Exhibit 99.2
SENIOR OFFICER
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INTERFACE, INC.
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "Agreement") is entered into as of
the ___ day of _______________, 20___, by and between INTERFACE, INC. (the
"Company") and __________________ ("Grantee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the Interface, Inc. Omnibus Stock
Incentive Plan (the "Plan") which is administered by a committee appointed by
the Company's Board of Directors (the "Committee"); and
WHEREAS, the Committee has granted to Grantee an award of Restricted
Shares under the terms of the Plan (the "Award") to encourage Grantee's
continued loyalty and diligence; and
WHEREAS, to comply with the terms of the Plan and to further the
interests of the Company and Grantee, the parties hereto have set forth the
terms of the Award in writing in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. PLAN PROVISIONS.
In addition to the terms and conditions set forth herein, the
Award is subject to and governed by the terms and conditions set forth in the
Plan, which are hereby incorporated herein by reference. Any terms used herein
with an initial capital letter shall have the same meaning as provided in the
Plan, unless otherwise specified herein. In the event of any conflict between
the provisions of this Agreement and the Plan, the Plan shall control.
2. STOCK AWARD.
Effective on ______________, 20___ (the "Grant Date"), and
subject to the restrictions and other conditions set forth herein, the Committee
granted to Grantee an Award of ______ Shares of the Class B common stock, $.10
par value per share, of the Company; provided, however, that if all of the
outstanding Class B Shares of the Company are converted into Class A Shares,
then Class A Shares shall be substituted for the Class B Shares granted
hereunder. Such Shares granted are hereinafter sometimes referred to as the
"Restricted Shares." The Fair Market Value of each Restricted Share on the Grant
Date was $______.
3. VESTING RESTRICTIONS.
(a) GENERAL. The Restricted Shares will vest and no longer be subject to
forfeiture if one of several criteria is satisfied. As described below, these
criteria are based on increasing the Company's annual earnings before interest
and taxes (hereinafter, "Company EBIT") [Note that performance criteria for
certain executives is based on division or business unit EBIT], Grantee's tenure
of employment, the occurrence of a Change in Control (as defined in subsection
(d) hereof), and/or the Company's termination, without Cause (as defined in
Section 3(f) below), of Grantee's employment with the Company.
(b) PERFORMANCE CRITERIA. For purposes of applying the performance
criteria to determine when Grantee's Restricted Shares will vest, the Restricted
Shares are divided into two groups, "Group A" and "Group B", each with an equal
number of ______ Shares. The Restricted Shares in each of Group A and Group B
will vest if and when the following performance criteria are satisfied:
GROUP A. If on any date on or after the one-year anniversary of
the Grant Date, (i) Grantee has remained continuously employed by the
Company or any of its Subsidiaries, (ii) Grantee has not yet vested in
the Shares in Group A, and (iii) the Company EBIT has increased to or
exceeded the applicable Target Level (as defined below), the vesting
restriction on the Shares in Group A will lapse immediately upon such
date, and Grantee thereupon will become vested in all of the Shares in
Group A.
GROUP B. If on any date on or after the two-year anniversary of
the Grant Date, (i) Grantee has remained continuously employed by the
Company or any of its Subsidiaries, (ii) Grantee has not yet vested in
the Shares in Group B, and (iii) the Company EBIT has increased to or
exceeded the applicable Target Level (as defined below), the vesting
restriction on the Shares in Group B will lapse immediately upon such
date, and Grantee thereupon will become vested in all of the Shares in
Group B.
As used herein "Target Level" shall mean, with respect to a particular
anniversary of the Grant Date (or as soon thereafter as the Company can
calculate and confirm the results), Company EBIT for the fiscal year then ended,
as set forth below (note that the Company reserves the right to "normalize" the
EBIT results to account for currency fluctuations, and to modify the EBIT Target
Levels based on the results of the fiscal 20____ year-end audit):
ANNIVERSARY FISCAL YEAR ENDED EBIT TARGET LEVEL
1 20__ $______________
2 20__ $______________
3 20__ $______________
4 20__ $______________
5 20__ $______________
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(c) TENURE OF EMPLOYMENT. If Grantee remains continuously employed by
the Company or any of its Subsidiaries until the five-year anniversary of the
Grant Date, 75 percent of the Restricted Shares (whether Group A or B) that have
not yet vested will do so on said date, and Grantee thereupon will become vested
in such Restricted Shares (and the balance of the Restricted Shares that have
not yet vested will be forfeited).
(d) CHANGE IN CONTROL. If a Change in Control (as defined below) occurs,
any Restricted Shares (whether Group A or B) that have not yet vested will do so
on the date of the Change in Control, and Grantee thereupon will become vested
in all such Restricted Shares. For purposes hereof:
(w) "CHANGE IN CONTROL" shall mean the earliest to occur of:
(i) during such period as the holders of the Company's Class B
common stock are entitled to elect a majority of the Company's Board of
Directors, 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 Securities Exchange Act of 1934) of a majority of the issued
and outstanding shares of the Company's Class B common stock;
(ii) at any time during which the holders of the Company's Class
B common stock have ceased to be entitled to elect a majority of the
Company's Board of Directors, 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 Securities Exchange Act of 1934, 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) the Company, 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 the Company with one or more corporations as a
result of which the holders of the outstanding Voting Stock of the
Company immediately prior to such merger or consolidation hold less than
51 percent of the 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 the
Company owns at least 51 percent of the Voting Stock, or (C) a plan of
complete liquidation of the Company; and
(iv) the election to the Board of Directors of the Company,
without the recommendation or approval of Xxx X. Xxxxxxxx if he is then
serving on the Board of Directors, or, if he is not then serving, of the
incumbent Board of Directors of the Company, of the lesser of (A) four
directors, or (B) directors constituting a majority of the number of
directors of the Company then in office.
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(x) "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 the Company, certain of its subsidiaries,
SunTrust Bank and the other banks 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.
(e) PARTIAL VESTING UPON CERTAIN EVENTS OF TERMINATION. Upon the date
that Grantee's employment with the Company and its Subsidiaries terminates as a
result of (i) an involuntary termination at the request of the Company (or the
Subsidiary that is Grantee's employer) for any reason other than Cause (as
defined in subsection (f)(i) hereof), (ii) Grantee's Disability (as defined in
subsection (f)(ii) hereof), (iii) Grantee's death, or (iv) Grantee's retirement
upon or after attaining age 65, a portion of the Restricted Shares that have not
yet vested will do so on such date, and Grantee thereupon will become vested in
such portion of the Restricted Shares. The portion of Restricted Shares that
shall vest will be equal to the product of (x) 75 percent of the Restricted
Shares granted hereunder that have not yet vested pursuant to the performance
criteria; and (y) a fraction, the numerator of which is the number of full and
partial 12-month periods that have elapsed since the Grant Date (with any
partial 12-month period treated as a whole 12-month period), and the denominator
of which is five.
(f) CAUSE AND DISABILITY. As used herein, the following terms shall
have the meanings ascribed to such terms as set forth below:
(i) CAUSE. The term "Cause" shall mean the reason for
termination of Grantee's employment is (A) Grantee's fraud, dishonesty, gross
negligence or willful misconduct, with respect to business affairs of the
Company or its Subsidiaries, (B) Grantee's refusal or repeated failure to follow
the established lawful policies of the Company or its Subsidiaries applicable to
persons occupying the same or similar positions, or (C) Grantee's conviction of
a felony or other crime involving moral turpitude.
(ii) DISABILITY. The term "Disability" shall mean Grantee's
inability, as a result of physical or mental incapacity, to substantially
perform Grantee's duties for the Company and its Subsidiaries on a full-time
basis for a continuous period of six months. The Committee, in its sole
discretion, shall make all determinations as to whether or not Grantee has
incurred a Disability, and the Committee's determination shall be final and
binding.
4. FORFEITURE UPON RESIGNATION OR TERMINATION FOR CAUSE.
If Grantee voluntarily resigns from employment with the Company
and all of its Subsidiaries, or if the Company or the Subsidiary that is
Grantee's
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employer terminates Grantee's employment for Cause (as defined in Section
3(f)(i) above), any Restricted Shares that are not then vested under any
provision of Section 3 shall be immediately forfeited, and Grantee shall have no
rights in such Restricted Shares.
5. DELIVERY OF STOCK CERTIFICATE.
Within a reasonable time after the date hereof, the Company
shall cause the Restricted Shares to be registered in the name of Grantee,
subject to the risk of forfeiture set forth in Sections 3 and 4 hereof. Grantee
may not sell, assign, transfer or pledge any Restricted Shares prior to the date
on which the possibility of forfeiture with respect to such Shares has lapsed.
During the period that any Restricted Shares remain subject to a risk of
forfeiture under Sections 3 and 4 hereof, the Company may retain possession of
the certificate representing such Shares as a means of enforcing such
restrictions.
6. ACKNOWLEDGMENT OF GRANTEE.
Grantee acknowledges that certain restrictions under state,
federal or foreign securities laws may apply with respect to the Restricted
Shares granted pursuant to the Award. Grantee further acknowledges that, to the
extent Grantee is an "affiliate" of the Company (as that term is defined by the
Securities Act of 1933), the Restricted Shares granted as a result of the Award
are subject to certain trading restrictions under applicable securities laws
(including, particularly, Rule 144 under the Securities Act). Grantee hereby
agrees to execute such documents and take such actions as the Company may
reasonably require with respect to state, federal and foreign securities laws
applicable to the Company and any restrictions on the resale of such Shares
which may pertain under such laws. The Company has registered or intends to
register the securities represented by the Restricted Shares; however, in the
event such registration at any time is ineffective or any special rules apply,
such securities may be sold or transferred only in accordance with the Plan and
pursuant to additional, effective securities laws registrations or in a
transaction that is exempt from such registration requirements. If appropriate
under the circumstances, the certificate(s) evidencing the Restricted Shares
shall bear a restrictive legend indicating that the Restricted Shares have not
been registered under applicable securities laws.
7. EXECUTION OF AGREEMENT.
Grantee shall execute this Agreement within 30 days after
receipt of same, and promptly return an executed copy to the Company.
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8. WITHHOLDING.
Grantee shall pay the Company an amount equal to the sum of all
applicable employment taxes that the Company or any Subsidiary is required to
withhold at any time. Such payment may be made in cash, by withholding from
Grantee's normal pay, or, if permitted by the Company at the relevant time, by
delivery of Shares (including Restricted Shares then vested under this
Agreement).
9. MISCELLANEOUS.
(a) EMPLOYMENT RIGHTS. The granting of the Award and the execution of
this Agreement shall not afford Grantee any rights to similar grants in future
years or any right to be retained in the employ or service of the Company or any
of its Subsidiaries, nor shall it interfere in any way with the right of the
Company or any such Subsidiary to terminate Grantee's employment or services at
any time, with or without cause, or the right of Grantee to terminate Grantee's
employment or services at any time.
(b) SHAREHOLDER RIGHTS. While the Restricted Shares remain subject to
forfeiture under Sections 3 and 4 hereof, Grantee shall have all of the rights
of a shareholder of the Company, including the right to vote the Restricted
Shares and to receive any cash dividends.
(c) SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a governmental agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions contained in this Agreement
shall continue in full force and effect, and shall in no way be affected,
impaired or invalidated.
(d) CONTROLLING LAW. This Agreement is being made in the State of
Georgia (USA) and shall be construed and enforced in accordance with the laws of
that state.
(e) CONSTRUCTION. This Agreement contains the entire understanding
between the parties and supersedes any prior understanding and agreements
between them with respect to the subject matter hereof. There are no
representations, agreements, arrangements or understandings, oral or written,
between the parties hereto relating to the subject matter hereof which are not
fully expressed herein.
(f) BINDING EFFECT. This Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns, and Grantee and
Grantee's heirs and personal representatives. Any business entity or person
succeeding to all or substantially all of the business of the Company by stock
purchase, merger, consolidation, purchase of assets, or otherwise shall be bound
by and shall adopt and assume this Agreement, and the Company shall obtain the
assumption of this Agreement by such successor.
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(g) HEADINGS. Section and other headings contained in this Agreement are
included for reference purposes only and are in no way intended to define or
limit the scope, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the individual party hereto has executed this
Agreement, and the corporate party has caused this Agreement to be executed by a
duly authorized representative, as of the date first set forth above.
INTERFACE, INC.
By:
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[name]
[title]
GRANTEE
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[name]
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