AMENDED AND RESTATED EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT
AMENDED
AND RESTATED
EMPLOYMENT
AND CHANGE IN CONTROL AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AND CHANGE IN CONTROL AGREEMENT (this
“Agreement”) is made and entered into as of the 1st day of January, 2008, by and
between Interface, Inc.,
a corporation organized under the laws of the State of Georgia, U.S.A. (the
“Company”), and Xxxx X.
Xxxxx, a resident of Atlanta, Georgia (“Executive”).
W
I T N E S S E T H:
WHEREAS,
on April 1, 1997, desiring to set forth in writing the terms of Executive’s
employment with the Company, the parties entered into an Employment Agreement,
which was subsequently amended by the parties as of January 6, 1998, January
14,
1999 and January 31, 2003; and
WHEREAS,
to assure both itself and its key employees of continuity of management and
objective judgment in the event of a change in control of the Company, and
to
induce its key employees to remain employed by the Company, the Company has
entered into change in control agreements with certain key employees, including
a Change in Control Agreement with Executive, dated April 1, 1997, detailing
Executive’s compensation and benefits upon a change in control of the Company,
which was subsequently amended by the parties as of January 6, 1998 and
January 14, 1999; and
WHEREAS,
the parties desire to amend and restate such Employment Agreement and such
Change in Control Agreement (the “Prior Agreements”) and to combine the Prior
Agreements and bring the combined Prior Agreements into compliance with Section
409A of the Internal Revenue Code of 1986, as amended (“Code Section
409A”);
NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.
Employment. Subject
to the terms and conditions of this Agreement, Executive shall be employed
by
the Company as Senior Vice President of the Company (and as President and Chief
Executive Officer of Interface Americas Holdings, LLC), and shall perform such
duties and functions for the Company and its subsidiaries and affiliates as
shall be specified from time to time by the Chief Executive Officer (“CEO”) or
Board of Directors (the “Board”) of the Company. Executive accepts
such employment and agrees to perform such executive duties as may be assigned
to Executive. Executive may be relocated (prior to a Change in Control),
Executive’s titles and duties may be changed, and Executive may be promoted to a
higher position within the Company, but Executive will not be demoted or given
lesser titles.
2.
Duties. Executive
shall devote his full business-related time and best efforts to accomplishing
such executive duties at such locations as may be requested by the CEO of the
Company, acting under authorization from the Board.
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3.
Avoidance of Conflict
of Interest. While employed by the Company, Executive shall
not engage in any other business enterprise without the prior written consent
of
the Company. Without limiting the foregoing, Executive shall not
serve as a principal, partner, employee, officer or director of, or consultant
to, any other business or entity conducting business for profit without the
prior written approval of the Company. In addition, under no
circumstances will Executive have any financial interest in any competitor
of
the Company; provided, however, Executive may invest in no more than one percent
of the outstanding stock or securities of any competitor, the stock or
securities of which are traded on a national stock exchange of any
country.
4.
Term. Subject
to the terms of Section 5 hereof, the duration of this Agreement (the “term”)
shall be for a rolling, two-year term commencing on the date first set forth
above, and shall be deemed automatically (without further action by either
the
Company or Executive) to extend each day for an additional day such that the
remaining term of this Agreement shall continue to be two years; provided,
however, that on Executive’s 63rd birthday, this Agreement shall cease to extend
automatically and, on such date, the remaining term of this Agreement shall
be
two years.
5.
Termination. Executive’s
employment with the Company may be terminated as provided in this Section
5:
(a)
Definitions. In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the meanings ascribed to them below.
(i)
“Cause” shall
mean, for purposes of this Agreement (except with respect to a Section 409A
Separation from Service following a Change in Control, which is addressed in
Section 7(a)(i) hereof): (A) Executive’s fraud, dishonesty,
gross negligence, or willful misconduct with respect to business affairs of
the
Company (including its subsidiaries and affiliated companies),
(B) Executive’s refusal or repeated failure to follow the established
lawful policies of the Company applicable to persons occupying the same or
similar positions, (C) Executive’s material breach of this Agreement, or
(D) Executive’s conviction of a felony or other crime involving moral
turpitude. A termination of Executive for Cause based on clause (A),
(B) or (C) of the preceding sentence shall take effect 30 days after Executive
receives from the Company written notice of intent to terminate and the
Company’s description of the alleged Cause, unless Executive shall, during such
30-day period, remedy the events or circumstances constituting Cause; provided,
however, such termination shall take effect immediately upon the giving of
written notice of termination for Cause under any of such clauses if the Company
shall have determined in good faith that such events or circumstances are not
remediable (which determination shall be stated in such notice).
(ii)
“Section 409A
Separation from Service” shall mean a separation from service with the
Company and affiliated entities, as defined in Code Section 409A and guidance
issued thereunder. As a general overview, under Code Section 409A, an
employee will separate from service if the employee dies, retires, or otherwise
has a termination of employment determined in accordance with the
following:
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(A)
Leaves of
Absence. The employment relationship is treated as continuing
intact while Executive is on military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or,
if
longer, so long as Executive retains a right to reemployment with the Company
under an applicable statute or by contract. A leave of absence
constitutes a bona fide leave of absence only if there is a reasonable
expectation that Executive will return to perform services for the
Company. If the period of leave exceeds six months and Executive does
not retain a right to reemployment under an applicable statute or by contract,
the employment relationship is deemed to terminate on the first day immediately
following such six-month period.
(B)
Status
Change. Generally, if Executive performs services both as an
employee and an independent contractor, Executive must separate from service
both as an employee and as an independent contractor, pursuant to standards
set
forth in the applicable regulations promulgated by the Secretary of Treasury
under Code Section 409A (“Treasury Regulations”), to be treated as having a
separation from service. However, if Executive provides services to
the Company as an employee and as a member of the Board, the services provided
as a director are not taken into account in determining whether Executive has
a
separation from service as an employee for purposes of this
Agreement.
(C)
Termination of
Employment. Whether a termination of employment has occurred
is determined based on whether the facts and circumstances indicate that the
Company and Executive reasonably anticipate that no further services would
be
performed after a certain date or that the level of bona fide services Executive
would perform after such date (whether as an employee or as an independent
contractor) would permanently decrease to no more than 49 percent of the average
level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period
of services to the Company if Executive has been providing services to the
Company less than 36 months). Facts and circumstances to be
considered in making this determination include, but are not limited to, whether
Executive continues to be treated as an employee for other purposes (such as
continuation of salary and participation in employee benefit programs), and
whether similarly situated service providers have been treated
consistently. For periods during which Executive is on a paid bona
fide leave of absence and has not otherwise terminated employment as described
in subsection (A) above, for purposes of this subsection (C), Executive is
treated as providing bona fide services at a level equal to the level of
services that Executive would have been required to perform to receive the
compensation paid with respect to such leave of absence. Periods
during which Executive is on an unpaid bona fide leave of absence and has not
otherwise terminated employment are disregarded for purposes of this clause
(C)
(including for purposes of determining the applicable 36-month (or shorter)
period).
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The
Company and Executive reasonably
anticipate, as of the date of this Agreement, that the level of Executive’s
post-employment services for the Company, if any, will be no more than 49%
of
the historical level of services (as described hereinabove) that Executive
has
provided (such that he will have a Section 409A Separation from Service as
of the date of his termination of employment). Notwithstanding the
foregoing, the parties acknowledge that they should reassess the anticipated
level of services as of the date of Executive’s termination of employment to
confirm that it is sufficiently limited so that such termination date will
be
the date of Executive’s Section 409A Separation from Service. While
it is anticipated Executive’s Section 409A Separation from Service will occur on
the date that his employment terminates, this Agreement is drafted to take
into
account the chance that it will not.
(D)
Service with
Affiliates. For purposes of determining whether a separation
from service has occurred under the above provisions, the “Company” shall
include the Company and all entities that would be treated as a single employer
with the Company under Section 414(b) or (c) of the Internal Revenue Code of
1986, as amended (the “Code”), but substituting “at least 50 percent” instead of
“at least 80 percent” each place it appears in applying such rules.
(b)
Termination by the
Company After Notice of Resignation. Executive may voluntarily
terminate his employment hereunder at any time, effective 90 days after delivery
to the Company of Executive’s signed, written resignation. The
Company may accept said resignation and, at its option, terminate Executive’s
employment before the end of such 90-day period; provided, if Executive has
given such 90 days notice, then the Company shall pay Executive, in lieu of
waiting for passage of the notice period and in addition to the amounts payable
to Executive pursuant to Section 6 below, an amount equal to the salary that
would have been paid to Executive through the end of the notice period had
his
actual employment continued. Any such amount payable by the Company
(in lieu of waiting for the passage of the notice period) for the period after
Executive’s actual termination of employment shall be paid in a single lump-sum
cash payment within 30 days after the date of Executive’s actual termination of
employment.
(c)
Termination by the
Company. Subject to the terms of Section 5(d) below, the
Company may terminate Executive’s employment hereunder, in its sole discretion,
whether with or without Cause, at any time upon written notice to
Executive.
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(d)
Termination Without
Cause. If, prior to the end of the term of this Agreement, the
Company terminates Executive’s employment with the Company without Cause,
Executive shall be entitled to receive, as damages payable as a result of,
and
arising from, the Company’s breach of this Agreement, the compensation and
benefits set forth in clauses (i) through (vi) below. The time
periods for which compensation and benefits will be provided with respect to
clauses (i) through (v) below is referred to herein as the “Continuation
Period,” which means the time period remaining from the date of Executive’s
termination of employment to the end of the remaining term of this Agreement
as
provided in Section 4 above. Executive shall have no duty to mitigate
any of the damages payable hereunder. The fact that Executive is eligible for
retirement, including early retirement, under applicable retirement plans or
agreements at the time of Executive’s termination shall not make Executive
ineligible to receive benefits under this Section 5(d).
(i)
Salary. Executive
will continue to receive an amount equal to his current salary (the “Continued
Salary Payments”), subject to the withholding of all applicable taxes, for the
Continuation Period. For purposes hereof, Executive’s “current
salary” shall be the highest rate in effect during the six-month period prior to
Executive’s termination of employment. Executive will receive the
Continued Salary Payments on a semi-monthly basis, payable on the fifteenth
day
and last day of each calendar month, in substantially equal installments,
beginning on the earliest such payment date following the date of Executive’s
termination of employment. Notwithstanding the foregoing, the payment
of any portion of the Continued Salary Payments that (A) is not exempt from
Code
Section 409A, and (B) is payable (based on the payment schedule hereinabove)
before, or within the six-month period immediately following, the date of
Executive’s Section 409A Separation from Service, will be delayed and will be
made in a single lump-sum cash payment upon the day after the six-month
anniversary of Executive’s Section 409A Separation from Service.
(ii)
Bonuses and
Incentives. Executive shall receive cash bonus payments from
the Company for each calendar month during the Continuation Period in an amount
equal to one-twelfth of the average of the bonuses paid to Executive under
the
executive bonus program(s) for the two calendar years immediately preceding
the
year in which his termination of employment occurs (“Average
Bonus”). Executive will receive these payments (the “Average Bonus
Payments”) on a semi-monthly basis, payable on the fifteenth day and the last
day of each calendar month, in substantially equal installments, beginning
on
the earliest such payment date following the date of Executive’s termination of
employment. Notwithstanding the foregoing, the payment of any portion
of the Average Bonus Payments that (A) is not exempt from Code Section 409A,
and
(B) is payable (based on the payment schedule hereinabove) before, or within
the
six-month period immediately following, the date of Executive’s Section 409A
Separation from Service, will be delayed and will be made in a single lump-sum
cash payment upon the day after the six-month anniversary of Executive’s Section
409A Separation from Service.
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Executive
also shall receive a prorated bonus for the year in which Executive’s employment
terminates. Such bonus shall be equal to (A) the Average Bonus multiplied by the
number of days Executive worked in the year of his employment termination,
(B)
divided by 365
days (“Prorated Bonus”). The Prorated Bonus shall be paid in a lump
sum in cash within 30 days after the date of Executive’s termination of
employment. Notwithstanding the foregoing, if the Prorated Bonus (or
any portion thereof) is not exempt from Code Section 409A, the Prorated Bonus
(or such portion) will be paid in a single lump-sum cash payment upon the day
after the six-month anniversary of Executive’s Section 409A Separation from
Service.
Any
bonus
amounts that Executive had previously earned from the Company but which may
not
yet have been paid as of the date of termination shall not be affected by this
provision; provided, however, if the amount of the bonus for such prior year
has
not yet been determined, the bonus shall be an amount not less than the Average
Bonus.
(iii)
Health Insurance
Coverages. The health insurance benefit coverages, whether
self insured or commercially insured by the Company (including any executive
medical plans), provided to Executive at Executive’s date of termination shall
be continued for and during the Continuation Period by the Company at the same
level and in the same manner as if Executive’s employment had not terminated
(subject to the customary changes in such coverages upon Executive’s retirement,
reaching age 65 or similar events). Any additional health benefit
coverages Executive had at termination, including spousal and/or dependent
coverage, will also be continued for and during the Continuation Period on
the
same terms, to the extent permitted by the applicable policies or
contracts. The expense of all such health insurance benefit coverages
shall be paid by the Company and/or Executive in the same respective amounts
as
each would pay if Executive’s employment had not
terminated. Executive shall pay his portion of such expenses by
separate check payable to the Company each month in advance (or in such other
manner, such as withholding a portion of monthly payments otherwise payable
to
Executive hereunder, as the Company may agree). If the terms of any
benefit plan referred to in this subsection do not permit continued
participation by Executive, then the Company will arrange for other coverage
at
its expense providing substantially similar benefits. Unless
Executive has satisfied the eligibility requirements for retiree health coverage
under the Company’s retiree medical plan (if any) as of the date of his
termination of employment (and enrolled within 30 days after such termination
date), the coverages provided for in this subsection shall be applied against
and reduce the period for which COBRA benefits will be provided.
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(iv)
Life and Long-Term
Care Insurance Coverages. The life and long-term care
insurance benefit coverages (including any executive life and long-term care
insurance plans) provided to Executive at Executive’s date of termination shall
be continued for and during the Continuation Period by the Company at the same
level and in the same manner as if Executive’s employment had not terminated
(subject to the customary changes in such coverages upon Executive’s retirement,
reaching age 65 or similar events). Any additional life and long-term
care coverages Executive had at termination, including spousal and/or dependent
coverage, will also be continued for and during the Continuation Period on
the
same terms, to the extent permitted by the applicable policies or
contracts. The expense of all such life and long-term care benefit
coverages shall be paid by the Company and/or Executive in the same respective
amounts as each would pay if Executive’s employment had not
terminated. Executive shall pay his portion of such expenses by
separate check payable to the Company each month in advance (or in such other
manner, such as withholding a portion of monthly payments otherwise payable
to
Executive hereunder, as the Company may agree). If the terms of any
benefit plan referred to in this subsection do not permit continued
participation by Executive, then the Company will arrange for other coverage
at
its expense providing substantially similar benefits. If Executive is
covered by a split-dollar or similar life insurance program as of the date
of
termination, Executive shall have the option, in Executive’s sole discretion, to
have such policy transferred to Executive upon termination, provided that,
except as may otherwise be provided in a separate agreement, the Company is
paid
for its interest (i.e., the cash surrender value) in the policy upon such
transfer.
(v)
Employee Retirement
Plans. Upon the termination of Executive’s employment,
Executive shall no longer actively participate in the tax-qualified employee
retirement plans maintained by the Company. However, with respect
to
any such plans, the Company shall pay to Executive the following
amounts:
(A)
Savings Plan Company
Match. The Company shall pay to Executive an amount equal to
the dollar amount of matching contributions, if any, that would have been made
to Executive’s account(s) under the Interface, Inc. Savings and Investment Plan
or any successor Code Section 401(k) plan (the “Savings Plan”) if Executive had
continued to actively participate in the Savings Plan and had made deferrals
at
the maximum permissible level (in effect on the date of his termination of
employment) throughout the Continuation Period.
(B)
Savings Plan
Vesting. To the extent that Executive is not fully vested
under the Savings Plan on the date of his termination of employment, the Company
shall pay to him an amount equal to (1) the value of his Savings Plan account
on
the date of his termination of employment had he been fully vested on such
date,
minus (2) the actual value of his vested Savings Plan account on such
date.
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(C)
Retirement
Plan. If, at the time of his employment termination, Executive
participates in a tax-qualified defined benefit pension plan, the Company shall
pay to Executive an amount equal to the present value on the date of termination
of employment (calculated as provided in such tax-qualified pension plan) of
the
excess of (1) the benefit Executive would have been paid under such plan if
Executive had continued to be covered for the Continuation Period (less any
amounts Executive would have been required to contribute) and had been fully
vested, over (2) the benefit actually payable under such plan. Such
amount shall be calculated, for the period after Executive’s employment
termination, on the basis of the compensation payable to Executive under
subsections (d)(i) and (ii) above.
(D)
Timing of
Payment. All amounts payable pursuant to this clause (v) shall
be paid to Executive, or, if applicable, Executive’s spouse, estate or other
beneficiary, in one lump-sum cash payment within 30 days after the date of
Executive’s termination of employment, with any portion of such amount that is
not exempt from Code Section 409A to be paid upon the day after the six-month
anniversary of Executive’s Section 409A Separation from Service.
(E)
Salary Continuation
Agreement. For the avoidance of doubt, from and after
Executive’s date of termination, Executive shall continue to be covered by, and
entitled to the benefits under, Executive’s Salary Continuation Agreement dated
as of January 1, 2008, payable in accordance with the terms of said
agreement.
(vi)
Stock
Awards.
(A)
Stock
Options. As of Executive’s date of termination, all
outstanding stock options granted to Executive under the Interface, Inc. Omnibus
Stock Incentive Plan (Amended and Restated effective February 22, 2006), the
Interface, Inc. Omnibus Stock Incentive Plan (dated January 20, 1997), and
the
Interface, Inc. Key Employee Stock Option Plan (1993), and any similar plan(s)
in effect at the time of Executive’s termination of employment (collectively, the
“Stock Plans”), shall become 100% vested and thus immediately
exercisable. To the extent inconsistent with this immediate vesting
requirement, the provisions of this clause (vi) shall constitute an amendment
of
Executive’s stock option agreements under the Stock Plans.
(B)
Restricted Stock,
etc. In addition, but only to the extent expressly provided in
any restricted stock or other award agreement associated with a Stock Plan,
restrictions on all shares of restricted stock (and other performance shares,
performance units or deferred shares) awarded to Executive under the Stock
Plans
shall lapse, and the affected shares shall become 100% vested.
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(vii)
Cessation Upon
Death. The continuation benefits payable or to be provided
under clauses (i), (ii), (iii), (iv) and (v) of this Section 5(d) shall cease
in
the event of Executive’s death. (The foregoing shall not operate or
be construed to negate the benefits payable to Executive and Executive’s estate
under the plans and policies referenced in clauses (iii), (iv) and (v) of this
Section 5(d) or under any other plans and policies referenced in this
Agreement. Furthermore, in the event of Executive’s death following a
Change in Control, the provisions of Section 7(c)(iv) shall
govern.)
(viii)
Additional
Consideration. To be entitled to receive the foregoing
compensation, Executive shall sign such additional release of claims,
confidentiality agreements and other documents the Company may reasonably
request of Executive at the time of payment; and, for so long as Executive
is
entitled to the benefits of such compensation, Executive shall cooperate fully
with and devote Executive’s reasonable best efforts to providing assistance
requested by the Company. Such assistance shall not require Executive
to be active in the Company’s day-to-day activities or engage in any substantial
travel, and Executive shall be reimbursed for all reasonable and necessary
out-of-pocket business expenses incurred in providing such assistance. Any
reimbursements made pursuant to the preceding sentence shall be made as soon
as
practicable, but not later than 30 days after Executive submits evidence of
such expenses to the Company.
6.
Effect of Other
Termination Events. If Executive is terminated for Cause prior
to the end of the term of this Agreement, then Executive shall be entitled
to no
payment or compensation whatsoever from the Company under this Agreement, other
than such salary, reimbursable expenses and other amounts as may
properly be due Executive through Executive’s last day of
employment. If Executive voluntarily resigns from employment (other
than a Separation from Service for Good Reason, as defined in Section 7(a)(iv)
below), then Executive shall be entitled to an amount equal to: (a) Executive’s
salary, reimbursable expenses and other amounts as may be due Executive through
the last day of Executive’s employment, and (b) the annual bonus for the
calendar year in which Executive’s employment terminates, prorated through the
last day of Executive’s employment (the amount of such bonus to be determined by
the Company based on the audited year-end financial results of the
Company). If Executive’s employment is terminated due to Executive’s
disability (as defined in the Company’s long-term disability plan or insurance
policy) or death, Executive shall be entitled to the amounts described in the
preceding sentence, as well as any amounts that may be due under the Company’s
short and long-term disability plans or, in the case of death, the Company’s
life insurance payment policy or plan in effect for executives of Executive’s
level or pursuant to the terms of any separate agreement concerning split-dollar
or similar life insurance; provided, Executive or Executive’s estate, as the
case may be, shall not by operation of this provision forfeit any rights in
which Executive is vested (or becomes vested) at the time of Executive’s
disability or death (including, without limitation, the rights and benefits
provided under the Stock Plans, Executive’s Salary Continuation Agreement or
other applicable retirement plans).
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Executive
or, if appropriate,
Executive’s spouse, estate or other beneficiary (as applicable) shall receive
the amounts due under the first sentence of this Section 6 and clause (a) of
the
second sentence of this Section 6 in a single lump-sum cash payment within
30
days after the date of Executive’s termination of employment.
Executive
or, if appropriate,
Executive’s spouse, estate or other beneficiary, shall receive the amounts due
under clause (b) of the second sentence of this Section 6 in a single lump-sum
cash payment between January 1 and March 15, inclusive, of the calendar year
immediately following the calendar year in which his employment terminates
under
this Section 6.
7.
Change in
Control.
(a)
Definitions. In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the meanings ascribed to them below.
(i)
“Cause” shall
mean, with respect to any Section 409A Separation from Service following a
Change in Control: (A) an act that constitutes, on the part of
Executive, fraud, dishonesty, gross negligence or willful misconduct and which
directly results in injury to the Company, or (B) Executive’s conviction of a
felony or other crime involving moral turpitude. A termination of
Executive for Cause based on clause (A) of the preceding sentence shall take
effect 30 days after the Company gives written notice of such termination to
Executive specifying the conduct deemed to qualify as Cause, unless Executive
shall, during such 30-day period, remedy the events or circumstances
constituting Cause to the reasonable satisfaction of the Company. A
termination for Cause based on clause (B) above shall take effect immediately
upon the Company’s delivery of the termination notice.
(ii)
“Change in
Control” shall mean a change of ownership or effective control of the
Company, or a change in the ownership of a substantial portion of the assets
of
the Company, all within the meaning of Code Section 409A and guidance issued
thereunder. As a general overview, Code Section 409A defines “change
in control” as any of the following:
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(A)
Change in the
Ownership of the Company. A change in ownership of the Company
occurs on the date that any one person, or more than one person acting as a
group, acquires ownership of stock of the Company that, together with stock
then
held by such person or group constitutes more than 50 percent of the total
fair
market value or total voting power of the stock of the
Company. However, if any one person, or more than one person acting
as a group, is considered to own more than 50 percent of the total fair market
value or total voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons is not considered to cause a
change in the ownership of the Company or to cause a change in the effective
control of the Company. An increase in the percentage of stock owned
by any one person, or persons acting as a group, as a result of a transaction
in
which the Company acquires its stock in exchange for property will be treated
as
an acquisition of stock for purposes of this clause (A). This clause
(A) applies only when there is a transfer of stock of the Company (or issuance
of stock of the Company) and stock in the Company remains outstanding
after the transaction.
(B)
Change in the
Effective Control of the Company. A change in the effective
control of the Company will occur on either of the following dates:
(1)
The date any one person, or more than one person acting as a group, acquires
(or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of the Company
possessing 30 percent or more of the total voting power of the stock of the
Company; or
(2)
The date a majority of members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Company’s Board before the date of the appointment or
election.
(C)
Change in the
Ownership of a Substantial Portion of the Company’s Assets. A
change in the ownership of a substantial portion of the Company’s assets occurs
on the date that any one person, or more than one person acting as a group,
acquires (or has acquired during the 12-month period ending on the date of
the
most recent acquisition by such person or persons) assets from the Company
that
have a total gross fair market value equal to or more than 40 percent of the
total gross fair market value of all of the assets of the Company immediately
before such acquisition or acquisitions.
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(iii)
“Involuntary
Separation from Service” (and “Involuntarily Separated from Service” and
other similar terms) shall mean a Section 409A Separation from Service brought
about as a direct result of the independent exercise of the unilateral authority
of the Company to terminate Executive’s services (other than at Executive’s
request) at a time when Executive is willing and able to continue services,
for
any reason other than for Cause.
(iv)
“Separation from
Service for Good Reason” (and “Separates from Service for Good Reason”
and other similar terms) shall mean a Section 409A Separation from Service
that
is voluntary on the part of Executive and that occurs within two years after
the
initial existence of one or more of the following conditions that occur without
Executive’s consent, to the extent that there is, or would be if not corrected,
a material negative change in Executive’s employment relationship with the
Company:
(A)
A material reduction of Executive’s responsibilities, title or status resulting
from a formal change in such title or status, or from the assignment to
Executive of any duties inconsistent with Executive’s title, duties or
responsibilities in effect within the year prior to the Change in
Control;
(B)
A material reduction in Executive’s compensation or benefits (a reduction in
value of five percent or more will be deemed material, however, whether a
reduction of less than five percent is or is not material will be determined
at
the time of such reduction based on all of the facts and circumstances at that
time); or
(C)
A Company-required, material, involuntary relocation of Executive’s place of
residence or a material increase in Executive’s travel requirements (such a
relocation outside of the city of Atlanta and the five core counties (Xxxxxx,
Dekalb, Gwinnett, Xxxx and Xxxxxxx) comprising the metropolitan Atlanta, Georgia
area will be deemed material, however, whether such a relocation within the
metropolitan Atlanta area (as described above) is or is not material will be
determined at the time of such relocation based on all of the facts and
circumstances at that time).
In
order
to Separate from Service for Good Reason hereunder, Executive must provide
notice to the Company of the existence of one of the above conditions within
90
days of the initial existence of the condition, and such termination for Good
Reason shall not take effect unless the Company does not cure the condition
within 30 days of such notice.
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(b)
Vesting Upon Change
in
Control. Upon the occurrence of a Change in Control during the
term of this Agreement, (i) all outstanding stock options (and stock
appreciation rights, if any) granted to Executive under the Stock Plans shall
become 100% vested and thus immediately exercisable, and (ii) all restrictions
on, and vesting requirements for, all shares of restricted stock (or other
performance shares, performance units or deferred shares) awarded to Executive
under the Stock Plans shall lapse, and such shares and awards shall become
100%
vested and immediately payable to Executive. To the extent
inconsistent with this immediate vesting requirement, the provisions of this
subsection (b) shall constitute an amendment of Executive’s stock option
agreements, restricted stock agreements and other award agreements issued under
the Stock Plans.
(c)
Certain Separations
from Service within 24 Months Following a Change in
Control. If a Change in Control occurs during the term of this
Agreement and, within 24 months following the date of such Change in Control,
Executive is Involuntarily Separated from Service or Separates from Service
for
Good Reason, Executive shall be entitled to all of the benefits described in
clauses (i) through (v) of Section 5(d) of this Agreement, for a period of
24
months following Executive’s termination of employment, with the following
modifications:
(i)
Salary. Instead
of the Continued Salary Payments described in Section 5(d)(i) of this Agreement,
Executive shall receive an amount equal to (A) the amount of such Continued
Salary Payments payable during each month (B) multiplied
by 24. Such amount shall be paid to Executive in a lump-sum
payment in cash (without discounting or any other adjustment for the time value
of money) within 30 days after the date of Executive’s Section 409A Separation
from Service.
(ii)
Bonuses and
Incentives. Instead of the Average Bonus Payments described in
Section 5(d)(ii) of this Agreement, Executive shall receive an amount equal
to
(A) the amount of such Average Bonus Payments payable each month (B) multiplied
by 24. Such amount shall be paid to Executive in a lump-sum payment
in cash (without discounting or any other adjustment for the time value of
money) within 30 days after the date of Executive’s Section 409A Separation from
Service. This Section 7(c)(ii) shall not affect any other provision
of Section 5(d)(ii), including, without limitation, the terms of such provision
relating to the Prorated Bonus.
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(iii)
Payments to Cover
Excise Taxes.
(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 Stock Plan or salary continuation agreement), or similar right (a “Payment”
or “Payment(s)”), 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 subsection (c)(iii) 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 four largest accounting firms
in the United States (the “Accounting Firm”). The Company shall cause
the Accounting Firm to 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 any Payment(s), and if the Accounting
Firm determines that no Excise Tax is payable by Executive with respect to
such
Payment(s), the Company shall cause it to 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 subsection (c)(iii) 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 7(c)(iii)(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: (1) 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 any Payment(s) with
respect to which the Company has failed to make a sufficient Gross-Up Payment,
(2) upon a determination by a court, (3) 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 (4) upon the
resolution to the satisfaction of Executive of his 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 clauses (1), (2), (3) or (4) above, but in no
event less than five 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 (1) 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 (2)
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 subsection (c)(iii).
(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 subsection (c)(iii)(B)
hereof.
(F)
The fees and expenses of the Accounting Firm for its services in connection
with
the Determination and calculations contemplated by subsection (c)(iii)(B) hereof
shall be paid by the Company. Any payments made pursuant to the preceding
sentence shall be made as soon as practicable, but not later than 30 days after
Executive submits evidence of such expenses to the Company.
(iv)
Executive’s
Death. In the event Executive shall die within 24 months
following a Change in Control, all amounts and benefits which would have been
payable or due to Executive if Executive had continued to live (including,
in
the event Executive dies after being Involuntarily Separated from Service or
after having Separated from Service for Good Reason, the amounts and benefits
described in Section 7 hereof) shall be paid and provided in accordance with
the
terms of this Agreement to the executors, administrators, heirs or personal
representatives of Executive’s estate.
8.
Compensation and
Benefits. During the term of Executive’s employment with the
Company hereunder:
(a)
Continuity.
Executive’s salary, current perquisites (including, but not limited to, company
car) and bonus opportunity (currently expressed as a percentage of Executive’s
base salary) may be increased from time to time as determined by the CEO or
the
Board (or Committee of the Board), but shall not be reduced or
eliminated.
(b)
Other
Benefits. Executive shall be entitled to vacation with pay,
life insurance, health insurance, long-term care insurance, and such other
employee benefits as Executive may be eligible to receive in accordance with
the
established plans and policies of the Company, as in effect from time to
time.
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(c)
Short-Term Disability
Benefits. For purposes of this subsection (c), “Disability”
and “Disabled” shall mean Executive’s inability, as a result of physical or
mental incapacity, to substantially perform Executive’s duties for the Company
on a full-time basis for a continuous period of six months. Upon the
Company being made aware of Executive’s Disability, Executive shall be entitled
to receive, for a period of six months (the “Short-Term Disability Period”), the
following:
(i)
Salary
Continuation. An amount equal to his current salary (subject
to withholding of all applicable taxes) for the shorter of (A) his Short-Term
Disability Period, or (B) the period he remains Disabled. For
purposes hereof, Executive’s “current salary” shall be the rate in effect on the
day immediately prior to the date upon which the Company is made aware of
Executive’s Disability. Executive will receive such salary payments
in accordance with the Company’s normal executive payroll
processes.
(ii)
Bonus and
Incentives. Executive shall continue to participate in each
applicable bonus and incentive plan of the Company during the Short-Term
Disability Period. Executive will receive bonus and incentive
payments, if any, in accordance with the normal processes and timing for payment
of such amounts to executives who are actively at work.
(d)
Tax
Equalization. In the event of Executive’s relocation, the
Company and Executive will cooperate in good faith to agree on such adjustments
to Executive’s compensation and benefits package as are appropriate to provide
consistent after-tax income to Executive equivalent to that of a person
receiving Executive’s pay and benefits taxable under the terms of the Code,
while also acting in the best interests of the Company.
9.
Restrictive
Covenants.
(a)
Definitions In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the meanings ascribed to them as set forth below.
(i)
“Company” shall
mean, for the purposes of, and as used in, this Section 9, Interface, Inc.
and
its direct and indirect subsidiaries and affiliated entities throughout the
world.
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(ii)
“Confidential
Information” shall mean information relating to the Company’s customers,
operations, finances, and business in any form that derives value from not
being
generally known to other persons or entities, including, but not limited to,
technical or nontechnical data, formulas, patterns (including future carpet
patterns), customer purchasing practices and preferences, compilations
(including compilations of customer information), programs (including computer
programs and models), devices (including carpet manufacturing equipment),
methods (including aesthetic and functional design and manufacturing methods),
techniques (including style and design technology and plans), drawings
(including product or equipment drawings), processes, financial data (including
sales forecasts, sales histories, business plans, budgets and other forecasts),
or lists of actual or potential customers or suppliers (including identifying
information about those customers), whether or not reduced to writing.
Confidential Information subject to this Agreement may include information
that
is not a trade secret under applicable law, but such information not
constituting a trade secret shall be treated as Confidential Information under
this Agreement for only a two-year period after termination of Executive’s
employment.
(iii)
“Customers”
shall mean
customers of the Company that Executive, during the two-year period
before termination of Executive’s employment, (A) solicited or serviced or
(B) about whom Executive had Confidential Information. The parties
acknowledge that a two-year period for defining Customers (as well as
“Suppliers,” below) is reasonable based on the Company’s typical sales cycle,
budgetary requirements and procurement procedures.
(iv)
“Products”
shall mean
carpet tile, modular carpet, broadloom carpet (whether 12-foot,
six-foot or other competitive widths) and resilient textile flooring for
contract, commercial, institutional (including, but not limited to, government
and education), and residential markets and customers.
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(v)
“Services”
shall mean
the services Executive shall provide as a Company executive, and that
Executive shall be prohibited from providing (whether as an owner, partner,
employee, consultant or in any other capacity) in competition with the Company,
in accordance with the terms of this Agreement, which are to manage and
supervise, and to have responsibility for, the conduct of the business of
designing, developing, manufacturing, purchasing for resale, marketing, selling,
distributing, installing, maintaining and reclaiming Products, including, but
not limited to, (A) preparation of business plans, budgets and forecasts,
(B) development of strategies for pricing of Products to customers, (C)
supervision of marketing and sale of products and customer service,
(D) development of overall strategy for such business, (E) design and
development of Products, (F) development and maintenance of relationships with
principal customers and suppliers, (G) employment and supervision of key
executives and sales personnel, (H) development of plans for expansion of
such business, including expansion through market segmentation strategies,
merger, acquisition, joint venture and other combinations and affiliations,
and
(I) supervision and oversight of manufacturing operations and quality control
for Products, including “mass customization” production strategy and methods for
reducing waste in the production process. Executive acknowledges that
he has been informed of and had an opportunity to discuss with the Company
the
specific activities Executive will perform as Services and that Executive
understands the scope of the activities constituting Services.
(vi)
“Supplier”
shall mean
a supplier of the Company that Executive, during the two-year period
before termination of Executive’s employment, (A) had contact with on
behalf of the Company, or (B) about whom Executive had Confidential
Information.
(vii)
“Territory”
shall mean
North America, which is the geographic area where Executive performs
Services for the Company and in which the Company continues to conduct business.
Executive has been informed of and had an opportunity to discuss with the
Company the specific territory in which Executive will perform
Services. Executive acknowledges that the market for the Company
Products is worldwide, and that the Territory is the area in which Executive’s
provision of Services in violation of this Agreement would cause harm to the
Company.
(b)
Non-disclosure and
Restricted Use. Executive shall use best efforts to protect
Confidential Information. Furthermore, Executive will not use, except
in connection with work for the Company, and will not disclose during or after
Executive’s employment, the Company’s Confidential Information.
(c)
Return of
Materials. Upon the expiration of this Agreement or
termination for any reason of Executive’s employment, or at any time upon the
Company’s request, Executive will deliver promptly to the Company all materials,
documents, plans, records, notes or other papers and any copies in Executive’s
possession or control relating in any way to the Company’s business, which at
all times shall be the property of the Company.
(d)
Non-solicitation
of
Customers. During employment with the Company and for two
years after the termination for any reason of Executive’s employment, Executive
will not solicit Customers for the purpose of providing or selling any
Products.
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(e)
Non-solicitation
of
Suppliers. During employment with the Company and for two
years after the termination for any reason of Executive’s employment, Executive
will not solicit any Supplier for the purpose of obtaining goods or services
that the Company obtained from that Supplier and that are used in or relate
to
any Products.
(f)
Non-solicitation
of
Company Employees. During employment with the Company and for
two years after the termination for any reason of Executive’s employment,
Executive will not solicit for employment with another person or entity, anyone
who is, or was at any time during the year prior to such termination of
Executive’s employment, a Company employee.
(g)
Limitations on
Post-Termination Competition. During employment with the
Company and for two years after the termination for any reason of Executive’s
employment, Executive will not provide any Services within the Territory to
any
person or entity developing, manufacturing, marketing, selling, distributing
or
installing any Products.
(h)
Disparagement. Executive
shall not at any time make false or misleading statements about the Company,
including its Products, management, employees, Customers and
Suppliers.
(i)
Future Employment
Opportunities. At any time before, and for two years after,
the termination for any reason of Executive’s employment, Executive shall,
before accepting employment with another employer, provide such prospective
employer with a copy of this Agreement and, upon accepting any employment with
another employer, provide the Company with such employer’s name and a
description of the services Executive will provide to such
employer.
(j)
Work For Hire
Acknowledgment; Assignment. Executive acknowledges that
Executive’s work on and contributions to documents, programs, and other
expressions in any tangible medium (collectively, “Works”) are within the scope
of Executive’s employment and part of Executive’s duties and
responsibilities. Executive’s work on and contributions to the Works
will be rendered and made by Executive for, at the instigation of, and under
the
overall direction of, the Company, and are and at all times shall be regarded,
together with the Works, as “work made for hire” as that term is used in the
United States Copyright Laws. Without limiting this acknowledgment,
Executive assigns, grants, and delivers exclusively to the Company all rights,
titles, and interests in and to any such Works, and all copies and versions,
including all copyrights and renewals. Executive will execute and
deliver to the Company, its successors and assigns, any assignments and
documents the Company requests for the purpose of establishing, evidencing,
and
enforcing or defending its complete, exclusive, perpetual and worldwide
ownership of all rights, titles and interests of every kind and nature,
including all copyrights, in and to the Works, and Executive constitutes and
appoints the Company as Executive’s agent to execute and deliver any assignments
or related documents Executive fails or refuses promptly to execute and deliver,
this power and agency being coupled with an interest and being
irrevocable.
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(k)
Inventions, Ideas
and
Patents. Executive shall disclose promptly to the Company
(which shall receive it in confidence), and only to the Company, any invention
or idea of Executive (developed alone or with others) conceived or made during
Executive’s employment by the Company or within six months of the date of
expiration of this Agreement or termination of employment. Executive
assigns to the Company any such invention or idea in any way connected with
Executive’s employment with the Company or related to the Company’s business,
research or development, or demonstrably anticipated research or development,
and will cooperate with the Company and sign all documents deemed necessary
by
the Company to enable it to obtain, maintain, protect and defend patents
covering such inventions and ideas and to confirm the Company’s exclusive
ownership of all rights in such inventions, ideas and patents. Executive
irrevocably appoints the Company as Executive’s agent to execute and deliver any
assignments or related documents Executive fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest and
being
irrevocable. This constitutes the Company’s written notification that this
assignment does not apply to an invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was
developed entirely on Executive’s own time, unless (i) the invention relates (A)
directly to the business of the Company or (B) to the Company’s actual or
demonstrably anticipated research or development, or (ii) the invention results
from any work performed by Executive for the Company.
(l)
Survival of
Provisions. Upon termination of Executive’s employment for any
reason whatsoever (whether voluntary on the part of Executive, for Cause, or
other reasons), the obligations of Executive pursuant to this Section 9 shall
survive and remain in effect.
(m)
Injunctive
Relief. Executive acknowledges that any breach of the terms of
this Section 9 would result in material damage to the Company, although it
might be difficult to establish the monetary value of the
damage. Executive therefore agrees that the Company, in addition to
any other rights and remedies available to it, shall be entitled to obtain
an
immediate injunction (whether temporary or permanent) from any court of
appropriate jurisdiction in the event of any such breach thereof by Executive,
or threatened breach which the Company in good faith believes will or is likely
to result in irreparable harm to the Company.
10.
Governing
Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia and the federal
laws of the United States of America, without regard to rules relating to the
conflict of laws. Executive hereby consents to the exclusive
jurisdiction of the Superior Court of Xxxx County, Georgia and the U.S. District
Court in Atlanta, Georgia, and hereby waives any objection Executive might
otherwise have to jurisdiction and venue in such courts in the event either
court is requested to resolve a dispute between the parties.
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11.
Dispute Resolution;
Expenses. All claims by Executive for any unpaid compensation
and benefits under this Agreement shall be directed to the Board and shall
be in
writing. Any denial by the Board of a claim for compensation or benefits under
this Agreement shall be delivered to Executive in writing and shall set forth
the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable
opportunity to Executive for a review of a decision denying a claim and shall
further allow Executive to appeal to the Board a decision of the Board within
60
days after notification by the Board that Executive’s claim has been
denied. In the event Executive incurs legal fees and other expenses
in seeking to obtain or to enforce any rights or benefits provided by this
Agreement and is successful, in whole or in part, in obtaining or enforcing
any
such rights or benefits through litigation, settlement, arbitration, mediation
or otherwise, the Company shall pay or reimburse Executive’s reasonable legal
fees and expenses incurred in enforcing this Agreement. Except to the
extent provided in the preceding sentence, each party shall pay his or its
own
legal fees and other expenses associated with any dispute. Any of Executive’s
legal fees or expenses to be paid by the Company shall be paid as soon as
practicable, but not later than 30 days after Executive submits evidence of
such
expenses to the Company.
12.
Code Section
409A. This Agreement is intended to comply with the
requirements of Code Section 409A and shall be construed
accordingly. Any payments or distributions to be made to Executive
under this Agreement upon a separation from service of amounts classified as
“nonqualified deferred compensation” for purposes of Code Section 409A, and not
exempt from Code Section 409A, shall in no event be made or commence until
six
months after Executive’s Section 409A Separation from Service. Any
reference to a payment being exempt (or not exempt) from Code Section 409A
refers to any applicable exemption available under Section 409A, including,
without limitation, the short-term deferral rule and severance pay exemptions
as
provided in Code Section 409A and the Treasury Regulations. Each
payment under this Agreement (whether of cash, property or benefits) shall
be
treated as a separate payment for purposes of Code Section
409A. Where this Agreement provides that a payment will be made upon
a specified date or during a specified period, such date or period, as required
by Code Section 409(A), but in no way to detract from or excuse the payment
deadlines set forth in the operative provisions above in this Agreement, will
be
the Code Section 409A “payment date” or “payment period”, and actual payment
will be made no later than the latest date permitted under Code Section 409A
and
the regulations thereunder (generally, by the later of the end of the calendar
year in which the payment date falls, or the fifteenth day of the third calendar
month after the payment date occurs). To the extent that any payments
made pursuant to this Agreement are reimbursements exempt from Code Section
409A, the amount of such payments during any calendar year shall not affect
the
benefits provided in any other calendar year, and the right to any such payments
shall not be subject to liquidation or exchange for another benefit or
payment. As required by Code Section 409A, but in no way to detract
from or excuse the payment deadlines set forth in the operative provisions
above
in this Agreement, the payment date for any reimbursements shall in no event
be
later than the last day of the calendar year immediately following the calendar
year in which the reimbursed expense was incurred or, for purposes of Sections
7(c)(iii)(B) and (C) above, the calendar year in which the Excise Tax must
be
remitted to the applicable governmental taxing authority.
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13.
Notices. All
notices, consents and other communications required or authorized to be given
by
either party to the other under this Agreement shall be in writing and shall
be
deemed to have been given or submitted (a) upon actual receipt if delivered
in
person or by facsimile transmission with receipt confirmation, (b) upon the
earlier of actual receipt or the expiration of two business days after sending
by express courier (such as UPS or Federal Express), and (c) upon the earlier
of
actual receipt or the expiration of seven days after mailing if sent by
registered or certified express mail, postage prepaid, to the parties at the
following addresses:
|
To
the
Company:
Interface, Inc.
0000
Xxxxx Xxxxx Xxxx, Xxxxx
0000
Xxxxxxx,
Xxxxxxx
00000
Fax
No.:
000-000-0000
Attn:
Chief Executive
Officer
|
|
With
a copy
to:
Interface, Inc.
0000
Xxxxx Xxxxx Xxxx, Xxxxx
0000
Xxxxxxx,
Xxxxxxx
00000
Fax
No.:
000-000-0000
Attn:
General
Counsel
|
|
To
Executive:
Xxxx X. Xxxxx
at
the last address and fax
number
shown
on the records of the
Company
|
Executive
shall be responsible for providing the Company with a current address. Either
party may change its address (and facsimile number) for purposes of notices
under this Agreement by providing notice to the other party in the manner set
forth above.
14.
Failure to
Enforce. The failure of either party hereto at any time, or
for any period of time, to enforce any of the provisions of this Agreement
shall
not be construed as a waiver of such provision(s) or of the right of such party
thereafter to enforce each and every such provision.
15.
Binding Effect;
Assignment. This Agreement shall inure to the benefit of, and
be binding upon, the Company and its successors and assigns, and Executive
and
his heirs and personal representatives, but, except as hereinafter provided,
neither this Agreement nor any right hereunder may be assigned or transferred
by
either party hereto (or by any beneficiary or any other person), nor shall
this
Agreement or any right hereunder be subject to alienation, anticipation, sale,
pledge, encumbrance, execution, levy or other legal process of any kind against
Executive, Executive’s beneficiary or any other
person. Notwithstanding the foregoing, any person or business entity
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 express assumption of this Agreement by such successor and provide evidence
of same to Executive.
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16.
Nature of
Obligation. The agreement of the Company (or its successor) to
make payments to Executive hereunder shall represent the unsecured obligation
of
the Company (and its successor), except to the extent (a) the terms of any
other
agreement, plan or arrangement pertaining to the parties provide for funding,
or
(b) the Company (or its successor), in its sole discretion, elects in whole
or
in part to fund the Company’s obligations under this Agreement pursuant to a
trust arrangement or otherwise.
17.
Entire
Agreement. This Agreement supersedes all prior discussions and
agreements between the parties (including, without limitation, the Prior
Agreements) and constitutes the sole and entire agreement between the Company
and Executive with respect to the subject matter hereof. This
Agreement shall not be modified or amended except pursuant to a written document
signed by the parties hereto, which makes specific reference to this Agreement
and the fact that it is modifying or amending this Agreement.
18.
Preservation of
Benefits. Nothing in this Agreement shall limit or replace the
compensation or benefits payable to Executive, or otherwise affect Executive’s
rights, under any other benefit plan, program or agreement in which Executive
participates or to which Executive is a party.
19.
Severability. If
any provision of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of
the
parties that the remaining provisions shall constitute their agreement with
respect to the subject matter hereof, and all such remaining provisions shall
continue in full force and effect.
20.
Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one and the same
instrument.
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IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officers, and Executive has hereunder set his
hand, as of the date first above written.
|
INTERFACE,
INC.
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|
By:
/s/ Xxxxxx X. Xxxxxxx
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||
|
Xxxxxx
X.
Xxxxxxx
|
||
|
President
and
CEO
|
||
|
Attest:
/s/ Xxxxxxx X.
Xxxxxxx
|
||
|
Xxxxxxx
X.
Xxxxxxx
|
||
|
Secretary
|
||
|
EXECUTIVE:
|
||
|
/s/
Xxxx X. Xxxxx
|
||
|
Xxxx
X. Xxxxx
|
||
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