal 1993. Mr. Gable
served as President of the Company from March 1984 until June 1985.

During 1993, the Company paid premiums to J. Smith Lanier & Co., an
insurance agency, of approximately $1,992,000 in connection with insurance
policies purchased on behalf of the Company. J. Smith Lanier, II has a
substantial ownership interest in this insurance agency. Management of the
Company believes that the insurance brokerage transaction was effected on terms
at least as favorable to the Company as could

10
<PAGE> 13

have been obtained from other sources or unrelated parties in view of the nature
of the transaction and the services rendered.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company acquired Bentley Mills, Inc. in June 1993. Royce R. Renfroe, a
director and executive officer of the Company, was a director, President and
CEO, and a shareholder of Bentley at the time of the acquisition. In connection
with the acquisition, Mr. Renfroe received cash consideration of $192 and 1,750
shares of Series A Preferred Stock (having a face value and liquidation value of
$175,000, and which are convertible into 11,834 shares of Class A Common Stock).
The consideration paid to Mr. Renfroe was pursuant to the formula used for all
shareholders of Bentley.

In November 1993, the Company extended C. Edward Terry, a director and
executive officer of the Company, an advance of $330,924 in connection with Mr.
Terry's relocation from LaGrange to Atlanta, Georgia. The advance, together with
interest at the rate of 7% per annum, is repayable upon the sale of Mr. Terry's
residential property in LaGrange, Georgia. The Company has the option to
purchase the property in exchange for forgiveness of the debt owed by Mr. Terry.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Compensation awards, and achievement criteria, for the Company's senior
management are recommended annually by the Company's Chief Executive Officer,
and reviewed and approved by the Compensation Committee of the Board of
Directors. The Committee is composed of three members, Ray C. Anderson, the
Company's Chairman and Chief Executive Officer, Carl I. Gable and J. Smith
Lanier, II. Messrs. Gable and Lanier are non-employee directors of the Company.

The Company's compensation program is designed to enable the Company to
attract, motivate and retain outstanding senior management. The program consists
of three principal components: (i) competitive base salaries, (ii) annual,
variable cash bonuses based on the achievement of established financial and
non-financial objectives, and (iii) long-term stock option incentives. Under the
program, a substantial portion of an executive's compensation is directly linked
to the Company's financial performance and the interests of shareholders. The
Committee strives to administer the program to present total compensation
opportunities for senior executives of the Company that are commensurate with
the responsibilities undertaken by the executives, and that are competitive with
those offered by employers of comparable size in the Company's industry.
(Information concerning compensation offered by other employers in the industry
is gathered informally, at irregular intervals, and serves only as a general
benchmark; the Committee, for fiscal 1993, made no determination to set the
compensation levels of the Company's executives to correspond to the high,
median or low end of such comparative data. Certain of the competitors
considered from time to time are included in the companies comprising the
"industry group" index used in the performance graph below.)

Base Salary. Base salary compensation is based on a variety of factors,
including the executive's level of responsibility, time with the Company and
individual contribution and performance, as well as internal equalization
policies of the Company, comparison to executive pay outside of the Company, and
general economic conditions. (Evaluation of certain of these factors is
subjective, and no fixed, relative weights are assigned to the criteria
considered.) Raises in base salary afforded to senior executives (including the
Chief Executive Officer) in recent years have generally only reflected cost of
living inflation adjustments (although somewhat higher raises have been awarded
to executives who took on new or additional responsibilities, usually involving
a relocation). The Company has been operating under stringent cost control
measures in recent years due to the recessionary climate impacting most of the
Company's principal markets, and, consistent therewith, the executives named in
the Summary Compensation Table (including the Chief Executive Officer) did not
receive an increase in base salary for fiscal 1993. (The apparent increase in
base salary from 1992 to 1993, for certain executives, is due to the executives
receiving a full year's pay in fiscal 1993 at pay levels that were put in place
during fiscal 1992.)

Bonuses. The Company's incentive compensation program is tied to Company,
business unit (subsidiary) and individual performance. Each executive officer of
the Company (including the Chief Executive Officer) is assigned a range of bonus
potential (expressed as a percentage of base salary), and a personalized set of
financial and non-financial objectives for the year. Evaluation of non-financial
objectives is, inherently,

11
<PAGE> 14

somewhat subjective, and equal weight is assigned to each of these objectives.
At least 65% of each executive officer's bonus potential is based on measurable
financial performance. Typical relative weights assigned to financial objectives
are indicated below. The amount of bonus earned is determined (under the
Company's formula) by the degree to which the financial and non-financial
objectives have been achieved.

For the Senior Vice Presidents of the Company who are directly accountable
for the profitability of subsidiaries, financial objectives for 1993 focused on:
(i) earnings per share, (ii) return on net assets managed, (iii) subsidiary
sales growth, measured against budgeted amounts and results from the prior year,
and (iv) control of fixed costs, also measured against budgeted amounts and
results from the prior year. (Relative weights assigned to these financial
objectives were 20%, 40%-50%, 20% and 10%-20%, respectively.) Non-financial
objectives for such senior executives are tailored to their respective markets
and geographic regions, but consistently focus on sales and competitive
strategies, strategic acquisitions, investments and alliances, technological
advancements, quality control measures and employee relations.

Mr. Anderson's financial objectives for 1993 (70% weight) were based on:
(i) earnings per share, (ii) return on net assets, (iii) market performance
(price/earnings ratio) of the Company's stock, and (iv) Company sales growth,
measured against budgeted amounts and results from the prior year. Relative
weights assigned to such financial objectives were 20%, 40%, 20% and 20%,
respectively. Mr. Anderson's non-financial objectives for 1993 (30% weight)
focused on defining overall corporate strategy (including acquisitions), and
also were linked to the non-financial objectives of the executive officers who
report to him.

On an aggregate basis (giving effect to relative weights), Mr. Anderson
achieved 72% of target levels for his financial objectives, with the best
performance being in the areas of return on net assets, and market performance
of the Company's stock. Mr. Anderson was credited with a significantly higher
percentage of target levels for his non-financial objectives, receiving high
marks for his efforts in the June 1993 acquisition of Bentley Mills, Inc. and
the recently concluded acquisition of another broadloom carpet producer, Prince
Street Technologies, Ltd.

Stock Options. The Company also utilizes grants of stock options to its
executives to strengthen the mutuality of interests between the Company's senior
management and shareholders. (A description of the Company's stock option plan
is set forth above under the heading "Compensation Pursuant to Plans -- Key
Employee Stock Option Plan".) Stock options help to retain and motivate
executives, but reward executives only for overall performance which translates
into higher returns for shareholders. Options granted under the Company's stock
option plan have an exercise price equal to at least 100% of the market price of
the underlying Common Stock on the date of grant; thus, the options only have
value if the market price of the Company's stock rises. Moreover, options
granted under the plan typically vest incrementally over a five-year period,
compelling an executive to remain with the Company for a significant time period
before being able to fully recognize the value of the options. The five-year
vesting schedule also serves to focus executives on the long-term objectives of
the Company. The Committee believes stability of quality management and a proper
focus on long-term Company objectives provide for enduring shareholder value.

Each of the executive officers named in the Summary Compensation Table,
except Mr. Anderson (who is a principal shareholder), holds stock options.
(Options currently held by Mr. Russell are not disclosed in the chart reflecting
year-end option values because they were issued in fiscal 1994). No options were
granted to the named executives in fiscal 1993.

The Committee does not anticipate that the new tax law serving to cap
executive compensation that is deductible by the Company at $1,000,000 per
individual will, in the near term, dictate any change in the compensation
policies of the Committee.

The foregoing policies and programs are subject to change as the Committee
deems necessary from time to time to respond to economic conditions, meet
competitive standards and serve the objectives of the Company and its
shareholders.

THE COMPENSATION COMMITTEE

Ray C. Anderson
Carl I. Gable
J. Smith Lanier, II

12
<PAGE> 15

PERFORMANCE GRAPH

The following graph compares, for the five-year period ended January 2,
1994, the Company's total return to shareholders (stock price increase plus
dividends, divided by beginning stock price) with that of (i) all U.S. companies
listed on NASDAQ and (ii) an industry group comprised of NASDAQ-listed companies
(U.S. and foreign) producing textile products.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS ($)

<TABLE>
<CAPTION>
NASDAQ STOCKS
(U.S.+FOR-
NASDAQ STOCK EIGN) - TEX-
MEASUREMENT PERIOD INTERFACE, MARKET (U.S. TILE MILL
(FISCAL YEAR COVERED) INC. COMPANIES) PRODUCTS
<S> <C> <C> <C>
01/01/89 100.0 100.0 100.0
12/31/89 124.6 122.1 117.1
12/30/90 69.1 101.1 81.6
12/29/91 79.3 167.1 99.1
01/03/93 87.9 192.2 119.5
01/02/94 110.5 219.4 170.2
</TABLE>

NOTES:
A. The lines represent annual index levels derived from compounded daily returns
that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the annual interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to 100.0 on 01/01/89.

13
<PAGE> 16

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors held four meetings during 1993. All of the incumbent
directors attended at least 75% of the meetings of the Board and of each
committee of the Board on which they served that were held during the periods
that they served.

The Board of Directors has an Executive Committee currently composed of Ray
C. Anderson, Carl I. Gable and J. Smith Lanier, II. The Executive Committee met
three times during 1993. Messrs. Anderson, Gable and Lanier also serve as the
members of the Board's Compensation Committee. The Compensation Committee met
two times during 1993. The function of the Compensation Committee is to review
and determine compensation for executives of the Company and to administer the
Company's stock option and employee benefit plans. (See "Executive Compensation"
above.) The Board of Directors also has an Audit Committee, currently composed
of Mr. Gable, Mr. Lanier and Leonard G. Saulter. (Mr. Saulter replaced Don H.
Lee on the Committee upon Mr. Lee's retirement from the Company in February
1994.) The Audit Committee met three times during 1993. The function of the
Audit Committee is to (i) recommend annually to the Board whether the Company's
independent auditors should be retained, (ii) review with the independent
auditors the auditors' report or opinion on the Company's financial statements
and related notes, and (iii) review the Company's internal financial reporting
procedures and any transactions between the Company and its directors.

The Board of Directors does not have a standing nominating committee or
other standing committee performing similar functions.

AMENDMENT OF KEY EMPLOYEE STOCK OPTION PLAN
(ITEM 2)

The Board of Directors has adopted, subject to shareholder approval, an
amendment to the Key Employee Stock Option Plan (1993) (the "Option Plan") which
increases the number of shares of Common Stock authorized to be issued under the
plan from 550,000 to 1,050,000, an increase of 500,000 shares (or approximately
2.9% of currently outstanding Common Stock). The full text of the amendment will
be furnished to any shareholder upon written request made to the Secretary of
the Company. For a description of the material features of the Option Plan, see
"Compensation Pursuant to Plans -- Key Employee Stock Option Plan" above.

The following table sets forth the number (and dollar value) of options
under the Option Plan that will be received by the named executive officers and
groups, to the extent determinable.

NEW PLAN BENEFIT TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Name and Position Dollar Value ($) Number of Units

- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Ray C. Anderson, Chief Executive Officer............... * *
- ------------------------------------------------------------------------------------------------
Grant E. Todd, Senior Vice President................... * *
- ------------------------------------------------------------------------------------------------
C. Edward Terry, Senior Vice President................. * *
- ------------------------------------------------------------------------------------------------
Don E. Russell, Senior Vice President.................. * *
- ------------------------------------------------------------------------------------------------
David Milton, Senior Vice President.................... * *
- ------------------------------------------------------------------------------------------------
Executive Officer Group (10 Persons)................... * *
- ------------------------------------------------------------------------------------------------
Non-Executive Director Group (6 Persons)............... # #
- ------------------------------------------------------------------------------------------------
Non-Executive Officer Employee Group................... * *
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------

* Awards of options for the additional 500,000 shares are not yet determinable
as none are currently contemplated.

# Directors who are not officers or employees of the Company are not eligible to
participate in the Option Plan.
</TABLE>
14
<PAGE> 17

The Board of Directors believes that the Option Plan is an important
component of the Company's compensation package because it secures for the
Company and its shareholders the advantages of the incentive inherent in stock
ownership on the part of its key employees. The Company believes that stock
ownership incentives give employees a greater concern for the welfare of the
Company and its future growth and encourage them to continue their association
with the Company. The Company issued a significant portion of the 550,000 option
shares originally authorized under the Option Plan to key employees of Bentley
Mills, Inc. in connection with the acquisition of Bentley, and to other senior
management personnel recently hired by other subsidiaries of the Company.
Additional shares will be needed, in future years, to maintain this element of
the Company's incentive compensation program for the Company's key employees.
Accordingly, the Board of Directors requests that the shareholders vote in favor
of amending the Option Plan to increase the shares available for issuance by the
sum of 500,000 shares.

VOTE REQUIRED AND RECOMMENDATION OF BOARD

Under the Company's Bylaws, the proposal to amend the Option Plan is
approved if the affirmative votes cast by the Company's outstanding shares of
Common Stock entitled to vote and represented (in person or by proxy) at the
meeting exceed the negative votes. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE PROPOSAL, AND THE ENCLOSED PROXY WILL BE VOTED IN THAT MANNER
UNLESS THE SHAREHOLDER EXECUTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY
(OR ABSTAINS).

RESOLUTION CONCERNING THE MACBRIDE PRINCIPLES
(ITEM 3)

The Company is informed that the New York City Police Pension Fund and Fire
Department Pension Fund, c/o Office of the Comptroller, The City of New York,
Municipal Building, New York, New York 10007, holders of a total of 40,500
shares of Class A Common Stock, intend to introduce at the annual meeting the
following resolution:

WHEREAS, a wholly-owned subsidiary of Interface, Inc. has operations in
Northern Ireland;

WHEREAS, employment discrimination in Northern Ireland has been cited by
the International Commission of Jurists as being one of the major causes of the
conflict in that country;

WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel
Peace laureate, has proposed several equal opportunity employment principles to
serve as guidelines for corporations in Northern Ireland. These include:

1. Increasing the representation of individuals from under-represented
religious groups in the work force, including managerial, supervisory,
administrative, clerical and technical jobs.

2. Adequate security for the protection of minority employees both at the
workplace and while traveling to and from work.

3. The banning of provocative religious or political emblems from the
workplace.

4. All job openings should be publicly advertised and special recruitment
efforts should be made to attract applicants from under-represented
religious groups.

5. Layoff, recall, and termination procedures should not, in practice,
favor particular religious groupings.

6. The abolition of job reservations, apprenticeship restrictions, and
differential employment criteria, which discriminate on the basis of
religion or ethnic origin.

7. The development of training programs that will prepare substantial
numbers of current minority employees for skilled jobs, including the
expansion of existing programs and the creation of new programs to
train, upgrade and improve the skills of minority employees.

15
<PAGE> 18

8. The establishment of procedures to assess, identify and actively
recruit minority employees with potential for further advancement.

9. The appointment of a senior management staff member to oversee the
company's affirmative action efforts and the setting up of timetables
to carry out affirmative action principles.

RESOLVED, the aforementioned shareholder requests the Board of Directors
to:

1. Make all possible lawful efforts to implement and/or increase activity
on each of the nine MacBride Principles.

VOTE REQUIRED AND RECOMMENDATION OF BOARD

Under the Company's Bylaws, the proposal to implement the MacBride
Principles is approved if the affirmative votes cast by the Company's
outstanding shares of Common Stock entitled to vote and represented (in person
or by proxy) at the meeting exceed the negative votes. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST APPROVAL OF THE PROPOSAL, AND THE ENCLOSED PROXY WILL
BE VOTED IN THAT MANNER UNLESS THE SHAREHOLDER EXECUTING THE PROXY SPECIFICALLY
VOTES TO THE CONTRARY (OR ABSTAINS).

PROPOSING SHAREHOLDER STATEMENT ON PROPOSAL

- Continued discrimination and worsening employment opportunities have been
cited as contributing to increasing support among Catholics for a violent
solution to Northern Ireland's problems.

- In May 1986, the United States District Court ruled in NYCERS v. American
Brands, 634 F. Supp. 1382 (S.D.N.Y., May 12, 1986) that "all nine of the
MacBride Principles could be legally implemented by management [of
American Brands] in its Northern Ireland facility."

- An endorsement of the MacBride Principles by Interface, Inc. will
demonstrate its concern for human rights and equality of opportunity in
its international operations. Please vote your proxy FOR these concerns.

BOARD OF DIRECTORS STATEMENT ON PROPOSAL

The Board of Directors favors a vote AGAINST this proposal.

As a matter of corporate policy, the Company shares the concern of the
proposing shareholder regarding equal employment in Northern Ireland and
elsewhere. The Company's policy worldwide is to offer employment and advancement
on a fair and non-discriminatory basis. It is the policy of the Company that
equal employment opportunities be extended to qualified persons regardless of
their age, race, color, sex, religion or national origin, and the Board of
Directors supports this commitment.

The Board of Directors believes that the Company's employment policies in
Northern Ireland are consistent with the principles of fair employment and equal
opportunity, and fulfill the requirements of law that there be no discrimination
in employment and that employment practices not have the effect of making it
more difficult for persons of any particular religious belief to obtain
employment or advancement. The Company adheres to the Fair Employment (Northern
Ireland) Act of 1989 (the "Act"), which makes religious discrimination and
preferential treatment in employment illegal. The Act requires the Company to
monitor its work force, submit annual returns and regularly review its
employment procedures; allows the Fair Employment Commission to oversee such
reviews; and provides for the imposition of penalties against employers who are
found to have discriminated on the grounds of religious or political beliefs,
including, in some instances, a refusal to allow employers to obtain government
contracts. In addition, as an employer with more than 25 employees in Northern
Ireland, the Company has registered under the Act, and thus works with the Fair
Employment Commission to further ensure that its employment procedures are not
discriminatory.

The Board of Directors does not believe that it is advisable for the
Company to endorse or subscribe to the MacBride Principles as set forth in the
proposed resolution. The Company believes that governmental

16
<PAGE> 19

action is the proper method by which to address the difficulties in Northern
Ireland. The Board of Directors believes that the Act adequately addresses the
concerns raised by the MacBride Principles. The Company also believes that
implementing some of the principles (for example, numbers 1 and 8) could cause
the Company to go beyond encouraging minority employment and to engage in
reverse discrimination, which is illegal under the laws of the United Kingdom.
Although the shareholder proposal endorses only "lawful" activity, the Company
believes the difficulty in distinguishing between legal and illegal behavior in
this area makes it inadvisable for the Company to adopt the Principles as a
matter of corporate policy. Other aspects of the Principles could require the
Company to take actions which are beyond its power to accomplish. For example,
Principle 2 could be interpreted to require the Company to provide adequate
security to employees while traveling to and from work, which obviously is
impossible for any employer to ensure anywhere in the world. In addition, many
of the policies suggested by the Principles are already encompassed within the
Company's current policy of equal employment opportunity.

For the foregoing reasons, the Board of Directors does not believe that
adoption of this resolution is advisable or that such adoption would advance the
Company's existing commitment to fair employment practices. If the votes cast in
favor of the resolution are less than 10% of the total number of votes cast, the
Company can delete this proposal from future proxy statements; the Board of
Directors thus urges you to vote AGAINST this proposal.

INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS

BDO Seidman served as the principal independent auditors for the Company
during fiscal 1993. Management of the Company anticipates that BDO Seidman will
be the independent auditors for the current fiscal year, but the Board of
Directors has not yet considered the selection of public accountants for the
current year. Representatives of BDO Seidman are expected to be present at the
annual meeting and will have the opportunity to make a statement, if they desire
to do so, and to respond to appropriate questions.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the Company's 1995
annual meeting must be received by the Company no later than December 16, 1994,
in order to be eligible for inclusion in the Company's Proxy Statement and form
of Proxy for that meeting.

OTHER MATTERS THAT MAY COME BEFORE THE MEETING

Management of the Company knows of no matters other than those stated above
that are to be brought before the meeting. However, if any other matter should
be properly presented for consideration and voting, it is the intention of the
persons named as proxies in the enclosed Proxy to vote the Proxy in accordance
with their judgment of what is in the best interest of the Company.

By order of the Board of Directors

/s/ DAVID W. PORTER

DAVID W. PORTER
Secretary

April 11, 1994

17
<PAGE> 20

CLASS A COMMON STOCK
INTERFACE, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1994 ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Ray C. Anderson and J. Smith Lanier, II, or
either of them, with power of substitution to each, the proxies of the
undersigned to vote the Class A Common Stock of the undersigned at the Annual
Meeting of Shareholders of INTERFACE, INC. to be held on May 17, 1994, and any
adjournment thereof.

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION OF THE LISTED NOMINEES.
<TABLE>
<S> <C> <C>
1. / / FOR all nominees for directors listed below / / WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below

CARL I. GABLE; ARIE GLIMMERVEEN; J. SMITH LANIER, II; LEONARD G.
SAULTER; DAVID G. THOMAS; and CLARINUS C. TH. VAN ANDEL.
(INSTRUCTION: To withhold authority to vote for any individual
nominee strike through that nominee's name.)

-----------------------------------------------------------------
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 2.
2. Proposal to amend the Company's Key Employee Stock Option Plan to
increase the number of shares authorized to be issued thereunder.
/ / FOR / / AGAINST / / ABSTAIN
(Continued, and to be signed, on other side)

THE BOARD OF DIRECTORS FAVORS A VOTE "AGAINST" PROPOSAL 3.
3. Proposal submitted by a shareholder requesting implementation of
the MacBride Principles.
/ / FOR / / AGAINST / / ABSTAIN
4. In accordance with their best judgment with respect to any other
matters that may properly come before the meeting.

</TABLE>

Please date and sign this Proxy
exactly as name appears.

------------------------------------

NOTE: When signing as an attorney,
trustee, administrator or guardian,
please give your title as such. In
the case of joint tenants, each
joint owner must sign.

Dated:
-----------------------------
<PAGE> 21

CLASS B COMMON STOCK
INTERFACE, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1994 ANNUAL MEETING OF SHAREHOLDERS

The undersigned hereby appoints Ray C. Anderson and J. Smith Lanier, II, or
either of them, with power of substitution to each, the proxies of the
undersigned to vote the Class B Common Stock of the undersigned at the Annual
Meeting of Shareholders of INTERFACE, INC. to be held on May 17, 1994, and any
adjournment thereof.

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION OF THE LISTED NOMINEES.

<TABLE>
<S> <C> <C> <C> <C>
1. / / FOR all nominees for directors listed below / / WITHHOLD AUTHORITY to vote for all
(except as marked to the contrary) nominees listed below
</TABLE>

RAY C. ANDERSON; BRIAN L. DEMOURA; CHARLES R. EITEL; DAVID MILTON; ROYCE R.
RENFROE; DON E. RUSSELL; and C. EDWARD TERRY.

(INSTRUCTION: To withhold authority to vote for any individual nominee strike
through that nominee's name.)

-----------------------------------------------------------------------------
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 2.

2. Proposal to amend the Company's Key Employee Stock Option Plan to increase
the number of shares authorized to be issued thereunder.

/ / FOR / / AGAINST / / ABSTAIN

(Continued, and to be signed, on other side)

THE BOARD OF DIRECTORS FAVORS A VOTE "AGAINST" PROPOSAL 3.

3. Proposal submitted by a shareholder requesting implementation of the MacBride
Principles.

/ / FOR / / AGAINST / / ABSTAIN

4. In accordance with their best judgment with respect to any other matters that
may properly come before the meeting.

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSALS 1 AND 2 AND FAVORS A VOTE
"AGAINST" PROPOSAL 3, AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN
THE SPACE PROVIDED, THIS PROXY WILL BE SO VOTED. (IF YOU OWN CLASS B SHARES THAT
ARE SUBJECT TO THE VOTING AGREEMENT DESCRIBED IN THE PROXY STATEMENT, THOSE
SHARES WILL BE VOTED AS INDICATED ON PAGE 7 OF THE PROXY STATEMENT.)

Please date and sign this Proxy
exactly as name appears.

------------------------------------

NOTE: When signing as an attorney,
trustee, administrator or guardian,
please give your title as such. In
the case of joint tenants, each
joint owner must sign.
Dated:
------------------------------