INTERFACE INC, DEF 14A, 1995-04-13

INTERFACE INC
DEF 14A, 1995-04-13
CARPETS & RUGS

Previous: AMERICAN EXPLORATION CO, 424B3, 1995-04-13

Next: BKLA BANCORP, 8-K, 1995-04-13

<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:

<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

INTERFACE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.

/ / $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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

/ / Fee paid previously with preliminary materials.

/ / 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.
2859 PACES FERRY ROAD, SUITE 2000
ATLANTA, GEORGIA 30339

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD MAY 18, 1995
---------------------

The annual meeting of shareholders of Interface, Inc. (the "Company") will
be held on Thursday, May 18, 1995, at 10:00 a.m., at the Company's office
located at 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. If presented, a proposal submitted by two shareholders requesting
implementation of the MacBride Principles concerning employment
practices of the Company's subsidiary that has a facility in Northern
Ireland.

3. 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 22, 1995 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 1994 Annual Report to
Shareholders.

By order of the Board of Directors

DAVID W. PORTER
----------------------------------
DAVID W. PORTER
Secretary

April 10, 1995

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.

2859 PACES FERRY ROAD, SUITE 2000
ATLANTA, GEORGIA 30339

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

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 18, 1995, 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 13, 1995.

The record of shareholders entitled to vote at the annual meeting was taken
as of the close of business on March 22, 1995. On that date, the Company had
outstanding and entitled to vote 15,160,728 shares of Class A Common Stock and
3,074,625 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", 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 the proposal concerning the MacBride Principles,
if presented, 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 fee for such assistance will be $5,000
(plus expenses).
<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 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 each nominee proposed by the Board,
including his or her principal occupation during the past five years, is set
forth below.

CLASS A NOMINEES

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Carl I. Gable (55)............. 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.
Dr. June M. Henton (55)........ Dr. Henton was elected as a director in February 1995 to
fill the vacancy created by the Board's increase of the
number of directors from 13 to 14. (A director of the
Company, Arie Glimmerveen, will not be standing for
reelection, so the Board will consist of 13 directors
following the annual meeting.) Since 1985, Dr. Henton has
served as Dean of the School of Human Sciences at Auburn
University, which includes a program in interior
environments. Dr. Henton, who received her Ph.D. from the
University of Minnesota, is an accomplished author and
lecturer on child and family issues. She has provided
leadership for a wide variety of professional, policy and
civic organizations. As a charter member of the Operating
Board of the National Textile Center, Dr. Henton has
significant expertise in the integration of academic and
research programs spanning the textile industrial complex.
J. Smith Lanier, II (67)....... 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 nonprofit organizations.
</TABLE>

2
<PAGE> 5

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Leonard G. Saulter (68)........ 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 (69)........... 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,
(65)......................... 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. (formerly Interface Heuga
B.V.), the Company's modular carpet subsidiary based in the
Netherlands, since 1984.
</TABLE>

CLASS B NOMINEES

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>

Ray C. Anderson (60)........... 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 (49).......... Mr. DeMoura, elected to the Board in May 1994, 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.
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>

3
<PAGE> 6

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
Charles R. Eitel (45).......... 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), with responsibility for the Company's modular
carpet operations throughout the Americas. He also became a
Senior Vice President of the Company at that time. He was
elected as a director in February 1994. In October 1994, Mr.
Eitel was appointed to the newly created position of
Executive Vice President (President and CEO, Floorcoverings
Group), thereby assuming overall responsibility for the
Company's worldwide carpet business. From July 1987 until
joining the Company, Mr. Eitel served as President of the
Floorcoverings Division (based in Dalton, Georgia) of
Collins & Aikman Corporation. Collins & Aikman is a
diversified textile producer, headquartered in New York. Mr.
Eitel also serves as a director of Weeks Corporation, an
industrial real estate company based in Atlanta.
David Milton (59).............. 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 (48).......... Mr. Renfroe has served, for the past five years, as
President and Chief Executive Officer of Bentley Mills,
Inc., a California based producer of broadloom and modular
carpet for commercial and institutional applications,
acquired by the Company in June 1993. Mr. Renfroe was
elected as a director in February 1994, and he became a
Senior Vice President of the Company at that time.
Don E. Russell (57)............ Mr. Russell has been a director since 1974. He was Vice
President -- Marketing until 1986 when he became a Senior
Vice President. Mr. Russell has served as Managing Director
of the Company's United Kingdom modular carpet subsidiary
since 1989. Mr. Russell assumed responsibility for the
balance of the Company's European operations in February
1991 when he became President of Interface Europe, Inc. (the
Company's U.S. holding company for its subsidiaries in
Europe). In November 1991, he became President and Chief
Executive Officer of Interface Europe B.V., and relocated
his base of operations to the Netherlands.
</TABLE>

4
<PAGE> 7

<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ------------------------------- ------------------------------------------------------------
<S> <C>
C. Edward Terry (60)........... Mr. Terry has been a director since February 1989 and a
Senior Vice President since 1987. He has served as President
of Rockland React-Rite, Inc. and Interface Research
Corporation since 1987 and 1988, respectively. (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>

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 SHAREHOLDERS AND MANAGEMENT STOCK OWNERSHIP

The following table sets forth, as of February 1, 1995 (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 13,826 (3) * 9.7%
2859 Paces Ferry Road, Suite 2000 Class B 1,612,463 (4) 52.4%
Atlanta, Georgia 30339
Ariel Capital Management, Inc. Class A 3,539,430 (5)(6) 23.4%
307 N. Michigan Avenue
Chicago, Illinois 60601
David L. Babson & Company, Inc. Class A 1,260,100 (5)(7) 8.3%
One Memorial Drive
Cambridge, Massachusetts 02142
FMR Corp. Class A 1,127,634 (5)(8) 7.5%
82 Devonshire Street
Boston, Massachusetts 02109
Brian L. DeMoura Class B 8,000 (9) * *
</TABLE>

5
<PAGE> 8

<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>
Charles R. Eitel Class A 7,956 (10) * *
Class B 50,000 (10) 1.6%
Carl I. Gable Class A 5,983 (11) * *
Class B 20,622 *
June M. Henton None
J. Smith Lanier, II Class A 10,500 (12) * 1.0%
Class B 148,824 (12) 4.8%
David Milton Class A 17,782 (13) * *
Class B 60,000 (13) 2.0%
Royce R. Renfroe Class A 19,834 (14) *
Don E. Russell Class A 9,692 (15) * *
Class B 84,732 2.8%
Leonard G. Saulter Class A 2,000 (16) *
C. Edward Terry Class A 79,470 (17) *
David G. Thomas Class A 5,000 *
Clarinus C. Th. van Andel Class A 50,000 (18) *
All executive officers and directors Class A 316,043 (19) 2.1% 13.3%
as a group (17 persons) Class B 1,984,641 (20) 64.5%
</TABLE>

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

* 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 2,000 shares held by Mr. Anderson's wife and 11,826 shares
issuable upon conversion of Interface, Inc. 8% Convertible Subordinated
Debentures ("Debentures") held by The Ray C. Anderson Foundation, Inc. (a
nonprofit 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, 1994.

(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 2,538,955 shares and shared voting power with respect to
229,900 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.)

6
<PAGE> 9

(7) David L. Babson & Company, Inc. ("Babson"), in its capacity as investment
advisor, has sole voting power with respect to 722,200 shares and shared
voting power with respect to 537,900 shares. Babson has sole investment
power with respect to all such shares.

(8) Includes 171,584 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 252,369 shares. FMR has sole
investment power with respect to all such shares. (Edward C. Johnson, III,
Chairman and a controlling person of FMR, may be deemed to have sole voting
power with respect to 252,369 shares and sole investment power with respect
to all such shares, as well. Mr. Johnson, together with various Johnson
family members and trusts for the benefit of Johnson family members, form a
controlling group with respect to FMR.)

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

(10) Mr. Eitel has the right to acquire 2,956 of such Class A shares upon
conversion of Debentures and all such Class B shares 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 14,782 of such Class A shares upon
conversion of Debentures and all such Class B shares pursuant to
exercisable stock options.

(14) Includes 8,000 shares that Mr. Renfroe has the right to acquire pursuant to
exercisable stock options, and 11,834 shares that 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) Includes 8,000 shares that Mr. Russell has the right to acquire pursuant to
exercisable stock options.

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

(17) 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.

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

(19) Includes an aggregate of 245,311 shares that all executive officers and
directors as a group have the right to acquire pursuant to exercisable
stock options (198,000 shares) and upon conversion of Series A Preferred
Stock (11,834 shares) and Debentures (35,477 shares).

(20) Includes 118,000 shares that all executive officers and directors as a
group have the right to acquire pursuant to exercisable stock options.

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

7
<PAGE> 10

attorney-in-fact to vote the shares subject to the agreement; thus all Class B
Proxies received by the Company 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 against
the proposal (if presented) to implement the MacBride Principles, which is
described below.

EXECUTIVE COMPENSATION AND RELATED ITEMS

SUMMARY OF CASH AND CERTAIN OTHER 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 1994) for each of the last
three fiscal years of the Company.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Long-Term
Annual Compensation Compensation
---------------
Awards
- -------------------------------------------------------------------------------------------------
Other
Annual Securities All Other
Compen- Underlying 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, 1994 315,000 250,000 N/A(1) 20,000 1,848(5)
---------------------------------------------------------------------
President and Chief 1993 250,000 149,015 N/A(1) -0- 1,799(5)
---------------------------------------------------------------------
Executive Officer 1992 242,500 110,144 N/A(1) -0- 1,746(5)
- -------------------------------------------------------------------------------------------------------------
Charles R. Eitel, Executive 1994 299,167 240,000 N/A(1) -0- -0-
---------------------------------------------------------------------
Vice President (President & 1993 42,364(2) 175,000(2) N/A(1) 100,000 -0-
---------------------------------------------------------------------
CEO, Floorcoverings Group) 1992 N/A(2) N/A(2) N/A(1) N/A(2) N/A(2)
- -------------------------------------------------------------------------------------------------------------
Royce R. Renfroe, 1994 225,000 225,000 N/A(1) -0- 15,595(5)
---------------------------------------------------------------------
Senior Vice President 1993 131,250(3) 153,563(3) N/A(1) 40,000 -0-
---------------------------------------------------------------------
1992 N/A(3) N/A(3) N/A(1) N/A(3) N/A(3)
- -------------------------------------------------------------------------------------------------------------
Don E. Russell, 1994 250,000 200,000 N/A(1) 40,000 1,848(5)
---------------------------------------------------------------------
Senior Vice President 1993 200,000 50,490 N/A(1) -0- 1,799(5)
---------------------------------------------------------------------
1992 195,000 50,000 N/A(1) -0- 1,746(5)
- -------------------------------------------------------------------------------------------------------------
David Milton, 1994 373,061(4) 30,000 N/A(1) -0- 1,848(5)
---------------------------------------------------------------------
Senior Vice President 1993 289,319(4) 67,548 N/A(1) -0- 1,799(5)
---------------------------------------------------------------------
1992 270,609(4) 30,000 N/A(1) 100,000 -0-
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
</TABLE>

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

(2) Mr. Eitel joined the Company in November 1993. The bonus paid to Mr. Eitel
in 1993 was paid pursuant to the terms of Mr. Eitel's employment agreement.

(3) Mr. Renfroe joined the Company in June 1993.

(4) Includes $173,061 (1994), $139,319 (1993) and $120,609 (1992) in
extraordinary remuneration related to assignment in Hong Kong.

8
<PAGE> 11

(5) Represents the Company's matching contribution (made in the form of Class A
Common Stock) under the Company's 401(k) Savings and Investment Plans. Mr.
Renfroe's figure also includes a $1,500 profit sharing contribution under
the 401(k) Plan in effect for Bentley Mills, and $12,595 paid for the
premium on a whole life insurance policy (a portion of which will be repaid
to the Company under the terms of the policy).

COMPENSATION PURSUANT TO CERTAIN PLANS

Pension Plan. The Company maintains a tax-qualified, noncontributory
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,
1994. 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 -- 22 years, Mr.
Eitel -- 1 year, and Mr. Milton -- 2 years.

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> <C> <C>
150,000............................. 30,000 30,000 34,650 41,580 48,150
----------------------------------------------------------------
200,000............................. 40,000 40,000 47,150 56,580 66,010
----------------------------------------------------------------
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
----------------------------------------------------------------
500,000............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
550,000............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
600,000............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
650,000............................. 45,168 45,168 56,110 67,332 78,554
----------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>

(1) For the plan year beginning August 1, 1990, only the first $200,000 of
compensation (subject to cost-of-living indexing, but limited to $150,000
for the plan year beginning in 1994) is considered for plan purposes.
Further, the annual benefit cannot exceed $90,000 (subject to
cost-of-living indexing, $118,800 for 1994).

Salary Continuation Plan. The Company maintains a nonqualified salary
continuation plan (the "Salary Continuation Plan") which is designed to induce
selected officers of the Company to remain in the

9
<PAGE> 12

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; (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, Eitel and Russell
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 22 years for Messrs. Anderson and Russell, and 1 year
for Mr. Eitel.

Assuming a 5% annual increase in compensation over 1994 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 -- $261,831; Mr. Eitel -- $467,520; and Mr.
Russell -- $253,479.

Key Employee Stock Option Plans. The Company has adopted a key employee
stock option plan (the "Stock Option Plan") which provides for the grant of
incentive stock options (which qualify for certain favorable tax treatment) and
nonqualified options to key employees of the Company and its subsidiaries. (The
Stock Option Plan also allows the issuance of stock appreciation rights, but
only in tandem with options granted under the plan.) A maximum of 1,050,000
shares of Common Stock are authorized for issuance with respect to options (and
stock appreciation rights) granted under the plan.

The Stock 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 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. Options granted
under the Stock Option 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. No member of the Compensation Committee is currently eligible to
receive an award under the Stock Option Plan. Directors who are not officers or
employees of the Company also are not eligible to participate in the Stock
Option Plan.

The Company also maintains a stock option plan under which nonqualified
options may be granted to key employees and directors of the Company's
subsidiaries located outside of the United States (the "Offshore Plan"). A
maximum of 1,000,000 shares of Common Stock are authorized for issuance with
respect to options under the Offshore Plan. The Compensation Committee also
administers the Offshore Plan, and options granted under the Offshore Plan
generally have the same terms as those granted under the Stock Option Plan.

10
<PAGE> 13

The following table sets forth information with respect to options granted
during fiscal 1994 to the executive officers named in the Summary Compensation
Table.

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------

Potential
Realizable Value
at
Assumed Annual
Rates of Stock
Price Alternative to
Appreciation (f) and (g):
for Option Grant Date
Individual Grants Term(1) Value
- -----------------------------------------------------------------------------------------------------------------
Number of Percent of
Securities Total
underlying Options
Options Granted Exercise or Grant Date
Granted to Employees Base Price Expiration 5% 10% Present Value
Name (#) in Fiscal Year ($/Sh) Date ($) ($) $
- -----------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h)
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Ray C. Anderson 20,000 4.06 11.375 11/10/04 143,074 362,576 --
- -----------------------------------------------------------------------------------------------------------------
Charles R. Eitel -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Royce R. Renfroe -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
Don E. Russell 40,000 8.12 15.50 01/05/04 389,915 988,120 --
- -----------------------------------------------------------------------------------------------------------------
David Milton -- -- -- -- -- -- --
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The 5% and 10% assumed rates of appreciation are mandated by the rules of
the Securities and Exchange Commission and are not an estimate or
projection of future prices of the Company's Common Stock.

The following table sets forth, for each of the executive officers named in
the Summary Compensation Table, (i) the number of options held at fiscal
year-end, and (ii) the value of such options at fiscal year-end. No options were
exercised by the named executives during fiscal 1994.

FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Value of
Number of Unexercised
Unexercised In-the-Money
Options Options
at Fiscal at Fiscal
Year-End (#) Year-End ($)
----------- -----------
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------
(a) (b) (c)
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
Ray C. Anderson 0/20,000 0/20,000(1)
- -----------------------------------------------------------------------------------------------
Charles R. Eitel 50,000/50,000 43,750/43,750(1)
- -----------------------------------------------------------------------------------------------
Royce R. Renfroe 8,000/32,000 11,000/44,000(1)
- -----------------------------------------------------------------------------------------------
Don E. Russell 8,000/32,000 0/0(2)
- -----------------------------------------------------------------------------------------------
David Milton 60,000/40,000 52,500/35,000(1)
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>

(1) Aggregate market value of the shares issuable upon exercise of the options
(based on December 31, 1994 closing price for Class A Common Stock of
$12.375 per share), less the aggregate exercise price payable by the named
executive officer.

(2) Exercise price of options exceeds market price of Class A Common Stock at
fiscal year-end.

11
<PAGE> 14

EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement with Charles R. Eitel in
October 1993, appointing him as a Senior Vice President of the Company and
President of Interface Flooring Systems, Inc. and Interface Americas, Inc. (Mr.
Eitel's current position is President and CEO, Floorcoverings Group.) The
Company also agreed to nominate Mr. Eitel for election as a director of the
Company each year during the term of the employment agreement. The agreement
provides that Mr. Eitel will receive a minimum annual salary of $295,000, and
will be eligible to participate in the Company's bonus plan as in effect from
time to time. In connection with his agreement, Mr. Eitel was granted an option
to purchase 100,000 shares of Common Stock under the Stock Option Plan. The
option was structured to vest in full over a three year period. The employment
agreement is for a three year term, but will be automatically extended for
additional successive one year periods through the fourteenth anniversary of the
date of the agreement, unless either the Company or Mr. Eitel provides the other
with notice not less than 90 days prior to any such anniversary date of its or
his intention to allow the agreement to expire on such anniversary date. The
Company may terminate Mr. Eitel's employment at any time, with or without cause.
In the event the Company terminates Mr. Eitel's employment without cause prior
to the "scheduled expiration date" (which means the end of the initial three
year term, or the next succeeding anniversary date in the event of an annual
renewal), Mr. Eitel will be entitled to continue to receive his salary and
participate in certain employee benefit plans through the scheduled expiration
date or the first anniversary of the date of termination, whichever is later.

The Company entered into a five year employment agreement with Royce R.
Renfroe in June 1993, appointing him President and CEO of Bentley Mills, Inc.
The agreement provides that Mr. Renfroe will receive a minimum annual salary of
$225,000, and will be eligible to participate in the Company's bonus plan as in
effect from time to time. In connection with his employment agreement, Mr.
Renfroe was granted an option to purchase 40,000 shares of Common Stock under
the Stock Option Plan. The Company may terminate Mr. Renfroe's employment at any
time, with or without cause. In the event the Company terminates Mr. Renfroe's
employment without cause, he will be entitled to continue receiving his salary
through the scheduled expiration date of the agreement, provided, however, that
such salary shall be reduced by any amounts earned by Mr. Renfroe from other
employment during such period. The Company is also obligated, in the event of a
termination without cause, to continue paying, through the first anniversary of
the date of termination, the cost of Mr. Renfroe's participation in health,
medical, dental, life and disability insurance benefit plans. In the event of a
change in control of Bentley Mills, if Mr. Renfroe is not offered employment by
the buyer of or successor to Bentley Mills on substantially the same terms and
conditions as under his existing employment agreement, Mr. Renfroe could be
entitled to receive severance benefits on the grounds that the Company has
terminated his employment without cause.

The Company entered into an employment agreement with Don E. Russell in
February 1995, appointing him as a Senior Vice President of the Company and
President of Interface Europe, Inc. The agreement provides that Mr. Russell will
receive a minimum annual salary of $250,000, and will be eligible to participate
in the Company's bonus plan as in effect from time to time. The agreement is for
a term ending on Mr. Russell's 65th birthday (January 10, 2003). The Company may
terminate Mr. Russell's employment at any time, with or without cause; provided,
however, in the event the Company terminates Mr. Russell's employment prior to
January 11, 1998, the Company is obligated to continue the salary, bonus and
benefits payable to Mr. Russell under the employment agreement and all
applicable employee benefit plans of the Company through January 11, 1998. In
the event Mr. Russell is terminated for cause (as defined in the agreement) at
any time, or terminated without cause after January 11, 1998, he would not be
entitled to any severance pay.

The Company entered into an employment agreement with David Milton in July
1994, appointing him as a Senior Vice President of the Company and President of
Interface Asia-Pacific, Inc. The agreement provides that Mr. Milton will receive
a minimum annual salary of $200,000, and will be eligible to participate in the
Company's bonus plan as in effect from time to time. The agreement is for a term
ending on Mr. Milton's 65th birthday (October 19, 2000). The Company may
terminate Mr. Milton's employment at any time, with or without cause; provided,
however, in the event the Company terminates Mr. Milton's employment prior to
January 1, 1997, the Company is obligated to continue the salary, bonus and
benefits payable to Mr. Milton

12
<PAGE> 15

under the employment agreement and all applicable employee benefit plans of the
Company through January 1, 1997. In the event Mr. Milton is terminated for cause
(as defined in the agreement) at any time, or terminated without cause after
January 1, 1997, he would not be entitled to any severance pay.

The employment agreement for each of the above-named executives contains
provisions placing certain restrictions on the executive's ability to compete
with the Company following the expiration or termination of his employment
agreement.

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 1994, 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 a total of $41,280 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 a total of $30,280 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.

In fiscal 1994, the Company issued stock options (under the Offshore Plan)
for 20,000 shares each to Messrs. Anderson, Gable, Lanier, Saulter, Thomas and
van Andel in connection with their serving as directors of certain of the
Company's foreign subsidiaries. The options vest incrementally over a five year
period.

The Company has agreed to pay Leonard G. Saulter, who previously served as
an executive officer of the Company, $45,000 per year for a five year period
ending in 1998, and $15,000 per year beginning in 1999 for the remainder of his
life. The Company made the required payment during 1994. The Company paid Mr.
Saulter an additional $15,000 in 1994 for consulting services related to the
Company's interior fabrics business.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following persons served on the Compensation Committee of the Board of
Directors during fiscal 1994: 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 1994. Mr. Gable
served as President of the Company from March 1984 until June 1985.

During 1994, the Company paid premiums to J. Smith Lanier & Co., an
insurance agency, of approximately $2,160,000 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 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

In April 1994, the Company extended Charles R. Eitel, a director and
executive officer of the Company, an advance of $225,000 in connection with Mr.
Eitel's relocation from Chattanooga, Tennessee to Atlanta, Georgia. The advance
was repaid in full (without interest) within 60 days.

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, was to be repaid upon the sale of Mr.
Terry's residential property in LaGrange, Georgia. The Company retained the
option, however, to purchase the property in exchange for forgiveness of the
debt owed by Mr. Terry, and the Company exercised the purchase option in 1994.

13
<PAGE> 16

The law firm with which Carl I. Gable, a director of the Company, is
associated rendered legal services to the Company during fiscal 1994 (but does
not serve as the Company's principal outside counsel).

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 nonemployee 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
nonfinancial 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 1994, 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,
geographical cost-of-living considerations 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.) The senior executives
of the Company (including the Chief Executive Officer) received raises in base
salary in fiscal 1994 averaging 14%. These 1994 increases were deemed
appropriate in light of prevailing market conditions and the fact that raises in
recent years had been restricted under the Company's stringent cost control
program in effect since 1991. Indeed, the senior executives of the Company
(including the Chief Executive Officer) did not receive any increase in base
salary for fiscal 1993. (The apparent small 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 nonfinancial objectives for the year. Evaluation of nonfinancial
objectives is, inherently, 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 by the degree to which the financial and nonfinancial objectives
have been achieved. In limited instances the operation of the bonus formula has
resulted in a bonus amount that the Committee believed to be unjust in light of
extenuating circumstances, and the Committee has, on certain occasions,
increased the bonus paid to the affected executive.

For the Senior Vice Presidents of the Company who are directly accountable
for the profitability of subsidiaries, financial objectives for 1994 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-

14
<PAGE> 17

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 1994 (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 1994 (30% weight)
focused on defining overall corporate strategy (including acquisitions and
management succession), and also were linked to the nonfinancial objectives of
the executive officers who report to him.

On an aggregate basis (giving effect to relative weights), Mr. Anderson
achieved 87% of target levels for his financial objectives, with the best
performance being in the areas of earnings per share and market performance of
the Company's stock. Mr. Anderson was credited with a slightly higher percentage
of target levels for his nonfinancial objectives, receiving high marks for his
role in securing the services of Messrs. Eitel and DeMoura, and his efforts in
the acquisition of Prince Street.

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 summary description of the Company's stock
option plans is set forth above under the heading "Compensation Pursuant to
Certain Plans -- Key Employee Stock Option Plans".) 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 plans 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 plans 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 holds stock options.

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

15
<PAGE> 18

PERFORMANCE GRAPH

The following graph compares, for the five year period ended January 1,
1995, 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 ($)

NASDAQ STOCKS
NASDAQ STOCK (U.S.+FOREIGN)
MEASUREMENT PERIOD INTERFACE, MARKET (U.S. - TEXTILE MILL
(FISCAL YEAR COVERED) INC. COMPANIES) PRODUCTS
<S> <C> <C> <C>
01/01/90 100.0 100.0 100.0
12/30/90 55.4 82.8 69.7
12/29/91 63.6 136.9 84.6
01/03/93 70.5 157.5 102.0
01/02/94 88.7 179.7 145.4
01/01/95 73.3 175.7 103.5
</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 01/01/90.
E. The Company's fiscal year ends on the Sunday nearest to December 31.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors held four meetings during 1994. 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 1994. Messrs. Anderson, Gable and Lanier also serve as the
members of the Board's Compensation Committee. The Compensation Committee met
two times during 1994. 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. The Audit Committee met three
times during 1994. 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

16
<PAGE> 19

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.

RESOLUTION CONCERNING THE MACBRIDE PRINCIPLES
(ITEM 2)

The Company is informed that the New York City Employees' Retirement Fund,
Teachers' Retirement Fund, Police Pension Fund and Fire Department Pension Fund,
c/o Comptroller of the City of New York, 1 Centre Street, New York, New York
10007, and the Minnesota State Board of Investment, MEA Building, 55 Sherburne
Avenue, St. Paul, Minnesota 55155, holders of a total of 282,723 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, the ongoing peace process in Northern Ireland encourages us to
search for nonviolent means for establishing justice and equality;

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.

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 shareholders request the Board of Directors
to:

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

17
<PAGE> 20

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 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 SHAREHOLDERS' STATEMENT ON PROPOSAL

- Continued discrimination and worsening employment opportunities have been
cited as contributing to increasing support 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 shareholders regarding equal employment in Northern Ireland and
elsewhere. The Company's policy worldwide is to offer employment and advancement
on a fair and nondiscriminatory 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.

Furthermore, 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 "Fair Employment Act"), which
makes religious discrimination and preferential treatment in employment illegal.
The Fair Employment 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 Fair Employment 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, however, 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 action is the
proper method by which to address the difficulties in Northern Ireland, and that
the Fair Employment 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 formally 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 guarantee adequate security to

18
<PAGE> 21

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 1994. 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 1996
annual meeting must be received by the Company no later than December 14, 1995,
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

DAVID W. PORTER
------------------------------------
DAVID W. PORTER
Secretary

April 10, 1995

19
<PAGE> 22

(INTERFACE(R) LOGO)
<PAGE> 23
APPENDIX A

CLASS A COMMON STOCK
INTERFACE, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1995 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 18, 1995, 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; JUNE M. HENTON; 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 "AGAINST" PROPOSAL 2.
2. Proposal submitted by two shareholders requesting implementation of the MacBride Principles.
/ / FOR / / AGAINST / / ABSTAIN
(Continued, and to be signed, on other side)
3. In accordance with their best judgment with respect to any other matters that may properly come before the meeting.
</TABLE>

THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 1 AND FAVORS A VOTE
"AGAINST" PROPOSAL 2, 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:
--------------------------------------
<PAGE> 24
APPENDIX B

CLASS B COMMON STOCK
INTERFACE, INC.

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1995 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 18, 1995, 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

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.)

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:
--------------------------------------