Exhibit
99.1
INDEMNITY AGREEMENT OF
DIRECTOR
This INDEMNITY AGREEMENT (this
“ Agreement ”) is effective as of __________
___, 2___, between Interface, Inc., a Georgia corporation (the
“ Company ”), and __________________________
(“ Indemnitee ”).
WHEREAS , it is essential to the Company to retain and
attract as directors the most capable persons available;
and
WHEREAS , both the Company and Indemnitee recognize the
increased risk of litigation and other Claims being asserted
against directors of public companies in today’s environment
(note that certain capitalized terms used herein are defined in
Section 17 of this Agreement); and
WHEREAS , damages sought by class action plaintiffs in
some cases amount to tens of millions of dollars and, whether or
not the case is meritorious, the cost of defending them can be
enormous with few individual directors having the resources to
sustain such legal costs, not to mention the risk of a judgment
running into millions even in cases where the defendant was neither
culpable nor profited personally to the detriment of the
corporation; and
WHEREAS , Section 14-2-851 of the Georgia Business
Corporation Code (the “ Code ”), under which the
Company is organized, empowers corporations to indemnify persons
serving as a director of the corporation or a person who serves at
the request of the corporation as a director, trustee, officer,
partner, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise;
and
WHEREAS , the Bylaws of the Company permit the Company
to indemnify any person who was or is a party or is threatened to
be made a party to a proceeding by reason of the fact that he is or
was a director or officer of the Company to the maximum extent
permitted by, and in the manner provided by, the Code;
and
WHEREAS , Section 14-2-859 of the Code empowers the
Company to adopt resolutions or enter into a contract approved by
the Company’s Board of Directors obligating the Company to
provide indemnification, advance funds or pay for or reimburse
expenses prior to any act or omission giving rise to a proceeding
pursuant to which indemnification is permitted; and
WHEREAS , on October 27, 1998 the Company’s Board
of Director adopted resolutions (the “ Resolutions
”) obligating the Company to indemnify directors and officers
of the Company to the fullest extent permitted by law, to advance
funds for expenses incurred and to take certain related actions;
and
WHEREAS , in recognition of Indemnitee’s need for
substantial protection against personal liability in order to
enhance Indemnitee’s service to the Company in an effective
manner, the increasing difficulty in obtaining satisfactory
directors’ and officers’ liability insurance coverage,
and in part, to provide Indemnitee with additional contractual
assurances that indemnification protection provided under the
Company’s Bylaws and the Resolutions will be available to
Indemnitee (regardless of, among other things, any amendment to or
revocation of the Articles of Incorporation (“
Articles ”) or Bylaws (“ Bylaws ”)
of the Company or any change in the composition of the
Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses
to Indemnitee to the fullest extent (whether partial or complete)
authorized or permitted by law and as set forth in this Agreement,
and for the continued coverage of Indemnitee under the
Company’s directors’ and officers’ liability
insurance policies; and
WHEREAS , in order to induce Indemnitee to serve or
continue to serve as a director, the Company has agreed to provide
Indemnitee with the benefits contemplated by this Agreement;
and
WHEREAS , the Company’s Board of Directors is
making no determination by this Agreement that indemnification of
Indemnitee for any particular act or omission giving rise to a
proceeding is permissible;
NOW, THEREFORE , in consideration of the premises and of
Indemnitee agreeing to serve or to continue to serve the Company
directly or, at its request, another enterprise, and intending to
be legally bound hereby, the parties hereto agree as
follows:
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1.
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Basic
Indemnification Arrangement and Advances for Expenses
.
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a)
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In the event
Indemnitee was, is, or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness
or other participant in, a Claim by reason of (or arising in part
out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent a Georgia corporation is
authorized or permitted by law, without shareholder approval as
provided in Section 14-2-856 of the Code, to indemnify its officers
and directors, as soon as practicable but in any event no later
than thirty (30) days after written demand is presented to the
Company, against any and all Expenses, judgments, fines, penalties
(whether civil, criminal or other) and amounts paid in settlement
(including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses,
judgments, fines, penalties or amounts paid in settlement) of such
Claim; provided , however , that, except for
proceedings to enforce rights to indemnification, the Company shall
not be obligated to indemnify Indemnitee in connection with a
proceeding (or part thereof) initiated by Indemnitee unless such
proceeding (or part thereof) was authorized in advance, or
unanimously consented to, by the Company’s Board of
Directors. If so
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requested by
Indemnitee, the Company shall, before final disposition of a Claim,
advance (within five (5) business days of such request) any and all
Expenses to Indemnitee to the fullest extent a Georgia corporation
is authorized or permitted, without shareholder approval as
provided in Section 14-2-856 of the Code, to advance Expenses to
its officers and directors (an “ Expense Advance
”).
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b)
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Notwithstanding
the foregoing, (i) the obligations of the Company under Section
1(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion, in any case in
which the Independent Legal Counsel referred to in Section 2
hereof is involved) that Indemnitee would not be permitted to be
indemnified under applicable law; provided , however
, that no entitlement decision need be made prior to an Expense
Advance, and (ii) the obligation of the Company to make an Expense
Advance pursuant to Section 1(a) shall be subject to the
condition that Indemnitee delivers to the Company: (A) a written
affirmation of his or her good faith belief that he or she has met
the relevant standard of conduct under the Code or that the Claim
involves conduct for which such Indemnitee’s liability has
been eliminated under the Articles; and (B) his or her written
undertaking to repay any Expense Advance if it is ultimately
determined that Indemnitee is not entitled to indemnification under
this Agreement, the Resolutions, Articles or the Code, which must
be an unlimited general obligation of Indemnitee but need not be
secured and may be accepted without reference to the financial
ability of Indemnitee to make repayment. Notwithstanding the
foregoing, if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under
applicable law shall not be binding and Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a
final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or
lapsed). If there has not been a Change in Control, the Reviewing
Party shall be selected by the Company’s Board of Directors,
and if there has been such a Change in Control, the Reviewing Party
shall be the Independent Legal Counsel referred to in Section
2 hereof. If there has been no determination by the Reviewing
Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or
in part under applicable law, Indemnitee shall have the right to
commence litigation in any court in the State of Georgia having
subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any
such determination by the Reviewing Party or any aspect thereof,
including the legal or factual bases therefor, and the Company
hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise
shall be conclusive and binding on the Company and
Indemnitee.
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c)
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No change in
the Articles, Bylaws or Resolutions or in the Code subsequent to
the date of this Agreement shall have the effect of limiting or
eliminating the indemnification available under this Agreement as
to any act, omission or capacity for which this Agreement provides
indemnification at the time of such act, omission or capacity. If
any change after the date of this Agreement in any applicable law,
statute or rule expands the power of the Company to indemnify
Indemnitee, such change shall to the same extent expand
Indemnitee’s rights and the Company’s obligations under
this Agreement. If any change in any applicable law, statute or
rule diminishes the power of the Company to Indemnify Indemnitee,
such change, except to the extent otherwise required by law,
statute or rule to be applied to this Agreement, shall have no
effect on this Agreement or the parties’ rights and
obligations hereunder.
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d)
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If the
indemnification provided in Section 1(a) is unavailable or
may not be paid to Indemnitee for any reason, then in respect of
any threatened, pending or completed Claim in which the Company is
jointly liable with Indemnitee (or would be if joined in such
action, suit or proceeding) other than any Claim in which final
judgment is rendered against Indemnitee for an accounting of
profits made from the purchase or sale by Indemnitee of securities
of the Company, pursuant to the provisions of Section 16(b) of the
Exchange Act or similar provisions of any federal, state or local
statutory law, or on account of any payment by Indemnitee to the
Company in respect of any claim for such an accounting, the Company
shall contribute to the amount of expenses, judgments, fines and
settlements paid or payable by Indemnitee in such proportion as is
appropriate to reflect (i) the relative benefits received by the
Company on the one hand and Indemnitee on the other hand from the
transaction from which such action, suit or proceeding arose, and
(ii) the relative fault of the Company on the one hand and of
Indemnitee on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts,
as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of Indemnitee on
the other shall be determined by reference to, among other things,
the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances
resulting in such expenses, judgments, fines or settlement amounts.
The Company agrees that it would not be just and equitable if
contribution pursuant to this Section 1(d) were determined
by pro rata allocation or any other method of allocation that does
not take account of the foregoing equitable
considerations.
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2. Change
in Control . The Company agrees that if there is a Change in
Control, then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and
Expense Advances under this Agreement, the Resolutions or any other
agreement, or any Article or Bylaw provision now or hereinafter in
effect relating to Claims
for
Indemnifiable Events, any determinations to be made by a Reviewing
Party pursuant to the Resolutions or Section 14-2-855 of the Code,
shall be made on behalf of the Company by Independent Legal Counsel
selected by the Company in accordance with Section 14-2-855 from a
list of at least three attorneys or firms of attorneys qualified to
serve as Independent Legal Counsel provided by Indemnitee;
provided, however, that in the event there are multiple officers
and directors seeking indemnification with respect to a matter (the
“indemnified parties”), the Company shall be obligated
to select only one Independent Legal Counsel which shall be (i)
selected from the aggregate of all lists of attorneys or firms
submitted by the indemnified parties involved in such matter and
(ii) not objected to in writing by any such indemnified party
within ten (10) days of written notice of the identity of such
Independent Legal Counsel to all such indemnified parties on any
reasonable basis set forth in such notice of objection. Such
counsel, among other things, shall render its written opinion to
the Comp
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