Exhibit 99.1
DIRECTOR
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INTERFACE, INC.
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (this "Agreement") is entered into as of
the ___ day of _____________, 20__, by and between INTERFACE, INC. (the
"Company") and _____________________ ("Grantee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the Interface, Inc. Omnibus Stock
Incentive Plan (the "Plan") which is administered by a committee appointed by
the Company's Board of Directors (the "Committee"); and
WHEREAS, Grantee is an "Outside Director" of the Company, and the
Committee has granted to Grantee an award of Restricted Shares under the terms
of the Plan (the "Award") to encourage Grantee's continued participation as a
director of the Company; and
WHEREAS, to comply with the terms of the Plan and to further the
interests of the Company and Grantee, the parties hereto have set forth the
terms of the Award in writing in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. PLAN PROVISIONS.
In addition to the terms and conditions set forth herein, the
Award is subject to and governed by the terms and conditions set forth in the
Plan, which are hereby incorporated herein by reference. Any terms used herein
with an initial capital letter shall have the same meaning as provided in the
Plan, unless otherwise specified herein. In the event of any conflict between
the provisions of this Agreement and the Plan, the Plan shall control.
2. STOCK AWARD.
Effective on ____________, 20__ (the "Grant Date"), and subject
to the restrictions and other conditions set forth herein, the Committee granted
to Grantee an Award of _____ Shares of the Class B common stock, $.10 par value
per share, of the Company; provided, however, that if all of the outstanding
Class B Shares of the Company are converted into Class A Shares, then Class A
Shares shall be substituted for the Class B Shares granted hereunder. Such
Shares granted are hereinafter sometimes referred to as the "Restricted Shares."
The Fair Market Value of each Restricted Share on the Grant Date was $_______.
3. VESTING RESTRICTIONS.
(a) GENERAL. The Restricted Shares will vest and no longer be subject to
forfeiture if one of several criteria is satisfied. As described below, these
criteria are based on increasing the Company's annual earnings before interest
and taxes (hereinafter, "Company EBIT"), Grantee's tenure as a director of the
Company, and/or the occurrence of a Change in Control (as defined in subsection
(d) hereof).
(b) PERFORMANCE CRITERIA. For purposes of applying the performance
criteria to determine when Grantee's Restricted Shares will vest, the Restricted
Shares are divided into two groups, "Group A" and "Group B", each with an equal
number of _____ Shares. The Restricted Shares in each of Group A and Group B
will vest if and when the following performance criteria are satisfied:
GROUP A. If on any date on or after the one-year anniversary of
the Grant Date, (i) Grantee has remained continuously engaged as a
director of the Company, (ii) Grantee has not yet vested in the Shares
in Group A, and (iii) the Company EBIT has increased to or exceeded the
applicable Target Level (as defined below), the vesting restriction on
the Shares in Group A will lapse immediately upon such date, and Grantee
thereupon will become vested in all of the Shares in Group A.
GROUP B. If on any date on or after the two-year anniversary of
the Grant Date, (i) Grantee has remained continuously engaged as a
director of the Company, (ii) Grantee has not yet vested in the Shares
in Group B, and (iii) the Company EBIT has increased to or exceeded the
applicable Target Level (as defined below), the vesting restriction on
the Shares in Group B will lapse immediately upon such date, and Grantee
thereupon will become vested in all of the Shares in Group B.
As used herein "Target Level" shall mean, with respect to a particular
anniversary of the Grant Date (or as soon thereafter as the Company can
calculate and confirm the results), Company EBIT for the most recent fiscal year
then ended, as set forth below (note that the Company reserves the right to
"normalize" the EBIT results to account for currency fluctuations, and to modify
the EBIT Target Levels based on the results of the fiscal 20__ year-end audit):
ANNIVERSARY FISCAL YEAR ENDED EBIT TARGET LEVEL
1 20__ $________
2 20__ $________
3 20__ $________
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(c) TENURE OF ENGAGEMENT. If Grantee remains continuously engaged as a
director of the Company until the three-year anniversary of the Grant Date, any
of the Restricted Shares (whether Group A or B) that have not yet vested will do
so on said date, and Grantee thereupon will become vested in all such Restricted
Shares.
(d) CHANGE IN CONTROL. If a Change in Control (as defined below) occurs,
any Restricted Shares (whether Group A or B) that have not yet vested will do so
on the date of the Change in Control, and Grantee thereupon will become vested
in all such Restricted Shares. For purposes hereof:
(x) "CHANGE IN CONTROL" shall mean the earliest to occur of:
(i) during such period as the holders of the Company's Class B
common stock are entitled to elect a majority of the Company's Board of
Directors, the Permitted Holders (as defined below) shall at any time
fail to be the "beneficial owners" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934) of a majority of the issued
and outstanding shares of the Company's Class B common stock;
(ii) at any time during which the holders of the Company's Class
B common stock have ceased to be entitled to elect a majority of the
Company's Board of Directors, the acquisition by any "person", entity,
or "group" of "beneficial ownership" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, and rules
promulgated thereunder) of more than 30 percent of the outstanding
capital stock entitled to vote for the election of directors ("Voting
Stock") of (A) the Company, or (B) any corporation which is the
surviving or resulting corporation, or the transferee corporation, in a
transaction described in clause (iii)(A) or (iii)(B) immediately below;
(iii) the effective time of (A) a merger, consolidation or other
business combination of the Company with one or more corporations as a
result of which the holders of the outstanding Voting Stock of the
Company immediately prior to such merger or consolidation hold less than
51 percent of the Voting Stock of the surviving or resulting
corporation, or (B) a transfer of all or substantially all of the
property or assets of the Company other than to an entity of which the
Company owns at least 51 percent of the Voting Stock, or (C) a plan of
complete liquidation of the Company; and
(iv) the election to the Board of Directors of the Company,
without the recommendation or approval of Xxx X. Xxxxxxxx if he is then
serving on the Board of Directors, or, if he is not then serving, of the
incumbent Board of Directors of the Company, of the lesser of (A) four
directors, or (B) directors constituting a majority of the number of
directors of the Company then in office.
(y) "PERMITTED HOLDERS" shall mean the individuals listed on
Schedule 10.11 to the Second Amended and Restated Credit Agreement dated
June 25, 1997, by and among the Company, certain of its subsidiaries,
SunTrust Bank and the other banks parties thereto (regardless of whether
said agreement is terminated or continues in force and effect),
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provided that, for purposes of this definition, the reference to each
such individual shall be deemed to include the members of such
individual's immediate family, such individual's estate, and any trusts
created by such individual for the benefit of members of such
individual's immediate family.
(e) PARTIAL VESTING UPON CERTAIN EVENTS. Upon the date that
Grantee's engagement as a director of the Company terminates as a result
of (i) Grantee's Disability (as defined below) or (ii) Grantee's death,
a portion of the Restricted Shares that have not yet vested will do so
on such date, and Grantee thereupon will become vested in such portion
of the Restricted Shares. The portion of Restricted Shares that shall
vest will be equal to the product of (x) the total number of Restricted
Shares granted hereunder that have not yet vested pursuant to the
performance criteria; and (y) a fraction, the numerator of which is the
number of full and partial 12-month periods that have elapsed since the
Grant Date (with any partial 12-month period treated as a whole 12-month
period), and the denominator of which is three. As used herein, the term
"Disability" shall mean Grantee's inability, as a result of physical or
mental incapacity, to substantially perform Grantee's duties as a
director of the Company for a continuous period of six months. The
Committee, in its sole discretion, shall make all determinations as to
whether or not Grantee has incurred a Disability, and the Committee's
determination shall be final and binding.
4. FORFEITURE UPON RESIGNATION OR NON-ELECTION.
If Grantee voluntarily resigns from the Board of Directors of
the Company, for any reason, or stands for re-election as a director of the
Company but is not elected, any Restricted Shares that are not then vested under
any provision of Section 3 shall be immediately forfeited, and Grantee shall
have no rights in such Restricted Shares.
5. DELIVERY OF STOCK CERTIFICATE.
Within a reasonable time after the date hereof, the Company
shall cause the Restricted Shares to be registered in the name of Grantee,
subject to the risk of forfeiture set forth in Sections 3 and 4 hereof. Grantee
may not sell, assign, transfer or pledge any Restricted Shares prior to the date
on which the possibility of forfeiture with respect to such Shares has lapsed.
During the period that any Restricted Shares remain subject to a risk of
forfeiture under Sections 3 and 4 hereof, the Company may retain possession of
the certificate representing such Shares as a means of enforcing such
restrictions.
6. ACKNOWLEDGMENT OF GRANTEE.
Grantee acknowledges that certain restrictions under state,
federal or foreign securities laws may apply with respect to the Restricted
Shares granted pursuant to the Award. Grantee further acknowledges that, to the
extent Grantee is an "affiliate" of the Company (as that term is defined by the
Securities Act of 1933), the Restricted Shares granted as a result of the Award
are subject to certain trading restrictions under applicable securities laws
(including, particularly, Rule 144 under the
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Securities Act). Grantee hereby agrees to execute such documents and take such
actions as the Company may reasonably require with respect to state, federal and
foreign securities laws applicable to the Company and any restrictions on the
resale of such Shares which may pertain under such laws. The Company has
registered or intends to register the securities represented by the Restricted
Shares; however, in the event such registration at any time is ineffective or
any special rules apply, such securities may be sold or transferred only in
accordance with the Plan and pursuant to additional, effective securities laws
registrations or in a transaction that is exempt from such registration
requirements. If appropriate under the circumstances, the certificate(s)
evidencing the Restricted Shares shall bear a restrictive legend indicating that
the Restricted Shares have not been registered under applicable securities laws.
7. EXECUTION OF AGREEMENT.
Grantee shall execute this Agreement within 30 days after
receipt of same, and promptly return an executed copy to the Company.
8. WITHHOLDING.
Grantee shall pay the Company an amount equal to the sum of
all applicable taxes, if any, that the Company is required to withhold at any
time. Such payment may be made in cash, by withholding from Grantee's directors'
fees, or, if permitted by the Company at the relevant time, by delivery of
Shares (including Restricted Shares then vested under this Agreement).
9. MISCELLANEOUS.
(a) FUTURE RIGHTS. The granting of the Award and the execution of this
Agreement shall not afford Grantee any rights to similar grants in future years
or any right to continue to serve as a director of the Company.
(b) SHAREHOLDER RIGHTS. While the Restricted Shares remain subject to
forfeiture under Sections 3 and 4 hereof, Grantee shall have all of the rights
of a shareholder of the Company, including the right to vote the Restricted
Shares and to receive any cash dividends.
(c) SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court or a governmental agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions contained in this Agreement
shall continue in full force and effect, and shall in no way be affected,
impaired or invalidated.
(d) CONTROLLING LAW. This Agreement is being made in the State of
Georgia (USA) and shall be construed and enforced in accordance with the laws of
that state.
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(e) CONSTRUCTION. This Agreement contains the entire understanding
between the parties and supersedes any prior understanding and agreements
between them with respect to the subject matter hereof. There are no
representations, agreements, arrangements or understandings, oral or written,
between the parties hereto relating to the subject matter hereof which are not
fully expressed herein.
(f) BINDING EFFECT. This Agreement shall inure to the benefit of, and be
binding upon, the Company and its successors and assigns, and Grantee and
Grantee's heirs and personal representatives. Any business entity or person
succeeding to all or substantially all of the business of the Company by stock
purchase, merger, consolidation, purchase of assets, or otherwise shall be bound
by and shall adopt and assume this Agreement, and the Company shall obtain the
assumption of this Agreement by such successor.
(g) HEADINGS. Section and other headings contained in this Agreement are
included for reference purposes only and are in no way intended to define or
limit the scope, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the individual party hereto has executed this
Agreement, and the corporate party has caused this Agreement to be executed by a
duly authorized representative, as of the date first set forth above.
INTERFACE, INC.
By:
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[name]
[title]
GRANTEE
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[name]
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