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EXHIBIT 10.4
AMENDMENT NO. 1
TO THE
EMPLOYMENT AGREEMENT
THIS AMENDMENT is made and entered into the 25th day of July, 1995, by and
between INTERFACE, INC., a corporation organized under the laws of the State
of Georgia, U.S.A. (the "Company"), and XXXXXXX X. XXXXX (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company and the Executive have previously entered into an
agreement for the employment of the Executive by the Company (the "Employment
Agreement");
WHEREAS, the Company and the Executive have agreed to amend the terms of
such Employment Agreement as provided herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
Employment Agreement is hereby amended as follows:
1.
Section 5.3 of the Employment Agreement is hereby amended by adding the
following new subsections (e) and (f) at the end of the present section:
"(e) Notwithstanding any provision of this Agreement to the contrary
(including (d) above), if Executive's employment is terminated (whether
by the Company or by Executive) under circumstances that would entitle
him to receive benefits under his agreement with the Company providing
compensation and benefits for terminations following a "change in
control" of the Company (as defined in such agreement), then any such
termination shall be treated under this Agreement as a termination by the
Company without Cause and the Executive shall be entitled to the
compensation and benefits set forth in (a) through (c) above for the
time periods provided in this Section 5.3.
(f) If Executive becomes entitled to compensation and benefits under
this Section 5.3 and such payments are considered to be severance
payments contingent upon a change in control under Internal Revenue Code
Section 280G, Executive shall be required to be willing to perform the
duties and job he was performing under this Agreement at the time of the
change in control and, if such offer is rejected, to mitigate damages (but
only with respect to amounts that would be treated as
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severance payments) by reducing the amount of severance payments he is
entitled to receive by any compensation and benefits he earns from
subsequent employment (but shall not be required to seek such employment)
during the 24-month period after termination (or such lesser period as
he is entitled to compensation and benefits under this Agreement)."
2.
This Amendment No. 1 is effective as of the date first written above.
Except as hereby amended, the provisions of the Employment Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this amendment to be executed
by its duly authorized officer, and the Executive has executed this Agreement,
all as of the date first written above.
INTERFACE, INC.
By: /s/ Xxx X. Xxxxxxxx
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Name: Xxx X. Xxxxxxxx
Title: Chairman
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
SUMMARY OF CHANGE IN CONTROL AGREEMENT ("AGREEMENT")
I. Purpose and Design of Agreement
A. The Agreement provides benefits in the event your employment with
Interface, Inc. (the "Company") is terminated without cause in
connection with a change in control.
B. The tax laws restrict the amount of compensation and benefits that
can be paid to you as severance payments after a change in
control. However, these limits do not apply to payments or
benefits received as damages for premature termination under an
employment agreement.
C. This Agreement is coordinated with your Employment Agreement which
is being amended to provide that payments made to you upon your
termination of employment will be treated as damages, not subject
to the tax limitation referred to in I.B. above. However, if the
Internal Revenue Service classifies any of such payments as
severance payments, rather than damages, your compensation and
benefits under this Agreement may be reduced to comply with the
tax limit.
II. Term of Agreement -- The term of the Agreement will, at all times, be
two years, unless the Company gives you notice that it ceases to
automatically extend the term of the Agreement. If the Company gives
you such notice, the term of the Agreement will be two years from the
date of such notice.
III. Operation of Agreement
A. You will be entitled to benefits under the Agreement if you are
terminated within 24 months after or 6 months prior to the date
of the Change in Control, if your termination is related to such
Change in Control, and if your termination meets the definition
of either an "Involuntary Termination" or a "Voluntary
Termination" as defined in Section IV.1 of the Agreement.
Generally, these definitions allow you to receive benefits
under the Agreement if you are involuntarily terminated or
constructively terminated without cause as a result of the
Change in Control.
B. "Change in Control" is defined in the Agreement in Section III.4
and includes certain mergers, consolidations, and business
combinations; the termination of the Voting Agreement (as
defined in Section III.ll); the death of Xxx X. Xxxxxxxx; and the
elimination of the Company's Class B Common Stock or the
conversion of such stock into Class A Common Stock.
IV. Benefits Provided Under the Agreement -- If you are entitled to
benefits under the Agreement, you will be entitled to the following
compensation and benefits, reduced by any compensation and benefits
actually paid to you under your Employment Agreement.
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A. Salary -- You will receive your current salary (subject to
withholding of all applicable taxes) for a period of 24
months from your date of termination. You will be paid the
present value of these salary payments in a lump sum payment
no later than 30 days after your termination of employment.
B. Bonuses and Incentives -- You will receive bonus payments for
the 24 months following the month you terminate in an amount
for each month equal to l/12th of the average of your bonuses
paid to you for the previous two calendar years. You will be
paid the present value of these bonus payments in a lump sum
payment no later than 30 days after your termination of
employment.
C. Health and Life Insurance Coverage -- You will continue to
receive any health and life insurance benefits provided to
you as of your date of termination for a period of 24 months
from such termination date. Such coverages will be continued
at the same level and in the same manner as if your
employment had not terminated (subject to the customary
changes in such coverages if you retire, reach age 65 or
similar events). If you were paying any costs for such
coverages or additional coverages, such as dependent
coverage, you must continue to pay such costs to maintain
such coverages.
D. Employee Retirement Plans -- If permitted by the applicable
retirement plans, you will be entitled to continue to
participate in the tax qualified retirement plans maintained
by the Company for a period of 24 months from the date of your
termination of employment. You will also be considered fully
vested in such plans. If continued participation or full
vesting is not permited under any such plan, you will be paid
a lump sum supplemental benefit equal to the present value of
the difference between the benefit you would have received
had you participated for the full 24 months and been fully
vested and the benefit you actually receive.
E. Stock Options -- As of your date of termination, you will be
fully vested in all outstanding stock options granted to you
under the Interface, Inc. Key Employee Stock Option Plan
(1993), the Interface, Inc. Offshore Stock Option Plan and the
Interface Flooring Systems, Inc. Key Employee Stock Option
Plan.
F. Salary Continuation Agreement -- You will be entitled to a
benefit under your Salary Continuation Agreement equal to the
greater of the benefit calculated in accordance with its
terms, or the benefit calculated under a formula provided in
the Agreement.
G. The tax laws restrict the amount of compensation and benefits
that can be paid to an you as severance payments after a
change in control. This limit is 2.99 times your "base year"
compensation, which is defined as the annual average of your
W-2 compensation for the five years preceding the year of the
change in control. If this limit is exceeded, significant
adverse tax consequences will occur. Because of these adverse
tax consequences, the Agreement limits the compensation and
benefits to which you are entitled under the Agreement so
that any payments which would cause this limit to be exceeded
will not be made under the Agreement.
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