Document:

Exhibit 4.2

    
      

    

     

    

    EXHIBIT
      4.2

    

    

    INTERFACE,
      INC.

    

    STOCK
      OPTION AGREEMENT

    

    

    THIS
      STOCK OPTION AGREEMENT (hereinafter referred to as the "Agreement"), made and
      entered into as of July 31, 1996, by and between Interface,
      Inc.,
      a
      corporation organized under the laws of the State of Georgia (hereinafter
      referred to as the "Corporation"), and Don
      G. Aaron
      (hereinafter referred to as the "Recipient").

    

    

    W I T N E S S E T H:

    

    

    WHEREAS,
      the Corporation desires to grant to the Recipient a Stock Option to purchase
      shares of the Corporation's Class A or B Common Stock (as the Corporation
      determines), $0.10 par value per share (the "Common Stock"), on the terms and
      conditions hereinafter set forth.

    

    NOW,
      THEREFORE, for and in consideration of the premises and the mutual agreements
      and covenants hereinafter set forth, consulting services to be rendered by
      Recipient in accordance with Corporation's instructions, and other good and
      valuable consideration, the receipt, adequacy and sufficiency of which are
      hereby acknowledged, the parties hereto agree as follows:

    

    1.    Grant
      Of Option.
      Subject
      to the terms and conditions of this Agreement, the Corporation hereby grants
      to
      the Recipient the right and option (the "Option") to purchase four thousand
      (4,000) shares of the Common Stock (the "Option Shares").

    

    2.    Stock
      Option.

    

    (a)    Option
      Price.
      The
      purchase price of each share of Common Stock subject to this Option shall be
      fourteen dollars ($14.00), which price represents a value not less than the
      fair
      market value (meaning the closing sales price on the NASDAQ national market
      system or such other principal securities exchange on which the Common Stock
      may
      be listed) of each such share as of the date of grant of this
      Option.

    

    (b)    Exercise
      of Option.
      The
      Recipient may exercise this Option in whole or in part and from time to time
      at
      any time on or after the first anniversary of the date of this Agreement and
      prior to 5:00 p.m. on the date which immediately precedes the tenth anniversary
      of the date of this Agreement; subject, however, to earlier termination as
      provided in subparagraph 2(f) hereof and to the partial exercise provisions
      of
      subparagraph 2(c) immediately below. It is further provided that no partial
      exercise of this Option may be made for less than 100 shares or, if less than
      such number then remain available for purchase by exercise of this Option,
      the
      number of such remaining shares.

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    (c)    Partial
      Exercise.
      This
      Option shall be exercisable on or after the first anniversary of the date of
      this Agreement only to the extent of: 800 of the Option Shares before the
      expiration of two years from the date of this Agreement, 1,600 of the Option
      Shares before the expiration of three years from the date of this Agreement,
      2,400 of the Option Shares before the expiration of four years from the date
      of
      this Agreement and 3,200 of the Option Shares before the expiration of five
      years from the date of this Agreement. During the sixth year from the date
      of
      this Agreement, and at any time thereafter until expiration of the term of
      this
      Option, this Option shall be exercisable to the full extent of all 4,000 of
      the
      Option Shares (subject to the provisions of subparagraphs 2(b) and 2(f)
      hereof).

    

    (d)    Manner
      of Exercise.
      This
      Option may be exercised by delivering written notice of exercise to the
      Secretary of the Corporation, in person, or by mail, postage prepaid, addressed
      to the attention of the Secretary of the Corporation at the location at which
      the Corporation then maintains its principal office (currently at 2859 Paces
      Ferry Road, Suite 2000, Atlanta, Georgia 30339), and if so mailed, the date
      of
      mailing will be considered the date of exercise. The Corporation, in the event
      of exercise by an authorized person other than the Recipient, may require proof
      of the right of such person to exercise this Option. As promptly as practicable
      after receipt by the Corporation of the aforementioned notice to purchase and
      the full purchase price, the Corporation shall cause to be issued to the person
      entitled to purchase the shares for which this Option is exercised, stock
      certificate(s) for the number of shares of Common Stock being purchased, which
      shall evidence fully paid and nonassessable shares. The shares shall be either
      Class A or Class B shares, or a combination thereof, as determined by the
      Corporation at the time of issue.

    

    (e)    Person
      Who May Exercise Option.
      During
      the lifetime of the Recipient, this Option shall be exercisable only by the
      Recipient, or if the Recipient is disabled, by his duly appointed guardian
      or
      legal representative. Upon his or her death, this Option may be exercised by
      the
      Recipient's legal representative or by a person who receives the right to
      exercise this Option under the Recipient's will or by the applicable laws of
      descent and distribution.

    

    (f)    Earlier
      Termination of Option.
      Notwithstanding any other provision of this Agreement, this Option, to the
      extent that it has not previously been exercised, shall terminate upon the
      earliest to occur of: (i) the expiration of the term of this Option as set
      forth
      in subparagraph 2(b) hereof, (ii) the expiration of three (3) months after
      the
      earlier of the date on which the Recipient has been notified that his services
      no longer are needed, or he ceases to make his services available to the
      Corporation; or (iii) the expiration of one (1) year after the death of the
      Recipient or such later time as may be approved by the Compensation Committee
      of
      the Board of Directors of the Corporation (the "Committee").

    

    
      3.    
        Transferability.
        This
        Agreement and any rights hereunder shall be nontransferable and nonassignable
        by
        the Recipient or by any other person entitled hereunder to exercise any such
        rights and may not be pledged or hypothecated in any way; provided, however,
        that upon the death of the Recipient any rights granted hereunder shall be
        transferable, subject to the provisions of subparagraph 2(f) hereof, by the
        Recipient's will or by the applicable laws of descent and distribution. Any
        attempted transfer, assignment, pledge or other disposition of this Option
        contrary to the provisions hereof shall be null and void and without legal
        effect.

    

     

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    

    4.     
      Adjustment
      Of Shares.
      In the
      event of (i) any dividend payable in shares of Common stock; (ii) any
      recap-italization, reclassification, split-up or consolidation of, or other
      change in, the Common Stock; or (iii) an exchange of the outstanding shares
      of
      Common stock, in connection with a merger, consolidation or other reorganization
      of the Corporation or a sale by the Corporation of all or a portion of its
      assets, for a different number or class of shares of stock or other securities
      of the Corporation or for shares of the stock or other securities of any other
      corporation; then the Corporation shall, in such manner as it shall determine
      in
      its sole discretion to be appropriate under the circumstances, adjust the number
      and class of the Option Shares or the number and class of shares or other
      securities that shall then be subject to this Option and/or the purchase price
      per share which must be paid thereafter upon exercise of this
      Option.

    

    5.     
      Investment
      Representation.
      The
      Recipient hereby represents, warrants and agrees that:

    

    (a)    He
      understands the offer of shares under this Agreement is made pursuant to a
      claim
      of exemption from the registration provisions of the Securities Act of 1933,
      as
      amended (the "Act") and applicable state securities law;

    

    (b)    The
      Corporation shall not be obligated to issue shares of the Common Stock upon
      exercise of this Option until there has been compliance with any federal, state
      or foreign laws or regulations which the Corporation may deem
      applicable;

    

    (c)    The
      shares that shall be purchased under this Agreement, if unregistered as referred
      to in subparagraph 5(d) below, will be purchased for his own account for
      investment purposes only and not with a view to resale or distribution
      thereof;

    

    (d)    The
      shares subject to this Agreement may be unregistered and, if so, will be
      required to be held until such shares are subsequently registered or an
      exemption from registration is then available;

    

    (e)    The
      Corporation is under no obligation to register such shares or to undertake
      to
      facilitate compliance with any such exemption; and

    

    (f)    The
      transfer agent for the Corporation may be instructed not to transfer ownership
      of the stock certificate(s) representing shares acquired upon any exercise
      of
      this Option, unless in the prior written opinion of counsel reasonably
      acceptable to the Corporation, such transfer is lawful under the Act and
      applicable state securities law.

    

    In
      regard
      to the foregoing, the Recipient understands and agrees that the certificate(s)
      evidencing any shares that may be purchased pursuant to the exercise of this
      Option which have not been registered under the Act or any applicable state
      securities law, may bear an appropriate restrictive legend in a form determined
      in the sole discretion of the Corporation.

    

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    

    6.     
      No
      Rights As Shareholder.
      Neither
      the Recipient nor any other person authorized to purchase Common Stock upon
      exercise of this Option shall have any interest in or shareholder rights with
      respect to any shares of the Common Stock which are subject to this Option
      until
      such shares have been issued and delivered to the Recipient or any such person
      pursuant to the exercise of this Option.

    

    7.     
      Heirs
      And Successors.
      This
      Agreement and all terms and conditions hereof shall be binding upon the
      Corporation and its successors and assigns, and upon Recipient and his heirs,
      legatees and legal representatives.

    

    8.     
      Miscellaneous.
      This
      Option is executed and delivered in, and shall be governed by, the laws of
      the
      State of Georgia. This Agreement may not be modified or amended (except to
      the
      extent otherwise expressly stated herein) other than by a writing executed
      by
      each of the parties hereto.

    

    IN
      WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by
      its
      duly authorized officer, and the Recipient has executed this Agreement, all
      as
      of the date and year first above written.

     

    
 

    
      	 	
              INTERFACE,
                INC.

               

              

              By:/s/Ray
                C. Anderson

                   
                Ray C. Anderson, President

              

              
 

              RECIPIENT:

               

              

              /s/Don
                G. Aaron 

              Don
                G. Aaron

            

    

     

     

     

    
 

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

    

    

    

    EXERCISE
      OF

    STOCK
      OPTION

    

    

    

    he
      undersigned option Recipient under that certain Interface, Inc. Stock Option
      Agreement dated as of July 31, 1996 (the "Agreement"), hereby exercises the
      Stock Option granted under the Agreement for the following number of shares
      of
      Common Stock, subject to the terms and conditions of the Agreement:

    

    

    

    
      	
               

               

              Number
                of shares being purchased

               

              Total
                purchase price submitted herewith $

               

               

            

    

    

    

    

    

    

    

    

    
      	 	
              
                

              

               (Signature) 

              

              

              

               

                

              

              (Print
                Name and Representative) 

              Capacity,
                if Applicable) 

              

              

              

               

                

              

               (Date)

            

    

    

     

    

    
5Exhibit 4.3

    
      

    

     

    

      EXHIBIT
        4.3

      

      

      INTERFACE,
        INC.

      

      STOCK
        OPTION AGREEMENT

      

      

      THIS
        STOCK OPTION AGREEMENT (hereinafter referred to as the "Agreement"), made
        and
        entered into as of July 31, 1997, by and between Interface,
        Inc.,
        a
        corporation organized under the laws of the State of Georgia (hereinafter
        referred to as the "Corporation"), and Don
        G. Aaron
        (hereinafter referred to as the "Recipient").

      

      

      W I T N E S S E T H:

      

      

      WHEREAS,
        the Corporation desires to grant to the Recipient a Stock Option to purchase
        shares of the Corporation's Class A or B Common Stock (as the Corporation
        determines), $0.10 par value per share (the "Common Stock"), on the terms
        and
        conditions hereinafter set forth.

      

      NOW,
        THEREFORE, for and in consideration of the premises and the mutual agreements
        and covenants hereinafter set forth, consulting services to be rendered by
        Recipient in accordance with Corporation's instructions, and other good and
        valuable consideration, the receipt, adequacy and sufficiency of which are
        hereby acknowledged, the parties hereto agree as follows:

      

      1.    Grant
        Of Option.
        Subject
        to the terms and conditions of this Agreement, the Corporation hereby grants
        to
        the Recipient the right and option (the "Option") to purchase four thousand
        (4,000) shares of the Common Stock (the "Option Shares").

      

      2.    Stock
        Option.

      

       (a)    Option
        Price.
        The
        purchase price of each share of Common Stock subject to this Option shall
        be
        fourteen dollars ($14.00), which price represents a value not less than the
        fair
        market value (meaning the closing sales price on the NASDAQ national market
        system or such other principal securities exchange on which the Common Stock
        may
        be listed) of each such share as of the date of original grant of this
        Option.

      

       (b)    Exercise
        of Option.
        The
        Recipient may exercise this Option in whole or in part and from time to time
        at
        any time on or after the first anniversary of the date of this Agreement
        and
        prior to 5:00 p.m. on the date which immediately precedes the tenth anniversary
        of the date of this Agreement; subject, however, to earlier termination as
        provided in subparagraph 2(f) hereof and to the partial exercise provisions
        of
        subparagraph 2(c) immediately below. It is further provided that no partial
        exercise of this Option may be made for less than 100 shares or, if less
        than
        such number then remain available for purchase by exercise of this Option,
        the
        number of such remaining shares.

      

      
        
          

            

          

          
          

        

        
           

          
            

          

        

        
          
          

        

      

       (c)    Partial
        Exercise.
        This
        Option shall be exercisable on or after the first anniversary of the date
        of
        this Agreement only to the extent of: 800 of the Option Shares before the
        expiration of two years from the date of this Agreement, 1,600 of the Option
        Shares before the expiration of three years from the date of this Agreement,
        2,400 of the Option Shares before the expiration of four years from the date
        of
        this Agreement and 3,200 of the Option Shares before the expiration of five
        years from the date of this Agreement. During the sixth year from the date
        of
        this Agreement, and at any time thereafter until expiration of the term of
        this
        Option, this Option shall be exercisable to the full extent of all 4,000
        of the
        Option Shares (subject to the provisions of subparagraphs 2(b) and 2(f)
        hereof).

      

       (d)    Manner
        of Exercise.
        This
        Option may be exercised by delivering written notice of exercise to the
        Secretary of the Corporation, in person, or by mail, postage prepaid, addressed
        to the attention of the Secretary of the Corporation at the location at which
        the Corporation then maintains its principal office (currently at 2859 Paces
        Ferry Road, Suite 2000, Atlanta, Georgia 30339), and if so mailed, the date
        of
        mailing will be considered the date of exercise. The Corporation, in the
        event
        of exercise by an authorized person other than the Recipient, may require
        proof
        of the right of such person to exercise this Option. As promptly as practicable
        after receipt by the Corporation of the aforementioned notice to purchase
        and
        the full purchase price, the Corporation shall cause to be issued to the
        person
        entitled to purchase the shares for which this Option is exercised, stock
        certificate(s) for the number of shares of Common Stock being purchased,
        which
        shall evidence fully paid and nonassessable shares. The shares shall be either
        Class A or Class B shares, or a combination thereof, as determined by the
        Corporation at the time of issue.

      

       (e)    Person
        Who May Exercise Option.
        During
        the lifetime of the Recipient, this Option shall be exercisable only by the
        Recipient, or if the Recipient is disabled, by his duly appointed guardian
        or
        legal representative. Upon his or her death, this Option may be exercised
        by the
        Recipient's legal representative or by a person who receives the right to
        exercise this Option under the Recipient's will or by the applicable laws
        of
        descent and distribution.

      

       (f)    Earlier
        Termination of Option.
        Notwithstanding any other provision of this Agreement, this Option, to the
        extent that it has not previously been exercised, shall terminate upon the
        earliest to occur of: (i) the expiration of the term of this Option as set
        forth
        in subparagraph 2(b) hereof, (ii) the expiration of three (3) months after
        the
        earlier of the date on which the Recipient has been notified that his services
        no longer are needed, or he ceases to make his services available to the
        Corporation; or (iii) the expiration of one (1) year after the death of the
        Recipient or such later time as may be approved by the Compensation Committee
        of
        the Board of Directors of the Corporation (the "Committee").

      

      3.    Transferability.
        This
        Agreement and any rights hereunder shall be nontransferable and nonassignable
        by
        the Recipient or by any other person entitled hereunder to exercise any such
        rights and may not be pledged or hypothecated in any way; provided, however,
        that upon the death of the Recipient any rights granted hereunder shall be
        transferable, subject to the provisions of subparagraph 2(f) hereof, by the
        Recipient's will or by the applicable laws of descent and distribution. Any
        attempted transfer, assignment, pledge or other disposition of this Option
        contrary to the provisions hereof shall be null and void and without legal
        effect.

      
        
          

            

          

          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

      4.    Adjustment
        Of Shares.
        In the
        event of (i) any dividend payable in shares of Common stock; (ii) any
        recap-italization, reclassification, split-up or consolidation of, or other
        change in, the Common Stock; or (iii) an exchange of the outstanding shares
        of
        Common stock, in connection with a merger, consolidation or other reorganization
        of the Corporation or a sale by the Corporation of all or a portion of its
        assets, for a different number or class of shares of stock or other securities
        of the Corporation or for shares of the stock or other securities of any
        other
        corporation; then the Corporation shall, in such manner as it shall determine
        in
        its sole discretion to be appropriate under the circumstances, adjust the
        number
        and class of the Option Shares or the number and class of shares or other
        securities that shall then be subject to this Option and/or the purchase
        price
        per share which must be paid thereafter upon exercise of this
        Option.

      

      5.    Investment
        Representation.
        The
        Recipient hereby represents, warrants and agrees that:

      

      (a)    He
        understands the offer of shares under this Agreement is made pursuant to
        a claim
        of exemption from the registration provisions of the Securities Act of 1933,
        as
        amended (the "Act") and applicable state securities law;

      

      (b)    The
        Corporation shall not be obligated to issue shares of the Common Stock upon
        exercise of this Option until there has been compliance with any federal,
        state
        or foreign laws or regulations which the Corporation may deem
        applicable;

      

      (c)    The
        shares that shall be purchased under this Agreement, if unregistered as referred
        to in subparagraph 5(d) below, will be purchased for his own account for
        investment purposes only and not with a view to resale or distribution
        thereof;

      

      (d)    The
        shares subject to this Agreement may be unregistered and, if so, will be
        required to be held until such shares are subsequently registered or an
        exemption from registration is then available;

      

      (e)    The
        Corporation is under no obligation to register such shares or to undertake
        to
        facilitate compliance with any such exemption; and

      

      (f)    The
        transfer agent for the Corporation may be instructed not to transfer ownership
        of the stock certificate(s) representing shares acquired upon any exercise
        of
        this Option, unless in the prior written opinion of counsel reasonably
        acceptable to the Corporation, such transfer is lawful under the Act and
        applicable state securities law.

      

      In
        regard
        to the foregoing, the Recipient understands and agrees that the certificate(s)
        evidencing any shares that may be purchased pursuant to the exercise of this
        Option which have not been registered under the Act or any applicable state
        securities law, may bear an appropriate restrictive legend in a form determined
        in the sole discretion of the Corporation.

      

      6.    No
        Rights As Shareholder.
        Neither
        the Recipient nor any other person authorized to purchase Common Stock upon
        exercise of this Option shall have any interest in or shareholder rights
        with
        respect to any shares of the Common Stock which are subject to this Option
        until
        such shares have been issued and delivered to the Recipient or any such person
        pursuant to the exercise of this Option.

      
        
          

            

          

          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      

      7.    Heirs
        And Successors.
        This
        Agreement and all terms and conditions hereof shall be binding upon the
        Corporation and its successors and assigns, and upon Recipient and his heirs,
        legatees and legal representatives.

      

      8.    Miscellaneous.
        This
        Option is executed and delivered in, and shall be governed by, the laws of
        the
        State of Georgia. This Agreement may not be modified or amended (except to
        the
        extent otherwise expressly stated herein) other than by a writing executed
        by
        each of the parties hereto.

      

      IN
        WITNESS WHEREOF, the Corporation has caused this Agreement to be executed
        by its
        duly authorized officer, and the Recipient has executed this Agreement, all
        as
        of the date and year first above written.

       

      
 

      
        	 	
                INTERFACE,
                  INC.

                

                

                By:
                  /s/Ray
                  C.
                  Anderson                      
                  

                   
                     Ray C. Anderson, Chairman

                      
                  and Chief Executive Officer

                

                

                RECIPIENT:

                 

                /s/Don
                  G.
                  Aaron                            
                      

                Don
                  G. Aaron

              

      

      

      
        
          
            

              

            

          

          
          

        

        
          4

          
            

          

        

        
          
          

          
          

        

      

      

      

      EXERCISE
        OF

      STOCK
        OPTION

      

      

      

      The
        undersigned option Recipient under that certain Interface, Inc. Stock Option
        Agreement dated as of July 31, 1997 (the "Agreement"), hereby exercises the
        Stock Option granted under the Agreement for the following number of shares
        of
        Common Stock, subject to the terms and conditions of the Agreement:

      

      

      

      
        	
                 

                 

                Number
                  of shares being purchased

                Total
                  purchase price submitted herewith $

                 

                 

              

      

      

      

      

      

      
        	 	
                
                  

                  (Signature)

                 

                 

                  

                

                (Print
                  Name and Representative)

                Capacity,
                  if Applicable)

                 

                 

                  

                

                (Date)

                 

              

      

       

       

       

       

      5

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