Exhibit 10.2 – Form of Performance Share Agreement for executive officers

 

INTERFACE, INC.

PERFORMANCE SHARE AGREEMENT

 

This Performance Share 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, the Committee has granted to Grantee an award of Performance Shares
under the terms of the Plan (the “Award”) to encourage Grantee’s continued
loyalty and diligence; 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)             Performance Share Award.

 

(a)     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 ______ Performance Shares based on a “Target Level” of
vesting as described in Section 3. Such Performance Shares granted are
hereinafter sometimes referred to as the “Performance Shares.” The Fair Market
Value of each Performance Share awarded on the Grant Date was $______.

 

(b)     If cash dividends are paid with respect to Shares, Grantee shall be
credited with a “dividend equivalent” representing the right to receive a cash
payment equal to the amount of such dividend with respect of each Performance
Share that vests under the Award. If dividends are paid in the form of Shares
rather than cash, then the number of Performance Shares shall be increased by
the Performance Shares for each Share that would have been received as a
dividend had the Performance Shares been outstanding Shares. Dividend
equivalents and additional Performance Shares credited under the Section shall
vest or be forfeited at the same time as the Performance Shares to which they
relate.

 

 

 
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3)             Vesting Restrictions.

 

(a)     General.   All or a portion (as applicable) of the Performance 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 the Company’s
earnings per share (“EPS”) growth or relative total shareholder return (“TSR”),
the termination of Grantee’s employment after the occurrence of a Change in
Control (as defined in subsection (c) hereof), and/or certain other events
resulting in termination of Grantee’s employment with the Company.

 

(b)     Performance Vesting. The Performance Shares shall vest under this
Section 3(b), to the extent not otherwise vested or forfeited hereunder, to the
extent that the performance vesting criteria specified in this Section 3(b) is
achieved. [Performance Vesting Criteria Described Here]

 

(c)     Performance Vesting. [Any additional Performance Vesting Criteria
Described Here]

 

(d)     Effect of a Change in Control. In the event of a Change in Control (as
defined in Section 4(d)), the Committee shall have the authority to, without the
Grantee’s consent, alter or amend the terms of the Award, with respect to any
Performance Shares that have not then vested or been forfeited, in any manner
that it deems equitable and necessary or advisable to take into account the
effect of the Change in Control. Such modifications may include, by way of
example and not by way of limitation, (i) providing for payment in the form of
cash or other securities in lieu of Shares, (ii) vesting of all or a portion of
the Performance Shares based on the attainment of the performance criteria under
Section 3(b) or 3(c) determined as of the date of the Change of Control,
(iii) accelerating the vesting of the Performance Shares in full or on a pro
rata basis, (iv) converting some or all of the Shares to time-based vesting, or
(v) making appropriate adjustments to the performance criteria under Sections
3(b) and 3(c). Nothing in this Section 3(d) shall limit the Committee from
taking any other action permitted under the Plan with respect to the Performance
Shares.

 

4)             Effect of Termination of Employment

 

(a)     Resignation or Termination for Cause. If Grantee voluntarily resigns
from employment with the Company and all of its Subsidiaries for any reason
other than Disability (as defined in subsection (b) below), or if the Company or
the Subsidiary that is Grantee’s employer terminates Grantee’s employment for
Cause (as defined below), any Performance Shares that are not then vested shall
be immediately forfeited, and Grantee shall have no rights in such Performance
Shares. For purposes hereof, the term “Cause” shall mean the reason for
termination of Grantee’s employment is (A) Grantee’s fraud, dishonesty, gross
negligence or willful misconduct, with respect to the business affairs of the
Company or its Subsidiaries, (B) Grantee’s refusal or repeated failure to follow
the established lawful policies of the Company or its Subsidiaries applicable to
persons occupying the same or similar positions, or (C) Grantee’s conviction of
a felony or other crime involving moral turpitude.

 

 

 
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(b)     Disability or Death. If Grantee’s employment with the Company and its
Subsidiaries terminates as a result of (i) Grantee’s Disability (as defined
below) or (ii) Grantee’s death, Grantee (or Grantee’s heirs) shall vest in a
portion of the Performance Shares that have not yet vested or been forfeited.
The number of Performance Shares that shall vest will be equal to the product of
(x) the nominal number of Performance Shares specified in Section 2(a), reduced
by the number of Performance Shares that have vested under the performance
criterion (pursuant to Sections 3(b) and 3(c) hereof), 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 _________. Any
Performance Shares that do not vest as described herein shall be immediately
forfeited, and Grantee (or Grantee’s heirs) shall not have any rights in such
Performance Shares. For purposes hereof, the term “Disability” shall mean
Grantee’s inability, as a result of physical or mental incapacity, to
substantially perform Grantee’s duties for the Company and its Subsidiaries on a
full-time basis 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.

 

(c)     Involuntary Termination. If Grantee’s employment with the Company and
its Subsidiaries terminates as a result of an involuntary termination at the
request of the Company (or the Subsidiary that is Grantee’s employer) for any
reason other than Cause (as defined in subsection (a) above) and the provisions
of Section 4(d) do not apply, Grantee will retain a portion of the Performance
Shares that have not yet vested or been forfeited; provided however, that
(i) such retained Performance Shares shall vest only in accordance with Section
3(b) and/or 3(c) and (ii)  in order to retain such Performance Shares Grantee
must sign a release of claims and acknowledgement in the form required by the
Company. Any Performance Shares that are not retained by Grantee shall be
immediately forfeited, and Grantee shall not have any rights in such Performance
Shares. The number of such Performance Shares that shall be retained will be
equal to the product of (x) the nominal number of Performance Shares specified
in Section 2(a), reduced by the number of Performance Shares that have vested
under the performance criteria (pursuant to Sections 3(b) and 3(c) hereof), 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.

 

(d)     Termination After a Change in Control. If, within 24 months following
the occurrence of a Change in Control (as defined below), Grantee’s employment
with the Company and its Subsidiaries terminates as a result of (i) involuntary
termination at the request of the Company (or the Subsidiary that is Grantee’s
employer) for any reason other than Cause (as defined in Section 4(a)), or (ii)
a voluntary termination by Grantee with Good Reason (as defined below), a
portion of the Performance Shares granted hereunder that have not yet vested or
been forfeited will become vested on the date of Grantee’s termination of
employment in accordance with this Section 4(d). The number of Performance
Shares that shall vest upon such termination of employment shall be equal to the
nominal number of Performance Shares set forth in Section 2(a), reduced by the
number of Performance Shares previously vested and any Performance Shares that
vest pursuant to Section 3(b) after the Grantee’s termination of employment due
to the Committee’s subsequent certification of EPS with respect to a fiscal year
that ended during the Grantee’s employment. For purposes hereof, “Change in
Control” shall mean the earliest to occur of:

 

 

 
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(i)     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 (ii)(A) or (ii)(B) immediately below;

 

(ii)     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

 

(iii)     the election to the Board of Directors of the Company, without the
recommendation or approval 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.

 

“Good Reason” shall mean, following a Change in Control, (i) a material
reduction in Grantee’s authorities, duties or responsibilities, (ii) a material
reduction in Grantee’s base compensation or bonus opportunity as in effect
immediately prior to the Change in Control, (iii) a material reduction in
Grantee’s benefits, other than a reduction affecting substantially all similarly
situated employees, (iv) a material reduction in any budget over which the
Grantee has authority, or (v) a Company-required relocation of more than 30
miles of the Grantee’s principal place of employment. An event described in
clause (i), (ii) or (iii) shall constitute Good Reason only if the Grantee
notifies the Company within 20 days of the occurrence of the event and the
Company fails to take appropriate action to cure such event within 20 days after
receiving such notice.

 

5)             Delivery of Shares.

 

Within a reasonable time after the vesting of any Performance Shares (and in no
event later than two and one-half months after the later of (i) the calendar
year in which such Performance Shares vest and (ii) the Company’s fiscal year in
which such Performance Shares vest), the Company shall deliver a number of
Shares equal to the number of vested Performance Shares; provided, however, that
the Committee may elect to make payment in cash equal to the Fair Market Value
of the Shares, or in a combination of cash and Shares. Grantee may not sell,
assign, transfer or pledge any right or interest in the Performance Shares prior
to the date on which payment or delivery in respect of such Performance Shares
has been made.

 

 

 
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6)             Acknowledgment of Grantee.

 

Grantee acknowledges that certain restrictions under state, federal or foreign
securities laws may apply with respect to the Performance 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 Shares issued under the Award are subject to certain trading
restrictions under applicable securities laws (including, particularly, Rule 144
under the 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 the Shares delivered in respect of such
Performance Shares which may pertain under such laws. The Company has registered
(or intends to register) the Shares represented by the Performance 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 such Shares shall bear a restrictive legend indicating that such
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 Secretary of the Company.

 

8)             Withholding.

 

Grantee shall pay the Company an amount equal to the sum of all applicable
employment taxes that the Company or any Subsidiary is required to withhold at
any time in connection with the operation of this Agreement. In the absence of
prior arrangements satisfactory to the Company for payment of all such taxes
required to be withheld, the Company shall withhold a portion of the Shares or
cash to be delivered under this Agreement in payment of such taxes, except to
the extent such withholding of Shares is prohibited by any covenants governing
the Company’s debt as in effect from time to time.

 

9)             Miscellaneous.

 

a)     Employment 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 be retained in the employ or service of the Company or any of
its Subsidiaries, nor shall it interfere in any way with the right of the
Company or any such Subsidiary to terminate Grantee’s employment or services at
any time, with or without cause, or the right of Grantee to terminate Grantee’s
employment or services at any time.

 

 

 
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b)     Shareholder Rights. Prior to the delivery of Shares pursuant to Section
5, Grantee shall not have the rights of a shareholder of the Company, including
the right to vote such Shares or 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. Grantee hereby consents to the exclusive jurisdiction of the Superior
Court of Cobb County, Georgia, and the U.S. District Court in Atlanta, Georgia,
and hereby waives any objection Grantee might otherwise have to jurisdiction and
venue in such courts, in the event either court is requested to resolve a
dispute between the parties with respect to this Agreement.

 

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.

 

 

 
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IN WITNESS WHEREOF, the individual party hereto has executed this Agreement, and
the corporate party has caused this Agreement to be executed by a duly
authorized representative, as of the date first set forth above.

 

INTERFACE, INC.

 

By:                                                                             

[name]

ex10-2.htm

 

GRANTEE 

 

____________________________________

[name] 

 

 

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