Exhibit 10.21
FORM OF SECOND AMENDMENT TO CHANGE IN CONTROL AGREEMENT
This Second Amendment to Change in Control Agreement ("Amendment") is
made and entered into as of the 14th day of January, 1999, by and between
INTERFACE, INC. (the "Company") and ___________________ ("Executive").
W I T N E S S E T H :
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WHEREAS, the Company and Executive did enter into that certain Change
in Control Agreement dated as of April 1, 1997, as previously amended (the
"Agreement"); and
WHEREAS, the parties hereto desire to modify the Agreement in certain
respects, as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. All capitalized terms used in this Amendment, unless otherwise
defined herein, shall have the same meanings ascribed to such terms in the
Agreement.
2. Section 4(c) of the Agreement is hereby deleted in its entirety and
the following is substituted in its place:
(c) Benefits to be Provided. If Executive becomes eligible for
benefits under subsection (b) above, the Company shall pay or provide
to Executive the compensation and benefits set forth in this subsection
(c); provided, however, that the compensation and benefits to be paid
or provided pursuant to paragraphs (i) through (iv) of this subsection
(c) shall be reduced to the extent that Executive receives or is
entitled to receive upon Executive's termination the compensation and
benefits (but only to the extent Executive actually receives such
compensation and benefits) described in paragraphs (i) through (iv) of
this subsection (c) pursuant to the terms of an employment agreement
with the Company or as a result of a breach by the Company of the
employment agreement; and, provided, further, after taking into
consideration any such reductions, Executive shall continue to be
entitled to receive in the aggregate under this Agreement and the
employment agreement an amount of compensation and benefits equal to
the full amount of compensation and benefits provided under this
Agreement, and any amounts paid under paragraphs (i), (ii) and (iv) of
this Agreement shall be paid in the manner provided in such paragraphs.
3. Section 5 of the Agreement is hereby deleted in its entirety and the
following is substituted in its place:
5. Payments to Cover Excise Taxes.
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(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined (as hereafter
provided) that any payment or distribution to or for Executive, whether
paid or payable or distributed or distributable pursuant to the terms
of this Agreement or pursuant to or by reason of any other agreement,
policy, plan, program or arrangement (including, without limitation,
any employment agreement, Stock Plan or salary continuation agreement),
or similar right (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code (or any successor provisions
thereto), or any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereafter collectively referred to as the "Excise Tax"), then Executive
shall be entitled to receive an additional payment or payments (a
"Gross-Up Payment") from the Company. The total amount of the Gross-Up
Payment shall be an amount such that, after payment by (or on behalf
of) Executive of any Excise Tax and all federal, state and other taxes
(including any interest or penalties imposed with respect to such
taxes) imposed upon the Gross-Up Payment, the remaining amount of the
Gross-Up Payment is equal to the Excise Tax imposed upon the
Payment(s). For purposes of clarity, the amount of the Gross-Up Payment
shall be that amount necessary to pay the Excise Tax in full and all
taxes assessed upon the Gross-Up Payment.
(b) An initial determination as to whether a Gross-Up Payment
is required pursuant to this Section 5 and the amount of such Gross-Up
Payment shall be made by an accounting firm selected by the Company,
and reasonably acceptable to Executive, which is then designated as one
of the five largest accounting firms in the United States (the
"Accounting Firm"). The Accounting Firm shall provide its determination
(the "Determination"), together with detailed supporting calculations
and documentation to the Company and Executive as promptly as
practicable after such calculation is requested by the Company or by
Executive with respect to a Payment (or Payments), and if the
Accounting Firm determines that no Excise Tax is payable by Executive
with respect to a Payment (or Payments), it shall furnish Executive
with an opinion reasonably acceptable to Executive that no Excise Tax
will be imposed with respect to any such Payment(s). Within 15 days of
the delivery of the Determination to Executive, Executive shall have
the right to dispute the Determination (the "Dispute"). The Gross-Up
Payment, if any, as determined pursuant to this Section 5 shall be paid
by the Company to Executive within 15 days of the receipt of the
Accounting Firm's Determination. The existence of the Dispute shall not
in any way affect the right of Executive to receive the Gross-Up
Payment in accordance with the Determination. If there is no Dispute,
the Determination shall be binding, final and conclusive upon the
Company and Executive subject to the application of Section 5(c).
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(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have been
paid (an "Excess Payment") or a Gross-Up Payment (or a portion thereof)
which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred upon
the earliest to occur of the following events: (i) upon notice (formal
or informal) to Executive from any governmental taxing authority that
the tax liability of Executive (whether in respect of the then current
taxable year of Executive or in respect of any prior taxable year of
Executive) may be increased by reason of the imposition of the Excise
Tax on a Payment (or Payments) with respect to which the Company has
failed to make a sufficient Gross-Up Payment, (ii) upon a determination
by a court, (iii) by reason of a determination by the Company (which
shall include the position taken by the Company, or its consolidated
group, on its federal income tax return), or (iv) upon the resolution
to the satisfaction of Executive of the Dispute. If any Underpayment
occurs, Executive shall promptly notify the Company and the Company
shall pay to Executive within 15 days of the date the Underpayment is
deemed to have occurred under (i), (ii), (iii) or (iv) above, but in no
event less than 5 days prior to the date on which the applicable
government taxing authority has requested payment, an additional
Gross-Up Payment equal to the amount of the Underpayment plus any
interest and penalties imposed on the Underpayment.
An Excess Payment shall be deemed to have occurred upon a
"Final Determination" (as hereinafter defined) that the Excise Tax
shall not be imposed upon any Payment(s) (or portion of a Payment) with
respect to which Executive had previously received a Gross-Up Payment.
A Final Determination shall be deemed to have occurred when Executive
has received from the applicable governmental taxing authority a refund
of taxes or other reduction in his tax liability by reason of the
Excess Payment and upon either (i) the date a determination is made by,
or an agreement is entered into with, the applicable governmental
taxing authority which finally and conclusively binds Executive and
such taxing authority, or in the event that a claim is brought before a
court of competent jurisdiction, the date upon which a final
determination has been made by such court and either all appeals have
been taken and finally resolved or the time for all appeals has
expired, or (ii) the statute of limitations with respect to Executive's
applicable tax return has expired. If an Excess Payment is determined
to have been made, the amount of the Excess Payment shall be treated as
a loan by the Company to Executive and Executive shall pay to the
Company within 15 days following demand (but not less than 30 days
after the determination of such Excess Payment) the amount of the
Excess Payment plus interest at an annual rate equal to the rate
provided for in Section 1274(b)(2)(B) of the Code from the date the
Gross-Up Payment (to which the Excess Payment relates) was paid to
Executive until the date of repayment to the Company.
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(d) Notwithstanding anything contained in this Agreement to
the contrary, in the event that, according to the Determination, an
Excise Tax will be imposed on any Payment(s), the Company shall pay to
the applicable government taxing authorities as Excise Tax withholding,
the amount of any Excise Tax that the Company has actually withheld
from the Payment(s); provided, that the Company's payment of withheld
Excise Tax shall not alter the Company's obligation to pay the Gross-Up
Payment required under this Section 5.
(e) Executive and the Company shall each provide the
Accounting Firm access to and copies of any books, records and
documents in the possession of the Company or Executive, as the case
may be, reasonably requested by the Accounting Firm, and otherwise
cooperate with the Accounting Firm in connection with the preparation
and issuance of the Determination contemplated by Section 5(b) hereof.
(f) The fees and expenses of the Accounting Firm for its
services in connection with the Determination and calculations
contemplated by Section 5(b) shall be paid by the Company.
4. The Agreement, as expressly modified by this Amendment, shall remain
in full force and effect in accordance with its terms and continue to bind the
parties.
IN WITNESS WHEREOF, Executive has executed this Amendment, and
the Company has caused this Amendment to be executed by a duly authorized
representative, as of the date first set forth above.
INTERFACE, INC.
By: _____________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman and CEO
EXECUTIVE:
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