INTERFACE, INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement (this "Agreement") is entered into as of
the 11th day of April, 1997, by and between INTERFACE, INC. (the
"Company") and XXXX XXXXXX ("Optionee").
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, subject to approval of the Plan by the Company's
shareholders, the Committee has granted to Optionee a Stock Option under
the terms of the Plan (the "Option") to encourage Optionee's continued
loyalty and diligence; and
WHEREAS, to comply with the terms of the Plan and to further the
interests of the Company and Optionee, the parties hereto have set forth
the terms of the Option 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
Option 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. GRANT OF OPTION.
On January 20, 1997 (the "Grant Date"), the Committee granted
to Optionee the right to purchase 10,000 Shares of the $.10 par value
common stock of the Company, subject to the restrictions and other
conditions set forth herein. Such Shares may be either Class A common
stock or Class B common stock, or any combination thereof, as determined
by the Committee in its sole discretion at the time of exercise. Such
Shares are hereinafter sometimes referred to as the "Option Shares." The
Option is not intended to qualify as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.
3. EXERCISE PRICE.
The purchase price payable for the Option Shares upon exercise
of the Option, in whole or in part, shall be $19.125 per share (the
"Exercise Price"), which is the Fair Market Value of an Option Share on
the Grant Date.
4. VESTING.
The Option shall vest and become exercisable with respect to 20
percent of the Option Shares on each of the first five anniversaries of
the Grant Date. Optionee may, but need not, exercise the Option with
respect to Option Shares at the time they first vest and become
exercisable, or may exercise such Option Shares at any later time before
the Option terminates (see Section 6 hereof).
5. FORFEITURE UPON TERMINATION OF RELATIONSHIP.
If Optionee's employment, services or association with the
Company and all of its Subsidiaries is terminated for any reason
whatsoever, any portion of the Option that is not then vested shall be
terminated and immediately forfeited, and Optionee shall have no rights
in such portion of the Option.
6. TERMINATION OF OPTION.
Notwithstanding any other provision of this Agreement to the
contrary, the Option shall terminate and shall no longer be exercisable
after the first to occur of: (a) the tenth anniversary of the Grant
Date; (b) the expiration of the three-month period beginning on the date
Optionee's employment, services or association with the Company and all
of its Subsidiaries terminates for any reason other than Optionee's
Disability (as defined below) or death; (c) the expiration of the 12-
month period beginning on the date Optionee's employment, services or
association with the Company and its Subsidiaries terminates as a result
of Optionee's Disability; or (d) the expiration of the 24-month period
beginning on the date Optionee's employment, services or association with
the Company and its Subsidiaries terminates as a result of Optionee's
death. For purposes hereof, "Disability" shall mean Optionee's
inability, as a result of physical or mental incapacity, to substantially
perform Optionee's duties or services for the Company and its
Subsidiaries on a regular basis for a continuous period of six months.
The Committee, in its sole discretion, shall make all determinations as
to the date Optionee's employment, services or association with the
Company and its Subsidiaries has been terminated, or whether or not
Optionee has incurred a Disability, and the Committee's determination
shall be final and binding. The Committee may extend such exercise
period, in its sole discretion.
7. OPTION NOT TRANSFERABLE.
Optionee may not transfer or assign the Option other than by
will or the laws of descent and distribution. During the lifetime of
Optionee, only Optionee (or in the event of Optionee's Disability,
Optionee's duly appointed guardian or attorney-in-fact) may exercise the
Option.
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8. DEATH OF OPTIONEE.
In the event of Optionee's death, the unexercised, vested
portion of the Option may be exercised (but not transferred or assigned)
by Optionee's personal representatives, heirs or legatees at any time
prior to the date as of which the Option expires under Section 6 hereof.
Such exercise shall be effected in accordance with the terms hereof as if
such representative, heir or legatee was Optionee hereunder; however, the
Company may require proof of the right of such person to exercise the
Option.
9. MANNER OF EXERCISE.
(a) NOTICE OF EXERCISE. Optionee, or Optionee's successors (as
permitted herein), may exercise the Option by delivery to the Secretary
of the Company of a written notice of exercise executed by Optionee or
such successor (the "Notice of Exercise"). The Notice of Exercise shall
be substantially in the form set forth on Exhibit A, attached hereto and
made a part hereof, and shall identify the Option and the number of
Option Shares being purchased pursuant to the Option exercise.
(b) PARTIAL EXERCISE. Optionee may exercise the Option for less
than the full number of Option Shares, but no such partial exercise shall
be made for less than 100 Shares. Subject to the other restrictions on
exercise set forth herein, the unexercised portion of the Option Shares
may be exercised at a later date by Optionee, and the 100-Share
requirement shall not apply to any exercise of the Option if all
remaining vested Option Shares subject to the Option are exercised.
10. PAYMENT OF EXERCISE PRICE.
(a) GENERAL. Upon exercise of the Option, Optionee (or Optionee's
successors) shall pay the Exercise Price in cash, in Shares or any
combination thereof.
(b) PAYMENT IN SHARES. If Optionee pays all or a portion of the
Exercise Price with Shares, the following conditions shall apply:
(i) Optionee shall deliver to the Secretary of the Company a
certificate or certificates representing such Shares duly endorsed for
transfer to the Company (or an attestation of Optionee's then current
ownership of a number of Shares equal to the number thereby authorized to
be withheld);
(ii) Optionee shall have held such Shares for at least six
months before the date such payment is made;
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(iii) Such Shares shall be valued on the basis of the Fair
Market Value of Shares on the date of exercise, pursuant to the terms of
the Plan; and
(iv) The value of the Shares delivered shall be less than or
equal to the full Exercise Price. If Optionee delivers Shares with a
value that is less than the Exercise Price, Optionee shall pay the
balance of the Exercise Price in cash.
11. WITHHOLDING.
As a condition to exercise of the Option, Optionee (or
Optionee's successors) shall pay the Company an amount equal to the sum
of all applicable employment taxes that the Company is required to
withhold at any time. Such payment may be made in cash, by withholding
from Optionee's normal pay or by delivery of Shares (or an attestation of
ownership of Shares in lieu of delivery).
12. DELIVERY OF STOCK CERTIFICATE.
As soon as practicable after the date of exercise of the Option
and receipt by the Company of full payment of the Exercise Price, the
Company shall either instruct its transfer agent to issue a stock
certificate representing the Option Shares acquired by Optionee pursuant
to Optionee's exercise of the Option or shall otherwise effectively
transfer such Option Shares to Optionee.
13. ACKNOWLEDGMENT OF OPTIONEE.
Optionee acknowledges that certain restrictions under state,
federal or foreign securities laws may apply with respect to the Option
Shares issued pursuant to the Option. Optionee further acknowledges
that, to the extent Optionee is an "affiliate" of the Company (as that
term is defined by the Securities Act of 1933), the Option Shares are
subject to certain trading restrictions under applicable securities laws
(including, particularly, Rule 144 under the Securities Act). Optionee
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 and any restrictions on the resale of such Shares which
may pertain under such laws. The Company intends to register the
securities represented by and subject to the Option; 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 Shares issued upon exercise of the Option shall bear a
restrictive legend indicating that the Shares have not been registered
under applicable securities laws.
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14. EXECUTION OF AGREEMENT.
Optionee shall execute this Agreement within 30 days after
receipt of same, and promptly return an executed copy to the Company.
15. MISCELLANEOUS.
(a) EMPLOYMENT RIGHTS. The granting of the Option and the
execution of this Agreement shall not afford Optionee 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 Subsidiary to
terminate Optionee's employment, services or association at any time,
with or without cause, or the right of Optionee to terminate Optionee's
employment, services or association at any time.
(b) SHAREHOLDER RIGHTS. Optionee shall have none of the rights of
a shareholder with respect to the Option Shares until Optionee has
exercised the Option and thereby acquired the Option Shares in accordance
with this Agreement.
(c) SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or 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 understandings 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
Optionee and Optionee'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.
(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.
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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: /s/ Xxx X. Xxxxxxxx
Xxx X. Xxxxxxxx
Chairman and Chief Executive Officer
OPTIONEE
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
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EXHIBIT A
INTERFACE, INC.
OMNIBUS STOCK INCENTIVE PLAN
(January 20, 1997)
NOTICE OF EXERCISE FOR STOCK OPTION AGREEMENT
This Notice is given pursuant to the terms of the Stock Option
Agreement, dated April 11, 1997, between Interface, Inc. and the
undersigned Optionee, which Agreement is made a part hereto and
incorporated herein by reference.
Optionee hereby exercises the Option with respect to _________
Option Shares. Optionee hereby delivers, together with this written
statement of exercise, the full Exercise Price with respect to the
exercised Option Shares, which consists of: [COMPLETE ONLY ONE]
/ / cash in the total amount of $__________.
/ / __________Shares of the Company's Class _____ common
stock.
/ / cash in the total amount of $__________ and
______ Shares of the Company's Class _____ common stock.
Optionee hereby acknowledges that, to the extent Optionee is an
"affiliate" of the Company (as that term is defined by the Securities Act
of 1933), any Shares of the Company's common stock acquired by Optionee
as a result of Optionee's exercise of the Option pursuant to this Notice
are subject to certain trading restrictions under applicable securities
laws (including, particularly, Rule 144 of the Securities Act), all as
described in Section 13 of the Agreement, and Optionee hereby agrees to
comply with all such restrictions and to execute such documents or take
such other actions as the Company may require in connection with such
restrictions.
Executed this _____ day of _______________, _____.
OPTIONEE:
__________________________________________
Signature
__________________________________________
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