<PAGE>
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 Section240.14a-11(c) or
Section240.14a-12
INTERFACE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
INTERFACE, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
-----------------------------------------------------------------------
(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 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:
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<PAGE>
[LOGO]
INTERFACE, INC.
2859 PACES FERRY ROAD, SUITE 2000
ATLANTA, GEORGIA 30339
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 18, 1999
---------------
The annual meeting of shareholders of Interface, Inc. (the "Company") will
be held on Tuesday, May 18, 1999, at 4:00 p.m., at the Company's office located
at 2859 Paces Ferry Road, Atlanta, Georgia, for the purpose of considering and
voting upon:
<TABLE>
<CAPTION>
RECOMMENDED
ITEM VOTE
------------------------------------------------------------------------------------------ -------------
<C> <S> <C>
1. The election of 13 members of the Board of Directors, six directors to be elected by the FOR
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 approve the Company's Executive Bonus Plan. FOR
3. If presented, a proposal submitted by two shareholders requesting implemen-tation of the AGAINST
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.
</TABLE>
Only shareholders of record at the close of business on March 24, 1999 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 date, sign and return the enclosed Proxy at your earliest
convenience. You may, of course, change or withdraw your Proxy at any time prior
to the voting at the meeting. However, returning your Proxy in a timely manner
will assure your representation at the annual meeting.
Also enclosed is a copy of the Company's 1998 Annual Report to Shareholders.
By order of the Board of Directors
/s/ RAYMOND S. WILLOCH
RAYMOND S. WILLOCH
SECRETARY
April 6, 1999
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>
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, 1999, 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 16, 1999.
The record of shareholders entitled to vote at the annual meeting was taken
as of the close of business on March 24, 1999. On that date, the Company had
outstanding and entitled to vote 46,135,204 shares of Class A Common Stock and
6,629,446 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. If no specification is
made, the Proxy will be voted (i) 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", (ii) for the proposal relating to the Executive Bonus
Plan; and (iii) against the proposal, if presented, to implement the MacBride
Principles. 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,
fax or e-mail. 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 $6,500
(plus expenses).
The closing price of the Company's Class A Common Stock as reported on The
Nasdaq National Market on April 5, 1999 was $9.0625 per share. There is no
public market for the Class B Common Stock (but Class B shares are convertible
on a share-for-share basis into Class A shares).
<PAGE>
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>
Dianne Dillon-Ridgley (47)............... Ms. Dillon-Ridgley was elected to the Board in February 1997. Since
1994, Ms. Dillon-Ridgley has served as president of Zero Population
Growth, the nation's largest grassroots organization concerned with the
impacts of rapid population growth. She has also served as a senior
policy analyst with the Women's Environment and Development
Organization since 1993, and as an associate with the Kettering
Foundation in Dayton, Ohio since 1991. In 1994, she was appointed by
President Clinton to the President's Council on Sustainable Development
where she serves as Co-Chair of the Council's Population and
Consumption Task Force.
Carl I. Gable (59)....................... Mr. Gable, a director since March 1984, is a private investor. Mr.
Gable was an attorney-at-law with the Atlanta based law firm of
Troutman Sanders LLP, from March 1996 until April 1998. From September
1992 until March 1996, he was a member of another Atlanta law firm,
Booth Owens & Jospin (formerly Booth, Wade & Campbell). Mr. Gable
serves on the Boards of numerous nonprofit organizations.
Dr. June M. Henton (59).................. Dr. Henton was elected as a director in February 1995. 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 within the textile
industry.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ----------------------------------------- -----------------------------------------------------------------------
J. Smith Lanier, II (71)................. Mr. Lanier has been a director since 1973. He is Chairman of the Board
of J. Smith Lanier & Co., a general insurance agency based in West
Point, Georgia. Mr. Lanier also serves as a director of Vista Eyecare,
Inc. (f/k/a National Vision Associates, Ltd.), a Lawrenceville, Georgia
based operator of retail optical centers. He also serves on the Boards
of numerous nonprofit organizations.
<S> <C>
Thomas R. Oliver (58).................... Mr. Oliver was elected as a director in July 1998. He has served as
Chairman and Chief Executive Officer of Bass Hotels and Resorts, the
hotel business of Bass PLC, since March 1997. From June 1996 until
March 1997, Mr. Oliver served as Chairman and Chief Executive Officer
of AudioFax, Inc., an Atlanta based telecommunications company. From
June 1993 to June 1996, he served as President and CEO of VoiceCom
Systems, Inc., a leading supplier of large scale messaging systems,
also in Atlanta. Mr. Oliver also serves on the Executive Committee and
the Board of Directors of Bass PLC, and as a director of Bristol Hotel
& Resorts, Inc., a Dallas, Texas based hotel operating company.
Clarinus C.Th. van Andel (69)............ Mr. van Andel, who has been a director since October 1988, was a
partner in the law firm of Schut & Grosheide, Amsterdam, until his
retirement in January 1996. He served as Chairman of the supervisory
board of Interface Europe B.V. (formerly Interface Heuga B.V. and Heuga
Holding, B.V.), the Company's modular carpet subsidiary based in the
Netherlands, from 1984 until 1996, when the supervisory board was
dissolved.
</TABLE>
CLASS B NOMINEES
<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Ray C. Anderson (64)..................... Mr. Anderson has served as Chairman and Chief Executive Officer of the
Company since its founding in 1973. Mr. Anderson was appointed by
President Clinton to the President's Council on Sustainable Development
in 1996 and currently serves as Co-Chair. He also serves on the Boards
of numerous nonprofit organizations.
Brian L. DeMoura (53).................... Mr. DeMoura joined the Company in March 1994 as President and Chief
Executive Officer of Guilford of Maine, Inc. (now Interface Interior
Fabrics, Inc.) ("Interface Fabrics"), the Company's principal interior
fabrics subsidiary, and as a Senior Vice President of the Company. In
May 1994, he was elected to the Company's Board of Directors. He is
responsible for the Interior Fabrics Group, which includes the
following brands: GUILFORD OF MAINE, STEVENS LINEN, TOLTEC, INTEK,
CAMBORNE and GLENSIDE.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Charles R. Eitel (49).................... 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 was
elected as a director in February 1994. In October 1994, Mr. Eitel was
promoted to Executive Vice President of the Company and President and
Chief Executive Officer of the Floorcoverings Group, thereby assuming
overall responsibility for the Company's worldwide carpet business. In
February 1997, Mr. Eitel was promoted to President and Chief Operating
Officer of the Company. Mr. Eitel also serves as a director of Weeks
Corporation, an industrial real estate company based in Atlanta, and
Ladd Furniture, Inc., a North Carolina based furniture manufacturer.
Daniel T. Hendrix (44)................... Mr. Hendrix, who previously was with a national accounting firm, joined
the Company in 1983. He became Treasurer of the Company in 1984, Chief
Financial Officer in 1985, Vice President-Finance in 1986 and Senior
Vice President -Finance in October 1995. He was elected to the Board in
October 1996.
Leonard G. Saulter (72).................. 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. (now Interface Fabrics)
until January 1990, and as Interface Fabrics' Chairman from January
1990 until his retirement in June 1991. In October 1993, Mr. Saulter
resumed the position of President of Interface Fabrics on an interim
basis, serving until March 1994.
John H. Walker (54)...................... Mr. Walker was elected to the Board in October 1996. He began his
career with the Company as Financial Controller of the U.K. Division of
Heuga Holding B.V. (now Interface Europe, B.V.), a Netherlands based
carpet tile manufacturer, which was acquired by the Company in 1988. He
later served as Vice President-Sales & Marketing of Interface Europe,
B.V. and in July 1995 was promoted to the position of Senior Vice
President of the Company and President and Chief Executive Officer of
Interface Europe, Inc. In his current position, he has responsibility
for the Company's floorcovering operations in both Europe and the
Asia-Pacific region.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
NAME (AGE) INFORMATION
- ----------------------------------------- -----------------------------------------------------------------------
<S> <C>
Gordon D. Whitener (36).................. Mr. Whitener joined the Company in November 1993 as Senior Vice
President-Sales & Marketing of Interface Flooring Systems, Inc. In
October 1994, he became a Senior Vice President of the Company and
President and Chief Executive Officer of Interface Americas, Inc.,
assuming responsibility for both the Company's modular carpet
operations throughout the Americas and Prince Street Technologies,
Ltd., the Company's commercial broadloom carpet operation based in
Cartersville, Georgia. In July 1995, Mr. Whitener also assumed
corporate responsibility for Bentley Mills, Inc., the Company's
California based subsidiary which produces commercial broadloom and
modular carpet, at which time he became a director of the Company. In
April 1997, he assumed corporate responsibility for the Specialty
Products Group, composed of the Company's chemical and specialty sur-
face subsidiaries (Re: Source Technologies and Pandel), Intersept
antimicrobial sales and licensing program, and Interface Architectural
Resources raised/access flooring business unit. He is thus responsible
for all of the Company's businesses in the Americas, except the
Interior Fabrics Group. Mr. Whitener also serves as a director of The
Carpet & Rug Institute, a national trade association representing the
carpet and rug industry headquartered in Dalton, Georgia, and Aviation
Group, Inc., a Texas based provider of products and services to airline
companies and other aviation firms.
</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, 1999 (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
5
<PAGE>
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>
Ray C. Anderson.................................................................. Class A 21,274(3) * 6.6%
2859 Paces Ferry Road, Suite 2000 Class B 3,268,706(3) 50.0%
Atlanta, Georgia 30339
Ariel Capital Management, Inc.................................................... Class A 8,116,725(4)(5) 17.5%
307 N. Michigan Avenue
Chicago, Illinois 60601
David L. Babson and Co., Inc..................................................... Class A 2,802,500(4)(6) 6.1%
One Memorial Drive
Cambridge, Massachusetts 02142
Brian L. DeMoura................................................................. Class B 166,156(7) 2.5% *
Dianne Dillon-Ridgley............................................................ Class B 16,000(8) * *
Charles R. Eitel................................................................. Class A 298(9) * *
2859 Paces Ferry Road, Suite 2000 Class B 431,359(9) 6.5%
Atlanta, Georgia 30339
Carl I. Gable.................................................................... Class A 140(10) * *
Class B 73,244(10) 1.1%
Daniel T. Hendrix................................................................ Class A 2,030(11) * *
Class B 193,228(11) 3.0%
June M. Henton................................................................... Class B 29,000(12) * *
J. Smith Lanier, II.............................................................. Class A 21,000(13) * *
300 West Tenth Street Class B 329,648(13) 5.0%
West Point, Georgia 31833
Thomas R. Oliver................................................................. Class A 13,350(14) *
Leonard G. Saulter............................................................... Class A 6,000(15) * *
Class B 32,000(15) *
Clarinus C.Th. van Andel......................................................... Class B 82,000(16) 1.2% *
John H. Walker................................................................... Class A 3,000 * *
Class B 133,556(17) 2.0%
John R. Wells.................................................................... Class A 1,258(18) * *
Class B 150,236(18) 2.3%
Gordon D. Whitener............................................................... Class A 367(19) * *
Class B 217,968(19) 3.3%
All executive officers and directors............................................. Class A 71,392(20) * 10.9%
as a group (19 persons) Class B 5,600,363(20) 75.4%
</TABLE>
- ------------------------
* Less than 1%.
6
<PAGE>
(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 beneficially owned by such person or group into
Class A shares.
(3) Includes 8,000 Class A shares held by Mr. Anderson's wife, although Mr.
Anderson disclaims beneficial ownership of such shares. Includes 13,274
Class A shares that Mr. Anderson beneficially owns through the Company's
Savings and Investment Plan. All Savings and Investment Plan information
included in the above table is as of December 31, 1998. Includes 8,000 Class
B shares that Mr. Anderson has the right to acquire pursuant to exercisable
stock options.
(4) Based upon information included in statements provided to the Company by
such beneficial owners. Information with respect to David L. Babson & Co.,
Inc. is as of December 31, 1998.
(5) All such shares are held by Ariel Capital Management, Inc. ("Ariel") for the
accounts of clients. Ariel disclaims beneficial ownership of all such
shares. Ariel, in its capacity as investment adviser, has sole voting and
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) All such shares are held by David L. Babson & Co., Inc. ("Babson"), an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940. Babson, in its capacity as investment adviser, has sole voting
and investment power with respect to all such shares.
(7) Includes 70,300 restricted shares, and 95,826 shares that may be acquired by
Mr. DeMoura pursuant to exercisable stock options.
(8) All such shares may be acquired by Ms. Dillon-Ridgley pursuant to
exercisable stock options.
(9) All such Class A shares are beneficially owned by Mr. Eitel pursuant to the
Company's Savings and Investment Plan. Includes 208,059 restricted Class B
shares and 143,300 Class B shares that Mr. Eitel has the right to acquire
pursuant to exercisable stock options.
(10) All such Class A shares are held by Mr. Gable as custodian for his son.
Includes 32,000 Class B shares that Mr. Gable has the right to acquire
pursuant to exercisable stock options.
(11) All such Class A shares are beneficially owned by Mr. Hendrix pursuant to
the Company's Savings and Investment Plan. Includes 136,068 restricted Class
B shares, and 9,900 Class B shares that Mr. Hendrix has the right to acquire
pursuant to exercisable stock options.
(12) Includes 27,000 shares that Dr. Henton has the right to acquire pursuant to
exercisable stock options.
(13) Includes 400 Class A shares and 157,004 Class B shares held by Mr. Lanier's
wife, and 32,000 Class B shares Mr. Lanier has the right to acquire pursuant
to exercisable stock options. Mr. Lanier disclaims beneficial ownership of
the shares owned by his wife.
(14) Includes 1,350 shares held by Mr. Oliver's sons, of which Mr. Oliver
disclaims beneficial ownership.
(15) All such Class A shares are held by Mr. Saulter's wife, and Mr. Saulter
disclaims beneficial ownership of such shares. All such Class B shares may
be acquired by Mr. Saulter pursuant to exercisable stock options.
7
<PAGE>
(16) Includes 28,000 shares that may be acquired by Mr. van Andel pursuant to
exercisable stock options.
(17) Includes 70,330 restricted shares, and 47,826 shares that may be acquired
by Mr. Walker pursuant to exercisable stock options.
(18) All such Class A shares are beneficially owned by Mr. Wells pursuant to the
Company's Savings and Investment Plan. Includes 74,410 restricted Class B
shares, and 67,826 Class B shares that may be acquired by Mr. Wells pursuant
to exercisable stock options.
(19) All such Class A shares are beneficially owned by Mr. Whitener pursuant to
the Company's Savings and Investment Plan. Includes 136,068 restricted Class
B shares, and 81,900 Class B shares that may be acquired by Mr. Whitener
pursuant to exercisable stock options.
(20) Includes 19,252 Class A shares that are beneficially owned by certain
executive officers pursuant to the Company's Savings and Investment Plan.
Includes 921,847 restricted Class B shares, and 890,168 Class B shares that
all executive officers and directors as a group have the right to acquire
pursuant to exercisable stock options.
8
<PAGE>
EXECUTIVE COMPENSATION AND RELATED ITEMS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth certain information for each of the last
three fiscal years of the Company 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 1998 (referred to herein as the "named executive
officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
AWARDS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OTHER RESTRICTED SECURITIES ALL
($) ($) ANNUAL STOCK UNDERLYING OTHER
COMPENSATION AWARDS OPTIONS COMPENSATION
($) ($)(1) (#)(2) ($)
Ray C. Anderson............... 1998 541,667 521,270 N/A(3) -0- -0- 175,000(4)
Chairman and 1997 472,500 484,924 N/A(3) -0- -0- 2,000(4)
Chief Executive 1996 377,500 364,282 N/A(3) -0- -0- 1,900(4)
Officer
Charles R. Eitel.............. 1998 461,667 754,670(5) N/A(3) 662,681 15,300 46,791(4)
President and 1997 407,500 742,665(5) N/A(3) 877,838 30,600 46,791(4)
Chief Operating 1996 359,218 375,029 N/A(3) -0- 80,000 1,900(4)
Officer
Gordon D. Whitener............ 1998 354,167 492,039(5) N/A(3) 428,794 9,900 40,128(4)
Senior Vice President 1997 312,500 442,562(5) N/A(3) 568,013 19,800 40,128(4)
(Subsidiary President) 1996 268,750 282,033 N/A(3) -0- -0- 1,900(4)
Daniel T. Hendrix............. 1998 286,000 382,008(5) N/A(3) 428,794 9,900 74,032(4)
Senior Vice President and 1997 253,750 385,761(5) N/A(3) 568,013 19,800 74,032(4)
Chief Financial Officer 1996 232,500 199,924 N/A(3) -0- -0- 1,900(4)
John R. Wells................. 1998 260,833 275,031 N/A(3) 228,517 15,824 2,000(4)
Vice President 1997 240,000 261,908 N/A(3) 302,634 31,652 2,000(4)
(Subsidiary President) 1996 215,000 232,721 N/A(3) -0- -0- 1,900(4)
</TABLE>
(1) Represents the dollar value of restricted stock awarded to the named
executive officer (calculated by multiplying the number of shares awarded,
by the closing price of the Company's Class A Common Stock as reported by
the Nasdaq National Market on the date of grant). As of December 31, 1998,
an aggregate of 611,284 shares of restricted stock were held by various
executive officers of the Company and its subsidiaries, with an aggregate
value of $5.69 million (based on the closing price of the Company's Class A
Common Stock as reported on the Nasdaq National Market on such date). If the
price of the Company's Class A Common Stock has appreciated 15% per annum as
of the second anniversary of the grant date, one-third of each award of
restricted stock disclosed in the above Summary Compensation Table will vest
as of such date. Dividends are paid on awards of restricted stock from the
date of grant.
(2) Retroactively adjusted to reflect a two-for-one stock split on June 15,
1998.
(3) Amount does not exceed the lesser of $50,000 or 10% of the salary/bonus paid
to such individual.
9
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(4) Includes the Company's matching contribution under the Company's Savings and
Investment Plan and/or its Nonqualified Savings Plan. Also includes, in the
case of Messrs. Anderson, Eitel, Hendrix and Whitener, the dollar value of
the annual premiums paid by the Company under certain life insurance
policies pursuant to split dollar insurance agreements with such officers.
(5) Includes an extraordinary bonus in the amount of $300,000 for Mr. Eitel and
$100,000 for each of Messrs. Whitener and Hendrix. See "Employment
Agreements" below.
COMPENSATION PURSUANT TO CERTAIN PLANS
PENSION PLANS. The Company previously maintained a tax-qualified,
noncontributory pension plan (the "Pension Plan") for the benefit of its
employees and the employees of all U.S. subsidiaries except Interface Fabrics
and Bentley Mills, Inc. In 1998, the Pension Plan was terminated and benefits
were distributed to participants. In connection withh terminating the Pension
Plan, the Company has added a profit-sharing component to its Savings and
Investment Plan.
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 employ of the Company by
providing them with retirement, disability and death benefits in addition to
those which they may receive under the Company's other benefit programs. The
Salary Continuation Plan entitles participants to (i) retirement benefits upon
retirement at age 65 (or early retirement at age 55) 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
under the death benefit feature; (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 up to 10 years.
Benefits are determined according to one of three formulas contained in the
Salary Continuation Plan. The Salary Continuation Plan is administered by the
Compensation Committee, which has full discretion in choosing participants and
the benefit formula applicable to each. The Company's obligations under the
Salary Continuation Plan are currently unfunded (although the Company uses
insurance instruments to hedge its exposure thereunder); however, the Company is
required to contribute the present value of its obligations thereunder to an
irrevocable grantor trust in the event of a "Change in Control" (as such term is
defined in the Salary Continuation Plan).
STOCK OPTION GRANTS
The following table sets forth information with respect to options granted
to the named executive officers during fiscal 1998.
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OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
INDIVIDUAL GRANTS
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL RATES
OF STOCK PRICE
NUMBER OF
SECURITIES PERCENT OF
UNDERLYING TOTAL OPTIONS EXERCISE
OPTIONS GRANTED TO PRICE APPRECIATION
GRANTED EMPLOYEES IN (PER SHARE) EXPIRATION FOR OPTION TERM (3)
NAME (1)(2) 1998 (1) DATE 10%
5%
Ray C. Anderson........ 0 -- -- -- -- --
Charles R. Eitel....... 15,300 2.9% $ 14.4375 1/6/08 $ 138,924 $ 352,053
Gordon D. Whitener..... 9,900 1.9% $ 14.4375 1/6/08 $89,892 $ 227,799
Daniel T. Hendrix...... 9,900 1.9% $ 14.4375 1/6/08 $89,892 $ 227,799
John R. Wells.......... 15,824 3.0% $ 14.4375 1/6/08 $ 143,682 $ 364,110
</TABLE>
(1) Retroactively adjusted to reflect a two-for-one stock split on June 15,
1998.
(2) All options were granted at an exercise price equal to the fair market value
of the Class A Common Stock on the date of grant. These options vest ratably
over a period of five years.
(3) These amounts represent certain assumed rates of appreciation only. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Class A Common Stock and overall market conditions. The
amounts reflected in this table may not necessarily be achieved.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth, for each of the named executive officers,
(i) the number of shares of Common Stock received upon exercise of options, (ii)
the aggregate dollar value received upon exercise, (iii) the number of options
held at fiscal year-end, and (iv) the value of such options at fiscal year-end.
OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT FISCAL AT FISCAL
ACQUIRED YEAR-END (#) YEAR-END ($)
ON VALUE
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
Ray C. Anderson...................... 24,000 $ 264,000 8,000/8,000 29,000/29,000(1)
Charles R. Eitel..................... 60,000 (2) $ 717,200 145,180/126,055 547,500/142,917(1)
Gordon D. Whitener................... -- -- 75,960/51,275 199,500/35,980(1)
Daniel T. Hendrix.................... 20,000 (2) $ 257,500 3,960/43,275 0/5,480(1)
John R. Wells........................ -- -- 58,330/87,236 114,000/62,403(1)
</TABLE>
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(1) Aggregate market value of the shares issuable upon exercise of the options
(based on December 31, 1998 closing price for Class A Common Stock of
$9.3125 per share), less the aggregate exercise price payable by the named
executive officer.
(2) Retroactively adjusted, as necessary, to reflect a two-for-one stock split
on June 15, 1998.
EMPLOYMENT AGREEMENTS
In April 1997, the Company entered into employment agreements with each of
the named executive officers and certain other executive officers of the
Company, appointing them to their current respective positions. (The employment
agreements amend and restate the prior employment agreements of executive
officers who had previously entered into an employment agreement with the
Company.) The agreements are substantially similar, except for such differences
as are noted below. Each of Messrs. Eitel's, Whitener's and Hendrix's agreement
runs for an initial term of five years and thereafter for a rolling two year
term, such that the remaining term is always two years; provided, that, each
agreement automatically terminates on the officer's 65th birthday. Each of
Messrs. Anderson's and Wells' agreement is for a rolling two year term such that
the remaining term is always two years; provided, that, each agreement
automatically terminates on the officer's 65th birthday. The Company may
terminate any of such agreements upon two years' notice, except that, in the
case of Messrs. Eitel, Whitener and Hendrix, such notice may only be given after
the third anniversary of the date of the agreement. Each of Messrs. Eitel,
Whitener and Hendrix are entitled under their agreement to receive an
extraordinary annual bonus of up to $300,000, $100,000 and $100,000,
respectively, in each of the initial five years of the employment agreements if
certain performance criteria and targets are achieved.
In the event that the Company terminates an officer's employment without
just cause, the officer will be entitled to continue to receive his salary and
bonus, and participate in certain employee benefit plans, for the remainder of
the term of the agreement. The officer will also immediately vest in all
unvested employee stock options, and a percentage of unvested restricted stock
awards (as specified in the applicable restricted stock agreement). The
employment agreements also contain provisions placing restrictions on the
officer's ability to compete with the Company following the termination of the
agreement.
CHANGE IN CONTROL AGREEMENTS
In April 1997, each of the named executive officers and certain other
executive officers of the Company entered into substantially similar "change in
control agreements" with the Company. (The agreements amend and restate the
prior agreements of executive officers who had previously entered into a change
in control agreement with the Company.) The agreements provide for certain
benefits in the event of a termination of employment under certain circumstances
in connection with a "Change in Control" (as defined in the agreements) of the
Company. In general, each agreement provides benefits to the officer upon an
"Involuntary Termination" (essentially, termination without cause) or a
"Voluntary Termination" (essentially, resignation in the face of coercive
tactics) occurring within 24 months after or six months prior to the date of a
change in control. Upon any such termination, the officer will be entitled to
receive the following benefits: (i) the officer's then-current salary, for the
balance of the term, paid in a lump sum discounted to present value; (ii) bonus
payments for the balance of the term, paid in a lump sum discounted to present
value and based upon the bonuses received during the two years prior to the
termination, as well as a prorated bonus for the year in which employment is
terminated; (iii) continuation of health and life insurance coverage for the
balance of the term and (iv) continuation of eligibility to participate in
Company retirement plans for the balance of the term, or the provision of
comparable benefits. (In addition, the officer will immediately vest in all
unvested employee stock options and restricted stock awards in the event of a
Change in Control.) Benefits paid under the change in control agreements will be
reduced by the compensation and benefits, if any, paid to an officer pursuant to
his employment agreement with the Company. If the payment of any such benefits
would result in the
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imposition of an excise tax under Section 4999 of the Internal Revenue Code, the
officer is entitled to receive a "gross-up" payment to cover the amount of the
excise taxes and any related taxes on the gross-up payment.
Each of Messrs. Eitel's, Whitener's and Hendrix's agreement runs for an
initial term of five years and thereafter for a rolling two year term, such that
the remaining term is always two years; provided, that, each agreement
automatically terminates on the officer's 65th birthday. Each of Messrs.
Anderson's and Wells' agreement is for a rolling two year term such that the
remaining term is always two years; provided, that, each agreement automatically
terminates on the officer's 65th birthday. The Company generally may terminate
any of such agreements upon two years' notice, except that, in the case of
Messrs. Eitel, Whitener and Hendrix, such notice may only be given after the
third anniversary of the date of the agreement.
COMPENSATION OF DIRECTORS
The Company has a policy pursuant to which non-employee directors ("outside
directors") are paid annual directors' fees of $25,000, plus $1,000 for each
Board or committee meeting attended.
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 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served on the Compensation Committee of the Board of
Directors until December 1, 1998: Ray C. Anderson, Carl I. Gable and J. Smith
Lanier, II. Mr. Anderson is the Chairman and Chief Executive Officer of the
Company. Mr. Gable served as President of the Company from March 1984 until June
1985.
During 1998, the Company paid premiums to J. Smith Lanier & Co., an
insurance agency, of approximately $4,303,000 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
The law firm with which Carl I. Gable, a director of the Company, was
previously associated rendered certain legal services to the Company during
fiscal 1998.
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 current members of the Compensation Committee are June M. Henton
and Thomas R. Oliver (Chair), both of whom are outside directors. Until December
1, 1998, the Committee was composed of Ray C. Anderson, the Company's Chairman
and Chief Executive Officer, Carl I. Gable and J. Smith Lanier, II.
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 and restricted stock
incentives. Under the program, a substantial portion of an executive's
compensation is directly linked to the
13
<PAGE>
Company's financial performance and the interests of shareholders. The Committee
strives to administer the program to present total compensation packages for
senior executives of the Company that are commensurate with the responsibilities
undertaken by the executives, and that are competitive with packages offered by
comparable companies.
The Company periodically engages a nationally recognized consulting firm to
assist it in developing appropriate compensation packages for senior executives.
Information concerning compensation offered by other employers in the industry,
as well as other publicly traded companies similar in size and growth rate to
the Company, is considered as one of several factors in developing such
compensation packages. The Committee generally targets the third quartile of the
comparator group in developing compensation packages for senior executives as a
group, but, for fiscal 1998, made no specific determinations to set the
compensation level for individual executives to correspond to the high, median
or low end of such comparative data. Certain of the companies considered from
time to time are included in the companies comprising the "self-determined peer
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 Committee has
elected to defer consideration regarding the granting of raises in base salary
to the Company's senior executives until mid-1999, as a result of recent
economic conditions in the Company's principal markets.
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. For fiscal 1998, 65% to 90% of each executive
officer's bonus potential was 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.
For the senior executives of the Company who are directly accountable for
the profitability of subsidiaries or business groups, financial objectives for
1998 focused on: (i) operating income for operations managed, (ii) VBM
(value-based management) for operations managed, (iii) reduction of off-quality
and waste (under the Company's QUEST program initiated in January 1995) for
operations managed, and (iv) earnings per share. Typical relative weights
assigned to these financial objectives were 50%, 15%, 15% and 10%, respectively.
Nonfinancial 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,
synergistic cooperation with affiliated companies, technological advancements,
quality control measures and employee relations.
Mr. Anderson's financial objectives for 1998 (90% weight) were based on: (i)
operating income, (ii) VBM, (iii) reduction of off-quality and waste for
operations, and (iv) earnings per share. Relative weights assigned to such
financial objectives were 50%, 15%, 15% and 10%, respectively. Mr. Anderson's
nonfinancial objectives for 1998 (10% weight) focused on defining and advancing
overall corporate strategy (including strategic acquisitions and investments,
the Company's environmental and ecological initiatives, and senior management
changes and 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 98% of target levels for his bonus
objectives in 1998.
During the fourth quarter of 1998, the Company recorded a pre-tax
restructuring charge of $25.3 million related to plant closures and
consolidations, headcount reduction and the write-down and disposal of
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<PAGE>
certain assets. Components of the restructuring charge which were determined by
the Committee to be within management's control have been factored into the
calculation of 1998 bonuses.
STOCK OPTIONS AND RESTRICTED STOCK. The Company also utilizes grants of
stock options and restricted stock awards to its executives to strengthen the
mutuality of interests between the Company's senior management and shareholders.
Awards in recent years have been based on a long-term incentive stock program
developed with the assistance of a nationally recognized consulting firm and
adopted in January 1997.
Stock options and restricted stock awards help to retain and motivate
executives. 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 such
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.
Similarly, restricted stock awards increase in value as the market price of
the Company's stock rises. Such awards also vest over a period of multiple
years; the executive generally must remain employed with the Company for a
period of nine years from the date of grant to completely vest in an award. The
Committee believes stability of quality management and a proper focus on
long-term Company objectives provide for enduring shareholder value. Each of the
named executive officers holds stock options and restricted stock. Information
concerning awards of stock options and restricted stock to the named executive
officers in 1998 is shown in the Summary Compensation Table and the "Option
Grants in Last Fiscal Year" table above.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held corporations for compensation in excess of $1,000,000
in any taxable year that is paid to the corporation's chief executive officer or
any of the four other most highly compensated executive officers. In 1998, with
the exception of Messrs. Anderson and Eitel, no executive officer of the Company
received more than $1,000,000 in compensation. Certain performance-based
compensation, however, is not subject to the limit on deductibility imposed by
Section 162(m). The Company is seeking shareholder approval of its Executive
Bonus Plan in order for that component of executive compensation to qualify in
the future for deductibility under Section 162(m). See "Item II--Approval of the
Executive Bonus Plan", below.
The foregoing policies and programs are subject to change as the Committee
deems necessary from time to time to respond to economic conditions, meet
competitive standards and serve the objectives of the Company and its
shareholders.
THE COMPENSATION COMMITTEE
June M. Henton
Thomas R. Oliver
15
<PAGE>
PERFORMANCE GRAPH
The following graph compares, for the five year period ended January 3,
1999, the Company's total return to shareholders (stock price increase plus
dividends, divided by beginning stock price) with that of (i) all U.S. companies
listed on Nasdaq and (ii) a self-determined peer group comprised of companies in
the commercial interiors industry.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS ($)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ STOCK
<S> <C> <C> <C>
Interface,
Inc. Market (U.S. Companies) Self-Determined Peer Group
1/2/94 $100.000 $100.000 $100.000
1/1/95 $82.685 $97.752 $69.349
12/31/95 $115.446 $138.256 $85.618
12/29/96 $132.973 $170.223 $104.376
12/28/97 $201.089 $200.754 $134.856
1/3/99 $130.807 $293.209 $160.868
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1/2/94 1/1/95 12/31/95 12/29/96 12/28/97 1/3/99
Interface, Inc. 100.0 82.7 115.4 133.0 201.1 130.8
Nasdaq Stock Market (U.S. Companies) 100.0 97.8 138.3 170.2 200.8 293.2
Self-Determined Peer Group 100.0 69.3 85.6 104.4 134.9 160.9
</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 1/2/94.
E. The Company's fiscal year ends on the Sunday nearest December 31.
F. The following companies are included in the self-determined peer group:
Applied Power, Inc.; Armstrong World Industries, Inc.; B/E Aerospace, Inc.;
Hon Industries, Inc.; Herman Miller, Inc.; Kimball International, Inc.;
Mohawk Industries, Inc.; Shaw Industries, Inc.; and USG Corp.
G. For 1998, the Company elected to use a self-determined peer group rather than
the "textile mill products" published index which it had used in prior
years. The Company believes that the self-determined peer group more
accurately represents the commercial interiors industry in which the Company
competes. In contrast, the textile index is heavily weighted in favor of
traditional textile manufacturers and/or companies manufacturing products
for residential markets. Set forth below is a tabular comparison of the
Company's performance as compared to the textile index:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1/2/94 1/1/95 12/31/95 12/29/96 12/28/97 1/3/99
Interface, Inc. 100.00 82.7 115.4 133.0 201.1 130.8
Nasdaq stocks--Textile Mill Products 100.00 71.1 82.3 108.2 154.7 156.6
</TABLE>
16
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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during 1998. 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
13 times during 1998. With certain limited exceptions, the Executive Committee
may exercise all the power and authority of the Board of Directors in the
management of the business and affairs of the Company.
Until December 1, 1998, Messrs. Anderson, Gable and Lanier also served as
the members of the Board's Compensation Committee. The current members of the
Compensation Committee are Dr. June M. Henton and Mr. Thomas R. Oliver. The
Compensation Committee met four times during 1998. The function of the
Compensation Committee is to evaluate the performance of the Company's senior
executives, determine compensation arrangements for such executives, administer
the Company's stock and other incentive plans for key employees, and review the
administration of the Company's employee benefit plans.
The Board of Directors also has an Audit Committee which, until December
1998, was composed of Mr. Gable, Dr. Henton and Leonard G. Saulter. Mr. Lanier
replaced Dr. Henton as a member of this Committee on December 1, 1998. The Audit
Committee met three times during 1998. The function of the Audit Committee is to
review and evaluate the Company's accounting and financial reporting functions
and responsibilities.
The Board of Directors also has a Nominating Committee, currently composed
of Mr. Anderson, Mr. Gable, Dr. Henton and Charles R. Eitel. The Nominating
Committee met once in 1998. The function of the Nominating Committee is to
review the qualifications of potential candidates, and to nominate candidates to
fill vacancies on the Board. The Nominating Committee will consider candidates
recommended by shareholders. Shareholder recommendations must comply with the
procedures for shareholder proposals set forth in Article II, Section 9 of the
Company's Bylaws.
APPROVAL OF THE EXECUTIVE BONUS PLAN
(ITEM 2)
On February 23, 1999, the Board of Directors adopted, subject to
shareholders' approval, the Executive Bonus Plan (the "Plan"). The Company's
shareholders are being asked to approve the Plan solely for the purpose of
ensuring that bonuses paid to the Company's chief executive officer and its four
other most highly compensated executive officers ("Section 162(m) Officers") are
fully deductible for tax purposes by the Company without regard to the
limitations of Section 162(m) of the Internal Revenue Code.
The Plan will be administered by the Compensation Committee which will have
full discretionary authority in all matters relating to the discharge of its
responsibilities and the exercise of its authority under the Plan. All decisions
of the Compensation Committee and its actions with respect to the Plan are
final, binding and conclusive.
The Compensation Committee will determine which of the Company's officers
will participate in the Plan for each fiscal year. The Compensation Committee
will specifically identify any participants who it determines are Section 162(m)
Officers with respect to each performance period. For 1999, Messrs. Anderson,
Eitel and Whitener have been designated as Section 162(m) Officers.
The Compensation Committee will grant awards under the Plan for each
performance period at such time as it deems appropriate; provided, that, awards
to Section 162(m) Officers will be made no later than 90 days after the first
day of each performance period. Potential bonuses payable under the Plan will be
17
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tied to the attainment of performance objectives, and will be stated as a
percentage of each Participant's base salary. Performance objectives will be
based on specified levels or increases in any or all of the Company's (or a
subsidiary's) operating income, cash flow, reduction of off-quality and waste,
return on equity, earnings per share, return on capital, return on assets,
value-based management, earnings before interest and taxes, sales growth, gross
margin, total earnings, earnings growth or an increase in the fair market value
of the Company's Common Stock. In addition, as to participants who are not
Section 162(m) Officers, the Committee may establish other performance goals,
including goals relating to individual performance and non-financial objectives.
The maximum potential bonus payable under the Plan to any participant for any
fiscal year is $1,750,000.
The Compensation Committee will determine the extent to which the
performance objectives for the fiscal year have been attained and determine the
actual bonus amount payable to each participant in accordance with the awards
established for the fiscal year. The Compensation Committee may not increase the
amount of a Section 162(m) Officer's bonus for any reason. Subject to the
foregoing, the Compensation Committee has the right, in its sole discretion, to
adjust the bonus payable to any participant based on individual or Company
performance factors that the Compensation Committee deems relevant. The Plan
provides for the accelerated payment of a pro rata portion of existing awards in
the event of a "Change in Control" of the Company (as such term is defined in
the Plan).
The Board of Directors has approved the Plan, and has recommended that it be
submitted to the shareholders at the annual meeting for their approval. The
Board of Directors may terminate the Plan at any time and may, from time to
time, amend the terms of the Plan; provided, however, that no such amendment
shall adversely affect any right of a Participant with respect to any award
previously made, and provided further that no amendment that requires
shareholder approval for the Plan to continue to comply with Section 162(m)
shall be effective absent shareholder approval. The Plan will terminate five
years after approval by the shareholders, unless it is again approved by the
shareholders at that time. The Board of Directors believes that the approval of
the Plan is in the Company's and shareholders' best interests. The full text of
the Plan is set forth as Appendix A to this Proxy Statement.
VOTE REQUIRED AND RECOMMENDATION OF BOARD
Under the Company's Bylaws, adoption of the Plan is approved if the
affirmative votes cast by the Company's outstanding shares 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 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 Employees' Retirement System,
Teachers' Retirement System, Police Department 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 248,223
shares of Class A Common Stock, intend to introduce at the annual meeting the
following resolution:
WHEREAS, Interface, Inc. operates a wholly-owned subsidiary in Northern
Ireland, Interface Europe, Ltd.;
WHEREAS, the ongoing peace process in Northern Ireland encourages us to
search for non-violent means for establishing justice and equality;
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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.
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 support for a violent solution to Northern Ireland's
problems.
In May 1986, a United States District Court ruled on the legality of the
MacBride Principles under the Fair Employment (Northern Ireland) Act of 1976,
and granted a preliminary injunction requiring that American Brands include a
MacBride Principles shareholder proposal in its proxy materials, stating that
"all nine of the MacBride Principles could be legally implemented by management
in its Northern Ireland
19
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facility." NYCERS V. AMERICAN BRANDS, 634 F. Supp. 1382 (S.D.N.Y., May 12,
1986). The Fair Employment (Northern Ireland) Act was amended in 1989.
An endorsement of the MacBride Principles by Interface, Inc. will
demonstrate the company's 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 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 6% 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.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the Nasdaq National Market reports of ownership and
changes in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and greater than 10% shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely upon a review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that during fiscal 1998 all filing requirements applicable to
its directors, executive officers and greater than 10% beneficial owners were
complied with.
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
BDO Seidman, LLP served as the principal independent auditors for the
Company during fiscal 1998. 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 2000
annual meeting must be received by the Company no later than December 7, 1999,
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/ Raymond S. Willoch
RAYMOND S. WILLOCH
SECRETARY
April 6, 1999
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APPENDIX A
INTERFACE, INC.
EXECUTIVE BONUS PLAN
1. PURPOSE.
The purpose of the Interface, Inc. Executive Bonus Plan is to provide bonus
compensation for selected officers of Interface, Inc. The Plan is intended to
meet the requirements for "qualified performance-based compensation" under
Section 162(m) of the Internal Revenue Code of 1986, as amended.
2. DEFINITIONS.
The following capitalized terms, as used herein, shall have the following
meanings:
(a) "Annual Base Salary" shall mean: (i) with respect to any Participant other
than a Section 162(m) Officer, the base salary paid to such Participant
during any Performance Period; and (ii) with respect to any Section 162(m)
Officer, the annual rate of base salary of such Section 162(m) Officer in
effect on the first day of any Performance Period.
(b) "Award" shall mean an annual incentive compensation award, granted pursuant
to the Plan, which is contingent upon the attainment of Performance Goals
with respect to a Performance Period.
(c) "Board" shall mean the Board of Directors of Interface.
(d) "Change in Control" shall mean the occurrence of an event described in
Section 5(d) hereof.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean a committee of the Board as described in Section 3
hereof.
(g) "Company" shall mean, collectively, Interface and its direct and indirect
subsidiaries.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(i) "Interface" shall mean Interface, Inc., a Georgia corporation.
(j) "Participant" shall mean an officer of the Company who is, pursuant to
Section 4 of the Plan, selected to participate in the Plan.
(k) "Performance Goal" shall mean the criteria and objectives, determined by the
Committee, which must be met during the applicable Performance Period as a
condition of the Participant's receipt of payment with respect to an Award.
Performance Goals may relate to attainment by the Company or a subsidiary or
business unit of specified levels or increases in any or all of the
following: (i) operating income for operations managed; (ii) cash flow for
operations managed; (iii) reduction of off-quality and waste (under the
Company's "war on waste" program initiated in January 1995); (iv) return on
equity; (v) earnings per share; (vi) return on capital; (vii) return on
assets; (viii) value-based management; (ix) earnings before interest and
taxes; (x) sales growth; (xi) gross margin; (xii) total earnings; (xiii)
earnings growth; or (xiv) increase in the fair market value of Interface's
common stock. In addition, with respect to Participants who are not Section
162(m) Officers, the Committee may establish other Performance Goals,
including goals relating to individual performances and non-financial
objectives.
(l) "Performance Period" shall mean the Company's fiscal year.
(m) "Plan" shall mean the Interface, Inc. Executive Bonus Plan.
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(n) "Section 162(m) Officer" shall mean an officer of the Company who, in the
Committee's determination made at the time of any Award, is or may become a
"covered employee" as defined in Section 162(m) of the Code and the
regulations thereunder.
3. ADMINISTRATION.
(a) GENERAL. The Plan shall be administered by the Committee. The Committee
shall have the authority in its sole discretion, subject to the express
provisions of the Plan, to administer the Plan and to exercise all the
powers and authority either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation: the authority to grant Awards; to determine the persons to whom,
and the time or times at which, Awards shall be granted; to determine the
terms, conditions, restrictions and performance criteria, including
Performance Goals, relating to any Award; to determine whether, to what
extent, and under what circumstances an Award may be settled, canceled,
forfeited, or surrendered; to construe and interpret the Plan and any Award;
to prescribe, amend and rescind rules and regulations relating to the Plan;
to determine the terms and provisions of Awards; and to make all other
determinations deemed necessary or advisable for the administration of the
Plan. All decisions, determinations and interpretations of the Committee
shall be final and binding on all persons, including the Company, the
Participant (or any person claiming any rights under the Plan from or
through any Participant) and any shareholder.
(b) MEMBERS. The Committee shall consist of two or more members of the Board,
each of whom shall be an "outside director" within the meaning of Section
162(m) of the Code. All determinations of the Committee shall be made by a
majority of its members either present in person or participating by
conference telephone at a meeting or by written consent. The Committee may
delegate to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the Committee or any
person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan.
(c) LIABILITY. No member of the Board or the Committee shall be liable for any
action taken or determination made in good faith with respect to the Plan or
any Award granted hereunder.
4. ELIGIBILITY.
The Committee shall select which officers of the Company are to participate
in the Plan for a Performance Period. In selecting the officers of the Company
who are eligible to participate in the Plan and in establishing the terms of
Awards granted to such Participants, the Committee may accept such
recommendations of the senior management of the Company as it deems appropriate.
The Committee shall specifically identify any Participants who it determines are
Section 162(m) Officers with respect to each Performance Period.
5. TERMS OF AWARDS.
(a) IN GENERAL. The Committee shall grant awards under the Plan for each
Performance Period at such time or times as it deems appropriate; provided,
Awards to Section 162(m) Officers shall be made not later than 90 days after
the first day of each Performance Period. Awards shall be expressed as a
percentage of a Participant's Annual Base Salary. The Committee shall
specify the Performance Goals applicable to each Award, as well as the
percentage of the Award assigned to each Performance Goal. The terms of an
Award may contain a range of target levels so that a Participant who fails
to achieve the maximum target level for a Performance Goal may still earn a
portion of the potential bonus related to such Performance Goal. The terms
of an Award to a Section 162(m) Officer must state an objective formula or
standard for determining the amount of compensation payable to the
Participant. The maximum amount of compensation that may be paid to any
Participant in respect of an Award for
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any Performance Year is $1,750,000. Unless otherwise provided by the
Committee in connection with the termination of employment of a Participant
due to death or disability or involuntary termination without cause prior to
the last day of a Performance Period, or except as set forth in Section 5(d)
hereof, payment in respect of Awards to a Section 162(m) Officer shall be
made only if and to the extent the Performance Goals with respect to such
Performance Period are attained and the Participant is employed by the
Company on the last day of the Performance Period. Awards granted pursuant
to the Plan shall be evidenced in the minutes of the Committee or in such
other written form as the Committee shall determine appropriate.
(b) CERTIFICATION OF PERFORMANCE CRITERIA. After the end of each Performance
Period, the Committee shall determine the extent to which the Performance
Criteria have been achieved for that Performance Period and shall approve
the compensation to be paid to each Participant. The Committee in its sole
discretion may reduce, but not increase, the amount of compensation that
otherwise would be payable under the Plan to a Section 162(m) Officer if the
Committee determines such reduction to be appropriate based on personal,
corporate or other factors that the Committee deems appropriate. With
respect to Participants other than Section 162(m) Officers, the Committee
may take into account such factors (including, without limitation,
individual job performance, the effect of unanticipated events on the
Company's financial performance or other subjective criteria) as it deems
appropriate in determining whether the Performance Criteria have been
satisfied and in determining the amount of compensation payable to any such
Participant.
(c) TIME AND FORM OF PAYMENT. Unless otherwise determined by the Committee, all
payments in respect of Awards granted under this Plan shall be made in cash
within a reasonable period after the end of the Performance Period, subject
to deferral as provided by the Committee or under any applicable deferred
compensation plan of the Company.
(d) CHANGE IN CONTROL. Notwithstanding any other provision of the Plan to the
contrary, if, while any Awards remain outstanding under the Plan, a "Change
in Control" of Interface shall occur, the Performance Period outstanding at
the time of such Change in Control shall be deemed to have been completed,
the maximum level of performance set forth under the respective Performance
Goals shall be deemed to have been attained and a pro rata portion (based on
the number of full and partial months that have elapsed with respect to such
Performance Period) of each outstanding Award granted to each Participant
for the outstanding Performance Period shall become immediately payable in
cash to each Participant.
For purposes of this Section 5(d), a Change in Control of Interface shall
occur upon the happening of the earliest to occur of the following:
(i) During such period as the holders of Interface's Class B common stock
are entitled to elect a majority of Interface's Board, the Permitted
Holders (as defined below) shall at any time fail to be the "beneficial
owners" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of
the majority of the issued and outstanding shares of the Class B common
stock;
(ii) At any time during which the holders of Interface's Class B common
stock have ceased to be entitled to elect a majority of Interface's
Board, the acquisition by any "person," entity, or "group" of
"beneficial ownership" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act, and rules promulgated thereunder) of more
than 30 percent of the outstanding capital stock entitled to vote for
the election of directors ("Voting Stock") of (A) Interface, or (B) any
corporation which is the surviving or resulting corporation, or the
transferee corporation, in a transaction described in clause (iii)(A)
or (iii)(B) immediately below;
(iii) The effective time of (A) a merger, consolidation or other business
combination of Interface with one or more corporations as a result of
which the holders of the outstanding Voting Stock of Interface
immediately prior to such merger or consolidation hold less than 51
percent of the
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Voting Stock of the surviving or resulting corporation, or (B) a
transfer of all or substantially all of the property or assets of the
Company other than to an entity of which Interface owns at least 51
percent of the Voting Stock, or (C) a plan of complete liquidation of
Interface; and
(iv) The election to the Board, without the recommendation or approval of
Ray C. Anderson if he is then serving on the Board, or, if he is not
then serving, of the incumbent Board, of the lesser of (A) four
directors, or (B) directors constituting a majority of the number of
directors of Interface then in office.
As used herein, "PERMITTED HOLDERS" shall mean the individuals listed on
Schedule 10.11 to the Second Amended and Restated Credit Agreement dated June
25, 1997, by and among Interface, certain of its subsidiaries, SunTrust Bank and
the other bank parties thereto (regardless of whether said agreement is
terminated or continues in force and effect), provided that, for purposes of
this definition, the reference to each such individual shall be deemed to
include the members of such individual's immediate family, such individual's
estate, and any trusts created by such individual for the benefit of members of
such individual's immediate family.
6. GENERAL PROVISIONS.
(a) NONTRANSFERABILITY. Awards shall not be transferable by a Participant except
by will or the laws of descent and distribution.
(b) NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or in any Award or
other agreement entered into pursuant hereto shall confer upon any
Participant the right to continue in the employ of the company or to be
entitled to any remuneration or benefits not set forth in the Plan or such
other agreement or to interfere with or limit in any way the right of the
Company to terminate such Participant's employment.
(c) WITHHOLDING TAXES. The Company shall have the right to withhold the amount
of any taxes that the Company may be required to withhold before delivery of
payment of an Award to the Participant or other person entitled to such
payment, or to make such other arrangements for the withholding of taxes
that the Company deems satisfactory.
(d) AMENDMENT, TERMINATION AND DURATION OF THE PLAN. The Board or the Committee
may at any time and from time to time alter, amend, suspend, or terminate
the Plan in whole or in part; provided that, no amendment that requires
shareholder approval in order for the Plan to continue to comply with Code
Section 162(m) shall be effective unless the same shall be approved by the
requisite vote of the shareholders of the Company. Notwithstanding the
foregoing, no amendment shall affect adversely any of the rights of any
Participant, without such Participant's consent, under any Award theretofore
granted under the Plan. To the extent then required under Section 162(m) of
the Code, the Plan shall again be submitted to the shareholders of the
Company for approval no later than the first shareholder meeting that occurs
in the fifth year following the year in which the shareholders first approve
the Plan, and the Plan shall terminate if such approval is not obtained.
(e) PARTICIPANT RIGHTS. No Participant shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment
for Participants.
(f) GOVERNING LAW. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Georgia
without giving effect to the conflict of laws principles thereof.
(g) EFFECTIVE DATE. The Plan shall take effect upon its adoption by the Board;
provided, however, that the Plan shall be subject to the requisite approval
of the shareholders of the Company to the extent required under Section
162(m) of the Code. In the absence of such approval, any Award theretofore
granted to a Section 162(m) Officer under the Plan shall be null and void.
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(h) BENEFICIARY. A Participant may file with the Committee a written designation
of a beneficiary on such form as may be prescribed by the Committee and may,
from time to time, amend or revoke such designation. If no designated
beneficiary survives the Participant, the Participant's estate shall be
deemed to be the grantee's beneficiary.
(i) INTERPRETATION. The Plan is designed and intended to comply, to the extent
applicable, with the requirements for qualified performance-based
compensation under Section 162(m) of the Code, and all applicable provisions
hereof shall be construed in a manner to so comply.
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<PAGE>
CLASS A COMMON STOCK
INTERFACE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1999 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, 1999, and any
adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 1 AND PROPOSAL 2, AND
"AGAINST" PROPOSAL 3, AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN
THE SPACE PROVIDED, THIS PROXY WILL BE SO VOTED.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Please sign and date this Proxy exactly as name appears. NOTE: When signing
as an attorney, trustee, administrator or guardian, please give your
title as such. In the cases of joint tenants, each joint owner must sign.
-------------------------------------------------------------------------
<PAGE>
<TABLE>
<C> <S> <C> <C> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION OF THE LISTED NOMINEES.
1. Election of Directors.
CLASS A COMMON STOCK DIANNE DILLON-RIDGLEY; CARL I. GABLE; JUNE M. FOR ALL
INTERFACE, INC. HENTON; J SMITH LANIER, II; THOMAS R. OLIVER; AND FOR ALL NOMINEES
CLARINUS C. TH. VAN ANDEL. NOMINEES WITHHOLD EXCEPT
(INSTRUCTION: To withhold authority to vote for / / / / / /
any individual nominee, mark the "For All Except"
box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the
remaining member(s).
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" FOR AGAINST ABSTAIN
PROPOSAL 2.
2. Proposal to approve the Company's Executive
Bonus Plan.
/ / / / / /
CONTROL NUMBER:
RECORD DATE SHARES:
THE BOARD OF DIRECTORS FAVORS A VOTE "AGAINST" FOR AGAINST ABSTAIN
PROPOSAL 3.
3. Proposal submitted by two shareholders
requesting implementation of the MacBride
Principles.
/ / / / / /
4. In accordance with their best judgment, with respect to any other matters that
may properly come before the meeting.
</TABLE>
<TABLE>
<C> <S> <C>
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
</TABLE>
DETACH CARD DETACH CARD
<PAGE>
CLASS B COMMON STOCK
INTERFACE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
1999 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, 1999, and any
adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 1 AND PROPOSAL 2, AND
"AGAINST" PROPOSAL 3, AND, UNLESS INSTRUCTIONS TO THE CONTRARY ARE INDICATED IN
THE SPACE PROVIDED, THIS PROXY WILL BE SO VOTED.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Please sign and date 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.
-------------------------------------------------------------------------
<PAGE>
<TABLE>
<C> <S> <C> <C> <C>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION OF THE LISTED NOMINEES.
1. Election of Directors.
CLASS B COMMON STOCK RAY C. ANDERSON, BRIAN L. DEMOURA, CHARLES R. FOR ALL
INTERFACE, INC. EITEL, DANIEL T. HENDRIX, LEONARD G. SAULTER, JOHN FOR ALL NOMINEES
H. WALKER and GORDON D. WHITENER. NOMINEES WITHHOLD EXCEPT
INSTRUCTION: To withhold authority to vote for any / / / / / /
individual nominee, mark the "For All Except" box
and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the
remaining nominee(s).
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" FOR AGAINST ABSTAIN
PROPOSAL 2.
2. Proposal to approve the Company's Executive
Bonus Plan.
/ / / / / /
CONTROL NUMBER:
RECORD DATE SHARES:
THE BOARD OF DIRECTORS FAVORS A VOTE "AGAINST" FOR AGAINST ABSTAIN
PROPOSAL 3.
3. Proposal submitted by two shareholders
requesting implementation of the MacBride
Principles.
/ / / / / /
4. In accordance with their best judgment, with respect to any other matters that
may properly come before the meeting.
</TABLE>
<TABLE>
<C> <S> <C>
Please be sure to sign and date this Proxy. Date
Shareholder sign here Co-owner sign here
</TABLE>
DETACH CARD DETACH CARD
