INTERFACE,
INC.
EXECUTIVE BONUS
PLAN
1.
PURPOSE.
The
purpose of the Interface, Inc. Executive Bonus Plan is to provide
bonus compensation opportunities which support the Company’s
on-going efforts to attract, retain and develop exceptional
executive talent and which provide incentives directly linked to
the Company’s business objectives. The Plan is intended to
meet the requirements for "qualified performance-based
compensation" under Section 162(m) of the Internal Revenue Code of
1986, as amended.
The following
capitalized terms, as used herein, shall have the following
meanings:
(a) "Annual
Base Salary" shall mean: (i) with respect to any Participant other
than a Section 162(m) Officer, the base salary paid to such
Participant during any Performance Period (up to a maximum of one
year’s base salary paid); and (ii) with respect to any
Section 162(m) Officer, the annual rate of base salary of such
Section 162(m) Officer in effect on the first day of any
Performance Period.
(b) "Award"
shall mean an incentive compensation award, granted pursuant to the
Plan, which is contingent upon the attainment of Performance Goals
with respect to a Performance Period.
(c) "Board"
shall mean the Board of Directors of Interface.
(d) "Change in
Control" shall mean the occurrence of an event described
in Section 5(d) hereof.
(e) "Code"
shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Committee"
shall mean a committee of the Board as described in Section
3 hereof.
(g) "Company"
shall mean, collectively, Interface and its direct and
indirect subsidiaries.
(h) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as
amended.
(i) "Interface"
shall mean Interface, Inc., a Georgia corporation.
(j)
"Participant" shall mean an executive officer of the Company who
is, pursuant to Section 4 of the Plan, selected to participate in
the Plan.
(k)
"Performance Goal" shall mean the criteria and objectives,
determined by the Committee, which must be met during the
applicable Performance Period as a condition of the Participant's
receipt of payment with respect to an Award. Performance
Goals may relate to attainment by the Company or a subsidiary or
business unit of specified levels or increases in any or all of the
following: (i) operating income; (ii) cash flow,
(iii) reduction of off-quality and waste; (iv) return on
equity; (v) earnings per share; (vi) total earnings;
(viii) return on capital; (ix) return on assets;
(x) earnings before interest and taxes; (xi) gross
margin; (xii) economic value added; (xiii) sales; (xiv)
the fair market value of Interface’s common stock;
(xv) improvement in fixed charge coverage ratio;
(xvi) debt reduction and/or cash accumulation; or
(xvii) measurable financial criteria associated with credit
facility, bond indenture or other covenants. In
addition, with respect to Participants who are not Section 162(m)
Officers, the Committee may establish other Performance Goals,
including goals relating to individual performances and
non-financial objectives.
(l) "Performance Period" shall mean the Company's fiscal year or
such other time period determined by the Committee during which
Performance Goals are to be met.
(m) "Plan"
shall mean the Interface, Inc. Executive Bonus Plan.
(n) "Section 162(m) Officer" shall mean an officer of the Company
who, in the Committee's determination made at the time of any
Award, is or may become a "covered employee" as defined in Section
162(m) of the Code and the regulations thereunder.
(a) GENERAL.
The Plan shall be administered by the Committee. The Committee
shall have the authority in its sole discretion, subject to the
express provisions of the Plan, to administer the Plan and to
exercise all the powers and authority either specifically granted
to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation: the
authority to grant Awards; to determine the persons to whom, and
the time or times at which, Awards shall be granted; to determine
the terms, conditions, restrictions and performance criteria,
including Performance Goals, relating to any Award; to determine
the commencement date and end date for each Performance Period; to
determine whether, to what extent, and under what circumstances an
Award may be settled, canceled, forfeited, or surrendered; to
construe and interpret the Plan and any Award; to prescribe, amend
and rescind rules, regulations and procedures relating to the Plan;
to determine the terms and provisions of Awards; and to make all
other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations and
interpretations of the Committee shall be final and binding on all
persons, including the Company, the Participant (or any person
claiming any rights under the Plan from or through any Participant)
and any shareholder.
(b) MEMBERS.
The Committee shall consist of two or more members of the Board,
each of whom shall be an "outside director" within the meaning of
Section 162(m) of the Code. All determinations of the Committee
shall be made by a majority of its members either present in person
or participating by conference telephone at a meeting or by written
consent. The Committee may delegate to one or more of its members
or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice
with respect to any responsibility the Committee or such person may
have under the Plan.
(c) LIABILITY. No member of the Board or the
Committee shall be liable for any action taken or determination
made in good faith with respect to the Plan or any Award granted
hereunder.
The Committee
shall select which executive officers of the Company are to
participate in the Plan for a Performance Period. In selecting the
officers of the Company who are eligible to participate in the Plan
and in establishing the terms of Awards granted to such
Participants, the Committee may accept such recommendations of the
senior management of the Company as it deems
appropriate. The Committee shall specifically identify
any Participants who it determines are Section 162(m) Officers with
respect to each fiscal year.
(a) IN GENERAL.
The Committee shall grant awards under the Plan for