SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
INTERFACE, INC.
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(Name of Registrant as Specified in its Charter)
INTERFACE, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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(INTERFACE LOGO)
INTERFACE, INC.
2859 PACES FERRY ROAD, SUITE 2000
ATLANTA, GEORGIA 30339
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 2002
---------------------
The annual meeting of shareholders of Interface, Inc. (the "Company") will
be held on Tuesday, May 21, 2002, at 3:00 p.m., at the Company's office located
at 2859 Paces Ferry Road, Atlanta, Georgia, for the purpose of considering and
voting upon:
RECOMMENDED
ITEM VOTE
------------------------------------------------------------ -----------
1. The election of eleven members of the Board of Directors, FOR
five directors to be elected by the holders of the
Company's Class A Common Stock and six directors to be
elected by the holders of the Company's Class B Common
Stock.
2. Such other matters as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on March 18, 2002 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
A Proxy Statement and Proxy solicited by the Board of Directors are
enclosed herewith. Please date, sign and return the enclosed Proxy at your
earliest convenience. Returning your Proxy in a timely manner will assure your
representation at the annual meeting. You may, of course, change or withdraw
your Proxy at any time prior to the voting at the meeting.
Also enclosed is a copy of the Company's 2001 Annual Report to
Shareholders.
By order of the Board of Directors
/s/ RAYMOND S. WILLOCH
RAYMOND S. WILLOCH
Secretary
April 15, 2002
PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY PROMPTLY SO THAT YOUR VOTE MAY BE
RECORDED AT THE MEETING IF YOU DO NOT ATTEND PERSONALLY.
INTERFACE, INC.
2859 PACES FERRY ROAD, SUITE 2000
ATLANTA, GEORGIA 30339
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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
---------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
Proxies for Class A Common Stock and Class B Common Stock by the Board of
Directors of Interface, Inc. (the "Company") for use at the annual meeting of
shareholders of the Company to be held on May 21, 2002, and any adjournment
thereof, for the purposes set forth in the accompanying notice of the meeting.
It is anticipated that this Proxy Statement and the accompanying Proxy will
first be mailed to shareholders on April 17, 2002.
The record of shareholders entitled to vote at the annual meeting was taken
as of the close of business on March 18, 2002. On that date, the Company had
outstanding and entitled to vote 43,793,180 shares of Class A Common Stock and
7,031,347 shares of Class B Common Stock. Except for (i) the election and
removal of directors, and (ii) class votes as required by law or the Company's
Articles of Incorporation, holders of both classes of Common Stock vote as a
single class. In all cases, holders of Common Stock (of either class) are
entitled to cast one vote per share.
Each Proxy for Class A Common Stock ("Class A Proxy") or Class B Common
Stock ("Class B Proxy") that is properly executed and returned by a shareholder
will be voted as specified thereon by the shareholder. If no specification is
made, the Proxy will be voted for the election of the nominees (Class A or Class
B, as the case may be) listed herein under the caption "Nomination and Election
of Directors." A Proxy given pursuant to this solicitation may be revoked by a
shareholder who attends the meeting and gives oral notice of his or her election
to vote in person, without compliance with any other formalities. In addition, a
Proxy given pursuant to this solicitation may be revoked prior to the meeting by
delivering to the Secretary of the Company either an instrument revoking it or a
duly executed Proxy for the same shares bearing a later date.
An automated system administered by the Company's transfer agent tabulates
the votes. Abstentions and broker non-votes are included in the determination of
the number of shares present and entitled to vote (to establish a quorum).
Abstentions are the equivalent of a non-vote since directors are elected by a
plurality of the votes cast. Broker non-votes are not counted for purposes of
determining whether a proposal has been approved.
The expense of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by the Company. Copies of
solicitation material may be furnished to banks, brokerage houses and other
custodians, nominees and fiduciaries for forwarding to the beneficial owners of
shares of the Company's Common Stock, and normal handling charges may be paid
for the forwarding service. In addition to solicitations by mail, directors and
regular employees of the Company may solicit Proxies in person or by telephone,
fax or e-mail. The Company also has retained Georgeson & Company, Inc., a proxy
solicitation firm, to assist in soliciting Proxies from beneficial owners of
shares of the Company's Common Stock. The fee for such assistance will be $7,000
(plus expenses).
The closing price of the Company's Class A Common Stock as reported on the
Nasdaq National Market on April 5, 2002 was $6.26 per share. There is no public
market for the Class B Common Stock (but Class B shares are convertible on a
share-for-share basis into Class A shares).
NOMINATION AND ELECTION OF DIRECTORS
(ITEM 1)
The Bylaws of the Company provide that the Board of Directors shall consist
of a maximum of 15 directors, the exact number of directors being established by
action of the Board taken from time to time. The Board of Directors has set the
number of directors at 11. The holders of Class B Common Stock are entitled to
elect a majority (six) of the Board members. The holders of Class A Common Stock
are entitled to elect the remaining (five) directors. The term of office for
each director continues until the next annual meeting of shareholders and until
his or her successor, if there is to be one, has been elected and has qualified.
In the event that any nominee for director withdraws or for any reason is
not able to serve as a director, each Proxy that is properly executed and
returned will be voted for such other person as may be designated as a
substitute nominee by the Board of Directors, but in no event will any Class A
Proxy be voted for more than five nominees or Class B Proxy be voted for more
than six nominees. Management of the Company has no reason to believe that any
nominee will not serve if elected.
Certain information relating to each nominee proposed by the Board,
including his or her principal occupation during the past five years, is set
forth below.
CLASS A NOMINEES
NAME (AGE) INFORMATION
Dianne Dillon-Ridgley
(50)....................... Ms. Dillon-Ridgley was elected to the Board in
February 1997. Since 1997, Ms. Dillon-Ridgley has
served as the U.N. Headquarters representative for
the World YWCA (Geneva, Switzerland). From 1994 to
1997, Ms. Dillon-Ridgley served as President of
Zero Population Growth, an organization concerned
with population growth and the environment. From
1995 to 1998, she served as senior policy analyst
with the Women's Environment and Development
Organization, and from 1998 to 1999 she served as
Executive Director of that organization. In 1994,
she was appointed by President Clinton to the
now-dissolved President's Council on Sustainable
Development where she served as Co-Chair of the
Council's International and Population/Consumption
Task Forces. Ms. Dillon-Ridgley also serves on the
Boards of five nonprofit organizations and one
private company.
Dr. June M. Henton (62).... Dr. Henton was elected as a director in February
1995. Since 1985, Dr. Henton has served as Dean of
the College of Human Sciences at Auburn University,
which includes a program in interior environments.
Dr. Henton, who received her Ph.D. from the
University of Minnesota, has provided leadership
for a wide variety of professional, policy and
civic organizations. As a charter member of the
Operating Board of the National Textile Center, Dr.
Henton has significant expertise in the integration
of academic and research programs within the
textile industry.
Christopher G. Kennedy
(38)....................... Mr. Kennedy was elected as a director in May 2000.
He became an Executive Vice President of
Merchandise Mart Properties, Inc. in Chicago,
Illinois in 1994 and President in October 2000. Mr.
Kennedy also serves on the Board of Directors of
Merchandise Mart Properties. Since January 2000, he
has served on the Board of Cantilever Technologies.
Since 1994, he has served on the Board of Trustees
of Ariel Mutual Funds. From 1997 to 1999, Mr.
Kennedy served as the Chairman of the Chicago
Convention and Tourism Bureau. Mr. Kennedy also
serves on the Boards of three nonprofit
organizations.
2
NAME (AGE) INFORMATION
James B. Miller, Jr.
(61)....................... Mr. Miller was elected as a director in May 2000.
Since 1979, Mr. Miller has served as Chairman,
President and Chief Executive Officer of Fidelity
National Corporation, the holding company for
Fidelity National Bank. Since February 1998, he has
served as Chairman, since 1976 he has served as
director, and from 1977 to 1997 he served as Chief
Executive Officer and President, of Fidelity
National Bank. Mr. Miller also has served as
Chairman of Fidelity National Capital Investors,
Inc., a subsidiary of Fidelity National
Corporation, since 1992.
Thomas R. Oliver (61)...... Mr. Oliver was elected as a director in July 1998.
He has served as Chairman and Chief Executive
Officer of Six Continents Hotels (formerly Bass
Hotels and Resorts), the hotel business of Six
Continents, PLC (formerly Bass PLC), since March
1997. Mr. Oliver also serves on the Executive
Committee and the Board of Directors of Six
Continents, PLC. From June 1996 until March 1997,
Mr. Oliver served as Chief Executive Officer of
AudioFax, Inc., an Atlanta-based telecommunications
company.
CLASS B NOMINEES
NAME (AGE) INFORMATION
Ray C. Anderson (67)....... Mr. Anderson founded Interface in 1973 and served
as Chairman and Chief Executive Officer until his
retirement as Chief Executive Officer and
transition from day-to-day management on July 1,
2001, at which time he became non-executive
Chairman of the Board. He chairs the Executive
Committee of the Board and remains available for
policy level consultation on substantially a full
time basis. Mr. Anderson was appointed by President
Clinton to the President's Council on Sustainable
Development in 1996 and served as Co-Chair until
the Council's dissolution in June 1999. He
currently serves on the Boards of six nonprofit
organizations.
Carl I. Gable (62)......... Mr. Gable, a director since March 1984, is a
private investor. He was an attorney with the
Atlanta-based law firm of Troutman Sanders LLP,
from March 1996 until April 1998. Mr. Gable has
served as a director of Fidelity National
Corporation since July 2000. He also serves on the
Boards of three nonprofit organizations.
Daniel T. Hendrix (47)..... Mr. Hendrix joined the Company in 1983 after having
worked previously for a national accounting firm.
He was promoted to Treasurer of the Company in
1984, Chief Financial Officer in 1985, Vice
President-Finance in 1986, Senior Vice
President-Finance in 1995, Executive Vice President
in October 2000, and President and Chief Executive
Officer in July 2001. He was elected to the Board
in October 1996.
J. Smith Lanier, II (74)... Mr. Lanier has been a director since 1973. He is
Chairman of the Board of J. Smith Lanier & Co., a
general insurance agency based in West Point,
Georgia. Mr. Lanier also serves as a director of
two other private companies and two nonprofit
organizations.
3
NAME (AGE) INFORMATION
Leonard G. Saulter (75).... Mr. Saulter has been a director since July 1987. He
served as a Senior Vice President of the Company
from October 1987 until June 1991. He served as
President of Guilford of Maine, Inc. (now Interface
Fabrics Group, Inc.) until January 1990, and as
Interface Fabrics Group's Chairman from January
1990 until his retirement in June 1991. In October
1993, Mr. Saulter resumed the position of President
of Interface Fabrics Group on an interim basis,
serving until March 1994.
Clarinus C. Th. van Andel
(72)....................... Mr. van Andel, who has been a director since
October 1988, was a partner in the law firm of
Schut & Grosheide, based in Amsterdam, until his
retirement in January 1996. He served as Chairman
of the supervisory board of Interface Europe B.V.
(formerly Interface Heuga B.V. and Heuga Holding,
B.V.), the Company's modular carpet subsidiary
based in the Netherlands, from 1984 until 1996,
when the supervisory board was dissolved.
VOTE REQUIRED AND RECOMMENDATION OF BOARD
Under the Company's Bylaws, election of each of the five Class A nominees
requires a plurality of the votes cast by the Company's outstanding Class A
Common Stock entitled to vote and represented (in person or by proxy) at the
meeting. Election of each of the six Class B nominees requires a plurality of
the votes cast by the Company's outstanding Class B Common Stock entitled to
vote and represented (in person or by proxy) at the meeting. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE CLASS A NOMINEES AND
CLASS B NOMINEES LISTED ABOVE, AND PROXIES EXECUTED AND RETURNED WILL BE VOTED
FOR EACH OF THE NOMINEES (CLASS A OR CLASS B, AS APPLICABLE) UNLESS CONTRARY
INSTRUCTIONS ARE INDICATED THEREON.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during 2001. All of the incumbent
directors attended at least 75% of the meetings of the Board and of each
committee of the Board on which they served that were held during the periods
that they served.
The Board of Directors has an Executive Committee currently composed of Ray
C. Anderson, Daniel T. Hendrix, Carl I. Gable and J. Smith Lanier, II. The
Executive Committee met (in person or acting by unanimous written consent) six
times during 2001. With certain limited exceptions, the Executive Committee may
exercise all the power and authority of the Board of Directors in the management
of the business and affairs of the Company.
The Board of Directors also has a Compensation Committee currently composed
of June M. Henton, Christopher G. Kennedy and Thomas R. Oliver. The Compensation
Committee met (in person or acting by unanimous written consent) four times
during 2001. The function of the Compensation Committee is to (i) evaluate the
performance of the Company's senior executives, (ii) determine compensation
arrangements for such executives, (iii) administer the Company's stock and other
incentive plans for key employees, and (iv) review the administration of the
Company's employee benefit plans.
The Board of Directors also has an Audit Committee currently composed of
Mr. Gable, James B. Miller, Jr. and Leonard G. Saulter. The Audit Committee met
three times during 2001. The Board of Directors, in its business judgment, has
determined that all three members of the Audit Committee are "independent," as
required by applicable listing standards of Nasdaq. The Audit Committee operates
pursuant to an Audit Committee Charter that was adopted by the Board of
Directors. The function of the Audit Committee is to (i) serve as an independent
and objective party to review the Company's financial statements,
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financial reporting process and internal control system, (ii) review and
evaluate the performance of the Company's independent auditors and internal
financial management, and (iii) provide an open avenue of communication among
the Company's independent auditors, management, including internal financial
management, and the Board.
The Board of Directors also has a Nominating Committee, composed of Mr.
Anderson, Dianne Dillon-Ridgley, Mr. Hendrix and Mr. Kennedy. The Nominating
Committee did not meet in 2001. The function of the Nominating Committee is to
review the qualifications of potential new candidates and nominate candidates to
fill vacancies on the Board. The Nominating Committee will consider candidates
recommended by shareholders. Shareholder recommendations must comply with the
procedures for shareholder proposals set forth in Article II, Section 9 of the
Company's Bylaws.
PRINCIPAL SHAREHOLDERS AND MANAGEMENT STOCK OWNERSHIP
The following table sets forth, as of February 1, 2002 (unless otherwise
indicated), beneficial ownership of each class of the Company's Common Stock by:
(i) each person, including any "group" as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, known by the Company to be the
beneficial owner of more than 5% of any class of the Company's voting
securities, (ii) each nominee for director, (iii) the Company's Chief Executive
Officer and four other most highly compensated executive officers, and (iv) all
executive officers and directors of the Company as a group.
AMOUNT AND PERCENT OF
TITLE NATURE OF PERCENT CLASS A
OF BENEFICIAL OF AFTER
BENEFICIAL OWNER (AND BUSINESS ADDRESS OF 5% OWNERS) CLASS OWNERSHIP(1) CLASS(1) CONVERSION(2)
---------------------------------------------------- ------- ------------ -------- -------------
Ray C. Anderson................................. Class A 34,123(3) * 7.5%
2859 Paces Ferry Road, Suite 2000 Class B 3,509,686(3) 48.5%
Atlanta, Georgia 30339
Ariel Capital Management, Inc................... Class A 9,128,290(4)(5) 20.8%
200 E. Randolph Drive, Suite 2900
Chicago, Illinois 60601
Dimensional Fund Advisors, Inc.................. Class A 3,085,000(4)(6) 7.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
ICM Asset Management, Inc. and.................. Class A 6,168,373(4)(7) 14.1%
James M. Simmons
601 W. Main Avenue, Suite 917
Spokane, Washington 99201
Michael D. Bertolucci........................... Class A 2,790 * *
Class B 200,068(8) 2.7%
Brian L. DeMoura................................ Class B 310,404(9) 4.2% *
Dianne Dillon-Ridgley........................... Class B 44,000(10) * *
Carl I. Gable................................... Class A 140(11) * *
Class B 85,244(11) 1.2%
Daniel T. Hendrix............................... Class A 50,587(12) * *
Class B 433,850(12) 6.0%
June M. Henton.................................. Class B 41,000(13) * *
Christopher G. Kennedy.......................... Class A 28,728(14) * *
Class B 4,000(15) *
J. Smith Lanier, II............................. Class A 21,000(16) * *
Class B 341,648(16) 4.7%
James B. Miller, Jr............................. Class A 4,000 * *
Class B 4,000(17) *
5
AMOUNT AND PERCENT OF
TITLE NATURE OF PERCENT CLASS A
OF BENEFICIAL OF AFTER
BENEFICIAL OWNER (AND BUSINESS ADDRESS OF 5% OWNERS) CLASS OWNERSHIP(1) CLASS(1) CONVERSION(2)
---------------------------------------------------- ------- ------------ -------- -------------
Thomas R. Oliver................................ Class A 70,000 * *
Class B 28,000(18) *
Leonard G. Saulter.............................. Class A 6,000(19) * *
Class B 44,000(19) *
Clarinus C.Th. van Andel........................ Class B 100,000(20) 1.4% *
John R. Wells................................... Class A 24,637(21) * *
Class B 339,689(21) 4.6%
All executive officers and directors............ Class A 243,279(22) * 12.2%
as a group (16 persons) Class B 5,799,110(22) 71.1%
---------------
* Less than 1%.
(1) Shares of Class B Common Stock are convertible, on a share-for-share basis,
into shares of Class A Common Stock. The number of Class A shares indicated
as beneficially owned by each person or group does not include Class A
shares such person or group could acquire upon conversion of Class B
shares. The Percent of Class is calculated assuming that the beneficial
owner has exercised any conversion rights, options or other rights to
subscribe held by such beneficial owner that are exercisable within 60 days
(not including Class A shares that could be acquired upon conversion of
Class B shares), and that no other conversion rights, options or rights to
subscribe have been exercised by anyone else.
(2) Represents the percent of Class A shares the named person or group would
beneficially own if such person or group, and only such person or group,
converted all Class B shares beneficially owned by such person or group
into Class A shares.
(3) Includes 10,000 Class A shares held by Mr. Anderson's wife, although Mr.
Anderson disclaims beneficial ownership of such shares. Includes 24,123
Class A shares that Mr. Anderson beneficially owns through the Company's
Savings and Investment Plan. All Savings and Investment Plan information
included in the above table is as of December 31, 2001. Includes 52,000
Class B shares that may be acquired by Mr. Anderson pursuant to exercisable
stock options.
(4) Based upon information included in statements as of December 31, 2001
provided to the Company by such beneficial owners.
(5) All such shares are held by Ariel Capital Management, Inc. ("Ariel") for
the accounts of clients. Ariel disclaims beneficial ownership of all such
shares. Ariel, in its capacity as investment adviser, has sole voting power
with respect to 8,616,590 of such shares and sole investment power with
respect to all such shares. (John W. Rogers, Jr., Chairman and Chief
Executive Officer of Ariel, may be deemed to beneficially own all such
shares, but he disclaims such beneficial ownership.)
(6) All such shares are held by Dimensional Fund Advisors, Inc. ("Dimensional")
as an investment adviser registered under Section 203 of the Investment
Advisers Act of 1940. Dimensional, in its capacity as investment adviser,
has sole voting and dispositive power with respect to all such shares.
(7) All such shares are held by ICM Asset Management, Inc. ("ICM") as an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, and James M. Simmons, President of ICM. ICM, in its capacity
as investment adviser, and Mr. Simmons have shared voting power with
respect to 3,792,007 of such shares and shared dispositive power with
respect to all such shares.
(8) Includes 74,512 restricted Class B shares, and 100,399 Class B shares that
may be acquired by Dr. Bertolucci pursuant to exercisable stock options.
(See "Compensation Committee Report on Executive Compensation-Stock Options
and Restricted Stock" below for a discussion of the restrictions on
restricted stock.)
(9) Includes 161,178 restricted Class B shares, and 149,226 Class B shares that
may be acquired by Mr. DeMoura pursuant to exercisable stock options.
(10) All such shares may be acquired by Ms. Dillon-Ridgley pursuant to
exercisable stock options.
6
(11) All such Class A shares are held by Mr. Gable as custodian for his son.
Includes 44,000 Class B shares that may be acquired by Mr. Gable pursuant
to exercisable stock options.
(12) Includes 3,327 Class A shares beneficially owned by Mr. Hendrix pursuant to
the Company's Savings and Investment Plan. Includes 339,996 restricted
Class B shares, and 93,854 Class B shares that may be acquired by Mr.
Hendrix pursuant to exercisable stock options.
(13) Includes 39,000 shares that may be acquired by Dr. Henton pursuant to
exercisable stock options.
(14) Mr. Kennedy serves on the Board of Trustees of Ariel Mutual Funds, for
which Ariel Capital Management, Inc. serves as investment advisor and
performs services which include buying and selling securities on behalf of
the Ariel Mutual Funds. Mr. Kennedy disclaims beneficial ownership of all
shares held by Ariel Capital Management, Inc. as investment advisor for
Ariel Mutual Funds.
(15) All such shares may be acquired by Mr. Kennedy pursuant to exercisable
stock options.
(16) Includes 400 Class A shares and 157,004 Class B shares held by Mr. Lanier's
wife, and 44,000 Class B shares that may be acquired by Mr. Lanier pursuant
to exercisable stock options. Mr. Lanier disclaims beneficial ownership of
the shares owned by his wife.
(17) All such shares may be acquired by Mr. Miller pursuant to exercisable stock
options.
(18) All such shares may be acquired by Mr. Oliver pursuant to exercisable stock
options.
(19) All such Class A shares are held by Mr. Saulter's wife, and Mr. Saulter
disclaims beneficial ownership of such shares. All such Class B shares may
be acquired by Mr. Saulter pursuant to exercisable stock options.
(20) Includes 40,000 shares that may be acquired by Mr. van Andel pursuant to
exercisable stock options.
(21) Includes 4,637 Class A shares beneficially owned by Mr. Wells pursuant to
the Company's Savings and Investment Plan. Includes 171,666 restricted
Class B shares, and 160,023 Class B shares that may be acquired by Mr.
Wells pursuant to exercisable stock options.
(22) Includes 32,861 Class A shares that are beneficially owned by certain
executive officers pursuant to the Company's Savings and Investment Plan.
Includes 916,017 restricted Class B shares, and 969,391 Class B shares that
may be acquired by all executive officers and directors as a group pursuant
to exercisable stock options.
7
EXECUTIVE COMPENSATION AND RELATED ITEMS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for each of the last three fiscal years of
the Company, certain information concerning compensation paid by the Company and
its subsidiaries to the Company's Chief Executive Officer and each of the four
other most highly compensated executive officers of the Company, based on salary
and bonus earned in fiscal 2001 (referred to herein as the "named executive
officers"). For each of the last three fiscal years of the Company, the total
amount of perquisites, personal benefits and other annual compensation paid to
each named executive officer did not exceed the lesser of $50,000 or 10% of such
officer's total annual salary and bonus.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
ALL
RESTRICTED SECURITIES OTHER
STOCK UNDERLYING COMPEN-
SALARY BONUS AWARDS OPTIONS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) (#) ($)(2)
Ray C. Anderson 2001 625,000 -0- -0- 5,000 198,003
Chairman(3) 2000 571,736 297,303 -0- 80,000 195,927
1999 560,213 336,000 -0- 10,000 203,978
Daniel T. Hendrix 2001 450,000 -0- 1,241,060 87,669 84,207
President and Chief 2000 331,892 273,796 101,888(4) 185,000 83,732
Executive Officer 1999 300,000 180,000 449,712 17,535 84,628
John R. Wells 2001 357,083 -0- 475,537 33,592 13,080
Senior Vice President 2000 325,000 309,689 119,660(4) 45,000 9,589
(Division President) 1999 279,169 178,202 242,406 66,090 7,951
Brian L. DeMoura 2001 305,385 -0- 415,061 29,320 11,497
Senior Vice President 2000 270,241 269,082 119,660(4) 45,000 7,827
(Division President) 1999 255,000 217,145 205,686 22,850 7,748
Michael D. Bertolucci 2001 273,750 -0- 170,621 12,053 14,437
Senior Vice President 2000 259,167 213,812 105,668(4) 45,000 7,801
(Subsidiary President) 1999 248,333 111,749 96,687 16,115 4,040
(1) Represents the dollar value of restricted stock awarded to the named
executive officer (calculated by multiplying the number of shares awarded by
the closing price of the Company's Class A Common Stock as reported by the
Nasdaq National Market on the date of grant). As of December 30, 2001,
807,476 shares of restricted stock were held by various executive officers
of the Company and its subsidiaries, with an aggregate value of $4.72
million (based on the closing price of the Company's Class A Common Stock as
reported on the Nasdaq National Market on December 28, 2001). Awards of
restricted stock vest in increments of one-third, with the first two
one-thirds vesting upon no earlier than the second and fourth anniversaries,
respectively, of the grant date and only if the price of the Company's Class
A Common Stock has appreciated 15% per annum, compounded annually, as of
such anniversary. The final one-third vests upon the ninth anniversary of
the grant date. All such restricted shares vest on the ninth anniversary of
the grant date if not vested previously under the stock price performance
criteria.
8
(2) Includes the Company's matching contribution under the Company's Savings and
Investment Plan and/or its Nonqualified Savings Plan ($18,145, $11,365,
$12,540, $10,465 and $11,021 for Messrs. Anderson, Hendrix, Wells, DeMoura
and Bertolucci, respectively, in 2001). Also includes the Company's payment
of premiums on additional optional life insurance for the named executives
($6,858, $810, $540, $1,032 and $3,416 for Messrs. Anderson, Hendrix, Wells,
DeMoura and Bertolucci, respectively, in 2001) and, in the case of Messrs.
Anderson and Hendrix, the dollar value of the annual premiums paid by the
Company under certain life insurance policies pursuant to split-dollar
insurance agreements with such officers ($173,000 and $72,032, respectively,
in 2001).
(3) Mr. Anderson retired as Chief Executive Officer on July 1, 2001, but
continued throughout 2001 to participate in strategic policy decision making
in his transition role as non-executive Chairman of the Board.
(4) Includes restricted Class B Common Stock awarded to the named executive
officer in July 2000 which was issued in exchange for the cancellation of
stock options that were awarded in January 1998, at the ratio of three
shares of restricted stock per four stock options canceled. Thus,
retroactively adjusting the January 1998 stock option awards to reflect a
two-for-one stock split on June 15, 1998, 9,900 options awarded to Mr.
Hendrix, 15,824 options awarded to Mr. Wells, 15,824 options awarded to Mr.
DeMoura and 11,160 options awarded to Mr. Bertolucci were canceled in July
2000, and 7,425, 11,868, 11,868 and 8,370 shares of restricted stock,
respectively, were awarded in lieu thereof in July 2000.
COMPENSATION PURSUANT TO SALARY CONTINUATION PLAN
The Company maintains a nonqualified salary continuation plan (the "Salary
Continuation Plan") which is designed to induce selected officers of the Company
to remain in the employ of the Company by providing them with retirement,
disability and death benefits in addition to those which they may receive under
the Company's other benefit programs. The Salary Continuation Plan entitles
participants to (i) retirement benefits upon retirement at age 65 (or early
retirement at age 55) after completing at least 15 years of service with the
Company (unless otherwise provided in the plan), payable for the remainder of
their lives and in no event for less than 10 years under the death benefit
feature; (ii) disability benefits payable for the period of any pre-retirement
total disability; and (iii) death benefits payable to the designated beneficiary
of the participant for a period of up to 10 years. Benefits are determined
according to one of three formulas contained in the Salary Continuation Plan.
The Salary Continuation Plan is administered by the Compensation Committee,
which has full discretion in choosing participants and the benefit formula
applicable to each. The Company's obligations under the Salary Continuation Plan
are currently unfunded (although the Company uses insurance instruments to hedge
its exposure thereunder); however, the Company is required to contribute the
present value of its obligations thereunder to an irrevocable grantor trust in
the event of a "Change in Control" (as such term is defined in the Salary
Continuation Plan) of the Company.
9
STOCK OPTION GRANTS
The following table sets forth information with respect to options granted
to the named executive officers during fiscal 2001.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION
OPTIONS EMPLOYEES IN PRICE EXPIRATION FOR OPTION TERM(2)
NAME GRANTED(1) 2001 (PER SHARE)(1) DATE 5% 10%
Ray C. Anderson......... 5,000 0.7% $4.750 11/26/11 $ 14,936 $ 37,851
Daniel T. Hendrix....... 87,669 11.8 8.453 01/16/11 466,052 1,181,068
John R. Wells........... 33,592 4.5 8.453 01/16/11 178,577 452,548
Brian L. DeMoura........ 29,320 3.9 8.453 01/16/11 155,866 394,996
Michael D. Bertolucci... 12,053 1.6 8.453 01/16/11 64,074 162,377
(1) All options were granted at an exercise price equal to the fair market value
of the Class A Common Stock on the date of grant. These options vest ratably
over a period of five years.
(2) These amounts represent certain assumed rates of appreciation only, from the
original exercise price on the date of grant to the end of the option term.
Actual gains, if any, on stock option exercises are dependent on the future
performance of the Class A Common Stock and overall market conditions. The
amounts reflected in this table may not necessarily be achieved.
OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table sets forth, for each of the named executive officers,
(i) the number of shares of Common Stock received upon exercise of options, (ii)
the aggregate dollar value received upon exercise, (iii) the number of options
held at fiscal year-end, and (iv) the value of such options at fiscal year-end.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON VALUE FISCAL YEAR-END (#) FISCAL YEAR-END ($)(1)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
Ray C. Anderson................... -0- -0- 36,000/75,000 25,600/81,500
Daniel T. Hendrix................. -0- -0- 59,854/250,150 9,338/37,350
John R. Wells..................... -0- -0- 141,757/106,577 48,475/66,413
Brian L. DeMoura.................. -0- -0- 123,461/85,361 9,338/37,350
Michael D. Bertolucci............. -0- -0- 81,302/62,186 9,338/37,350
(1) Aggregate market value of the shares issuable upon exercise of the options
(based on December 28, 2001 closing price for Class A Common Stock of $5.85
per share), less the aggregate exercise price payable by the named executive
officer.
EMPLOYMENT AGREEMENTS
In April 1997, the Company entered into employment agreements with each of
the named executive officers, appointing them to their current respective
positions. The agreements are substantially similar, except for such differences
as are noted below. Mr. Hendrix's agreement was for an initial term of five
years and
10
thereafter has a rolling two-year term, such that the remaining term is always
two years. Each of Messrs. Anderson's, Bertolucci's, DeMoura's and Wells'
agreements is for a rolling two-year term such that the remaining term is always
two years. The Company may terminate any of such agreements upon two years'
notice. Mr. Hendrix is eligible under his agreement for an extraordinary bonus
of up to $100,000 in each of the initial five years of the employment agreement
if certain financial performance targets are achieved. These financial
performance targets were not achieved in 2001, which was the last year of the
arrangement.
In the event that the Company terminates an officer's employment without
just cause, the officer will be entitled to continue to receive his salary and
bonus, and participate in certain employee benefit plans, for the remainder of
the term of the agreement. The officer also will immediately vest in all
unvested employee stock options, and a percentage of theretofore unvested
restricted stock awards (as specified in the applicable restricted stock
agreement). The employment agreements also contain provisions placing
restrictions on the officer's ability to compete with the Company following the
termination of the agreement.
CHANGE IN CONTROL AGREEMENTS
In April 1997, each of the named executive officers entered into
substantially similar "change in control agreements" with the Company. The
agreements provide for certain benefits in the event of a termination of
employment under certain circumstances in connection with a "Change in Control"
(as defined in the agreements) of the Company. In general, each agreement
provides benefits to the officer upon an "Involuntary Termination" (essentially,
termination without cause) or a "Voluntary Termination" (essentially,
resignation in the face of coercive tactics) occurring within 24 months after or
six months prior to the date of a change in control. Upon any such termination,
the officer will be entitled to receive the following benefits: (i) the
officer's then-current salary, for the balance of the term, paid in a lump sum
discounted to present value; (ii) bonus payments for the balance of the term,
paid in a lump sum discounted to present value and based upon the bonuses
received during the two years prior to the termination, as well as a prorated
bonus for the year in which employment is terminated; (iii) continuation of
health and life insurance coverage for the balance of the term; and (iv)
continuation of eligibility to participate in Company retirement plans for the
balance of the term, or the provision of comparable benefits. In addition, the
officer will immediately vest in all unvested employee stock options and
restricted stock awards in the event of a Change in Control. Benefits paid under
the change in control agreements will be reduced by the compensation and
benefits, if any, paid to an officer pursuant to his employment agreement with
the Company. If the payment of any such benefits would result in the imposition
of an excise tax under Section 4999 of the Internal Revenue Code, the officer is
entitled to receive a "gross-up" payment to cover the amount of the excise taxes
and any related taxes on the gross-up payment.
Mr. Hendrix's agreement was for an initial term of five years and
thereafter has a rolling two-year term, such that the remaining term is always
two years. Each of Messrs. Anderson's, Bertolucci's, DeMoura's, and Wells'
agreements is for a rolling two-year term such that the remaining term is always
two years. The Company generally may terminate any of such agreements upon two
years' notice.
COMPENSATION OF DIRECTORS
The Company has a policy pursuant to which non-employee directors ("outside
directors") are paid an annual director's fee of $25,000, plus $1,000 for each
Board or Board committee meeting attended.
The Company has agreed to pay Leonard G. Saulter, who previously served as
an executive officer of the Company, a retirement benefit of $15,000 per year
beginning in 1999 and for the remainder of his life. The Company made the
required payment during 2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2001, the Company paid premiums to J. Smith Lanier & Co., an
insurance agency, of approximately $3,542,272 in connection with insurance
policies purchased on behalf of the Company. J. Smith Lanier, II, a director of
the Company, has a substantial ownership interest in this insurance agency.
Management of the Company believes that the insurance brokerage transactions
were effected on terms at
11
least as favorable to the Company as could have been obtained from other sources
or unrelated parties in view of the nature of the transactions and the services
rendered.
The Company has made loans to Ray C. Anderson, its Chairman, primarily in
connection with Mr. Anderson's payment of income taxes that were due prior to
the payment of expected compensation from the Company. The largest aggregate
amount of such indebtedness outstanding at any time during fiscal 2001 was
$600,958. The indebtedness bears no interest, and the amount outstanding as of
March 31, 2002, was $601,217.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation awards and achievement criteria for the Company's senior
management are recommended annually by the Company's Chief Executive Officer,
and reviewed and approved by the Compensation Committee of the Board of
Directors. The current members of the Compensation Committee are June M. Henton,
Christopher G. Kennedy and Thomas R. Oliver (Chair), all of whom are outside
directors.
The Company's compensation program is designed to enable the Company to
attract, motivate and retain outstanding senior management. The program consists
of three principal components: (i) competitive base salaries, (ii) annual,
variable cash bonuses based on the achievement of established financial and, for
certain executives, nonfinancial objectives, and (iii) long-term stock option
and restricted stock incentives. Under the program, a substantial portion of an
executive's compensation is directly linked to the Company's financial
performance and the interests of shareholders. The Committee strives to
administer the program to present total compensation packages for senior
executives of the Company that are commensurate with the responsibilities
undertaken by the executives, and that are competitive with packages offered by
comparable companies.
The Company periodically engages a nationally recognized consulting firm to
assist it in developing appropriate compensation packages for senior executives.
Information concerning compensation offered by other employers in the industry,
as well as other publicly traded companies similar in size and growth rate to
the Company, is considered as one of several factors in developing such
compensation packages. The Committee generally targets the median for base
salaries and third quartile for total cash compensation (base salary and bonus)
provided objectives are substantially achieved. Certain of the companies
considered from time to time are included in the companies comprising the
"self-determined peer group" index used in the performance graph below.
Base Salary. Base salary compensation is based on a variety of factors,
including the executive's level of responsibility, time with the Company,
geographical cost-of-living considerations and individual contribution and
performance, as well as internal equalization policies of the Company,
comparison to executive pay outside of the Company, and general economic
conditions. (Evaluation of certain of these factors is subjective, and no fixed,
relative weights are assigned to the criteria considered.) In fiscal 2001, three
of the senior executives received raises in base salary in connection with
promotions (Mr. Hendrix, who was promoted to President and Chief Executive
Officer, was the only named executive officer that received a raise in base
salary in 2001).
Bonuses. The Company's incentive compensation program is tied to Company,
business unit (subsidiary) and individual performance. Each executive officer of
the Company (including the Chief Executive Officer) is assigned a range of bonus
potential (expressed as a percentage of base salary), and a personalized set of
financial and, in some cases, nonfinancial objectives for the year. Evaluation
of nonfinancial objectives is, inherently, somewhat subjective, and equal weight
is assigned to each of these objectives. For fiscal 2001, 70% to 100% of each
executive officer's bonus potential was based on measurable financial
performance. Typical relative weights assigned to financial objectives are
indicated below. The amount of bonus earned is determined by the degree to which
the financial and nonfinancial objectives have been achieved.
For the senior executives of the Company who are directly accountable for
the profitability of subsidiaries or business groups, financial objectives for
2001 were at least 90% of the bonus opportunity and focused on: (i) operating
income for operations managed, (ii) VBM (value-based management/cash flows) for
opera-
12
tions managed, and (iii) earnings per share. These financial objectives
typically were assigned equal relative weights. Nonfinancial objectives for such
senior executives are tailored to their respective markets and geographic
regions, but consistently focus on sales and competitive strategies, strategic
acquisitions, investments and alliances, synergistic cooperation with affiliated
companies, technological advancements, quality control measures and employee
relations.
Mr. Anderson's financial objectives for 2001 (100% weight) were based on:
(i) operating income, (ii) VBM, and (iii) earnings per share. These financial
objectives were assigned equal relative weights. Application of the formula,
based on Mr. Anderson's achievement of target levels for his bonus objectives in
2001, rendered no bonus.
Mr. Hendrix's financial objectives for 2001 (70% weight), which were set at
the time he held the positions of Executive Vice President, Chief Financial
Officer and Treasurer, were based on: (i) operating income, (ii) VBM, and (iii)
earnings per share. Relative weights assigned to such financial objectives were
25%, 25% and 20%, respectively. Application of the formula, based on Mr.
Hendrix's achievement of target levels for his bonus objectives in 2001,
rendered no bonus.
Stock Options and Restricted Stock. The Company also utilizes grants of
stock options and restricted stock awards to its executives to strengthen the
mutuality of interests between the Company's senior management and shareholders.
Awards in recent years have been based on a long-term incentive stock program
developed with the assistance of a nationally known consulting firm and adopted
in January 1997. The award to Mr. Hendrix in January 2001 recognized his pending
promotion to the position of President and Chief Executive Officer effective
July 1, 2001.
Stock options and restricted stock awards help to retain and motivate
executives. Options granted under the Company's stock option plans have an
exercise price equal to at least 100% of the market price of the underlying
Common Stock on the date of grant. Thus, the options only have value if the
market price of the Company's stock rises. Moreover, options granted under such
plans typically vest incrementally over a five-year period, compelling an
executive to remain with the Company for a significant time period before being
able to fully recognize the value of the options. The five-year vesting schedule
also serves to focus executives on the long-term objectives of the Company.
Similarly, restricted stock awards increase in value as the market price of
the Company's stock rises. Such awards also vest over a period of multiple
years; the executive generally must remain employed with the Company for a
period of nine years from the date of grant to completely vest in an award. The
Committee believes stability of quality management and a proper focus on
long-term Company objectives provide for enduring shareholder value. Each of the
named executive officers holds stock options and/or restricted stock.
Information concerning awards of stock options and restricted stock to the named
executive officers in 2001 is shown in the "Summary Compensation Table" and the
"Option Grants in Last Fiscal Year" table above.
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to publicly held corporations for compensation in excess of $1,000,000
in any taxable year that is paid to the corporation's chief executive officer or
any of the four other most highly compensated executive officers. Certain
performance-based compensation, however, is not subject to the limit on
deductibility imposed by Section 162(m). In particular, executive compensation
under the Company's executive bonus plan qualifies for deductibility under
Section 162(m).
13
The foregoing policies and programs are subject to change as the Committee
deems necessary from time to time to respond to economic conditions, meet
competitive standards and serve the objectives of the Company and its
shareholders.
THE COMPENSATION COMMITTEE
June M. Henton
Christopher G. Kennedy
Thomas R. Oliver (Chair)
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Dr. Henton, Mr. Kennedy and Mr.
Oliver. No member of the Compensation Committee is an officer or employee, or
former officer or employee, of the Company or any of its subsidiaries.
PERFORMANCE GRAPH
The following graph compares, for the five-year period ended December 30,
2001, the Company's total return to shareholders (stock price increase plus
dividends, divided by beginning stock price) with that of (i) all U.S. companies
listed on The Nasdaq Stock Market, and (ii) a self-determined peer group
comprised primarily of companies in the commercial interiors industry.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS ($)
(PERFORMANCE GRAPH)
-------------------------------------------------------------------------------------------------------
12/29/96 12/28/97 1/03/99 1/02/00 12/31/00 12/30/01
-------------------------------------------------------------------------------------------------------
Interface, Inc. 100.0 151.2 98.4 62.4 97.9 67.5
Nasdaq Stock Market
(U.S. Companies) 100.0 117.7 172.5 320.4 192.7 155.9
Self-Determined Peer
Group 100.0 133.9 142.2 109.4 93.2 100.2
---------------
Notes:
A. The lines represent annual index levels derived from compounded daily returns
that include all dividends.
B. The indices are reweighted daily, using the market capitalization on the
previous trading day.
14
C. If the annual interval, based on the fiscal year-end, is not a trading day,
the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/29/96.
E. The Company's fiscal year ends on the Sunday nearest December 31.
F. The following companies are included in the self-determined peer group:
Actuant Corporation (formerly known as Applied Power, Inc.); Armstrong
Holdings, Inc.; BE Aerospace, Inc.; Burlington Industries, Inc.; The Dixie
Group, Inc.; Hon Industries Inc.; Herman Miller, Inc.; Kimball International,
Inc.; Mohawk Industries, Inc.; and USG Corp. Shaw Industries, Inc., which in
prior years was included in the Company's self-determined peer group, has
been removed from the group because, effective at the close of business on
January 8, 2001, its shares ceased trading on the New York Stock Exchange as
a result of the acquisition of Shaw Industries by an investor group led by
Berkshire Hathaway Inc.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the Nasdaq National Market reports of ownership and
changes in ownership of Common Stock and other equity securities of the Company.
Directors, executive officers and greater than 10% shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely upon a review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that during fiscal 2001 all filing requirements applicable to
its directors, executive officers and greater than 10% beneficial owners were
complied with.
INFORMATION CONCERNING THE COMPANY'S ACCOUNTANTS
BDO Seidman, LLP served as the independent auditors for the Company during
fiscal 2001. Management of the Company anticipates that BDO Seidman, LLP will be
the independent auditors for the current fiscal year, but the Board of Directors
has not yet considered the selection of public accountants for the current year.
Representatives of BDO Seidman, LLP are expected to be present at the annual
meeting and will have the opportunity to make a statement, if they desire to do
so, and to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed the Company by BDO Seidman, LLP for professional
services rendered for the audit of the Company's annual financial statements for
fiscal 2001 included in the Company's annual report on Form 10-K for the year
ended December 30, 2001, and the reviews of the financial statements included in
the Company's quarterly reports on Form 10-Q for the quarters ended April 1,
2001, July 1, 2001 and September 30, 2001, were $1,127,817.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
BDO Seidman, LLP provided no financial information systems design and
implementation services to the Company and thus did not bill the Company for
such services.
ALL OTHER FEES
The aggregate fees billed the Company by BDO Seidman, LLP for all other
services were $485,398, including $177,555 for audits of immaterial
subsidiaries, $12,400 for audits of employee benefit plans, $2,370 for services
related to the Company's S-8 filing regarding an amendment to the Omnibus Stock
Incentive Plan, $271,453 for tax consulting services and $21,620 for other
accounting fees.
15
AUDIT COMMITTEE REPORT
The Audit Committee operates pursuant to an Audit Committee Charter that
was adopted by the Board of Directors. The Company's management is responsible
for its internal accounting controls and the financial reporting process. The
Company's independent accountants, BDO Seidman, LLP, are responsible for
performing an audit of the Company's consolidated financial statements in
accordance with auditing standards generally accepted in the United States and
for expressing an opinion as to their conformity with generally accepted
accounting principles. The Audit Committee's responsibility is to monitor and
oversee these processes.
In keeping with that responsibility, the Audit Committee has reviewed and
discussed the Company's audited consolidated financial statements with
management and BDO Seidman, LLP. In addition, the Audit Committee has discussed
with BDO Seidman, LLP the matters required to be discussed by Statement on
Auditing Standards No. 61, "Communications with Audit Committee," as currently
in effect. In addition, the Audit Committee has received the written disclosures
from BDO Seidman, LLP required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and has discussed with the
independent accountants their independence. The Audit Committee has also
considered whether the provision of those services discussed above under the
caption "All Other Fees" by BDO Seidman, LLP is compatible with maintaining BDO
Seidman, LLP's independence.
The Board of Directors, in its business judgment, has determined that all
three members of the Audit Committee are "independent," as required by
applicable listing standards of Nasdaq. The members of the Audit Committee are
not professionally engaged in the practice of auditing or accounting and are not
experts in the fields of auditing or accounting, including in respect of auditor
independence. Members of the Audit Committee rely, without independent
verification, on the information provided to them and on the representations
made by management and BDO Seidman, LLP. Accordingly, the Audit Committee's
oversight does not provide an independent basis to determine that management has
followed appropriate accounting and financial reporting principles or maintained
appropriate internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not assure that
the audit of the Company's financial statements has been carried out in
accordance with generally accepted auditing standards, that the financial
statements are presented in accordance with generally accepted accounting
principles or that the Company's auditors are "independent."
Based on the reports and discussions described in this report, and subject
to the limitations on the role and responsibilities of the Audit Committee
referred to above and in the Audit Committee Charter, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial
statements of the Company be included in the Company's annual report on Form
10-K for the year ended December 30, 2001 for filing with the Securities and
Exchange Commission.
THE AUDIT COMMITTEE
Carl I. Gable (Chair)
James B. Miller, Jr.
Leonard G. Saulter
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's 2003
annual meeting must be received by the Company no later than December 18, 2002,
in order to be eligible for inclusion in the Company's Proxy Statement and form
of Proxy for that meeting. In addition, in accordance with Article II, Section
9, of the Bylaws of the Company, proposals of shareholders intended to be
presented at the Company's 2003 annual meeting must be presented to the Board of
Directors by no later than 90 days prior to that meeting, with such deadline for
presentation of proposals estimated to be February 19, 2003.
16
OTHER MATTERS THAT MAY COME BEFORE THE MEETING
Management of the Company knows of no matters other than those stated above
that are to be brought before the meeting. However, if any other matter should
be properly presented for consideration and voting, it is the intention of the
persons named as proxies in the enclosed Proxy to vote the Proxy in accordance
with their judgment of what is in the best interest of the Company.
By order of the Board of Directors
/s/ RAYMOND S. WILLOCH
RAYMOND S. WILLOCH
Secretary
April 15, 2002
17
(Interface Logo)
IFC01-PS-02
DETACH HERE ZIFC12
CLASS A COMMON STOCK
INTERFACE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 2002 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Ray C. Anderson and Daniel T. Hendrix, or
either of them, with power of substitution to each, the proxies of the
undersigned to vote the Class A Common Stock of the undersigned at the Annual
Meeting of Shareholders of Interface, Inc. to be held on May 21, 2002, and any
adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 1, AND, UNLESS INSTRUCTIONS
TO THE CONTRARY ARE INDICATED IN THE SPACES PROVIDED, THIS PROXY WILL BE SO
VOTED.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign and date this Proxy exactly as name appears. NOTE: When signing as
an attorney, trustee, administrator or guardian, please give your title as
such. In the case of joint tenants, each joint owner must sign.
INTERFACE, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE ZIFC11
PLEASE MARK
[X] VOTE AS IN
THIS EXAMPLE.
-------------------------------------------------------------------
INTERFACE, INC.
CLASS A COMMON STOCK
-------------------------------------------------------------------
1. Election of Directors. 2. In accordance with their best judgment, with respect to
NOMINEES: (01) Dianne Dillon-Ridgley, (02) June M. Henton, any other matters that may properly come before the
(03) Christopher G. Kennedy, (04) James B. Miller, Jr. meeting.
(05) Thomas R. Oliver
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION
--------------------------------------------------- OF THE LISTED NOMINEES.
For all nominees except as noted above
Please be sure to sign and date this Proxy.
Co-Owner
Signature: Date: Signature: Date:
--------------------------------- ---------------- --------------------------------- ----------------
DETACH HERE ZIFB32
CLASS B COMMON STOCK
INTERFACE, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE 2002 ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoints Ray C. Anderson and Daniel T. Hendrix, or
either of them, with power of substitution to each, the proxies of the
undersigned to vote the Class B Common Stock of the undersigned at the Annual
Meeting of Shareholders of Interface, Inc. to be held on May 21, 2002, and any
adjournment thereof.
THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" PROPOSAL 1, AND, UNLESS INSTRUCTIONS
TO THE CONTRARY ARE INDICATED IN THE SPACES PROVIDED, THIS PROXY WILL BE SO
VOTED.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
Please sign and date this Proxy exactly as name appears. NOTE: When signing as
an attorney, trustee, administrator or guardian, please give your title as
such. In the case of joint tenants, each joint owner must sign.
INTERFACE, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE ZIFB31
PLEASE MARK
[X] VOTE AS IN
THIS EXAMPLE.
--------------------------------------------------------------------
INTERFACE, INC.
CLASS B COMMON STOCK
--------------------------------------------------------------------
1. Election of Directors. 2. In accordance with their best judgment, with respect to
NOMINEES: (01) Ray C. Anderson, (02) Carl I. Gable, any other matters that may properly come before the
(03) Daniel T. Hendrix, (04) J. Smith Lanier, II, meeting.
(05) Leonard G. Saulter, (06) Clarinus C. Th. van Andel
FOR WITHHELD
ALL [ ] [ ] FROM ALL
NOMINEES NOMINEES
[ ] THE BOARD OF DIRECTORS FAVORS A VOTE "FOR" THE ELECTION
--------------------------------------------------- OF THE LISTED NOMINEES.
For all nominees except as noted above
Please be sure to sign and date this Proxy.
Co-Owner
Signature: Date: Signature: Date:
--------------------------------- ---------------- --------------------------------- ----------------