NOMINATIONAND ELECTION OF DIRECTORS

(ITEM 1)

The Bylaws of the Company provide that the Board of Directors shall consist of a maximum of 15 directors, with the exact number of directors being established by action of the Board taken from time to time. Commencing as of the 2016 annual meeting of shareholders,2022 Annual Meeting, the Board of Directors has set the number of directors at 9.nine. 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. EachMs. Hurd and Mr. O’Brien are new nominees, and each other nominee (other than Mr. Gould) is an incumbent director standing for re-election, and eachre-election. Each nominee has consented to being named herein and to serve or continue serving as a director if elected or re-elected. One of the Company’s current directors, Sheryl D. Palmer, has decided not to stand for re-election at the Annual Meeting.

Board Skills Matrix

The matrix below summarizes certain of the key experience, skills and attributes that our director nominees bring to the Board to enable the effective oversight of our Company and execution of our business strategy. This matrix highlights the depth and breadth of the skills and experience of our director nominees. Additional details regarding each director nominee’s skills, experience and background are set forth in the individual biographies that follow.

Certain information relating to each nominee proposed by the Board is set forth below. Directors are required to submit an offer of resignation upon experiencing a job change.

Nominees

Ms. Palmer was elected as a director in October 2015. Since 2007, Ms. Palmer has served as President and Chief Executive Officer of Taylor Morrison Home Corporation, a publicly traded leading North American home builder and developer, after previously serving as Executive Vice President for the West Region of Morrison Homes. Her previous experience includes senior leadership roles at Blackhawk Corp. and Pulte Homes/Del Webb Corporation, each homebuilders and developers of retirement communities, where she last held the title of Nevada Area President at Pulte/Del Webb Corporation. Ms. Palmer brings to the Board extensive executive level experience in the residential building industry, including leadership in the areas of sales and marketing, building development, strategy and operations management.

Vote Required and Recommendation of Board

Under the Company’s Bylaws, election of each of the nominees requires a plurality of the votes cast by the Company’s outstanding Common Stock entitled to vote and represented (in person or by proxy) at the meeting. As noted below, however, in an uncontested election, any nominee who does not receive a majority affirmative vote must submit a resignation (which may be conditional) to the Board or its Chair. THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE ELECTION OF EACH OF THE NOMINEES LISTED ABOVE, AND PROXIES EXECUTED AND RETURNED OR VOTED BY TELEPHONE OR INTERNET WILL BE VOTED FOR EACH OF THE NOMINEES UNLESS CONTRARY INSTRUCTIONS ARE INDICATED.

MEETINGSAND COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors held five meetings during 2015. All of the incumbent directors attended at least 75% of the total number of meetings ofDIRECTOR INDEPENDENCE

For each director, the Board makes a determination of whether the director is “independent” under the criteria established by the Nasdaq Stock Market and other governing laws and regulations. In its review of director independence, the Board considers all commercial, banking, consulting, legal, accounting, charitable or other business relationships any committeesdirector may have with the Company. The current directors are John P. Burke, Dwight Gibson, Daniel T. Hendrix, Christopher G. Kennedy, Joseph Keough, Catherine M. Kilbane, K. David Kohler, and Sheryl D. Palmer. As a result of which he or she was a member.its review, the Board has determined that all the current directors, with the exception of Daniel T. Hendrix (who is an employee), are independent.

CORPORATE GOVERNANCE

Board Leadership Structure and Role in Risk Management

We currently have a Lead Independent Director, and a combined Chairman and Chief Executive Officer. Mr. GableKennedy serves as Lead Independent Director, and Mr. Hendrix serves as Chairman and Chief Executive Officer. Although we do not have a formal policy on whether the same person should (or should not) serve as both the Chairman and Chief Executive Officer, the Board has determined that it is appropriate at the current time to have those positions combined. In making this determination, the Board has taken into account its evaluation of Mr. Hendrix’s performance as Chief Executive Officer, his very positive relationships with the other members of the Board and the Corporation’s various stakeholders, and the strategic vision and perspective he brings to the Chairman position. In addition, we believe that the Company’s sustainability mission has created high expectations for the role of Chairman of the Company, for which Mr. Hendrix is uniquely qualified. The Board is of the view that Mr. Hendrix provides excellent leadership to the Board in the performance of its duties.

Because our Chairman and Chief Executive Officer is an employee of the Company and therefore not considered “independent” under applicable standards, (see “Director Independence” below), the Board has appointed Mr. GableKennedy to serve as Lead Independent Director. The Board considers it to be useful and appropriate at the current time to have a non-managementan independent director serve in a lead capacity to promote corporate governance, coordinate the activities of the other non-managementindependent directors, and perform such other duties and responsibilities as the Board may determine. The specific responsibilities of the Lead Independent Director are as follows:

Meetings and Committees of the Board

The Board of Directors held six meetings during 2021. All the incumbent directors attended at least 75% of the total number of meetings of the Board and any committees of which he or she was a member.

The independent directors meet in regularly scheduled executive sessions without Mr. Hendrix or other members of management present. In 2021, the independent directors met three times in executive session.

The Board of Directors has the following standing committees that assist the Board in carrying out its duties: the Executive Committee, the Audit Committee, the Compensation Committee, and the Nominating & Governance Committee. The following table lists the current members of each committee:

Executive Committee Committee.The Executive Committee did not meet but acted by unanimous written consent once during 2015. With2021. Except for duties reserved to the other Board committees and for certain limitedother 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.

Audit Committee. The Audit Committee met fournine times and acted by unanimous written consent once during 2015.2021. The function of the Audit Committee is to (i) serve as an independent and objective party to review the Company’s financial statements, 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 has determined that all three members of the Audit Committee are “independent” in accordance with applicable law, including the rules and regulations of the Securities and Exchange CommissionSEC and the rules of the Nasdaq Stock Market, and that each of Messrs. GableMs. Palmer and MillerMr. Keough is an “audit committee financial expert” as defined by the rules and regulations of the Securities and Exchange Commission.SEC. The Audit Committee operates pursuant to an Audit Committee Charter which was adopted by the Board of Directors. The Audit Committee CharterDirectors and may be viewed on the Company’sInvestor Relations section of our website,www.interfaceglobal.com/Investor-Relations/Corporate-Governance/Audit-Committee-Charter.aspxhttps://investors.interface.com/investor-relations/default.aspx.

Compensation CommitteeCommittee.The Compensation Committee met two times and acted by unanimous written consent five times during 2015.2021. The function of the Compensation Committee is to (i) evaluate the performance of the Company’s Chief Executive Officer and other 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 has determined that each member of the Compensation Committee is “independent” in accordance with applicable law, including the rules and regulations of the Securities and Exchange CommissionSEC and the rules of the Nasdaq Stock Market. The Compensation Committee operates pursuant to a Compensation Committee Charter that was adopted by the Board of Directors. The Compensation Committee CharterDirectors and may be viewed on the Company’sInvestor Relations section of our website,www.interfaceglobal.com/Investor-Relations/Corporate-Governance/https://investors.interface.com/investor-relations/default.aspxCompensation-Committee-Charter.aspx. The Compensation Committee’s policies and philosophy are described in more detail below in this Proxy Statement under the heading “Compensation Discussion and Analysis.”

Nominating& Governance CommitteeCommittee. The Nominating & Governance Committee met twice in 2015.one time during 2021. The Nominating & Governance Committee assists the Board in establishing qualifications for Board membership and in identifying, evaluating and selecting qualified candidates to be nominated for election to the Board.Board, and monitoring the Company’s activities and practices regarding ESG matters that are significant to the Company. The Nominating & Governance Committee also assists the Board in reviewing and analyzing, and makes recommendations regarding, corporate governance matters, and it also recommends committee assignments for Board members. The Board of Directors has determined that each member of the Nominating & Governance Committee is “independent” in accordance with applicable law, including the rules of the Nasdaq Stock Market. The Nominating & Governance Committee operates pursuant to a Nominating & Governance Committee Charter that was adopted by the Board of Directors and may be viewed on the Investor Relations section of our website, https://investors.interface.com/investor-relations/default.aspx.

Nominations for Board Service

In the event of a vacancy on the Board, the Nominating & Governance Committee develops a pool of potential director candidates for consideration. The Nominating & Governance Committee seeks candidates for election and appointment with excellent decision-making ability, valuable and varied business experience and knowledge, and impeccable personal integrity and reputations. The Committee does not have a specific diversity policy, but considers diversity of race, ethnicity, gender, age, cultural background and professional experience in evaluating candidates for Board membership, in an effort to obtain a variety of viewpoints in the Board’s proceedings. The Nominating & Governance Committee considers whether candidates are free of constraints or conflicts which might interfere with the exercise of independent judgment regarding the types of matters likely to come before the Board, and have the time required for preparation, participation and attendance at Board and committee meetings. Other factors considered by the Nominating & Governance Committee in identifying and selecting candidates include the needs of the Company and the range of talent and experience already represented on the Board. The Nominating & Governance Committee solicits suggestions from other members of the Board, Company management, and occasionally outside search firms, regarding persons to be considered as possible nominees.Shareholdersnominees. Shareholders who wish the Nominating & Governance Committee to consider their recommendations for director candidates should submit their recommendations in writing to the Nominating & Governance Committee, in care of the office of the Chairman of the Board, Interface, Inc., 2859 Paces Ferry Road, Suite 2000,1280 West Peachtree Street NW, Atlanta, GA 30339.30309. Recommendations should include the information which would be required for a “Shareholder Proposal” as set forth in Article II, Section 9 of the Company’s Bylaws. Director candidates who are recommended by shareholders in accordance with these procedures will be evaluated by the Nominating & Governance Committee in the same manner as director candidates recommended by the Company’s directors.directors, management and outside search firms.

TheShareholder Outreach Programs

In each of the past three years, we have conducted one or more shareholder outreach programs per year, with the most recent taking place in late 2021 through early 2022. In that program, we requested conference calls with each of our top 25 shareholders, representing approximately 70% of outstanding shares, and we held conference calls with each shareholder that accepted our request, representing approximately 10% of outstanding shares. During the outreach program, which was led by the Company’s Chairman Dan Hendrix, we discussed with shareholders various proxy and Company related issues and areas of shareholder interest – such as the Company’s corporate governance practices, executive compensation philosophy and practices, and ESG initiatives.

Majority Vote Resignation Policy for Director Elections

Pursuant to governing law and documents, including the Company’s Bylaws as noted above, in most cases the Company's directors are elected by a plurality of the votes cast. Although nominees who receive the most votes for the available positions will generally continue to be duly elected, the Board of Directors has determinedadopted a resignation policy applicable to nominees who fail to receive the affirmative vote of a majority of the votes cast in an uncontested election for directors. (This policy does not alter the applicable legal standards.) The policy requires that a nominee who does not receive a majority affirmative vote in an uncontested election promptly will tender, to the Board or its Chair, their resignation from the Board and committees on which the director serves. The resignation may be conditioned upon Board acceptance. If it is not so conditioned, the resignation must specify that it is effective immediately on delivery.

A “majority affirmative vote” means that the votes cast “for” a nominee’s election exceed those voted "withhold", with broker and other non-votes not being considered “votes cast.”  You have been provided with options to vote “for” or “withhold” from each memberDirector nominee. However, neither a “withhold” vote nor declining to vote for directors (assuming the presence of a quorum) affects whether a director nominee in an uncontested election is legally elected under the plurality vote standard (provided such nominee receives at least one “for” vote).  But a “withhold” vote is considered in determining whether a director who is legally elected has received a “majority affirmative vote” for purposes of the resignation policy

The Nominating & Governance Committee of the Board will consider any resignation conditioned upon Board acceptance, including any information provided by the Director, and within 60 days of the shareholder meeting at which the Director failed to receive a majority affirmative vote, will recommend to the full Board what action to take on the Director’s resignation. The Nominating & Governance Committee may recommend, among other things, acceptance or rejection of the resignation, delayed acceptance pending the recruitment and election of a new director or rejection of the resignation in order to address the underlying reasons for the Director’s failure to receive the majority affirmative vote of the shareholders. The policy provides for the Board to act on the Nominating & Governance Committee’s recommendation within 90 days following the shareholder meeting.

In considering a conditional resignation, the Nominating & Governance Committee is “independent” in accordance with applicable law,and the Board may consider those factors it deems relevant to its recommendation, including but not limited to the rules and regulationsunderlying reasons for the failure of the SecuritiesDirector to receive a majority affirmative vote, the tenure and Exchange Commissionqualifications of the Director, the Director’s past and expected future contributions, other policies and the rulesoverall composition of the Nasdaq Stock Market.Board, including whether accepting the resignation would cause the Company to fail to meet legal or stock market requirements.

Following the Board’s decision, the Company will publicly announce the Board’s decision regarding any conditional resignation. A resigning Director cannot participate in committee or Board decisions regarding their resignation, except in certain cases where multiple directors have failed to receive majority affirmative votes, which circumstances are described in the full policy posted in the Investor Relations section of our website, https://investors.interface.com/investor-relations/default.aspx. The Nominating & Governancepreceding summary of the policy is qualified in its entirety by reference to the full policy.

Enterprise Risk Management

The Company maintains a formal and robust Enterprise Risk Management (“ERM”) program. The Company’s ERM program is based on the Enterprise Risk Management – Integrated Framework defined by the Committee operatesof Sponsoring Organizations of the Treadway Commission (“COSO”), although tailored to the Company’s specific risk profile and needs. The Company’s ERM program is managed by a risk committee comprised of executive officers and other senior managers, is administered by the Company’s Director of Internal Audit, and is overseen by the Audit Committee pursuant to a Nominating & Governance Committee Charter that was adoptedauthority delegated by the Board of Directors.Directors in the Audit Committee Charter. The Nominating & Governance Committee Charter may be viewedCompany’s program includes a continuous process of identifying, assessing, addressing, monitoring and reporting on the risks that pose the greatest threats to the Company. As part of that process, the management risk committee conducts an annual survey of the Company’s website,www.interfaceglobal.com/Investor-Relations/Corporate-Governance/Nominating---Governance-Charter-(1).aspx.top global leaders (and, beginning in 2022, its Board of Directors) to assess the likelihood, potential impact and velocity of a large number of potential risks and to help identify emerging risks. The management risk committee meets quarterly to monitor the key identified risks and how they are being addressed, which may include, depending on the circumstances, mitigating, sharing, accepting or avoiding the risk. The management risk committee and Director of Internal Audit report to the Audit Committee quarterly on significant developments and key elements of the program.

Risk Management

TheIn addition, the Board receives quarterly reports on other elements of risk that may potentially affect the Company, as identified and presented by management. The Board also assists in the Company’s risk oversight through its various committees described above. For example, the Audit Committee assists in overseeing risk as it relatesthe specific risks that relate to the Company’s financial statements, financial reporting process and internal control system. In that regard, the Company’s Director of Internal Audit and outside auditors report directly to the Audit Committee. The Nominating & Governance Committee assists in overseeing risk related to the Company’s corporate governance practices as well as the performance of individual Board members and committees, while the Compensation Committee assists in overseeing risk as it relates to the Company’s executive compensation program and practices.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines that provide the framework for the governance of the Company. Our Corporate Governance Guidelines are available on the Investor Relations section of our website, https://investors.interface.com/investor-relations/default.aspx and will also be made available to shareholders without charge upon request in writing to our corporate Secretary at Interface, Inc., 1280 West Peachtree Street NW, Atlanta, Georgia 30309.

Code of Business Conduct & Ethics

The Board has adopted a Code of Business Conduct & Ethics that applies to all of our directors, officers and employees, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The Code is publicly available on the Investor Relations section of our website, https://investors.interface.com/investor-relations/default.aspx and will also be made available without charge to any person upon request in writing to our corporate Secretary at Interface, Inc., 1280 West Peachtree Street NW, Atlanta, Georgia 30309. We intend to disclose amendments to, or waivers from, provisions of the Code that apply to any director or principal executive, financial or accounting officers on our website at www.interface.com, in lieu of disclosing such matters in Current Reports on Form 8-K.

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PRINCIPALSHAREHOLDERS AND MANAGEMENT STOCK OWNERSHIP

 

The following table sets forth, as of March 1, 201618, 2022 (unless otherwise indicated), beneficial ownership 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 director and nominee for director, (iii) each person who served as the Company’s PrincipalChief Executive Officer Principalor Chief Financial Officer, and the next three most highly compensated executive officers, during 2021 (the “Named Executive Officers”), and (iv) all executive officers and directors of the Company as a group. Due to the nature of the awards, performance shares awarded to the Company’s executive officers in January 2016 are not included in beneficial ownership of Common Stock. Unless otherwise noted, the business address for each beneficial owner is the Company’s corporate headquarters located at 1280 West Peachtree Street NW, Atlanta, Georgia 30309.

 

Beneficial Owner (and Business Address of 5% Owners)	Title ofClass	Amount and Nature of BeneficialOwnership	Percent of Class(1)
Bank of New York Mellon Corporation 225 Liberty Street New York, New York 10286	Common Stock	5,568,394(2)(3)	8.5%
BlackRock, Inc. 55 East 52nd Street New York, New York 10022	Common Stock	7,717,002(2)(4)	11.8%
FMR LLC    and Abigail P. Johnson.    245 Summer Street    Boston, Massachusetts 02210	Common Stock	2,746,753(2)(5)	4.2%
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355	Common Stock	5,831,529(2)(6)	8.9%
John P. Burke	Common Stock	13,786(7)	*
Edward C. Callaway	Common Stock	10,136(8)	*
Andrew B. Cogan	Common Stock	15,786(9)	*
Carl I. Gable	Common Stock	83,312(10)	*
Jay D. Gould	Common Stock	93,961(11)	*
Daniel T. Hendrix	Common Stock	360,551(12)	*
Christopher G. Kennedy	Common Stock	104,099(13)	*
K. David Kohler	Common Stock	39,786(14)	*
Patrick C. Lynch	Common Stock	181,825(15)	*
James B. Miller, Jr.	Common Stock	53,786(16)	*
Harold M. Paisner	Common Stock	51,786(17)	*
Sheryl D. Palmer	Common Stock	4,736(18)	*
John R. Wells	Common Stock	146,137(19)	*
Raymond S. Willoch	Common Stock	80,395(20)	*
All executive officers and directors (21 persons)	Common Stock	1,542,291(21)	2.4%

__________

*     Less than 1%.

Beneficial Owner (and Business Address of 5% Owners)		Title of Class		Amount and Nature of Beneficial Ownership				Percent of Class(1)
Barrow Hanley Global Investors 2200 Ross Avenue, 31st Floor Dallas, Texas 75201-2761		Common Stock			3,854,133	(2)(3)			6.5	%
BlackRock, Inc. 55 East 52nd Street New York, New York 10055		Common Stock			9,484,692	(2)(4)			16.0	%
Capital World Investors 333 South Hope Street, 55th Floor Los Angeles, California 90071		Common Stock			4,721,060	(2)(5)			8.0	%
Frontier Capital Management Co., LLC 99 Summer Street Boston, Massachusetts 02110		Common Stock			3,721,656	(2)(6)			6.3	%
The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355		Common Stock			6,355,727	(2)(7)			10.7	%
John P. Burke		Common Stock			50,053	(8)			*
David B. Foshee		Common Stock			134,094	(9)			*
Dwight Gibson		Common Stock			27,020	(10)			*
Bruce A. Hausmann		Common Stock			154,456	(11)			*
Daniel T. Hendrix		Common Stock			354,802	(12)			*
Laurel M. Hurd				None					N/A
Christopher G. Kennedy		Common Stock			159,776	(13)			*
Joseph Keough		Common Stock			27,020	(14)			*
Catherine M. Kilbane		Common Stock			30,570	(15)			*
K. David Kohler		Common Stock			76,053	(16)			*
Robert T. O’Brien				None					N/A
Sheryl D. Palmer		Common Stock			41,003	(17)			*
James L. Poppens		Common Stock			52,143	(18)			*
Nigel Stansfield		Common Stock			126,059	(19)			*
All executive officers and directors (12 persons)		Common Stock			1,233,049	(20)			2.1	%

 

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*	Less than 1%.

 

	(1)	Percent of class is based on 65,459,10659,330,565 shares outstanding on March 1, 201618, 2022 and is calculated assuming that the beneficial owner or group of beneficial owners has exercised any conversion rights, options or other rights to subscribe held by such beneficial owner that are exercisable within 60 days of March 1, 2016,18, 2022, and that no other conversion rights, options or rights to subscribe have been exercised by anyone else.

	(2)	Based upon information included in statements as of December 31, 20152021 provided to the Company and filed with the Securities and Exchange CommissionSEC by such beneficial owners.

	(3)	Bank of New York Mellon CorporationBarrow Hanley Global Investors in an investment advisor, and states that it has sole voting power with respect to 5,339,261over 2,923,400 of such shares, shared voting power with respect to 3,000 of such shares, sole dispositive power with respect to 5,021,788over 930,733 of such shares, and sharedsole dispositive power with respect to 541,816 ofover all such shares.

	(4)	According to BlackRock, various persons have the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of such shares, and noonly one such person’s (iShares Core S&P Small-Cap ETF) interests in such shares exceeds 5% of the total outstanding shares of Common Stock. It states that it has sole voting power with respect to 7,483,2989,332,899 of such shares, and sole dispositive power with respect to all of such shares.

	(5)	FMR LLCCapital World Investors is a parent holding company. Membersan investment advisor, and states that such shares include beneficial ownership by SMALLCAP World Fund, Inc. of more than 5% of the family of Edward C. Johnson 3d, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting commontotal outstanding shares of FMR, LLC, representing 49% of the voting power of FMR, LLC. They state that none of them has sole power to vote or direct the voting of the shares, which power resides with Boards of Trustees of the various Fidelity funds.Common Stock.

(6)

Frontier Capital Management Co., LLC is an investment advisor, and states that it has sole voting power with respect to 1,902,566 of such shares and sole dispositive power with respect to all such shares.

	(7)	The Vanguard Group, Inc. is an investment advisor, and states that it has sole voting power with respect to 145,336 of such shares, shared voting power with respect to 4,60079,651 of such shares, sole dispositive power with respect to 5,685,6936,238,012 of such shares, and shared dispositive power with respect to 145,836117,715 of such shares.
	(7)

Includes 6,611 restricted shares.

	(8)	Includes 6,6117,547 restricted shares.

	(9)	Includes 6,61156,406 restricted shares.

	(10)	Includes 6,6117,547 restricted shares, and 5,000 shares that may be acquired by Mr. Gable pursuant to exercisable stock options.shares.

	(11)	Includes 64,82379,725 restricted shares.

	(12)	Includes 93,039213,290 restricted shares, 4,5974,922 shares held indirectly through the Company’s 401(k) plan, and 50,07235,072 shares held indirectly by family trusts.

	(13)	Includes 6,6117,547 restricted shares, and 5,000 shares that may be acquired by Mr. Kennedy pursuant to exercisable stock options.shares. Mr. Kennedy serves on the Board of Trustees of Ariel Mutual Funds, for which Ariel Investments, LLC 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 Investments, LLC as investment advisor for Ariel Mutual Funds.

	(14)	Includes 6,6117,547 restricted shares.

	(15)	Includes 29,2947,547 restricted shares.

	(16)	Includes 6,6117,547 restricted shares, and 5,000 shares that may be acquired by Mr. Miller pursuant to exercisable stock options.shares.

	(17)	Includes 6,6117,547 restricted shares. Ms. Palmer is not standing for re-election.

	(18)	All areIncludes 49,365 restricted shares.

	(19)	Includes 15,00073,874 restricted shares.

	(20)	Includes 26,663525,489 restricted shares, and 725 shares held by Mr. Willoch’s son (although Mr. Willoch disclaims beneficial ownership of the shares held by his son).
	(21)	Includes 393,162 restricted shares, and 15,000 shares that may be acquired by all executive officers and directors as a group pursuant to exercisable stock options.shares.

 

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APPROVAL OF EXECUTIVE COMPENSATION

(ITEM 2)

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Company is asking its shareholders to vote, on an advisory basis, to approve the compensation of its Named Executive Officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to express their views on the compensation of the Company’s Named Executive Officers. At the 2017 annual meeting of shareholders, the Company’s shareholders voted, on an advisory basis, to hold a say on pay vote every year. The Board of Directors subsequently determined that the Company will hold say on pay votes every year until the next required advisory vote on the frequency of say on pay votes occurs or until the Board of Directors otherwise determines that a different frequency for say on pay votes is in the best interests of the shareholders.

Our executive compensation program is designed to attract, reward and retain key employees, including our Named Executive Officers, who are critical to the Company’s long-term success. Shareholders are urged to read the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement for greater detail about the Company’s executive compensation programs, including information about the fiscal year 2021 compensation of the Named Executive Officers.

The Company is asking the shareholders to indicate their support for the compensation of the Company’s Named Executive Officers as described in this Proxy Statement by voting in favor of the following resolution:

“RESOLVED, that the shareholders approve, on an advisory, non-binding basis, the compensation paid to the Company’s Named Executive Officers as disclosed in the “Compensation Discussion and Analysis” and “Executive Compensation” sections, including the compensation tables, notes, and narrative in those sections.”

Even though this say-on-pay vote is advisory and therefore will not be binding on the Company, the Compensation Committee and the Board value the opinions of the Company’s shareholders. Accordingly, to the extent there is a significant vote against the compensation of the Named Executive Officers, the Board will consider the shareholders’ concerns and the Compensation Committee will evaluate what actions may be necessary or appropriate to address those concerns.

You may vote “for,” “against,” or “abstain” from the proposal to approve on an advisory basis the compensation of our Named Executive Officers.

Vote Required and Recommendation of the Board

Under the Company’s Bylaws, the compensation of the Named Executive Officers is approved on an advisory basis if the affirmative votes cast by the holders of the Company’s outstanding shares of Common Stock entitled to vote and represented (in person or by proxy) at the meeting exceed the negative votes. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF EXECUTIVE COMPENSATION, AS DISCLOSED IN THIS PROXY STATEMENT, AND THE PROXY SUBMITTED BY TELEPHONE OR INTERNET OR PROXY CARD WILL BE VOTED IN THIS MANNER UNLESS THE SHAREHOLDER SUBMITTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY (OR ABSTAINS).

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COMPENSATION DISCUSSION AND ANALYSIS

 

This Compensation Discussion and Analysis describes the compensation program for the Company’s Named Executive Officers. For 2021, these individuals were:

Name	Title
Daniel T. Hendrix	President, Chief Executive Officer and Chairman
David B. Foshee	Vice President, General Counsel and Secretary
Bruce A. Hausmann	Vice President and Chief Financial Officer
James L. Poppens	Vice President (Division President – Americas)
Nigel Stansfield	Vice President (Division President – Europe, Asia, Australia and Africa (EAAA))

The COVID-19 pandemic continued to have material adverse effects on the Company’s business, results of operations, and financial condition in 2021, although we experienced some recovery following more severe impacts the prior year. The 2021 performance metrics and targets discussed below were established by the Compensation Committee early in the year 2021, during the intensity and uncertainty of the COVID-19 pandemic and its macroeconomic consequences. The Committee monitored the elements of the executive compensation program throughout the year, including the impacts of many uncertainties and challenges faced by the Company and its management due to the pandemic. As demonstrated below, the Committee believes that the Company’s performance-based compensation is appropriately designed to pay for performance, and that the structure strikes a proper balance among motivating management and rewarding strong management performance, while also accounting for uncertainty of the pandemic as well as the regular cyclicality of our industry that is outside of management’s control.

Below are the Company’s 2021 financial data that most significantly impacted our Executive Compensation Program. The non-GAAP financial measures of adjusted selling, general and administrative (“SG&A”) expenses, adjusted operating income, adjusted EBITDA and adjusted EPS were utilized as 2021 performance criteria for our annual bonus plan and long-term equity incentives as discussed further below.

(Note: Please see Appendix A for a reconciliation of non-GAAP measures to the most directly comparable GAAP measures and an explanation of why we believe non-GAAP measures provide useful information to shareholders and the additional purposes for which we use non-GAAP measures.)

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Overall Philosophy and Objectives

 

The Company’s compensation program is designed in a manner intended to both attract and retain a highly-qualified,highly qualified, motivated and engaged management team whose focus is on enhancing shareholder value. The Company believes a straightforward program that is readily understood and endorsed by its participants best serves these goals, and has constructed a program that contains (1) multiple financial elements, (2) clear and definitive targets, (3) challenging but attainable objectives, and (4) specified performance metrics. More specifically, the objectives of the Company’s management compensation program include:

 

	●	Establishing strong links between the Company’s performance and total compensation earned – i.e., “paying for performance”;
	●	Providing incentives for executives to achieve specific performance objectives;
	●	Promoting and facilitating management stock ownership, and thereby motivating management to think and act as owners;
	●	Emphasizing the Company’s mid and long-term performance, thus enhancing shareholder value; and
	●	Offering market competitive total compensation opportunities to attract and retain talented executives.

 

Program Design and Administration

 

The Compensation Committee of the Board of Directors, which is composed entirely of independent directors, has developed and administers the Company’s executive pay program to provide compensation commensurate with the level of financial performance achieved, the responsibilities undertaken by the executives, and the compensation packages offered by comparable companies. The program currently consists of four principal components, each of which is designed to drive a specific behavioral focus, which in turn helps to provide specific benefits to the Company:

 

Program Component		Behavioral Focus		Ultimate Benefit to Company
Competitive base salary		Rewards individual competencies, performance and level of experience		Assists with attraction and retention of highly-qualified executives, and promotes management stability
Annual cash bonuses based on achievement of established goals		Rewards operational results of specific business units and Company as a whole		Aligns individual interests with overall short term (quarterly and annual) objectives, and reinforces “pay for performance” program goals
Long-term incentives		Rewards engagement, longevity, sustained performance and actions designed to enhance overall shareholder value		Aligns individual interests with the long-term investment interests of shareholders, and assists with retention of highly-qualified executives
Other elements such as special incentives, retirement benefits and elective deferred compensation		Rewards targeted operational results, engagement and longevity, and sustained performance		Focuses enhanced efforts on a particular key objective (e.g., debt reduction), aligns individual interests with the long-term investment interests of shareholders, assists with the attraction and retention of highly-qualified executives, and promotes management stability

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The Company strives to structure various elements of these program components so that a large portion of executive compensation is directly linked to advancing the Company’s financial performance and the interests of shareholders. For 2021, those elements were substantially performance-based, as shown below (and based on target level achievement):

Dan Hendrix, CEO and Chairman

Bruce Hausmann, CFO

James Poppens, Division President

Nigel Stansfield, Division President

David Foshee, VP and General Counsel

Compensation Decision-Making

 

The Committee establishes base salaries for the executive officers, including the Named Executive Officers listed in the “Summary Compensation Table” included in this Proxy Statement. The Committee also administers the annual bonus program, the long-term incentive program, retirement benefits, deferred compensation arrangements, and, when applicable, special incentive programs.

 

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The Company benchmarks its compensation practices against its peer group. In selecting the peer group, the Committee has directly engaged Pearl Meyer & Partners, a nationally recognized, independent compensation consultant, to provide input on compensation matters. The services performedCommittee considered various factors including the potential peer's industry, business model, size and complexity. The Committee ultimately chose a peer group that provides a robust sample size with minimal revenue dispersion and includes companies with a significant international presence that are also focused on sustainability. The peer group selected by the Committee is comprised of:

Acuity Brands, Inc.	Albany International Corp.
Apogee Enterprises, Inc.	Armstrong Flooring, Inc.
Armstrong World Industries, Inc.	Caesarstone Ltd.
FLIR Systems, Inc.*	Gentherm Incorporated
H. B. Fuller Company	Harsco Corporation
Herman Miller, Inc.	HNI Corporation
Kimball International, Inc.	Knoll, Inc.*
Masonite International Corporation	Materion Corporation
P. H. Glatfelter Company	Steelcase Inc.
Unifi, Inc.	Welbilt, Inc.
*Each of FLIR Systems, Inc. and Knoll, Inc. were acquired by third parties during 2021 and no longer trade publicly, and thus were not included in the Company’s peer group as of the end of 2021.

In 2019-2021, Pearl Meyer may vary according tohas assisted the particular needs of the engagement, but typically will consist of providing a market or peer group overview of compensation elements, including salary, bonus, long-term incentives and special incentives. For 2015, the corporate peer group included: Acuity Brands, Inc.; Albany International Corp.; Apogee Enterprises, Inc.; Armstrong World Industries, Inc.; BE Aerospace, Inc.; The Dixie Group, Inc.; Herman Miller, Inc.; HNI Corporation; Kimball International, Inc.; Knoll, Inc.; Mohawk Industries, Inc.; Steelcase, Inc.; Unifi, Inc.; and USG Corp. Pearl Meyer also periodically conducts a business performance review of our Company compared with other companies, to assist theCompensation Committee in making itsbenchmarking the Company's compensation decisions.practices against the peer group. The work of Pearl Meyer to date has not raised any conflict of interest.

 

The Committee also seeks compensation input from the Company’s Chairman, Chief Executive Officer and Chief Human Resources Officer, and General Counsel.Officer. In addition, the Committee takes into account publicly available data relating to the compensation practices and policies of other companies within and outside the Company’s industry. Furthermore, the policies and programs described below 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.

 

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Compensation Risk Assessment

The Board, in conjunction with management, has reviewed our compensation policies and practices as generally applicable to our employees and determined that they do not encourage excessive risk or unnecessary risk taking and do not otherwise create risks that are reasonably likely to have a material adverse effect on the Company.

 

Clawback Policy

The Committee has adopted a Clawback Policy which authorizes the Committee to recover from executive officers certain incentive-based compensation, including both cash and equity, due to a restatement of the Company’s financial statements. Pursuant to the Clawback Policy, in the event the Company is required to prepare an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the U.S. federal securities laws (a “Restatement”), regardless of individual fault, the Committee may require the forfeiture or reimbursement, subject to the terms of the Clawback Policy, from any current or former “Covered Executive” (meaning, any officer of the Company covered by Section 16(a) of the Securities Exchange Act) of the Company any excess incentive-based compensation awarded during the thirty-six (36) months preceding the date on which the Company is required to prepare a Restatement. Excess incentive-based compensation, as defined in the Clawback Policy, essentially means the amount or value of incentive-based compensation granted, earned or vested (“Awarded”) in excess of what would have been Awarded to that Covered Executive based on the Restatement.

Discussion of Principal Elements of Compensation Program

 

Base Salaries

 

The Committee generally strives to set base salaries at the market median (50^th percentile) of salaries offered by other employers in our industry and other publicly traded companies with characteristics similar to the Company (size, growth rate, etc.), based, by and large, on information provided by our independent compensation consultantthird party advisors while also considering internal equalization policies of the Company. Some of the companies considered from time to time are included in the list of companies comprising the “self-determined peer group” index used by our independent compensation consultant and used to create the stock performance graph included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016. That graph is reproduced below for your reference.2, 2022.

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	1/2/11	1/1/12	12/30/12	12/29/13	12/28/14	1/3/16
Interface, Inc.	$100	$74	$102	$140	$109	$126
NASDAQ Composite Index	$100	$99	$114	$162	$190	$200
Self-Determined Peer Group (14 Stocks)	$100	$97	$137	$205	$227	$244

Notes to Performance Graph

(1)	The lines represent annual index levels derived from compound daily returns that include all dividends.
(2)	The indices are re-weighted daily, using the market capitalization on the previous trading day.
(3)	If the annual interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
(4)	The index level was set to $100 as of January 2, 2011 (the last day of fiscal 2010).
(5)	The Company’s fiscal year ends on the Sunday nearest December 31.
(6)	The following companies are included in the Self-Determined Peer Group depicted above: Acuity Brands, Inc.; Albany International Corp.; Apogee Enterprises, Inc.; Armstrong World Industries, Inc.; BE Aerospace, Inc.; The Dixie Group, Inc.; Herman Miller, Inc.; HNI Corporation; Kimball International, Inc.; Knoll, Inc.; Mohawk Industries, Inc.; Steelcase, Inc.; Unifi, Inc.; and USG Corp.

 

In addition, the Committee may consider other factors when setting individual salary levels, which may result in salaries somewhat above or below the targeted amount. These factors include the executive’s level of responsibility, achievement of goals and objectives, tenure with the Company, and specific background or experience, as well as external factors such as the availability of talent, the recruiting requirements of the particular situation, and general economic conditions and rates of inflation.

 

Base salary adjustments for executive officers generally are made (if at all) annually and are dependent on the factors described above. In 2015, each ofThe changes in base salaries for the Named Executive Officers, (other than and the rationale for those changes, is described below.

Name		2020 Base Salary			2021 Base Salary			% Change			Rationale
Daniel Hendrix			$927,000			$946,000			2%		Merit
David Foshee			$385,175			$392,879			2%		Merit
Bruce Hausmann			$445,578			$454,490			2%		Merit
James Poppens			$300,000			$400,000			33%		Promotion
Nigel Stansfield			£309,873			£316,070			2%		Merit

Mr. Gould, who joined the Company in January 2015) received aPoppens was promoted to his executive position on November 1, 2020, at which time has base salary increase of 3%, representing an aggregate increase of approximately $72,550 for those four Named Executive Officers.

was increased from $300,000 to $400,000. Please see the “Summary Compensation Table” included in this Proxy Statement for the base salaries actually paid to the Named Executive Officers in 2015.2021.

 

Annual Bonus OpportunitiesBonuses

 

The Committee administers the shareholder-approved Executive Bonus Plan, which provides bonus opportunities for Company executives. The bonus opportunities provide an incentive for executives to earn cash compensation based on the achievement of important corporate or business unit (division or subsidiary) financial performance. In determining the appropriate bonus opportunities, the Committee seeks to establish potential awards that, when combined with annual salary, place the total overall cash compensation opportunity for the Company’s executives at the market 7550^th percentile for comparable companies, provided that the performance objectives are substantially achieved.

 

2015 Annual Bonus Structure

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For 2015,2021, each executive officer of the Company including the Chief Executive Officer, was assigned a bonus potential, andexpressed as a personalized set of quarterly and annual financial objectives. The Chief Executive Officer’s bonus potential was 130%percentage of base salary, the Chief Operating Officer’s bonus potential was 100% of base salary, and thesalary. The 2021 bonus potential for the othereach Named Executive Officers was 90% of base salary. Officer is described below.

Name		2021 Bonus Potential (as a percentage of base salary)
Daniel Hendrix			150%
David Foshee			75%
Bruce Hausmann			90%
James Poppens			90%
Nigel Stansfield			90%

Actual awards could range from 0% to 150%175% of the bonus potential (as described below), depending on the degree to which the established financial objectives were achieved, and wereare paid on a quarterly andan annual basis inapproximately 60 days following the following manner:end of the year.

Achievement of Objectives		Percentage of Bonus Opportunity Payable		Timing of Payment to Employee Participant
First Quarter Objectives Achieved		15%		Approximately 45 days following end of first quarter
Second Quarter Objectives Achieved		15%		Approximately 45 days following end of second quarter
Third Quarter Objectives Achieved		15%		Approximately 45 days following end of third quarter
Fourth Quarter Objectives Achieved		15%		Approximately 60 days following end of year
Fiscal Year Objectives Achieved		40%		Approximately 60 days following end of year

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In 2015,connection with our 2021 compensation program, the Committee carefully considered the unique set of challenges created by the ongoing COVID-19 pandemic so that we could continue to retain and incentivize our leadership team during this unprecedented time of uncertainty. For the 2021 bonus potential, the Committee added a performance metric for currency-neutral adjusted SG&A expenses, such that the bonus criteria applicable to the CEO, CFO and other corporate employees are adjusted operating income (50% weighting), cash from operating activities (25% weighting) and currency-neutral adjusted SG&A expenses (25% weighting). The Committee also eliminated the requirement to achieve the adjusted operating income threshold target, such that a bonus may be earned for achieving targets for cash from operating activities and currency-neutral adjusted SG&A expenses independently. The Committee believes these changes are appropriate because they incentivize management to focus on key financial metrics that are likely to drive earnings growth and enhance shareholder value even while the pandemic is ongoing.

In 2021, 100% of the bonus potential for the Chief Executive Officer, Chief Financial Officer and each of the other Named Executive Officers was based on measurable financial objectives. ForAs noted above, for Messrs. Hendrix, Lynch, GouldFoshee and Willoch,Hausmann, these objectives consisted of adjusted operating income, and cash flow from operations, and currency-neutral adjusted SG&A expenses, and the relative weights assigned to these financial objectives were 75%50%, 25% and 25%, respectively. For Mr. WellsMessrs. Poppens and Stansfield (who managesmanage the Company’s Americas division)and EAAA divisions, respectively), the objectives and relative weights assigned were divisional adjusted operating income (40%(50%), consolidated adjusted operating income (25%(16.7%), divisional cash flow (15%from operations (16.7%), and divisional operating income contribution margin (20%currency-neutral adjusted SG&A expenses (16.7%).

For each objective, the Committee establishes a threshold level that must be achieved in order for any bonus amount to be earned with respect to that objective, and establishes a goal that must be achieved or exceeded to maximize bonus compensation for that objective (except that no bonus is payable if the threshold for operating income is not exceeded). A pro rata bonus amount is earned to the extent that the threshold is exceeded, up to 150% of the goal number for the Chief Executive Officer and for the other Named Executive Officers. Historically, the Committee has set the threshold level, in its discretion, based primarily on a consideration of the Company’s prior year results for each objective, such that no bonus will be earned with respect to the objective in the event that the Company fails to experience improvement. Also historically, the Committee has set the goal, in its discretion, based primarily on factors that would approximate 15% sales growth and 20% operating income and earnings per share growth from such incremental sales. With respect to cash flow, the Committee sets the goal, in its discretion, using similar approximations, but taking into account anticipated growth initiatives, capital expenditures, research and development costs, debt maturities, and other cash uses that the Committee deems relevant. Given this methodology, the Committee believes that the threshold level, while challenging, is reasonably likely to be achieved in normalized market conditions, while the target would be fully achieved or exceeded only with exceptional performance.

For example, the 2015 annual thresholds and goals that were applicable for our Chief Executive Officer, excluding accruals for bonuses, were as follows:

Criteria	Threshold	Goal
Operating Income	$80,000,000	$115,000,000
Cash Flow	$30,000,000	$40,000,000

For 2015, each of the Named Executive Officers received a bonus, which appears in the “Summary Compensation Table” included in this Proxy Statement, as their respective performance objectives were determined to have been achieved, in part, during the year. The bonuses were attributable to their achieving or exceeding their respective financial objective goals, primarily during the first, second and fourth quarters of the year.

2016 Annual Bonus Structure

For 2016, the bonus structure is similar to that for 2015, but with the modifications described in this section. The bonus potential for each Named Executive Officer remains the same, except that the Chief Operating Officer’s bonus potential has been increased to 115% of base salary. The financial objectives and relative weighting remain the same, except that, for Mr. Wells, the criterion of divisional operating income contribution margin has been changed to divisional gross profit. The Committee also has eliminated the quarterly opportunity for executive officers, so the entire bonus opportunity is now based on full fiscal year performance.

 

For each financial objective, the Committee has establishedestablishes a threshold amount, a goal amount, and a maximum amount. The threshold amount must be achieved in order for any bonus amount to be earned with respect to that objective (except that no bonus is payable if the threshold amount for operating income is not exceeded).objective. A pro rata bonus amount is earned based upon (i) the degree to which the threshold amount (resulting in a “cut in” payout equal to 25% of the bonus potential for that criterion) is exceeded, up to the goal amount (resulting in a payout equal to 100% of the bonus potential for that criterion), or (ii) the degree to which the goal amount (resulting in a payout equal to 100% of the bonus potential for that criterion) is exceeded, up to the maximum amount (resulting in a payout equal to 150%175% of the bonus potential for that criterion). The approach to goal setting involves a process of reviewing, among other things, our prior year’s financial performance, our annual operating plan, and our short-term and long-term strategic objectives. We also take into account the need for setting goals that are challenging yet reasonably achievable so as to provide a competitive pay package necessary for the retention of our talent. With respect to cash flow in particular, the Committee sets the targets, in its discretion, taking into account anticipated growth initiatives, capital expenditures, research and development costs, debt maturities, and other cash uses that the Committee deems relevant. Consideration of these factors may result in a cash flow target that is above or below the previous year's cash flow target. Given this methodology, the Committee believes that the threshold level, while challenging, is reasonably likely to be achieved in normalized market conditions, the goal amount is achievable with strong management performance, and the maximum amount would encourage and reward outstanding performance.

 

For example, the Company’s 2021 annual thresholds, goals and maximums that were applicable for Messrs. Hendrix, Foshee and Hausmann were as follows:

Criteria		Weighting				Threshold				Goal				Maximum
Adjusted Operating Income			50%				$78,000,000				$120,000,000				$138,000,000
Cash Flow from Operations			25%				$28,470,000				$43,800,000				$50,370,000
Currency-neutral adjusted SG&A Expenses			25%				$347,970,000				$331,400,000				$314,830,000

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For 2021, adjusted operating income (see Appendix A) was $122.3 million, and for compensation purposes only the Committee also excluded another $1.2 million of other nonrecurring expenses. As so calculated: (i) the Company’s 2021 adjusted operating income grew to approximately $123.4 million, thus exceeding the established goal amount and resulting in a payout of 114.3% for this criterion (57.2% of the executive’s bonus potential after applying the 50% weighting), (ii) the Company’s 2021 cash flow from operations was approximately $87.8 million, thus exceeding the established maximum amount and resulting in a payout of 175% for this criterion (43.8% of the executive’s bonus potential after applying the 25% weighting); and (iii) the Company’s 2021 currency-neutral adjusted SG&A expenses were $308.2 million, resulting in the maximum payout of 175% for this criterion (43.8% of the executive’s bonus potential after applying the 25% weighting). Strong adjusted operating income and cash flow from operations, coupled with reduced currency-neutral adjusted SG&A expenses, also were achieved during 2021 in the Company’s EAAA division (managed by Mr. Stansfield) and Americas division (managed by Mr. Poppens).

Based on the Company’s performance, overall 2021 bonus achievement was approximately 144.7% of bonus opportunity for Messrs. Hendrix, Foshee and Hausmann, 105.7% of bonus opportunity for Mr. Poppens, and 164.9% of bonus opportunity for Mr. Stansfield, resulting in the following cash payouts:

Name	2021 Actual Bonus
Daniel T. Hendrix	$2,053,293
David Foshee	$426,372
Bruce Hausmann	$591,882
James Poppens	$380,520
Nigel Stansfield	$633,259

Long-TermLong-Term Incentives

 

The Committee administers the shareholder-approved Interface, Inc. Omnibus Stock Incentive Plan (theand Interface, Inc. 2020 Omnibus Stock Incentive Plan (collectively, the “Omnibus Stock Plan”Plans”), which is anare equity-based planplans that allowsallow for long-term incentive awards such as restricted stock, performance shares and stock options. The Omnibus Stock Plan providesPlans provide for the grant to key employees and directors of the Company and its subsidiaries of restricted stock, incentive stock options (which qualify for certain favorable tax treatment), nonqualified stock options, stock appreciation rights, deferred shares, performance shares and performance units. The size of the awards made to individual officers is based on an evaluation of several factors, including the officer’s level of responsibility, the officer’s base salary, benchmark data and the Company’s overall compensation objectives. The amount and nature of prior equity incentive awards also are generally considered in determining new Omnibus Stock Plan awards for executive officers.

 

Long-term incentives are intended to attract and retain outstanding executive talent, create a direct link between shareholder and executive interests by focusing executive attention on increasing shareholder value, and motivate executives to achieve specific performance objectives. For instance, stock options (when granted) 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 stock options only have value if the market price of the Company’s stock rises after the grant date.date (although no stock options have been granted in recent years). Additionally, restricted stock and performance share awards generally vest, in whole or in part, over a period of multiple years (three to five years for grants made in recent years), giving the executive an incentive to remain employed with the Company for a significant time period to have the opportunity to vest in an award. Moreover, awardsAwards of restricted stock mayperformance shares granted prior to 2020 also had the opportunity to vest earlier if specific performance criteria designed to drive shareholder value arewere met. (As discussed below, 50-60% of the restricted stock awards granted during 2013-2015 are ineligible for time/retention vesting and are forfeited altogether if the performance criterion is not met.) All equity awards (whether restricted stock, performance shares or otherwise) will have a minimum vesting period or minimum performance period of at least one year.

 

Description ofAvailableAwards

 

Restricted Shares

 

Awards of restricted shares under the Omnibus Stock PlanPlans generally vest over a period of multiple years following the date of award,award. The Committee may, in its discretion, also establish performance criteria for these awards, and the restricted shares may vest earlier if specifiedsuch performance criteria established by the Committee are satisfied. Unvested awards are also subject to forfeiture under certain circumstances. All restricted shares awarded to date have been made without consideration from the participant (although the Omnibus Stock Plan authorizesPlans authorize the Committee, in connection with any award, to require payment by the participant of consideration, which can be less than the fair market value of the award on the date of grant). Awards of restricted stock generally will not be transferable by the participant other than by will or applicable laws of descent and distribution.

 

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Performance Shares

Performance shares are awards reflected in a bookkeeping entry that records the equivalent of one share of Common Stock that may subsequently be earned and payable (and issued) to the participant if specified performance criteria established by the Committee are satisfied. Awards of performance shares may be settled in Common Stock, cash, or a combination thereof, at the Company’s election. Grants of performance shares may provide for the payment to the participant of dividend equivalents on a current, deferred or contingent basis; provided, in all of our past awards of performance shares, we have accrued dividend equivalents that are paid only if and when the underlying performance shares vest. Awards of performance shares generally will not be transferable by the participant other than by will or applicable laws of descent and distribution.

Stock Options

Options granted under the Omnibus Stock PlanPlans may be incentive stock options (as defined in Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options or a combination of the foregoing, although only employees are eligible to receive incentive stock options. All options under the Omnibus Stock PlanPlans will be granted at an exercise price per share equal to not less than 100% of the fair market value of the Common Stock on the date the option is granted. Options may be structured to vest over a period of multiple years. Options granted under the Omnibus Stock PlanPlans expire following a pre-determined period of time after the date of grant (which may not be more than 10 years after the grant date), and generally will terminate on the date three months following the date that a participant’s employment with the Company terminates.

 

The Company receives no consideration upon the granting of an option. Full payment of the option exercise price must be made when an option is exercised. The exercise price may be paid in cash or in such other form as the Committee may approve, including shares of Common Stock valued at their fair market value on the date of option exercise. Options generally will not be transferable by the holder thereof other than by will or applicable laws of descent and distribution.

 

The Committee has not granted stock options to any executive officer in the past three years.

 

Other Potential Awards

The Omnibus Stock PlanPlans also providesprovide for the award of stock appreciation rights, deferred shares performance shares and performance units. Through the end of 2015, theThe Committee hadhas not granted any of these other types of awards. In 2016, the Committee granted awards of performance shares, as described below.to any executive officer.

 

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RecentOmnibus Stock Plan Awards in 2019Awards to Named Executive Officers

In February 2011, Mr. Hendrix received a special award of 200,000 shares of restricted stock. This special award was eligible to performance vest to the extent that FLOR gross billings reach specified target levels during a five-year performance period that included fiscal years 2011 through 2015. NoneOne-third of the shares were eligible to vest based on Mr. Hendrix’s tenure of employment. The Committee believed this special award was appropriate because (1) the Committee wanted to focus management on the growth of the FLOR consumer carpet tile business, both through the internet and catalog channels as well as through FLOR retail stores, and (2) the Committee believed that the number of restricted shares held by Mr. Hendrix had fallen well below historical and market levels as well as the levels desired both for his retention and to align his compensation with the long-term interests of our shareholders. In 2013, 40,000 of these shares vested based on FLOR’s gross billings achievement in 2012. None of the remaining 160,000 shares vested, and thus those shares were forfeited in February 2016.

In January 2013, each of the Named Executive Officers received an award of restricted stock. The 20132019 awards were eligible to performancegranted as time-based restricted stock, and the shares would vest to the extent that the Company’s earnings per share plus dividends reached or exceeded specified levels during a three-year performance period of 2013 to 2015 (the goal was approximately 15% compound annual growth for 2013 and 10% compound annual growth thereafter). Half of the award became eligible to vest based on results in the first year of the performance period, and all of the award was eligible to vest based on results in the second or third year. Forty percent of any unvested shares (i.e., shares that had not performance vested) from the 2013 award would vest100% on the third anniversary of the grant date, if the executive remained employed by the Company at that time. In February 2014, half of these awards vested based on the Company’s level of earnings per share plus dividends achieved in 2013, and the other half vested in February 2016 based on the Company’s level of earnings per share plus dividends achieved in 2015.

In January 2014, each of the Named Executive Officers received an award of restricted stock structured in the same manner as the January 2013 awards described above (except that fifty percent of any unvested shares were eligible to time vest on the third anniversary of the grant date if the executive remained employed by the Company at that time), and the awards were eligible to performance vest to the extent that the Company’s earnings per share plus dividends reached or exceeded specified levels during the three-year performance period of 2014 to 2016 (the goal was approximately 15% compound annual growth for 2014 and 10% compound annual growth thereafter). All of the 2014 awards vested in February 2016 based on the Company’s level of earnings per share plus dividends achieved in 2015.

In January 2015, each of the Named Executive Officers received an award of restricted stock structured in the same manner as the January 2014 awards described above, and the awards are eligible to performance vest to the extent that the Company’s earnings per share plus dividends reaches or exceeds specified levels during the three-year performance period of 2015 to 2017 (the goal was approximately 15% compound annual growth for 2015 and is 10% compound annual growth thereafter). In February 2016, half of these awards vested based on the Company’s level of earnings per share plus dividends achieved in 2015.

2016Omnibus Stock PlanAwards to Named Executive Officers

For 2016, the Committee modified the equity award program and divided each executive’s award into three equal subparts.

The first subpart of each award was granted as restricted stock, and the shares will vest 100% on the third anniversary of the grant date, if the executive remains employed with the Company until that date. The executive also hashad the right to receive any cash dividends paid on thethis time-based restricted stock, throughout the three-year term.

 

The second subpartother two-thirds were granted in a single award of the award was granted as performance shares with an opportunity for parttwo separate, independent vesting criteria: adjusted earnings per share (“EPS”) and Total Shareholder Return (“TSR") during the years 2019 to 2021. The first one-third of the awardthis subpart was eligible to vest based on the Company’s earnings per share (“EPS”)adjusted EPS in each2019, the second one-third of the years 2016 and 2017, and any shares that have not previously vested have the opportunitythis subpart was eligible to vest based on the Company’s adjusted EPS in 2018.2020, and all shares (to the extent not previously vested) were eligible to vest based on the Company’s adjusted EPS in 2021. The amount of performance shares that vest will bevested based on adjusted EPS was determined pro rata based upon (i) the degree to which an applicable EPS threshold level iswas achieved (at which point 25% of the performance shares would vest) or exceeded up to an applicable EPS target level (at which point 100% of the performance shares would vest), or (ii) the degree to which the applicable EPS target level iswas exceeded up to an applicable EPS maximum level (at which point two times the nominal performance shares would vest). There iswas no “time vesting” opportunity for this subpart. “DividendThe Company does not pay dividends on unvested performance shares. Rather, “dividend equivalents” will accrue on these awards of performance shares and beare paid only if and when the related performance shares vest.

The third subpartsecond vesting criterion for this portion of the award also2019 awards was granted as performance shares, with an opportunity for the award to vest based on the Company’s cumulative operating incomeTSR compared with its peer group during the three-year performance period of 2016-2018. The pro rata2019 to 2021 with the following vesting structure and dividend equivalent provisions are essentiallyopportunities (less any shares vested under the same as thoseEPS criteria described for the second subpart above.above):

 

TSR Percentile 2019-2021		Amount Vests (% of Nominal Award)
Less than 50th		0%
50th to 75th		Pro rata 50% to 100%
Greater than 75th		100%

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The 2019 time-based restricted stock awards also included a “double trigger” change-in-control vesting provision. In other words, these awards would not vest automatically based solely on the occurrence of a change in control alone; rather, there must be “second trigger” of either (i) an involuntary separation from service or (ii) a separation from service for “Good Reason” (essentially, resignation in the face of negative changes in executive’s employment relationship with the Company).

For the 2019 awards of performance shares, the Compensation Committee also retained authority in the event of a change-in-control to alter or amend the terms in any manner it deemed equitable and necessary or advisable to take into account the effect of the change-in-control. Such modifications may include, without limitation, (i) providing for payment in the form of cash or other securities in lieu of shares, (ii) vesting of all or a portion of the performance shares based on the attainment of the performance criteria determined as of the date of the change-in-control, (iii) accelerating the vesting of the performance shares in full or on a pro rata basis, (iv) converting some or all of the shares to time-based vesting, or (v) making appropriate adjustments to the performance criteria. However, in the event of a “double trigger” change-in-control and termination of employment as described above, the employee would vest in the nominal number of outstanding performance shares reduced by the number of performance shares previously vested under the performance criteria.

The threshold, goal and maximum achievement levels for this award required approximately 5%, 10% and 18% compound growth, respectively, each year, which yielded the following targets for the portion of this award that was eligible to vest based on 2021 EPS:

Criteria		Threshold		Goal		Maximum
Adjusted EPS		$1.72		$1.94		$2.45

For 2021, adjusted EPS (see Appendix A) was $1.23. Because this amount was less than the above-stated threshold, no portion of this award vested based on 2021 adjusted EPS. The Company’s TSR compared with its peer group during the three-year performance period of 2019 to 2021 was in the 31^st percentile, and thus no portion of this award vested based on the TSR criterion.

Omnibus Stock Plan Awards in 2020

The Committee made several changes in the features of the awards granted in 2020. After reviewing peer and benchmark data compiled by its independent consultant, the Committee (i) eliminated the alternative TSR vesting criteria described above, (ii) eliminated the opportunity in the third year of the performance period to vest in shares that had not previously vested in the first two years of the performance period, (iii) maintained the mix of 1/3 time-based and 2/3 performance-based awards but changed from having one performance metric (adjusted EPS) to two performance metrics – adjusted EBITDA (75% weighting) and three-year cumulative return on invested capital (25% weighting), and (iv) eliminated the opportunity to vest in performance-based shares prior to the end of the three-year performance period. Regarding item (iv) in the preceding sentence, the 2020 awards provide an opportunity for grantees to earn shares based on adjusted EBITDA achievement during each year of the three-year performance plan, but the vesting of those earned shares is deferred until the Committee’s certification of attainment of all performance measures following the end of the three-year performance period.

The threshold, goal and maximum achievement levels were set at the time of the award based upon the Company’s three-year strategic plan, which required targeted adjusted EBITDA growth (based on goal amounts) of approximately 10%, 7.5% and 6% compound growth for years 2020, 2021 and 2022, respectively, yielding the following targets for the portion of this award that was eligible to vest based on 2021 adjusted EBITDA (in millions):

Criteria		Threshold		Goal		Maximum
Adjusted EBITDA		$163.5		$233.5		$268.5

For 2021, adjusted EBITDA (see Appendix A) was $169.4 million, and for compensation purposes only the Committee also excluded another $1.2 million of other nonrecurring expenses. As so calculated, the Company’s 2021 adjusted EBITDA was $170.6 million, which exceeded the above-stated threshold and resulted in achievement of 32.6% of the portion of this award that was eligible to be earned based on 2021 performance. The earned shares will not vest until the end of the three-year performance period 2020-2022.

Omnibus Stock Plan Awards in 2021

Primarily due to the challenges involved in setting multi-year performance targets during the uncertainty created by the COVID-19 pandemic, the Committee made changes to the 2021 long-term incentive plan awards. The 2021 awards were one-half (rather than one-third) time-based restricted stock, and one-half (rather than two-thirds) performance shares. The performance metrics for the portion granted as performance shares are adjusted EBITDA (75% weighting) and three-year return on invested capital during the period 2021-2023 (25% weighting). The threshold, goal and maximum achievement levels for the year 2021 were set at the time of the award based upon the Company’s 2021 annual operating plan, yielding the adjusted EBITDA targets described below. Rather than setting at the time of the award specific adjusted EBITDA dollar goals for years 2022 and 2023, the goals for those years are based on a numerical formula targeting 6% growth over the prior year’s actual adjusted EBITDA result. In addition, if the actual adjusted EBITDA achieved in year 1 or year 2 of the award is less than the goal amount, any actual adjusted EBITDA achieved in the following year in excess of the goal amount will be added back to the prior year’s actual result to earn additional shares, capped at the goal amount. The Committee believes this approach recognizes the difficulty setting future year EBITDA targets in the uncertain pandemic environment while still requiring meaningful year-over-year growth regardless of the prior year results.

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The targets for the portion of this award that was eligible to vest based on 2021 adjusted EBITDA (in millions) were:

Criteria		Threshold		Goal		Maximum
Adjusted EBITDA		$115.5		$165.0		$189.8

As discussed above, for 2021, adjusted EBITDA (see Appendix A) was $169.4 million, and for compensation purposes only the Committee also excluded $1.2 million of other nonrecurring expenses. As so calculated, the Company’s 2021 adjusted EBITDA was $170.6 million, which exceeded the above-stated goal and resulted in achievement of 122.6% of the portion of this award that was eligible to be earned based on 2021 performance. The earned shares will not vest until the end of the three-year performance period 2021-2023.

Changes in Executive Compensation in 2022

The design of the Company’s executive compensation program 2022 is substantially similar to that described above for 2021, except for a change in one of the performance criteria for the 2022 bonus opportunity. In the 2022 bonus opportunity criteria, the Committee substituted currency-neutral net sales for currency-neutral adjusted SG&A expenses, such that the bonus criteria applicable to the CEO, CFO and other corporate employees are adjusted operating income (50% weighting), cash from operating activities (25% weighting) and currency-neutral net sales (25% weighting). For the division presidents (Messrs. Poppens and Stansfield), the objectives and relative weights assigned are divisional adjusted operating income (50%), consolidated adjusted operating income (16.7%), divisional cash flow from operations (16.7%), and divisional currency-neutral net sales (16.7%).

The health and safety of our employees and the communities in which we operate continue to be the Company’s paramount concern, and our Board of Directors, Compensation Committee and executive leadership team will continue to monitor the impacts of COVID-19 on our business and the Company’s executive compensation program.

Other Elements of Compensation Program

In addition to the principal compensation program elements described above, the Company has adopted a number of other elements to further its compensation program goals. They are as follows:

●         401(k) Plan and Other Defined Contribution Plans	●         Employment and Severance Protection Agreements
●         Elective Deferred Compensation Program	●         Limited Perquisites

401(k) Plan and Other Defined Contribution Plans

The Company maintains the Interface, Inc. Savings and Investment Plan (the “401(k) Plan”), a tax-qualified 401(k) plan which provides its U.S.-based employees a convenient and tax-advantaged opportunity to save for retirement. The Company’s Named Executive Officers who are based in the United States are eligible to participate in the 401(k) Plan on the same terms as other executive and non-executive employees based in the United States, and receive the same benefits afforded all other participants. Under the 401(k) Plan, all participating employees are eligible to receive matching contributions (except as described below for a portion of 2020) that are subject to vesting over time. The Company periodically evaluates the level of matching contributions afforded participant employees to ensure competitiveness in the marketplace. The Company matches 50% of the first 6% of the employee’s eligible compensation (capped by statutory limitations) that the employee contributed to the 401(k) Plan. As a cost-saving measure in response to the negative impacts of the COVID-19 pandemic, Interface discontinued its 401(k) matching contributions effective May 1 to December 31, 2020.

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Elective Deferred Compensation Program

The Company also maintains the Interface, Inc. Nonqualified Savings Plan II (the “Nonqualified Plan”) for certain U.S.-based “highly compensated employees” (as such term is defined in applicable IRS regulations), including the Named Executive Officers who are based in the United States. The compensation level required to participate in the Nonqualified Plan was $130,000 in total annual compensation, and the Company had 117 participants in the plan (including both current and former employees) at the end of 2021. As with the Company’s 401(k) Plan, the Named Executive Officers who are based in the United States are eligible to participate in the Nonqualified Plan on the same terms as other executive and non-executive eligible employees based in the United States, and receive the same benefits afforded all other participants. Under the Nonqualified Plan, all eligible employees can elect to defer, on a pre-tax basis, a portion of their salary and/or annual bonus compensation. The Company matches 50% of the first 6% of the employee’s eligible salary and bonus (and sales commissions, if applicable) that was deferred, less any potential Company matching amounts under the 401(k) Plan. As with the 401(k) Plan, the Company discontinued the Nonqualified Plan matching contributions from May 1 to December 31, 2020.

Please see the “Non-Qualified Deferred Compensation” table included in this Proxy Statement for further details regarding the Nonqualified Plan, as well as the Company’s Named Executive Officers’ contributions, earnings and account balances applicable to the Nonqualified Plan for fiscal year 2021.

Pension/Salary Continuation Programs

Foreign Defined Benefit Plans

The Company has trustee-administered defined benefit retirement plans (“Pension Plans”) which cover certain of its overseas employees. The benefits are generally based on years of service and the employee’s average monthly compensation. None of our Named Executive Officers are participants in these plans.

Salary Continuation Plan

Historically, the Company has maintained a nonqualified Salary Continuation Plan designed to induce selected employees of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those that they may receive under the Company’s other benefit programs. Mr. Hendrix is the only employee participating in the Salary Continuation Plan (pursuant to an arrangement from his previous tenure as CEO), and the Committee has determined that the plan is closed to new participants.

The Salary Continuation Plan entitles participants to (i) retirement benefits upon normal retirement from the Company at age 65 (or early retirement as early as 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 (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) 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 executive for a period of up to 10 years. The annual retirement benefit for retirement at age 65 is 50% of the executive’s final average earnings (defined as the average of the salary and bonus paid by the Company for the four individual calendar years of the executive’s highest compensation during the last eight full calendar years of the executive’s employment with the Company ending on or prior to the effective date of the executive’s retirement), which decreases proportionately to 30% of final average earnings for early retirement at age 55. The annual disability benefit is structured to essentially equate to 66% of current pay (salary and bonus) at the time of disability. The annual death benefit, for the 10-year payment period, is 50% of final average earnings, for a pre-retirement death, or a continuation of the actual retirement payments for the balance of the 10-year period (if any) for a post-retirement death (assuming no election of spousal survival benefits). The Company’s obligations under the Salary Continuation Plan are currently unfunded (although the Company uses insurance instruments in an irrevocable grantor (“rabbi”) trust to hedge its exposure thereunder); however, the Company is required to contribute the full present value of its obligations thereunder to a rabbi trust in the event of a “Change in Control” (as such term is defined in the Salary Continuation Plan) of the Company.

Pursuant to the Salary Continuation Plan, the Company has maintained a Salary Continuation Agreement with Mr. Hendrix since 1986. (The Company most recently amended and restated the Salary Continuation Agreement with Mr. Hendrix in January 2008, primarily to comply with Section 409A of the Internal Revenue Code of 1986, as amended. The benefits under his amended and restated agreement are substantially similar to those under his prior agreement.) The individual Salary Continuation Agreement contains essentially all of the benefit terms and conditions, and the agreement controls in the event of any conflict with the Salary Continuation Plan document. Please see the “Pension Benefits” table included in this Proxy Statement for information about the Salary Continuation Plan benefits applicable to Mr. Hendrix.

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Employment and Severance Protection Agreements

The Company has an employment agreement with Mr. Stansfield that generally provides for certain benefits (salary, bonus, etc.) in the event of a termination of employment without cause (as defined in the agreement), as well as certain benefits upon his resignation or a termination due to death or disability. The agreement also contains provisions placing restrictions on his ability to compete with the Company, or solicit its customers or employees, for a specified period of time following termination of employment.

The Company also has Severance Protection and Change in Control Agreements with each of Messrs. Foshee, Hausmann and Poppens that provide for certain severance benefits if the individual’s employment is terminated involuntarily without cause or in connection with a change in control. The agreement also contains provisions placing restrictions on the individual’s ability to compete with the Company for a period of 12 or 24 months following termination of employment, depending on the circumstances of termination.

Mr. Hendrix does not have an employment agreement. In the event of a termination, he is entitled to receive only those benefits outlined in (i) the Company’s policies applicable to similarly situated employees in the U.S., and (ii) the terms of his individual equity award agreements in effect at the time.

Please see the further discussion below in the “Potential Payments Upon Termination or Change of Control” section of this Proxy Statement regarding the respective employment and change in control agreements of the Company’s Named Executive Officers.

Perquisites

In order to provide a market competitive total compensation package to certain of the Company’s executive officers, including the Named Executive Officers, the Company provides a limited set of perquisites that it believes enable its Named Executive Officers to perform their responsibilities efficiently and with minimal distractions. The perquisites provided to one or more Named Executive Officers in 2021 included the following:

●         Company-provided automobile/allowance	●         Long-term care and life insurance
●         Company-provided telephone

Please see the “Summary Compensation Table” included in this Proxy Statement (and the notes thereto) for a more detailed discussion of these perquisites and their valuation.

Special Incentive Programs

From time to time, in its discretion, the Committee may implement special incentive programs which provide executives an opportunity to earn additional compensation if specific performance objectives (such as stock price appreciation, debt reduction, cash accumulation, or attainment of a specified financial ratio) are met. No special incentive programs have been used in the past several years.

Stock Ownership and Retention Guidelines

 

To further tie the financial interests of Company executives to those of shareholders, the Committee has established stock ownership and retention guidelines. Under the guidelines that were in place through the end of 2015, executive officers were expectedPursuant to accumulate a number of shares (unrestricted) of the Company’s Common Stock having a value equaling one and one-half times base salary in the case of the Chief Executive Officer and one times base salary in the case of the other executive officers (based on salaries and the stock price at the time the guidelines were adopted several years ago). The expectation was for executives to reach this ownership level within four years of being appointed as an executive officer. As of the end of 2015, all executive officers had met this target, with the exception of Jay Gould (President and Chief Operating Officer), Matt Miller (Vice President and Chief Strategy Officer) and Katy Owen (Vice President and Chief Human Resources Officer), each of whom was appointed as an executive officer in 2015. To facilitate accomplishing the ownership targets, executive officers generally are expected to retain at least one-half of the net after-tax shares (i.e., the net shares remaining after first selling sufficient shares to cover the anticipated tax liability and, in the case of stock options, the exercise price) obtained upon the vesting of restricted stock and the exercise of stock options.

For 2016, the Committee increased the stock ownership and retention guidelines, so that executives are now expected to accumulate a number of shares (unrestricted) of the Company’s Common Stock having a value equaling three times base salary in the case of the Chief Executive Officer and two times base salary in the case of the other executive officers (based on salaries and the stock price at the time the new guidelines were adopted)adopted in 2016). The expectation is for executives to reach this ownership level by Marchwithin four years of joining the Company or otherwise becoming an executive officer. As of the end of 2021, all Named Executive Officers had met this target, except for Mr. Poppens who was appointed to his executive position in November 2020. To facilitate accomplishing the ownership targets, executive officers generally are expected to retain at least one-half of the net after-tax shares (i.e., the net shares remaining after first selling or the withholding of sufficient shares to cover the anticipated tax liability and, in the case of stock options, the exercise price) obtained upon the vesting of equity awards and the exercise of stock options.

 

Directors also are subject to stock ownership requirements. Directors are required to hold 2,000 unrestricted shares. Any new director is required to accumulate these shares by the second anniversary of his or her election. All current directors have met this stock ownership standard, except Ms. Palmer, who was elected as a director in October 2015. As a guideline, non-employee directors also are expected to retain during their tenure all of the net after-tax shares obtained upon the vesting of restricted stock and at least one-half of the net after-tax shares obtained upon the exercise of stock options. All current directors have met this stock ownership standard.

 

The Company has a policy that generally prohibits all of its employees, officers and directors from engaging in short sales or trading in puts, calls and other options or derivatives with respect to the securities of the Company.

 

Other Elements

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Table of Compensation Program

In addition to the principal compensation program elements described above, the Company has adopted a number of other elements to further its compensation program goals. They are as follows:

●	401(k) Plan and Other Defined Contribution Plans	●	Severance Agreements
●	Elective Deferred Compensation Program	●	Perquisites
●	Pension/Salary Continuation Programs	●	Special Incentive Programs

401(k) Plan and Other Defined Contribution Plans

The Company maintains the Interface, Inc. Savings and Investment Plan (the “401(k) Plan”), a tax-qualified 401(k) plan which provides its U.S.-based employees a convenient and tax-advantaged opportunity to save for retirement. The Company’s Named Executive Officers who are based in the United States are eligible to participate in the 401(k) Plan on the same terms as other executive and non-executive employees based in the United States, and receive the same benefits afforded all other participants. Under the 401(k) Plan, all participating employees are eligible to receive matching contributions that are subject to vesting over time. The Company periodically evaluates the level of matching contributions afforded participant employees to ensure competitiveness in the marketplace. The Company matches 50% of the first 6% of the employee’s eligible compensation (capped by statutory limitations) that the employee contributed to the 401(k) Plan.

Elective Deferred Compensation Program

The Company also maintains the Interface, Inc. Nonqualified Savings Plan (the “Nonqualified Plan”) for certain U.S.-based “highly compensated employees” (as such term is defined in applicable IRS regulations), including the Named Executive Officers who are based in the United States. The compensation level required to participate in the Nonqualified Plan was $120,000 in total annual compensation, and the Company had 101 participants in the plan (including both current and former employees) at the end of 2015. As with the Company’s 401(k) Plan, the Named Executive Officers who are based in the United States are eligible to participate in the Nonqualified Plan on the same terms as other executive and non-executive eligible employees based in the United States, and receive the same benefits afforded all other participants. Under the Nonqualified Plan, all eligible employees can elect to defer, on a pre-tax basis, a portion of their salary and/or annual bonus compensation. The Company matches 50% of the first 6% of the employee’s eligible salary and bonus that was deferred, less any potential Company matching amounts under the 401(k) Plan.

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The Nonqualified Plan also contains a “Key Employee Retirement Savings Benefit” feature to permit discretionary contributions to certain key employees’ accounts (in a separately tracked sub-account) to enhance retirement savings and to couple such contributions with vesting structures that will promote the retention of such key employees. In each of the years 2013-2015, the Compensation Committee made a Key Employee Retirement Savings Benefit contribution of $50,000 to the Nonqualified Plan account of Mr. Lynch. This contribution will vest 50% upon his reaching age 50 and 50% upon his reaching age 55, assuming continuous service with the Company until such ages.

Please see the “Non-Qualified Deferred Compensation” table included in this Proxy Statement for further details regarding the Nonqualified Plan, as well as the Company’s Named Executive Officers’ contributions, earnings and account balances applicable to the Nonqualified Plan for fiscal year 2015.

Pension/Salary Continuation Programs

Foreign Defined Benefit Plans

The Company has trustee-administered defined benefit retirement plans (“Pension Plans”) which cover certain of its overseas employees. The benefits are generally based on years of service and the employee’s average monthly compensation. As determined by their respective trustees, the investment objectives of the Pension Plans are to maximize the return on the investments without exceeding the limits of prudent pension fund investment and to ensure that the assets ultimately will be sufficient to exceed minimum funding requirements. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The Pension Plans’ net assets did not include any shares of the Company’s own stock at January 3, 2016. None of our Named Executive Officers are participants.

Salary Continuation Plan

The Company maintains a nonqualified Salary Continuation Plan designed to induce selected employees of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those that they may receive under the Company’s other benefit programs. The Salary Continuation Plan entitles participants to (i) retirement benefits upon normal retirement from the Company at age 65 (or early retirement as early as 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 (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) 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 executive for a period of up to 10 years. The annual retirement benefit for retirement at age 65 is 50% of the executive’s final average earnings (defined as the average of the salary and bonus paid by the Company for the four individual calendar years of the executive’s highest compensation during the last eight full calendar years of the executive’s employment with the Company ending on or prior to the effective date of the executive’s retirement), which decreases proportionately to 30% of final average earnings for early retirement at age 55. The annual disability benefit is structured to essentially equate to 66% of current pay (salary and bonus) at the time of disability. The annual death benefit, for the 10-year payment period, is 50% of final average earnings, for a pre-retirement death, or a continuation of the actual retirement payments for the balance of the 10-year period (if any) for a post-retirement death (assuming no election of spousal survival benefits). The Salary Continuation Plan is administered by the Compensation Committee, which has determined that the Salary Continuation Plan is closed to any new participants. The Company’s obligations under the Salary Continuation Plan are currently unfunded (although the Company uses insurance instruments in an irrevocable grantor (“rabbi”) trust to hedge its exposure thereunder); however, the Company is required to contribute the full present value of its obligations thereunder to a rabbi trust in the event of a “Change in Control” (as such term is defined in the Salary Continuation Plan) of the Company.

Pursuant to the Salary Continuation Plan, the Company has maintained Salary Continuation Agreements with each of Named Executive Officers Hendrix, Wells and Willoch since 1986, 1998 and 1996, respectively. (The Company most recently amended and restated the Salary Continuation Agreements with Messrs. Hendrix, Wells and Willoch in January 2008, primarily to comply with Section 409A of the Internal Revenue Code of 1986, as amended. The benefits under their amended and restated agreements are substantially similar to those under their respective prior agreements.) The individual Salary Continuation Agreements contain essentially all of the benefit terms and conditions, and those agreements control in the event of any conflict with the Salary Continuation Plan document. Please see the “Pension Benefits” table included in this Proxy Statement for information about the Salary Continuation Plan benefits applicable to Messrs. Hendrix, Wells and Willoch.

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Severance Agreements

The Company has substantially similar Employment and Change in Control Agreements in effect with each of the Named Executive Officers. These agreements generally provide for certain benefits (salary, bonus, medical benefits, etc.) in the event of a Named Executive Officer’s termination of employment without “cause” (as defined in the agreements), as well as certain benefits upon his resignation, death or disability. These agreements also contain provisions placing restrictions on a Named Executive Officer’s ability to compete with the Company, or solicit its customers or employees, for a specified period of time following termination of employment. These agreements also provide for certain benefits in the event of a termination of employment in connection with a “Change in Control” (as defined in the agreements) of the Company.

Please see the further discussion below in the “Potential Payments Upon Termination or Change of Control” section of this Proxy Statement regarding the respective employment and change in control agreements of the Company’s Named Executive Officers.

Perquisites

In order to provide a market competitive total compensation package to certain of the Company’s executive officers, including the Named Executive Officers, the Company provides those limited perquisites that it believes enable its Named Executive Officers to perform their responsibilities efficiently and with minimal distractions. The perquisites provided to one or more Named Executive Officers in 2015 included the following:

●	Company-provided automobile/allowance	●	Long-term care and life insurance
●	Tax return preparation services up to $2,300	●	Split dollar insurance agreement (for Mr. Hendrix only)
●	Company-provided telephone

Please see the “Summary Compensation Table” included in this Proxy Statement (and the notes thereto) for a more detailed discussion of these perquisites and their valuation.

Special Incentive Programs

From time to time, in its discretion, the Committee may implement special incentive programs which provide executives an opportunity to earn additional compensation if specific performance objectives are met. Special incentive programs are used when the Committee recognizes a need or desire for the Company to achieve one or more targeted strategic or financial objectives (such as stock price appreciation, debt reduction, cash accumulation, or attainment of a specified financial ratio), in addition to those objectives generally covered by annual bonuses and long-term incentives. The time period for achievement of the objectives may vary from less than a year to a multiple-year period. In each case, the performance objectives are designed to represent challenging but achievable targets that will serve to align the interests of executives with the interests of shareholders, and encourage executives to think and act as owners.

No special incentive programs were applicable during 2013-2015.

Compensation Deductibility

An income tax deduction under federal law will be generally available for annual compensation in excess of $1 million paid to the chief executive officer and the named executive officers of a public corporation only if that compensation is “performance-based” and complies with certain other tax law requirements. Executive compensation under the Company’s Executive Bonus Plan, described above, meets these requirements and therefore qualifies for an income tax deduction under federal law.

 

Although the Committee considers deductibility issues when approving executive compensation elements, the Company and the Committee believe that other compensation objectives, such as attracting, retaining and providing incentives to qualified managers, are important and may supersede the goal of maintaining deductibility. Consequently, the Company and the Committee may make compensation decisions without regard to deductibility when it is deemed to be in the best interests of the Company and its shareholders to do so.

 

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COMPENSATIONCOMMITTEEREPORT

 

The Compensation Committee of the Board of Directors has reviewed and discussed with management the “Compensation Discussion and Analysis” section of this Proxy Statement. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” section be included in this 20162022 Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016,2, 2022, filed with the Securities and Exchange Commission.SEC.

 

		THE COMPENSATION COMMITTEE
		Edward C. Callaway (Chair)
		Andrew B. Cogan
		Sheryl D. Palmer (Chair)
Dwight Gibson
Joseph Keough

 

COMPENSATION COMMITTEEINTERLOCKSAND INSIDER PARTICIPATION

 

None of the executive officers of the Company served as either (1) a member of the Compensation Committee or (2) a director of any entity of which any member of the Compensation Committee is an executive officer. In addition, none of the executive officers of the Company served as a member of the compensation committee of any entity of which any member of the Board of Directors is an executive officer.

 

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EXECUTIVECOMPENSATION AND RELATED ITEMS

 

Summary Compensation Table

 

The following table provides information about the compensation paid by the Company and its subsidiaries to the Company’s Named Executive Officers for each of the past three fiscal years.

 

Name and Principal Position		Year		Salary				Bonus				Stock Awards				Option Awards				Non-Equity Incentive Plan Compensation				Change in Pension Value and Nonqualified Deferred Compensation Earnings				All Other Compensation				Total
				($)				($)				($)				($)				($)				($)				($)				($)
(a)		(b)		(c)				(d)(1)				(e)(2)				(f)				(g)(3)				(h)(4)				(i)(5)				(j)(6)
Daniel T. Hendrix,		2015			981,300				--				1,635,000				--				1,912,897				1,404,405				232,887				6,166,489
Chairman and Chief		2014			952,752				--				1,873,520				--				368,477				1,040,484				204,061				4,439,294
Executive Officer		2013			918,436				--				1,606,000				--				1,000,871				590				191,346				3,717,243
Patrick C. Lynch,		2015			443,200				--				490,500				--				598,121				--				117,645				1,649,466
Senior Vice President		2014			430,300				--				558,863				--				124,895				--				112,869				1,226,927
and Chief Financial Officer		2013			414,750				--				722,700				--				327,113				--				112,845				1,577,408
John R. Wells,		2015			625,100				--				490,500				--				843,547				370,637				77,949				2,407,733
Senior Vice President		2014			606,900				--				745,150				--				130,393				313,264				59,497				1,855,204
(Division President)		2013			584,900				--				722,700				--				163,669				--				68,260				1,539,530
Jay D. Gould,		2015			701,923				--				1,366,762				--				1,067,375				--				61,031				3,197,091
President and
Chief Operating Officer
Raymond S. Willoch,		2015			443,200				--				490,500				--				598,121				268,007				64,461				1,864,289
Senior Vice President		2014			430,300				--				558,863				--				124,895				448,200				60,763				1,623,021
and General Counsel		2013			414,750				--				513,920				--				327,113				--				63,153				1,318,937

Name and Principal Position		Year		Salary				Bonus				Stock Awards				Option Awards				Non-Equity Incentive Plan Compensation				Change in Pension Value and Nonqualified Deferred Compensation Earnings				All Other Compensation				Total
(a)		(b)		($) (c)				($) (d)(1)				($) (e)(2)				($) (f)				($) (g)(3)				($) (h)(4)				($) (i)(5)				($) (j)(6)
Daniel T. Hendrix,		2021			946,000				--				2,150,267				--				2,053,293				(1,253,455	)			268,536				4,164,641
President, CEO and		2020			888,375				--				999,996				--				--				1,892,754				267,067				4,048,192
Chairman
David B. Foshee,		2021			392,879				--				819,469				--				426,372				--				26,040				1,664,760
Vice President,		2020			388,264				--				499,999				--				--				--				36,704				924,967
General Counsel and Secretary		2019			385,175				--				442,955				--				231,475				--				46,276				1,105,881
Bruce A. Hausmann,		2021			454,490				--				1,137,561				--				591,882				--				28,419				2,212,352
Vice President an		2020			446,692				--				688,420				--				--				--				50,202				1,185,314
CFO		2019			445,578				--				668,379				--				401,662				--				65,991				1,581,610
James L. Poppens,		2021			400,000				--				667,456				--				380,520				--				27,681				1,475,657
Vice President		2020			313,411				--				224,993				--				--				--				20,295				558,699
(Division President)
Nigel Stansfield,		2021			426,695				--				1,111,610				--				633,259				--				34,442				2,206,006
Vice President		2020			378,045				--				611,174				--				--				--				42,418				1,031,637
(Division President)*		2019			396,637				--				620,863				--				169,563				--				51,702				1,238,765

______

 

*

Mr. Stansfield was paid in British pound sterling. In calculating the U.S. dollar equivalent for disclosure purposes, the Company has converted each payment in British pound sterling into U.S. dollars based on the exchange rate in effect as of the end of the year (£1 to $1.35 for 2021, £1 to $1.22 for 2020, and £1 to $1.28 for 2019).

 

	(1)	The Company paid no discretionary bonuses, or bonuses based on performance metrics that were not pre-established and communicated to the Named Executive Officers. All cash bonus awards were performance-based. These payments, which were made under the Company’s Executive Bonus Plan, are reported in the “Non-Equity Incentive Plan Compensation” column (column (g)).

	(2)	The amounts reported in the “Stock Awards” column are computed based upon the grant date fair values as of the respective grant dates. See the Note entitled “Shareholders’ Equity” to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016,2, 2022, regarding assumptions underlying valuation of equity awards. See the “Grants of Plan-Based Awards” table included in this Proxy Statement for additional information about equity awards granted in 2015,2021, and the “Outstanding Equity Awards at Fiscal Year-End” table included in this Proxy Statement for information with respect to awards outstanding at year-end 2015.2021. The ultimate payout value with respect to the “Stock Awards” included in column (e) may be significantly more or less than the amounts shown, and possibly zero, depending on the Company’s financial performance at the end of the performance or restricted period and the recipient’s tenure of employment. For a description of the performance criteria, please see the discussion contained in the “Compensation Discussion and Analysis” section herein.

	(3)	The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect the amounts earned by and paid to each Named Executive Officer under the Company’s Executive Bonus Plan.ThePlan.The material provisions of the Executive Bonus Plan are more fully described in the “Compensation Discussion and Analysis” section included herein.

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(4)

The amountsamount reported in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column representrepresents aggregate changes in the actuarial present value of the Named Executive Officers’ accumulated benefit under the Company’s Salary Continuation Plan (for Messrs.for Mr. Hendrix. The Company maintains a defined benefit Salary Continuation Agreement with Mr. Hendrix Wells and Willoch)dated as of January 1, 2008 (although earlier versions of the agreement date back to 1986). Messrs. Lynch and GouldIn 2021, the present value decreased due a combination of $832,752 of cash payments under Salary Continuation Agreement less a decrease of $2,086,207 in the present value of the accumulated benefits (primarily due to an increase in the discount rate used for determining present value), for a net decrease of $1,253,455. See the “Pension Benefits” table of this Proxy Statement for additional information about these benefits for Mr. Hendrix. The other Named Executive Officers do not participate in a Pension Plan or the Salary Continuation Plan. The Company does not pay any above-market interest (or any guaranteed interest rate) on its Nonqualified Plan. See the “Pension Benefits” table of this Proxy Statement for information about these benefits afforded each of the Company’s Named Executive Officers.

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(5)

The amounts reported in the “All Other Compensation” column reflect, for each Named Executive Officer, the sum of (i) the incremental cost to the Company of all perquisites and other personal benefits, and (ii) amounts contributed by the Company to the 401(k) Plan and theor Nonqualified Plan (collectively, the “Company Retirement Plans”). The material provisions of the Company Retirement Plans are contained in the “Compensation Discussion and Analysis” section herein.

 

The following table outlines those perquisites and all other compensation required by SEC rules to be separately quantified that were provided to the Company’s Named Executive Officers during 2015.2021.

 

Name		Automobile   ($)		Telephone   ($)		Long-Term Careand Life Insurance Premiums   ($)		Split Dollar Insurance Premiums   ($)		Other   ($)		Dividends on Restricted Stock   ($)		Company Contributions to Retirement Plans   ($)
Daniel T. Hendrix		17,996		3,292		7,001		72,032		2,250		71,640		58,676
Patrick C. Lynch		20,174		2,643		5,823		--		2,300		14,175		72,530
John R. Wells		20,415		1,939		6,834		--		--		15,750		33,011
Jay D. Gould		14,038		4,298		1,967		--		17,731		15,047		7,950
Raymond S. Willoch		18,457		1,741		6,478		--		2,250		13,005		22,530

		Automobile				Telephone				Dividends and Dividend Equivalents				Company Contributions to Retirement Plans				Other
Name
		($)				($)				($)				($)				($)
Daniel T. Hendrix			15,000				2,146				5,540				5,850				240,000
David B. Foshee			12,908				846				1,929				10,263				94
Bruce A. Hausmann			14,430				2,568				2,713				8,550				158
James L. Poppens			17,320				821				1,239				8,185				116
Nigel Stansfield			13,600				367				2,574				--				17,901

 

Automobile/Automobile Allowance.Allowance. Each of the Named Executive Officers werewas provided with use of a company-provided automobile, or an automobile allowance, plus fuel and maintenance.

 

Telephone.Telephone. The Company paid certain fees associated with the Named Executive Officers’ use of company-provided cellular telephones.

 

Long-Term CareDividends and Life Insurance. The Company paid certain premiums associated with long-term care insurance policies covering Messrs. Hendrix, Lynch, Wells and Willoch, and life insurance for all Named Executive Officers.

SplitDollar InsuranceAgreement with Daniel T. Hendrix.The Company is a party to a split dollar insurance agreement (the “Hendrix Split Dollar Agreement”) with Mr. Hendrix. Pursuant to the Hendrix Split Dollar Agreement, Mr. Hendrix has obtained an insurance policy on his life, and the Company pays the premiums on such policy as an additional employment benefit for Mr. Hendrix. The annual premium is $72,032. Mr. Hendrix is the owner of the policy, and has assigned to the Company a portion of the death benefit that is equal to the greater of (i) the total amount of the unreimbursed premiums paid by the Company with respect to the policy, or (ii) the death benefit under the policy in excess of $2,000,000. The Company’s portion totaled $2,404,918 as of January 3, 2016. The balance of the death benefits ($2,000,000) will be payable to the beneficiaries of the policy designated by Mr. Hendrix.

Other.The Company paid certain fees or costs associated with tax return preparation on behalf of Messrs. Hendrix, Lynch and Willoch. For Mr. Gould, the amount represents reimbursement of relocation expenses upon joining the Company.

Dividends on Restricted Stock.Dividend Equivalents. In 2015,2021, the Company paid on all outstanding Common Stock of the Company (including time-based awards of restricted stock)stock, but not on unvested performance shares) dividends of $0.04$0.01 per share in each fiscal quarter. Dividend equivalents accrue on awards of performance shares and are paid out only if, and to the first two quarters and $0.05 per share in each ofextent, the last two quarters.performance shares actually vest. The amounts in the “Dividends on Restricted Stock”and Dividend Equivalents” column reflect dividends paid on the time-based restricted shares of each Named Executive Officer in 2015.2021.

 

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Contributions toRetirement Plans. The Company makes matching contributions, on the same terms and using the same formulas as for other participating employees, to each U.S.-based Named Executive Officer’s account under the 401(k) Plan and the Nonqualified Plan, as applicable.

Other. For Mr. Hendrix, the amount represents his cash retainer for his service as Chairman of the Board. for Messrs. Hendrix, Foshee, Hausmann and Poppens, the amount represents Company paid premiums for long-term care insurance. For Mr. Stansfield, the amount represents Company paid premiums for life, critical illness and private health insurance.

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The amounts reflected below represent the contributions by the Company:

 

Name		Year		Company Contribution To 401(k) Plan ($)		Company Contribution To Nonqualified Plan ($)
Daniel T. Hendrix		2015		7,950		50,726
		2014		6,500		47,587
		2013		6,375		41,725
Patrick C. Lynch		2015		7,950		64,580
		2014		7,800		63,763
		2013		7,650		63,986
John R. Wells		2015		7,950		25,061
		2014		7,800		11,953
		2013		7,650		18,801
Jay D. Gould		2015		7,950		--
Raymond S. Willoch		2015		7,950		14,580
		2014		7,800		13,763
		2013		7,650		13,543

Name		Year		Company Contribution To 401(k) Plan ($)				Company Contribution To Nonqualified Plan ($)
Daniel T. Hendrix		2021			5,850				--
		2020			5,850				--
David B. Foshee		2021			6,817				3,446
		2020			7,313				2,459
		2019			7,125				10,727
Bruce A. Hausmann		2021			8,550				--
		2020			8,550				7,989
		2019			8,400				18,055
James L. Poppens		2021			8,185				--
		2020			4,106				--

 

The Company’s contributionsAs a non-U.S. employee, Mr. Stansfield is ineligible to participate in the 401(k) Plan and the Nonqualified Plan of Mr. Lynch included a $50,000 discretionary contribution under the Key Employee Retirement Savings Benefit in each year presented and each is subject to vesting criteria as described in the “Compensation Discussion and Analysis” section included herein.Plan.

 

(6)

In 2015,2021, salary as a percentage of total compensation (excluding change in pension value) for each of Messrs. Hendrix, Lynch, Wells, GouldFoshee, Hausmann, Poppens, and WillochStansfield was 20.6%18%, 26.9%24%, 30.7%21%, 22.0%27%, and 27.8%19%, respectively. In 2014,2020, this percentage for each of Messrs. Hendrix, Lynch, WellsFoshee, Hausmann, Poppens, and WillochStansfield was 28.0%41%, 35.1%42%, 39.4%38%, 56%, and 36.6%37%, respectively. In 2013,2019, this percentage for each of Messrs. Hendrix, Lynch, WellsFoshee, Hausmann, and WillochStansfield was 24.7%35%, 26.3%, 38.0%28%, and 31.4%32%, respectively. As reflected in column (d), the Company paid no discretionary bonuses.

 

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Grants of Plan-Based Awards in 20152021

 

The following table provides information about awards granted to the Company’s Named Executive Officers in 2015,2021, as well as potential future payments associated therewith.

 

				Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)						Estimated Future Payouts Under Equity Incentive Plan Awards
Name   (a)		Grant Date           (b)		Threshold ($)        (c)		Target ($)        (d)		Maximum ($)        (e)		Threshold (#)        (f)		Target (#)      (g)(2)		Maximum (#)        (h)		Grant Date Fair Value of Stock and Option Awards ($)            (l) (3)
														��
Daniel T. Hendrix		01-08-15		0		1,275,690		1,913,535		--		--		--		--
		01-08-15		--		--		--		--		100,000		100,000		1,635,000
Patrick C. Lynch		01-08-15		0		398,880		598,320		--		--		--		--
		01-08-15		--		--		--		--		30,000		30,000		490,500
John R. Wells		01-08-15		0		562,590		843,885		--		--		--		--
		01-08-15		--		--		--		--		30,000		30,000		490,500
Jay D. Gould		01-26-15		0		750,000		1,125,000		--		--		--		--
		01-26-15		--		--		--		--		83,594		83,594		1,366,762
Raymond S. Willoch		01-08-15		0		398,880		598,320		--		--		--		--
		01-08-15		--		--		--		--		30,000		30,000		490,500

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)												Estimated Future Payouts Under Equity Incentive Plan Awards
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)				Grant Date Fair Value of Stock and Option Awards ($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)(2)				(h)				(l) (3)
Daniel T. Hendrix			3-16-21				354,750				1,419,000				2,483,250				--				--				--				--
			5-5-21																19,716				78,864				157,728				1,037,850
			3-16-21																--				78,616				78,616				1,112,417
David B. Foshee			3-16-21				73,665				294,659				515,654				7,239				28,956				57,912				409,727
			3-16-21																--				28,957				28,957				409,742
Bruce A. Hausmann			3-16-21				102,260				409,041				715,822				10,049				40,196				80,392				568,773
			3-16-21																--				40,197				40,197				568,788
James L. Poppens			3-16-21				90,000				360,000				630,000				5,896				23,585				47,170				333,728
			3-16-21																--				23,585				23,585				333,728
Nigel Stansfield*			3-16-21				96,006				384,025				672,044				9,820				39,279				78,558				555,798
			3-16-21																--				39,280				39,280				555,812

 

*	Estimated potential payments under Non-Equity Incentive Plan Awards for Mr. Stansfield were converted into U.S. dollars based on the exchange rate as of the end of fiscal year 2021.

(1)

The payment amounts reflected in columns (c), (d) and (e) represent amounts associated with awards potentially earned for fiscal 20152021 by the Company’s Named Executive Officers under the Company’s Executive Bonus Plan. The total bonus opportunity under the Executive Bonus Plan (expressed as a percentage of 20152021 base salary) was 130%150% for Mr. Hendrix, 100%90% for Messrs. Hausmann, Poppens and Stansfield, and 75% for Mr. Gould, and 90% for the other Named Executive Officers. As reflected in column (c), no bonus is paidFoshee. Up to a participant under any individual Executive Bonus Plan element (such as operating income or cash flow) unless a designated financial threshold (operating income) is exceeded. As reflected in column (d), the target 2015 payout under the Executive Bonus Plan for each175% of the Named Executive Officers assumes 100% achievement of all Company financial goals. As reflected in column (e), thebonus opportunity may be earned for maximum 2015 payout under the Executive Bonus Plan for each of the Named Executive Officers assumes 150% or greater achievement of all Company financial goals (the achievement for bonus purposes is capped at 150%).achievement. Certain additional material provisions of the Executive Bonus Plan are more fully described in the “Compensation Discussion and Analysis” section included herein.

(2)

The amounts reflected in column (g) represent the number of shares of restricted stock and performance shares granted to the executives in January 20152021 under the Omnibus Stock Plan. See the Compensation Discussion and Analysis herein for additional information on these awards. The performance objective under the January 2015 awards is growth in the Company’s earnings per share plus dividends during a three-year performance period. Fifty percent of any unvested January 2015 awards (i.e., award shares not vested previously under the performance criteria) will vest on the third anniversary of the grant date. These shares of restricted stock are included in the “Stock Awards” column (column (e)) of the Summary Compensation Table.

(3)

The amounts reflected in column (l) represent the dollar value of restricted stock and performance shares awarded to the executives, calculated by multiplying the number of shares (assuming target payout) awarded by the closing price of the Company’s Common Stock as reported by the Nasdaq Stock Market on the trading date immediately preceding the date of grant. These values are included in the “Stock Awards” column (column (e)) of the Summary Compensation Table.

 

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Outstanding Equity Awards at2015at 2021 Fiscal Year-End

 

The following table provides information about the number of shares covered by exercisable and unexercisable options and unvested restricted stock awards outstanding and held by the Company’s Named Executive Officers as of January 3, 2016.the end of fiscal year 2021.

 

		Option Awards										Stock Awards
		Number of Securities Underlying Unexercised Options   (#)		Number of Securities Underlying Unexercised Options   (#)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options		Option Exercise Price		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested		Market Value of Shares or Units of Stock That Have Not Vested		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Name		Exercisable		Unexercisable		(#)		($)				(#)		($)		(#)		($)
(a)		(b)		(c)		(d)		(e)		(f)		(g)(1)		(h)(2)		(i)		(j)
Daniel T. Hendrix		--		--		--		--		--		398,000		7,617,720		--		--
Patrick C. Lynch		--		--		--		--		--		78,750		1,507,275		--		--
John R. Wells		--		--		--		--		--		87,500		1,674,750		--		--
Jay D. Gould		--		--		--		--		--		83,594		1,599,989		--		--
Raymond S. Willoch		--		--		--		--		--		72,250		1,382,865		--		--

		Option Awards																				Stock Awards
		Number of Securities Underlying Unexercised Options   (#)				Number of Securities Underlying Unexercised Options   (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options				Option Exercise Price				Option Expiration Date				Number of Shares or Units of Stock That Have Not Vested				Market Value of Shares or Units of Stock That Have Not Vested				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
Name		Exercisable				Unexercisable				(#)				($)								(#)				($)				(#)				($)
(a)		(b)				(c)				(d)				(e)				(f)				(g)(1)				(h)(2)				(i)				(j)(2)
Daniel T. Hendrix			--				--				--				--				--				138,496				2,209,011				78,864				1,257,881
David B. Foshee			--				--				--				--				--				48,225				769,189				56,456				900,473
Bruce A. Hausmann			--				--				--				--				--				67,837				1,082,000				79,542				1,268,695
James L. Poppens			--				--				--				--				--				30,981				494,147				34,269				546,591
Nigel Stansfield			--				--				--				--				--				64,341				1,026,259				74,907				1,194,767

______

 

(1)

Restricted stock awards that have not yet vested are subject to forfeiture by the Named Executive Officers under certain circumstances. For a description of the related performancevesting criteria, please see the discussion contained in the “Compensation Discussion and Analysis” section herein. The restricted stock vesting dates for each Named Executive Officer range from 2016-2018.Subject to risk of forfeiture, these shares were scheduled to vest as follows:

●

For Mr. Hendrix, 59,880 shares will vest on 2/7/23, and 78,616 will vest on 3/16/23.

●

For Mr. Foshee, 8,418 shares were scheduled to vest on 2/19/22, 10,850 shares will vest on 2/28/23, and 28,957 shares will vest on 3/16/24.

●

For Mr. Hausmann, 12,702 shares were scheduled to vest on 2/19/22, 14,938 shares will vest on 2/28/23, and 40,197 shares will vest on 3/16/24.

●

For Mr. Poppens, 2,518 shares were scheduled to vest on 2/19/22, 4,878 shares will vest on 2/28/23, and 23,585 shares will vest on 3/16/24.

●

For Mr. Stansfield,11,799 shares were scheduled to vest on 2/19/22, 13,262 shares will vest on 2/28/23, and 39,280 shares will vest on 3/16/24.

(2)	The market value referenced above is based on the closing price of $19.14$15.95 per share of the Company’s Common Stock on December 31, 20152021 (the last trading day of the Company’s 20152021 fiscal year), as reported by the Nasdaq Stock Market.

 

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Option Exercises andand Stock Vested in 20152021

 

The following table provides information about the number and corresponding value realized during 20152021 with respect to (i) the exercise of stock options, and (ii) the vesting of restricted stock and performance shares for each of the Company’s Named Executive Officers.

 

		Option Awards				Stock Awards
Name     (a)		Number of Shares Acquired on Exercise   (#)                 (b)		Value Realized on Exercise   ($)          (c)		Number of Shares Acquired on Vesting   (#)             (d)		Value Realized on Vesting   ($)        (e)(1)
Daniel T. Hendrix		--		--		35,000		725,200
Patrick C. Lynch		--		--		20,000		414,400
John R. Wells		--		--		20,000		414,400
Jay D. Gould		--		--		0		0
Raymond S. Willoch		--		--		16,250		336,700

		Option Awards								Stock Awards
		Number of Shares Acquired on Exercise				Value Realized on Exercise				Number of Shares Acquired on Vesting				Value Realized on Vesting
Name
			(#)				($)				(#)				($)
(a)			(b)				(c)				(d)				(e)(1)
Daniel T. Hendrix			--				--				--				--
David B. Foshee			--				--				5,295				57,821
Bruce A. Hausmann			--				--				8,416				91,903
James L. Poppens			--				--				--				--
Nigel Stansfield			--				--				5,721				62,473

______

 

(1)

The dollar amount is determined by multiplying (i) the number of shares vested by (ii) the closing price of our Common Stock on the Nasdaq Stock Market on the day preceding the vesting date.

 

2015 Pension Benefits

 

The following table provides information about the pension benefits for each of the Company’s Named Executive Officers.

 

Name (a)		Plan Name (b)(1)		Number of Years Credited Service (#) (c)		Present Value of Accumulated Benefit ($) (d)		Payments During Last Fiscal Year ($) (e)
Daniel T. Hendrix		Salary Continuation Plan		More than 15		11,106,123		--
Patrick C. Lynch		--		--		--		--
John R. Wells		Salary Continuation Plan		More than 15		4,319,719		--
Jay D. Gould		--		--		--		--
Raymond S. Willoch		Salary Continuation Plan		More than 15		3,927,986		--

Name		Plan Name				Number of Years Credited Service   (#)				Present Value of Accumulated Benefit   ($)				Payments During Last Fiscal Year   ($)
(a)		(b)(1)				(c)				(d)				(e)
Daniel T. Hendrix		Salary Continuation Plan				More than 15					14,382,651				832,752
David B. Foshee			--				--				--				--
Bruce A. Hausmann			--				--				--				--
James L. Poppens			--				--				--				--
Nigel Stansfield			--				--				--				--

______

 

(1)

The benefits for Mr. Hendrix under the Salary Continuation Plan vest upon 15 years of service and attainment of the age of 55, with maximum benefit accruing at age 65. Messrs. Hendrix and Willoch are the only Named Executive Officers participating in the Salary Continuation Plan that have reached age 55. The above values assume commencement of payment of the maximum benefit at age 65.previously vested. All other assumptions are the same as are used for financial reporting purposes under generally accepted accounting principles. The Compensation Committee has determined that the Salary Continuation Plan is closed to any new participants.

 

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20152021 Non-Qualified Deferred Compensation

 

The following table provides information about the contributions, earnings and account balances of the Company’s applicable deferred compensation plans for each of the Company’s Named Executive Officers.

 

Name   (a)(1)		Executive Contributions in Last FY   ($)   (b)		Company Contributions in Last FY   ($)   (c)(2)		Aggregate Earnings in Last FY   ($)   (d)		Aggregate Withdrawals/ Distributions   ($)   (e)		Aggregate Balance at Last FYE   ($)   (f)(3)
Daniel T. Hendrix		358,571		47,587		(2,013)		--		910,992
Patrick C. Lynch		45,059		63,763		(31,007)		--		1,010,591
John R. Wells		382,091		11,953		113,480		--		3,480,809
Jay D. Gould		--		--		--		--		--
Raymond S. Willoch		40,284		13,763		475		(39,973)		40,592

			Executive Contributions in Last FY				Company Contributions in Last FY				Aggregate Earnings in Last FY				Aggregate Withdrawals/ Distributions				Aggregate Balance at Last FYE
Name			($)				($)				($)				($)				($)
(a)(1)			(b)				(c)(2)				(d)(3)				(e)				(f)
Daniel T. Hendrix			--				--				93,712				(174,783	)			1,853,598
David B. Foshee			24,293				2,459				24,695				(59,468	)			156,845
Bruce A. Hausmann			--				7,989				5,346				--				196,185
James L. Poppens			--				--				--				--				--
Nigel Stansfield			--				--				--				--				--

______

 

	(1)	The Company maintains the Nonqualified Plan for certain U.S.-based “highly compensated employees” (as such term is defined in applicable IRS regulations), including each of the U.S.-based Named Executive Officers. As with the Company’s 401(k) Plan, the U.S.-based Named Executive Officers are eligible to participate in the Nonqualified Plan on the same terms as other eligible executive and non-executive employees based in the United States, and receive the same benefits afforded all other participants. As a non-U.S. employee, Mr. Stansfield is ineligible for participation in the plan.
		Under the Nonqualified Plan, all eligible employees can elect to defer, on a pre-tax basis, a portion of their salary and/or annual bonus compensation. Each participant elects when the deferred amounts will be paid out, which can be during or after employment, subject to the provisions of Section 409A of the Internal Revenue Code. The employee earns a deferred return based on deemed investments in mutual funds selected by the employee from a list provided by the Company. The investment risk is borne entirely by the employee participant. Gains and losses are credited based on the participant’s election of a variety of deemed investment choices. Participants’ accounts may or may not appreciate, and may even depreciate, depending on the performance of their deemed investment choices. None of the deemed investment choices provide interest at above-market rates (or any guaranteed interest rate). The Company has established an irrevocable grantor (“rabbi”) trust to hold, invest and reinvest deferrals and contributions under the Nonqualified Plan, and all deferrals are paid out in cash upon distribution.

	(2)	The amounts reported in column (c) reflect, for each Named Executive Officer (as applicable), the actual amounts contributed by the Company to the Nonqualified Plan during fiscal year 20152021 (including contributions in 20152021 with respect to compensation deferrals in 2014)2020).

	(3)	The amounts reported in column (d) were not reported as compensation to the Named Executive Officers in the Company’s Summary Compensation Table. However, the Company’s matching contributions reported in column (c) are included in the “All Other Compensation” column of the Company’s Summary Compensation Table.

 

Potential Payments Upon Termination or Change in Control

The Company is generally obligated to provide its Named Executive Officers with certain payments or other forms of compensation when their employment with the Company is terminated. The actual amount of compensation due each of the Named Executive Officers, as well as the duration of any periodic payments, depends on both the circumstances surrounding the termination, as well as the particulars of any employment-related agreements to which the Company and the Named Executive Officer are party.

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2015 DirectorDaniel T. Hendrix

Mr. Hendrix does not have an employment agreement. In the event of a termination, he would be entitled to receive only those benefits outlined in (i) the Company’s policies applicable to similarly situated employees in the U.S., and (ii) the terms of his individual equity award agreements in effect at the time.

David B. Foshee, Bruce A. Hausmann and James Poppens

The Company has Severance Protection and Change in Control Agreements with each of Messrs. Foshee, Hausmann and Poppens that provide for certain severance benefits if his employment is terminated involuntarily under certain circumstances.  In general, those benefits are:

●

In the event of a termination without cause, the executive is entitled to severance benefits equal to the executive’s annual base salary plus target annual bonus (payable for and over a 12-month period), a prorated annual bonus based on the date of termination, and continued health insurance benefits at the executive’s regular rate for 12 months.

●

In the event of an involuntary separation from service or a separation from service for good reason within 24 months following a “change in control” (as defined in the agreement), the executive is entitled to severance benefits equal to two times the executive’s annual base salary plus two times the greater of (i) target annual bonus or (ii) the average bonus earned over the preceding three fiscal years (payable in a lump sum), a prorated annual bonus based on the date of termination, and continued health insurance benefits at the executive’s regular rate for 12 months.

●

In the event of a termination for cause, the executive is entitled to no payment or compensation whatsoever, other than salary through the executive’s last day of employment, reimbursable expenses properly incurred through executive’s last day of employment, and such other amounts that in the ordinary course are due to be paid or delivered to the executive on or before the executive’s last day of employment.

●

The benefits outlined in the terms of the executive’s individual equity award agreements in effect at the time.

The agreements also contain provisions placing restrictions on their ability to compete with the Company for a period of 12 or 24 months following termination of employment, depending on the circumstances of termination.

Nigel Stansfield

The Company has entered into an employment contract with Mr. Stansfield that provides for certain benefits if Mr. Stansfield’s employment is terminated involuntarily. The Company may terminate the employment contract for any reason by providing Mr. Stansfield 12 months’ notice (or may terminate immediately for cause). During the 12-month notice period, the Company may require Mr. Stansfield to continue performing his duties, or may place him on “garden leave” during the 12 months termination notice period. Alternatively, the Company may elect to terminate his employment immediately and pay him the equivalent of his salary and benefits for such 12-month period. He also would receive the benefits outlined in the terms of his individual equity award agreements in effect at the time. The agreement contains provisions restricting Mr. Stansfield from competing with the Company for a period of 6 months or solicit the Company’s customers or employees for a period of 12 months following termination of employment.

The following tables summarize the benefits payable to each of the Named Executive Officers under his respective agreements or arrangements described above in effect on December 31, 2021 (the last business day of the Company’s 2021 fiscal year). The tables do not include amounts payable under employee benefit plans in which Company associates are eligible to participate on a non-discriminatory basis. The amounts shown in the tables below assume that a Named Executive Officer’s employment terminated as of December 31, 2021, and that the fair market value of the Company’s Common Stock was $15.95 per share.

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Daniel T. Hendrix

		Retirement or Resignation				Death/Disability				Termination with Cause				Termination without Cause				Termination Following Change in Control(1)
Compensation:			($)				($)				($)				($)				($)
Base salary			--				--				--				157,667				157,667
Bonus			--				--				--				--				--
Equity awards(2)			--				1,054,699				--				1,054,699				3,469,258
Benefits and Perquisites:
Salary Continuation(3)			832,752			416,376/832,752					832,752				832,752				832,752
Retirement plans			--				--				--				--				--
Health, life and other insurance			--				--				--				--				--

David B. Foshee

		Retirement or Resignation				Death/Disability				Termination with Cause				Termination without Cause				Termination Following Change in Control(1)
Compensation:			($)				($)				($)				($)				($)
Base salary			--				--				--				392,879				785,758
Bonus			--				--				--				718,689				1,013,348
Equity awards(2)			--				587,050				--				587,050				1,760,295
Benefits and Perquisites:
Retirement plans			--				--				--				--				--
Health, life and other insurance			--				--				--				195				195

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Bruce A. Hausmann

		Retirement or Resignation				Death/Disability				Termination with Cause				Termination without Cause				Termination Following Change in Control(1)
Compensation:			($)				($)				($)				($)				($)
Base salary			--				--				--				454,490				908,980
Bonus			--				--				--				997,671				1,406,712
Equity awards(2)			--				851,971				--				851,971				2,475,499
Benefits and Perquisites:
Retirement plans			--				--				--				--				--
Health, life and other insurance			--				--				--				17,882				17,882

James Poppens

		Retirement or Resignation				Death/Disability				Termination with Cause				Termination without Cause				Termination Following Change in Control(1)
Compensation:			($)				($)				($)				($)				($)
Base salary			--				--				--				400,000				800,000
Bonus			--				--				--				738,429				1,098,429
Equity awards(2)			--				272,295				--				272,295				1,081,966
Benefits and Perquisites:
Retirement plans			--				--				--				--				--
Health, life and other insurance			--				--				--				17,882				17,882

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Nigel Stansfield

		Retirement or Resignation				Death/Disability				Termination with Cause				Termination without Cause				Termination Following Change in Control(1)
Compensation:			($)				($)				($)				($)				($)
Base salary			--				--				--				426,695				426,695
Bonus			--				--				--				--				--
Equity awards(2)			--				795,192				--				795,192				2,331,938
Benefits and Perquisites:
Retirement plans			--				--				--				--				--
Health, life and other insurance			--				--				--				--				--

(1)

The Company does not utilize a “single trigger” concept for severance payments in its agreements. The “Change in Control” (as defined in the applicable agreements) does not, by itself, provide the Named Executive Officer with any right to resign and receive a severance benefit. Instead, there must be a “second trigger” of either (i) an “Involuntary Separation from Service” or (ii) a “Separation from Service for Good Reason” (essentially, resignation in the face of negative changes in executive’s employment relationship with the Company) that occurs within 24 months after the date of a Change in Control. The amounts included in this column thus assume that both a “Change in Control” and a termination (as described immediately above) occurred as of December 31, 2021. If a related termination did not in fact occur, no severance payments would be payable. The amounts in this column for Base Salary and Bonus would be paid in a lump sum within 30 days.

(2)

These amounts assume each Named Executive Officer (i) sold all newly vested shares of restricted stock, and (ii) ultimately vested at target in outstanding performance shares that would have been retained for possible future vesting, each based on the fair market value of those shares as of December 31, 2021. Also includes dividend equivalents accrued through December 31, 2021 that would have been paid out in connection with such assumed vesting of performance shares.

(3)

Mr. Hendrix previously vested in, and in 2017 began receiving, benefit payments under the Salary Continuation Plan (an arrangement from his prior tenure as CEO). The amount represents the annual payment to which he is entitled under the Salary Continuation Plan regardless of any termination event, payable for the remainder of his life. In the case of Mr. Hendrix’s death, his surviving spouse would receive one-half of the amount otherwise payable.

CEO PAY RATIO

As required by SEC rules and described below, we are disclosing the annual total compensation of our CEO, the annual total compensation of our median employee, and the ratio between those two amounts.

To prepare this analysis, the Company identified its median employee from its 2019 analysis and calculated the total compensation for that employee for 2021 using data for the following elements of compensation: salary, equity awards, incentive compensation, and non-equity incentive compensation, over a trailing 12-month period from payroll records. The Company used the same median employee for its 2021 analysis as it did for 2019 because the Company believes that there has been no change in its employee population or employee compensation arrangements that would significantly impact the pay ratio.

For purposes of reporting annual total compensation and the ratio of annual total compensation of the CEO to the median employee, both the CEO and median employee’s annual total compensation are calculated consistent with the disclosure requirements of executive compensation under Item 402(c)(2)(x) of Regulation S-K.

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For 2021, the median employee’s annual total compensation was $60,270, and the total annualized compensation of our CEO was $4,166,003 (including the change in pension value disclosed in the Summary Compensation Table). Based on this information, the ratio of the total annual compensation of our CEO to the total annual compensation of our median employee was 69:1. (Excluding the change in pension value, the ratio was 90:1.) The median employee was located in the United States.

2021 DIRECTOR COMPENSATION

 

The following table provides information about the compensation paid to the Company’s directors in 20152021 (excluding Company Chairman and Chief Executive Officer Daniel T.Mr. Hendrix, who is a Named Executive Officer who does not receive additional compensation for Board or Committee service and whose compensation is presented in the Summary Compensation Table included herein)above).

 

Name   (a)		Fees Earned or Paid in Cash   ($)   (b)(1)		Stock Awards   ($)   (c)(2)		Option Awards   ($)   (d)(3)		Non-Equity Incentive Plan Compensation   ($)   (e)		Change in Pension Value and Nonqualified Deferred Compensation Earnings   ($)   (f)		All Other Compensation   ($)   (g)(4)		Total   ($)   (h)
John P. Burke		65,000		61,313		--		--		--		972		127,285
Edward C. Callaway		67,500		61,313		--		--		--		972		129,785
Andrew B. Cogan		65,000		61,313		--		--		--		972		127,285
Carl I. Gable		80,000		61,313		--		--		--		972		142,285
June M. Henton		35,000		61,313		--		--		--		432		96,745
Christopher G. Kennedy		70,000		61,313		--		--		--		972		132,285
K. David Kohler		65,000		61,313		--		--		--		972		127,285
James B. Miller, Jr.		65,000		61,313		--		--		--		972		127,285
Harold M. Paisner		65,000		61,313		--		--		--		972		127,285
Sheryl D. Palmer		16,250		--		--		--		--		--		16,250

Name		Fees Earned or Paid in Cash			Stock Awards			Option Awards			Non-Equity Incentive Plan Compensation			Change in Pension Value and Nonqualified Deferred Compensation Earnings			All Other Compensation			Total
		($)			($)			($)			($)			($)			($)			($)
(a)		(b)(1)			(c)(2)			(d)			(e)			(f)			(g)(3)			(h)
John P. Burke		87,500			113,431			--			--			--			381			201,313
Dwight Gibson		87,500			113,431			--			--			--			381			201,313
Christopher G. Kennedy		110,000			113,431			--			--			--			381			223,813
Joseph Keough		103,750			113,431			--			--			--			381			217,563
Catherine M. Kilbane		95,625			113,431			--			--						381			209,438
K. David Kohler		87,500			113,431			--			--			--			381			201,313
Sheryl D. Palmer		103,125			113,431			--			--			--			381			216,938

 

______

 

	(1)	For fiscal year 2015,2021, the Company’s non-employee directors (“outside directors”) were paid an annual director’s fee of $60,000.$80,000. Outside directors who serveserved on the Audit Committee were paid an additional $10,000 and those who served on the Compensation Committee and the Nominating & Governance Committee were paid an additional $5,000 per year,$7,500, except that the Chairperson of the Audit Committee was paid an additional $20,000 (instead of $10,000) and the respective Chairpersons of the Audit Committee, Compensation Committee and Nominating & Governance Committee were paid an additional $10,000 per year (rather than $5,000)$15,000 (instead of $7,500). In addition, the lead independent director of the Board was paid an incremental $10,000 per year.$15,000. Directors also were reimbursed for expenses in connection with attending Board and Committee meetings.

	(2)	The amounts reported in the “Stock Awards” column are computed based upon the aggregate grant date fair value of the respective awards. See the Note entitled “Shareholder’s Equity” to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2016,2, 2022, regarding assumptions underlying valuation of equity awards. The ultimate payout value may be significantly less than the amounts shown, and possibly zero, depending on the recipient’s tenure as a director. In 2015,2021, each of the directors listed in the table received an award of 3,7507,547 shares of restricted stock having a weighted average grant date fair value of $16.35$15.03 per share. As of January 3, 2016,2, 2022, each of these directors held an aggregate of 5,4007,547 shares of restricted stock that had not vested, except that (1) Ms. Palmer held no restricted stock (she was elected in October 2015), and (2) Dr. Henton held no shares (her tenure on the Board ended in May 2015).
	(3)	Any amounts reported in the “Option Awards” column would have been computed based upon the aggregate grant date fair value of the respective awards. However, novested. No stock options were granted to directors in 2015. As of January 3, 2016, each of Messrs. Gable, Kennedy2021 (or in the past several years), and Miller held 5,000 outstanding options. The other directors heldthere were no stock options asheld by directors at the end of January 3, 2016.2021.

(4)(3)

In 2015,2021, the Company paid on all outstanding Common Stock of the Company (including restricted stock) dividends of $0.04$0.01 per share in each of the first two quarters and $0.05 per share in each of the last two quarters.fiscal quarter. The amounts in this column reflect dividends on the restricted shares of each director paid in 2015.2021.

 

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EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information concerning the Company’s equity compensation plans as of the end of fiscal year 2021.

Plan Category(1)		Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights			Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
		(a)		(b)			(c)
Equity Compensation Plan Approved by Security Holders:
Omnibus Stock Plan (2015)		347,957(2)		--			--
Omnibus Stock Plan (2020)		370,162(3)		--			2,798,515(4)

(1)

The Company does not have shares authorized for issuance under any compensation plan not approved by shareholders.

(2)

Represents the target level of performance share awards that were outstanding under the 2015 Omnibus Stock Plan.

(3)

Represents the target level of performance share awards that were outstanding under the 2020 Omnibus Stock Plan.

(4)

Assumes target level achievement and vesting of the performance share awards that were outstanding under the 2020 Omnibus Stock Plan. Assuming maximum level achievement and vesting of those performance share awards, this number would be 2,428,353.

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

(ITEM 3)

Information Concerning the Company’s Accountants

BDO USA, LLP (“BDO USA”) acted as the Company’s independent auditor during the past fiscal year. The Audit Committee has again appointed BDO USA to act as the independent auditor of the Company for fiscal year 2022. The Board of Directors will present to the annual meeting a proposal that such appointment be ratified. Should the shareholders fail to ratify the appointment, the Audit Committee will reconsider its selection, but may continue the engagement. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time. BDO USA has no financial interest, direct or indirect, in the Company or any subsidiary.

A representative of BDO USA is expected to be present at the annual meeting to make a statement if he or she desires to do so and to respond to appropriate questions.

Audit and Non-Audit Fees

The following table shows the fees for professional audit and other services provided by BDO USA to the Company for fiscal years 2021 and 2020.

		2021				2020
Audit Fees(1)		$	2,198,000			$	3,061,000
Audit-Related Fees(2)			75,000				78,000
Tax Fees(3)			59,000				126,000
All Other Fees(4)			--				--
Total		$	2,332,000			$	3,265,000

_________________

(1)

“Audit Fees” consist of fees billed or accrued for professional services rendered for the audit of the Company’s annual financial statements, audit of the Company’s effectiveness of internal control over financial reporting, review of the interim financial statements included in quarterly reports, and services that are normally provided by BDO USA in connection with statutory and regulatory filings.

(2)

“Audit-Related Fees” consist of fees billed or accrued primarily for employee benefit plan audits and other attestation services.

(3)

“Tax Fees” consist of fees billed or accrued for professional services rendered for tax compliance, tax advice and tax planning, both domestic and international.

(4)

“All Other Fees” consist of fees billed or accrued for those services not captured in the audit, audit-related and tax categories. The Company generally does not request such services from the independent auditors.

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Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Consistent with the SEC policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent auditors. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and non-audit services provided by the independent auditors.

These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for and detailed as to the particular services or category of services and is generally subject to a specific budget. Of the services rendered by the independent auditors under the categories “Audit-Related Fees”, “Tax Fees” and “All Other Fees” described above, none were approved by the Audit Committee after services were rendered pursuant to the de minimis exception established by the SEC.

You may vote “for,” “against,” or “abstain” from the proposal to ratify the appointment of BDO USA to act as the Company’s independent auditors for fiscal year 2022.

Vote Required and Recommendation of the Board

Under the Company’s Bylaws, the proposal to ratify the appointment of BDO USA to act as the Company’s independent auditors for fiscal year 2022 is approved if the affirmative votes cast by the holders of the Company’s outstanding shares of Common Stock entitled to vote and represented (in person or by proxy) at the meeting exceed the negative votes. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL, AND THE PROXY SUBMITTED BY TELEPHONE OR INTERNET OR PROXY CARD WILL BE VOTED IN THIS MANNER UNLESS THE SHAREHOLDER SUBMITTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY (OR ABSTAINS).

AUDIT COMMITTEE REPORT

The Audit Committee operates pursuant to an Audit Committee Charter that was adopted by the Board of Directors. (A copy of the Audit Committee Charter may be viewed on the Company’s website, https://investors.interface.com/investor-relations/default.aspx.) The Company’s management is responsible for its internal accounting controls and the financial reporting process. The Company’s independent auditors, BDO USA, are responsible for performing an audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States. The independent accountants also are responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles, and on the effectiveness of the Company’s internal control over financial reporting. 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 USA. In addition, the Audit Committee has discussed with BDO USA the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from BDO USA required by applicable PCAOB rules regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with the independent accountants their independence. The Audit Committee has also considered whether the provision of any services discussed above in Item 3 under the caption “Ratification of Appointment of Independent Auditors – Audit and Non-Audit Fees” by BDO USA is compatible with maintaining BDO USA’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 the Nasdaq Stock Market as currently in effect. Although 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), the Board of Directors determined that each of Ms. Palmer and Mr. Keough does qualify as an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K. Members of the Audit Committee rely, without independent verification, on the information provided to them and on the representations made by management and BDO USA. 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.”

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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 fiscal year ended January 2, 2022 for filing with the Securities and Exchange Commission.

THE AUDIT COMMITTEE

Joseph Keough (Chair)

Catherine M. Kilbane

Sheryl D. Palmer

OTHER INFORMATION:

GENERAL MEETING INFORMATION

The Board of Directors of Interface, Inc. is furnishing this Proxy Statement to solicit Proxies for the Company’s common stock, $0.10 par value per share (“Common Stock”) to be voted at the annual meeting of shareholders of the Company. The meeting will be held at 11:00 a.m. Eastern Time on May 16, 2022. The Proxies also may be voted at any adjournments of the meeting. It is anticipated that this Proxy Statement will first be sent or given to shareholders on or about April 6, 2022.

The record of shareholders entitled to vote at the annual meeting was taken as of the close of business on March 18, 2022. On that date, the Company had outstanding and entitled to vote 59,330,565 shares of Common Stock.

Each Proxy for Common Stock (“Proxy”) that is properly completed (whether executed in writing or submitted by telephone or Internet) by a shareholder will be voted as specified by the shareholder in the Proxy. If no specification is made, the Proxy will be voted (i) for the election of the nominees listed in this Proxy Statement under the caption “Nomination and Election of Directors,” (ii) for the resolution approving, on an advisory basis, executive compensation, and (iii) for the ratification of the appointment of BDO USA, LLP as independent auditors for 2022. A Proxy given pursuant to this solicitation may be revoked by a shareholder who attends the meeting and gives 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 for the purpose of establishing a quorum. A broker non-vote occurs when a broker or other nominee who holds shares for a customer does not have authority to vote on certain matters without instructions from their customer, such customer has not provided any voting instructions on the matter and the broker or other nominee returns a Proxy (or otherwise informs the transfer agent) that they are not voting on the matter for the foregoing reasons. Neither broker non-votes nor abstentions will affect the outcome of the vote on any matter expected to be voted upon at the annual meeting.

If your shares of Common Stock are held by a broker, bank or other nominee (e.g., in “street name”), you should receive instructions from your nominee, which you must follow in order to have your shares voted – the instructions may appear on a special proxy card provided to you by your nominee (also called a “voting instruction form”). Your nominee may offer you different methods of voting than those available to record holders. If you do hold your shares in “street name” and plan on attending the annual meeting of shareholders, you should request a proxy from your broker or other nominee holding your shares in record name on your behalf in order to attend the annual meeting and vote at that time (your broker or other nominee may refer to it as a “legal” proxy).

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 employees of the Company may solicit Proxies in person or by telephone, fax or e-mail. The Company also has retained Georgeson LLC, a proxy solicitation firm, to assist in soliciting Proxies from record and beneficial owners of shares of the Company’s Common Stock. The fee paid by the Company for such assistance is expected to be $9,000 (plus expenses).

CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS

 

The Board of Directors of the Company recognizes that transactions with related persons can present a heightened risk of conflict of interests and/or improper valuation (or the perception thereof). Accordingly, as a general matter, it is the Company’s preference to avoid transactions with related persons. Nevertheless, there are circumstances where the Company may (i) obtain products or services (i) of a nature, quantity or quality that are not readily available from alternative sources, (ii)or on terms comparable to those provided by other, unrelated parties, or (iii) when the Company provides(ii) provide products or services on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms provided to employees generally.

 

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Policy Regarding Review, Approval or Ratification ofTransactions Involving Related Persons

 

The Company has adopted a written policy (the “Related Transactions Policy”) with respect to the review, approval or ratification of transactions with related persons involving the Company (or its subsidiaries or controlled affiliates). In evaluating potential transactions with related persons, the Related Transactions Policy incorporates and applies the contents of Item 404(a) of Regulation S-K (including but not limited to the definitions of “related persons” and “transaction”, as well as the threshold for “direct or indirect material interest” contained therein).

 

Prior to entering into a transaction with the Company, the related person is required to advise a Company-designated “Compliance Officer” (currently the Company’s General Counsel), who shall determine whether the proposed transaction is a transaction with a related person under this policy. If the Compliance Officer determines that the proposed transaction is a transaction with a related person, the transaction is required to be submitted to the Audit Committee of the Board of Directors for consideration at its next meeting or, in those instances in which it is not practicable or desirable for the Company to wait until the next Audit Committee meeting, to the Chair of the Audit Committee (who possesses delegated authority to act between committee meetings). The Audit Committee (or where submitted to the Chair, the Chair) shall consider all of the available relevant facts and circumstances, including (if applicable) but not limited to: (i) the benefits to the Company; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director, or an entity in which the director is a partner, equity holder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms of the transaction; and (v) the terms available to or from unrelated third parties or employees generally, as the case may be. After review, the Audit Committee or Chair either approves or disapproves the proposed transaction and advises the Compliance Officer, who in turn conveys the decision to the appropriate persons within the Company. No member of the Audit Committee is permitted to participate in any review, consideration, or approval of any potential transaction with a related person with respect to which such member or any of his or her immediate family members is a related person.

 

The Related Transactions Policypolicy also provides for the review of (i) transactions involving related persons entered into by the Company not previously approved or ratified under this policy, as well as (ii) any previously approved or ratified transactions with related persons that remain ongoing and have a remaining term of more than six months or remaining amounts payable to or receivable from the Company of more than $120,000. The policy also explicitly requires disclosure of all transactions that are required to be disclosed under the Securities Act of 1933, the Securities Exchange Act of 1934 and related rules and regulations.

 

Transactions Involving Related Persons

Since the beginning of fiscal year 2015, the Company has not been a participant in any transaction involving an amount exceeding $120,000 in which any related person had or is expected to have a direct or indirect material interest, and no such transaction is currently proposed.

DIRECTORINDEPENDENCE

For each director, the Board makes a determination of whether the director is “independent” under the criteria established by the Nasdaq Stock Market and other governing laws and regulations. In its review of director independence, the Board considers all commercial, banking, consulting, legal, accounting, charitable or other business relationships any director may have with the Company. The current directors are John P. Burke, Edward C. Callaway, Andrew B. Cogan, Carl I. Gable, Daniel T. Hendrix, Christopher G. Kennedy, K. David Kohler, James B. Miller, Jr., Harold M. Paisner, and Sheryl D. Palmer. As a result of its review, the Board has determined that all of the current directors, with the exception of Daniel T. Hendrix (who is an employee), are independent.

The independent directors meet in regularly scheduled executive sessions without Mr. Hendrix or other members of management present. In 2015, the independent directors met four times in executive session.

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EQUITYCOMPENSATION PLAN INFORMATION

The following table sets forth information concerning the Company’s equity compensation plans as of January 3, 2016.

Plan Category(1)		Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
		(a)		(b)		(c)
Equity Compensation Plan Approved by Security Holders:
Omnibus Stock Plan		87,500		$8.75		5,103,830(2)

	(1)	The Company does not have shares authorized for issuance under any compensation plan not approved by shareholders.
	(2)	Each share issued under the Omnibus Stock Plan pursuant to an award other than a stock option will reduce the number of remaining shares available by 1.33 shares.

POTENTIALPAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

 

The Company is generally obligated to provide its Named Executive Officers with certain payments or other formsemploys John Hendrix, the son of compensation when their employment with the Company is terminated. The actual amount of compensation due each of the Named Executive Officers, as well as the duration of any periodic payments, depends on both the circumstances surrounding the termination, as well as the particulars of any employment-related agreements to which the CompanyChairman and the NamedChief Executive Officer are party.

EmploymentDan Hendrix, as its Global CRM Analyst. In 2021, John Hendrix earned salary and Changebonus of $141,015, and participated in Control Agreements

The Company has Employment and Change in Control Agreements with each of Messrs. Hendrix, Lynch, Wells and Willoch, which generally describe the benefits payable at, following, or in connection with various termination scenarios. (The agreements have been in place since 1997 for Messrs. Hendrix, Wells and Willoch, and since 2005 for Mr. Lynch, with the primary substantive changes since execution being those necessary to bring the agreements into compliance with Section 409A of the Internal Revenue Code of 1986, as amended.) Each Employment and Change in Control Agreement is for a rolling two-year term, such that the remaining term is always two years (until a specified retirement age). The Company may terminate any of such agreements at any time, with or without cause, and each executive may voluntarily terminate his respective employment upon 90 days notice. The agreements provide for certain benefits in the event of various termination scenarios, including termination without cause, termination with cause, voluntary retirement or resignation, termination due to death or disability, and termination in connection with a “change in control” (as defined in the agreements) of the Company. The agreements also provide for these executives to receive a tax “gross up” payment to cover the amount of any excise taxes imposed on the benefits payable in the event of a termination in connection with a “change in control.” (The tax gross up provision has been included in these agreements, without substantive change, since January 1999.) Each agreement also contains provisions placing restrictions on the executive’s ability to compete with the Company for a period of two years following the termination of his employment.

Mr. Gould has entered into an Employment and Change in Control Agreement with the Company that is similar to those of the other Named Executive Officers as described above, except that Mr. Gould’s agreement was entered into on January 9, 2015, has a rolling one-year term, has no tax “gross up” provision, and has a one-year post-termination restriction on competition against the Company. As with Mr. Gould, any new employment and change in control agreements entered into by the Company going forward will not contain a tax “gross up” provision.

Payments to Named Executive Officers Upon Termination or Change in Control

In the event that any of the Named Executive Officers (i) retired or voluntarily resigned, (ii) died or was terminated in connection with a disability, (iii) was terminated by the Company (x) with “cause”, (y) without “cause” or (z) experienced certain terminations (without cause) in connection with a “change in control” (as applicable, and as such terms are defined in the respective agreements) on December 31, 2015 (the last business day of fiscal year 2015), they would have been entitled to receive the following types of payments and benefits, and would have been subject to the various restrictive covenants, described below.

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Upon Retirement or Voluntary Resignation:

Payment, Benefit or Restrictive Covenant		Entitled to Receive
Base Salary		Executive would be entitled to receive his then-current base salary through the effective date of retirement or resignation.
Bonus		Executive would be entitled to receive a prorated portion of his annual bonus opportunity calculated based on the date of retirement or resignation (e.g., a June 30 retirement or resignation would entitle executive to 50% of the bonus otherwise payable).
Stock Options		Executive would forfeit any unvested stock options; all previously-vested options would terminate over the period of time specified in the applicable stock option agreements (typically 12 to 24 months).
Restricted Stock		Executive would forfeit any unvested restricted stock awards, except that upon retirement at age 65 or thereafter executive would immediately vest in a percentage of all unvested restricted stock awards as specified in the applicable restricted stock agreement(s).
Salary Continuation Plan		Salary Continuation Plan participant (Messrs. Hendrix, Wells and Willoch) would receive full benefits upon retirement at age 65 after completing at least 15 years of service, payable for the remainder of his life (or, if elected, a reduced benefit for the remainder of his life and any surviving spouse’s life). A reduced benefit is available to participant beginning at age 55. Upon retirement or voluntary resignation prior to age 55, Salary Continuation Plan participants would receive no benefit. Participant is prohibited from competing with the Company while receiving benefits.
Other Employee Retirement Plans		No additional benefit beyond those to which the executive normally would be entitled under the Company’s 401(k) Plan and Nonqualified Plan following termination of employment.
Health, Life and Other Insurance Coverages		No additional benefits are received beyond those to which the executive normally would be entitled under the terms of the respective medical and/or insurance plans. Mr. Hendrix has a Split Dollar Insurance Policy as described in footnote 5 to the 2015 Summary Compensation Table.
Restrictive Covenants		Executive would be prohibited from competing with the Company, or soliciting its customers or employees, for a two-year period (or, for Mr. Gould, a one-year period) following retirement or resignation.

Upon Death/Disability:

Payment, Benefit or Restrictive Covenant		Entitled to Receive
Base Salary		Executive would be entitled to receive his then-current base salary through the date of termination due to death/disability.
Bonus		Executive would be entitled to receive a prorated portion of his annual bonus opportunity calculated based on the date of termination due to death/disability (e.g., a June 30 termination due to death/disability would entitle executive to 50% of the bonus otherwise payable).
Stock Options		Executive would forfeit any unvested stock options; all previously-vested options would terminate over the period of time specified in the applicable stock option agreements (typically 12 to 24 months following termination due to disability and 24 months following termination due to death).
Restricted Stock		Executive would immediately vest in a percentage of all unvested restricted stock awards, as specified in the applicable restricted stock agreement(s).
Salary Continuation Plan		Upon Salary Continuation Plan participant’s death, he would receive a 10 year certain payout of an annual benefit level as if he were eligible for full benefits (e.g., age 65). Upon a participant’s disability, he would receive a payout at an annual benefit level that when combined with all other Company-sponsored disability security and salary continuation payments being paid, equals 66 2/3% of average salary and bonus during the preceding 1-3 years. The annual benefit level would continue for as long as the participant remains disabled, up to age 65, at which point the benefit would be reduced to the annual salary continuation benefit he would have received upon early retirement at age 55 (or such greater age at the time of becoming disabled). Participant is prohibited from competing with the Company while receiving benefits.
Other Employee Retirement Plans		No additional benefit beyond those to which the executive would be normally entitled under the Company’s 401(k) Plan and Nonqualified Plan following termination of employment.
Health, Life and Other Insurance Coverages		No additional benefits are received beyond those to which the executive would be normally entitled under the terms of the respective medical and/or insurance plans. Mr. Hendrix has a Split Dollar Insurance Policy as described in footnote 5 to the 2015 Summary Compensation Table.
Restrictive Covenants		Executive would be prohibited from competing with the Company, or soliciting its customers or employees, for a two-year period (or, for Mr. Gould, a one-year period) following any termination due to disability.

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Upon Termination With “Cause”:

Payment, Benefit or Restrictive Covenant		Entitled to Receive
Base Salary		Executive would be entitled to receive his then-current base salary through the effective date of termination.
Bonus		No benefit. .
Stock Options		Executive would forfeit any unvested stock options; all previously-vested options would terminate three months following termination.
Restricted Stock		Executive would forfeit any unvested restricted stock awards.
Salary Continuation Plan		Salary Continuation Plan participant would receive no benefit (unless he had already attained age 55 after completing at least 15 years of service, in which case a reduced benefit would be payable for the remainder of his life, or, if elected, a further reduced benefit for the remainder of his life and any surviving spouse’s life).
Other Employee Retirement Plans		No additional benefit beyond those to which the executive would be normally entitled under the Company’s 401(k) Plan and Nonqualified Plan following termination of employment.
Health, Life and Other Insurance Coverages		No additional benefits are received beyond those to which the executive would be normally entitled under the terms of the respective medical and/or insurance plans. Mr. Hendrix has a Split Dollar Insurance Policy as described in footnote 5 to the 2015 Summary Compensation Table.
Restrictive Covenants		Executive would be prohibited from competing with the Company, or soliciting its customers or employees, for a two-year period (or, for Gould, a one-year period) following termination.

Upon Termination Without “Cause”:

Payment, Benefit or Restrictive Covenant		Entitled to Receive
Base Salary		Executive would be entitled to receive his then-current base salary for two years (or, for Mr. Gould, a one-year period).
Bonus		Executive would be entitled to receive bonus payments for two years as well as a prorated bonus for the year in which employment terminates, each calculated based on the average bonus (excluding special incentive plan bonuses) received by the executive during the two years prior to the effective termination date.
Stock Options		Executive would immediately vest in all unvested options. The options could be subsequently exercised over the period of time specified in the applicable stock option agreements (typically 12 to 24 months).
Restricted Stock		Executive would immediately vest in a percentage of all unvested restricted stock awards, as specified in the applicable restricted stock agreement(s).
Salary Continuation Plan		If Salary Continuation Plan participant already had attained age 55 after completing at least 15 years of service, he would receive a reduced benefit for the remainder of his life (or, if elected, a further reduced benefit for the remainder of his and any surviving spouse’s life). If Salary Continuation Plan participant had not already attained age 55 after completing at least 15 years of service, Salary Continuation Plan participant would remain eligible for participation in the plan as if he were to remain employed, and would receive a reduced benefit beginning at age 55 after completing at least 15 years of service, payable for the remainder of his life (or, if elected, a further reduced benefit for the remainder of his and any surviving spouse’s life). Participant is prohibited from competing with the Company while receiving benefits.
Other Employee Retirement Plans		Executive would be entitled to an amount equal to the matching contribution he would have received under the Company’s 401(k) Plan for the two-year period following termination.
Health, Life and Other Insurance Coverages		Executive would be entitled to continue coverages for two years, with the Company paying the associated premiums.
Restrictive Covenants		Executive would be prohibited from competing with the Company, or soliciting its customers or employees, for a two-year period (or, for Mr. Gould, a one-year period) following termination.

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Upon Termination Following “Change in Control”:

Payment, Benefit or Restrictive Covenant		Entitled to Receive
Base Salary		Executive would be entitled to receive his base salary in its then-current amount for two years. Such amount would be paid in a lump sum within 30 days after separation from service.
Bonus		Executive would receive bonus payments for two years as well as a prorated bonus for the year in which employment terminates, each calculated based on the average bonus (including any special incentive plan bonuses) received by the executive during the two years prior to the effective termination date. Such amount would be paid in a lump sum within 30 days after separation from service.
Stock Options		Executive would immediately vest in all unvested options. The options could be subsequently exercised over the period of time specified in the applicable stock option agreements (typically 12 to 24 months).
Restricted Stock		Executive would immediately vest in all unvested restricted stock awards.
Salary Continuation Plan		If Salary Continuation Plan participant already had attained age 55 after completing at least 15 years of service, he would receive a reduced benefit for the remainder of his life (or, if elected, a further reduced benefit for the remainder of his and any surviving spouse’s life). If Salary Continuation Plan participant had not already attained age 55 after completing at least 15 years of service, Salary Continuation Plan participant would remain eligible for participation in the plan as if he were to remain employed, and would receive a reduced benefit beginning at age 55 after completing at least 15 years of service, payable for the remainder of his life (or, if elected, a further reduced benefit for the remainder of his and any surviving spouse’s life). Participant would also receive the benefit of a cost of living adjustment calculated with reference to a specified consumer price index on each participant’s annual benefit amount (such adjustment accruing from the date of termination until such date that the participant begins to receive benefits, and not thereafter). Participant is prohibited from competing with the Company while receiving benefits.
Other Employee Retirement Plans		Executive would be entitled to an amount equal to the matching contribution he would have received under the Company’s 401(k) Plan for the two-year period following termination.
Health, Life and Other Insurance Coverages		Executive would be entitled to continue coverages for two years with the Company paying the associated premiums.
Restrictive Covenants		Executive would be prohibited from competing with the Company, or soliciting its customers or employees, for a two year period following termination.

The following tables summarize the benefits payable to each of the Named Executive Officers under his employment and change in control agreement (or the terms of his individual equity award agreements) in effect on December 31, 2015 (the last business day of the Company’s 2015 fiscal year). The tables do not include amounts payable under employee benefit plans in which Company associates are eligibleprograms generally available to participate on a non-discriminatory basis. The amounts shownemployees in the tables below assume that a Named Executive Officer’s employment terminated asU.S. Dan Hendrix plays no part in the determination of December 31, 2015, and that the fair market value of the Company’s Common Stock was $19.14 per share.John Hendrix’s compensation.

 

Daniel T. HendrixDELINQUENT SECTION 16(

		Retirement or Resignation		Death/Disability		Termination with Just Cause		Termination without Just Cause		Termination Following Change in Control(1)
Compensation:		($)		($)		($)		($)		($)
Base salary		--		--		--		1,962,600		1,962,600
Bonus		1,167,607		1,167,607		--		1,369,348		1,369,348
Stock options		--		--		--		--		--
Restricted stock(2)		--		5,780,280		--		5,780,280		7,617,720
Benefits and Perquisites:
Salary continuation(3)		821,189		977,606 / 2,218,348		--		821,189 (6)		821,189 (6)
Retirement plans(4)		--		--		--		15,900		15,900
Health, life and other insurance(5)		--		--		--		46,834		46,834
Excise tax gross-up		--		--		--		--		3,737,678(7)

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Patrick C. Lyncha)

		Retirement or Resignation		Death/Disability		Termination with Just Cause		Termination without Just Cause		Termination Following Change in Control(1)
Compensation:		($)		($)		($)		($)		($)
Base salary		--		--		--		886,400		886,400
Bonus		365,085		365,085		--		452,008		452,008
Stock options		--		--		--		--		--
Restricted stock(2)		--		957,000		--		957,000		1,507,275
Benefits and Perquisites:
Salary continuation		--		--		--		--		--
Retirement plans(4)		--		--		--		15,900		15,900
Health, life and other insurance(5)		--		--		--		45,520		45,520
Excise tax gross-up		--		--		--		--		--

John R. Wells REPORTS

		Retirement or Resignation		Death/Disability		Termination with Just Cause		Termination without Just Cause		Termination Following Change in Control(1)
Compensation:		($)		($)		($)		($)		($)
Base salary		--		--		--		1,250,200		1,250,200
Bonus		491,860		491,860		--		294,062		294,062
Stock options		--		--		--		--		--
Restricted stock(2)		--		1,068,644		--		1,068,644		1,674,750
Benefits and Perquisites:
Salary continuation(3)		--		500,101 / 932,930		--		--(6)		--(6)
Retirement plans(4)		--		--		--		15,900		15,900
Health, life and other insurance(5)		--		--		--		47,544		47,544
Excise tax gross-up		--		--		--		--		4,076,829(7)

Jay D. Gould

		Retirement or Resignation		Death/Disability		Termination with Just Cause		Termination without Just Cause		Termination Following Change in Control(8)
Compensation:		($)		($)		($)		($)		($)
Base salary		--		--		--		750,000		750,000
Bonus		653,150		653,150		--		653,150		653,150
Stock options		--		--		--		--		--
Restricted stock(2)		--		628,041		--		628,041		1,599,989
Benefits and Perquisites:
Salary continuation		--		--		--		--		--
Retirement plans		--		--		--		7,950		7,950
Health, life and other insurance		--		--		--		--		--
Excise tax gross-up		--		--		--		--		--

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Raymond S. Willoch

		Retirement or Resignation		Death/Disability		Termination with Just Cause		Termination without Just Cause		Termination Following Change in Control(1)
Compensation:		($)		($)		($)		($)		($)
Base salary		--		--		--		886,400		886,400
Bonus		365,085		365,085		--		452,008		452,008
Stock options		--		--		--		--		--
Restricted stock(2)		--		832,590		--		832,590		1,382,865
Benefits and Perquisites:
Salary continuation(3)		272,931		401,369 / 841,842		--		272,931(6)		272,931(6)
Retirement plans(4)		--		--		--		15,900		15,900
Health, life and other insurance(5)		--		--		--		48,026		48,026
Excise tax gross-up		--		--		--		--		--(7)

	(1)	Unlike a number of publicly-traded companies, the Company does not utilize a “single trigger” concept for severance payments in its Employment and Change in Control Agreements. The “Change in Control” (as defined in the applicable agreements) does not, by itself, provide the Named Executive Officer with any right to resign and receive a severance benefit. Instead, for severance benefits to be payable, there must be a “second trigger” of either (i) an “Involuntary Separation from Service” or (ii) a “Separation from Service for Good Reason” (essentially, resignation in the face of negative changes in executive’s employment relationship with the Company) that occurs within 24 months after the date of a Change in Control. The amounts included in this column thus assume that both a “Change in Control” and a subsequent termination (as described immediately above) occurred as of December 31, 2015. If a related termination did not in fact occur, no severance payments would be payable. The amounts in this column for Base Salary and Bonus would be paid in a lump sum within 30 days.
	(2)	These amounts assume each Named Executive Officer sold all newly vested shares of restricted stock immediately upon termination of employment.
	(3)	The amounts included in the “Death/Disability” column represent theannualpayments to which Messrs. Hendrix, Wells and Willoch would be entitled under the Salary Continuation Plan following their death or disability as of December 31, 2015. The annual benefit amount following a participant’s death would be paid for 10 years, after which time it would permanently cease. In the event of a participant’s disability, the annual benefit amount would continue for as long as the participant continued to suffer the qualifying disability, up to age 65, at which point a reduced annual benefit would be payable ($690,244, $272,656 and $239,622 for Messrs. Hendrix, Wells and Willoch, respectively, assuming no election of the extended spousal life benefit described above). For Messrs. Hendrix and Willoch, the amount reported in the “Retirement or Resignation” column represents theannual payment to which he would be entitled under the Salary Continuation Plan following his retirement or resignation as of December 31, 2015, assuming no election of surviving spouse benefits.
	(4)	The amounts noted represent payments required to be made by the Company to each executive in lieu of 401(k) Plan matching contributions, following termination, and assume each executive maintained the maximum level of contribution to the 401(k) Plan as in effect on the date of termination.
	(5)	These amounts represent premiums paid by the Company on behalf of each Named Executive Officer following termination, and assume each Named Executive Officer chose to maintain his current coverages under the various medical and/or insurance plans in which he was a participant.
	(6)	For Messrs. Hendrix and Willoch, the amount represents theannual payment to which he would be entitled under the Salary Continuation Plan, payable for the remainder of his life and assuming no election of surviving spouse benefits. If Mr. Wells were terminated on December 31, 2015 without cause or following a “Change in Control”, he would not be entitled toany accelerated vesting and/or immediate payment of Salary Continuation Plan benefits. Instead, he would remain eligible for participation in the Salary Continuation Plan as if he remained employed, and would receive reduced benefits ($272,656) beginning at age 55. The benefits are payable annually for the remainder of his life, or, if elected, a further reduced benefit is payable for the remainder of his and any surviving spouse’s life. However, the excise tax calculations performed pursuant to Sections 4999 and 280G of the Internal Revenue Code require, for purposes of the presentation for a termination following a Change in Control and the resulting excise tax “gross-up” set forth herein for each executive (including Mr. Hendrix), that the fulllifetime benefit amount ultimately payable to each Salary Continuation Plan participant (reduced to a net present value) be included. The aggregate actuarial lifetime benefit amounts payable, reduced to a present value and assuming Salary Continuation Plan benefits are paid beginning at age 65, are $14,130,749, $6,942,880 and $5,675,569 for Messrs. Hendrix, Wells and Willoch, respectively.
		Each Salary Continuation Plan participant would, however, in the case of a termination following a Change in Control, receive the benefit of a cost of living adjustment calculated with reference to a specified consumer price index on each participant’s annual Salary Continuation Plan benefit amount (such adjustment accruing from the date of termination until such date that the participant actually begins to receive benefits, and not thereafter). The aggregate actuariallifetime value of the cost of living adjustment, reduced to a present value and assuming Salary Continuation Plan benefits are paid beginning at age 55 (or, for Messrs. Hendrix and Willoch, their actual respective ages of 61 and 57), are $0, $69,428 and $0 for Messrs. Hendrix, Wells and Willoch, respectively.
	(7)	As discussed in Footnote 6, these amounts are calculated assuming (as applicable) the inclusion of the fulllifetime benefit amount ultimately payable to each Salary Continuation Plan participant (reduced to a net present value) in connection with a termination following a Change in Control. To the extent that the cost of living adjustment amounts referenced in Footnote 6, rather than the full lifetime benefit amounts, were instead included in the Section 280G excise tax calculations, no excise tax “gross-up” benefits would be payable to Messrs. Wells or Willoch in connection with a termination following a Change in Control, while the same benefit amount would be payable to Mr. Hendrix. The excise tax “gross-up” amounts presented further assume that none of the payments in the event of a termination following a Change in Control would be categorized as “reasonable compensation” (such as, for example, payments associated with non-compete and other restrictive covenants) for purposes of the Section 280G excise tax calculation. The Company believes that a substantial amount of the payments could be deemed “reasonable compensation” for purposes of Section 280G, which could substantially reduce the excise tax “gross-up” payable hereunder.

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APPROVALoF Executive Compensation

(Item 2)

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the Company is asking its shareholders to vote, on an advisory basis, to approve the compensation of its Named Executive Officers as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives the Company’s shareholders the opportunity to express their views on the compensation of the Company’s Named Executive Officers. At the 2011 annual meeting of shareholders, the Company’s shareholders voted, on an advisory basis, to hold a say on pay vote every year. The Board of Directors subsequently determined that the Company will hold say on pay votes every year until the next required advisory vote on the frequency of say on pay votes occurs or until the Board of Directors otherwise determines that a different frequency for say on pay votes is in the best interests of the shareholders.

Compensation Program and Philosophy

Our executive compensation program is designed to attract, reward and retain key employees, including our Named Executive Officers, who are critical to the Company’s long-term success. Shareholders are urged to read the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this Proxy Statement for greater detail about the Company’s executive compensation programs, including information about the fiscal year 2015 compensation of the Named Executive Officers.

The Company is asking the shareholders to indicate their support for the compensation of the Company’s Named Executive Officers as described in this Proxy Statement by voting in favor of the following resolution:

“RESOLVED, that the shareholders approve, on an advisory, non-binding basis, the compensation paid to the Company’s Named Executive Officers as disclosed in the “Compensation Discussion and Analysis” and “Executive Compensation” sections, and the related compensation tables, notes, and narrative in this Proxy Statement.”

Even though this say-on-pay vote is advisory and therefore will not be binding on the Company, the Compensation Committee and the Board value the opinions of the Company’s shareholders. Accordingly, to the extent there is a significant vote against the compensation of the Named Executive Officers, the Board will consider the shareholders’ concerns and the Compensation Committee will evaluate what actions may be necessary or appropriate to address those concerns.

You may vote “for,” “against,” or “abstain” from the proposal to approve on an advisory basis the compensation of our Named Executive Officers.

Vote Required and Recommendation of the Board

Under the Company’s Bylaws, the compensation of the Named Executive Officers is approved on an advisory basis if the affirmative votes cast by the holders of the Company’s outstanding shares of Common Stock entitled to vote and represented (in person or by proxy) at the meeting exceed the negative votes. THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE APPROVAL OF EXECUTIVE COMPENSATION, AS DISCLOSED IN THIS PROXY STATEMENT, AND THE PROXY SUBMITTED BY TELEPHONE OR INTERNET OR PROXY CARD WILL BE VOTED IN THIS MANNER UNLESS THE SHAREHOLDER SUBMITTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY (OR ABSTAINS).

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RATIFICATIONOF APPOINTMENT OF INDEPENDENT AUDITORS

(ITEM 3)

Information Concerning the Company’s Accountants

BDO USA, LLP (“BDO USA”) acted as the Company’s independent auditor during the past fiscal year. The Audit Committee has again appointed BDO USA to act as the independent auditor of the Company for fiscal year 2016. The Board of Directors will present to the annual meeting a proposal that such appointment be ratified. Should the shareholders fail to ratify the appointment, the Audit Committee will reconsider its selection, but may continue the engagement. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time. BDO USA has no financial interest, direct or indirect, in the Company or any subsidiary.

A representative of BDO USA is expected to be present at the annual meeting to make a statement if he or she desires to do so and to respond to appropriate questions.

Audit and Non-Audit Fees

The following table shows the fees for professional audit and other services provided by BDO USA to the Company for fiscal years 2015 and 2014.

		2015				2014
Audit Fees1		$	1,522,000			$	1,468,000
Audit-Related Fees2			20,000				20,000
Tax Fees3			58,000				50,000
All Other Fees4			--				--
Total		$	1,600,000			$	1,538,000

_________________

	(1)	“Audit Fees” consist of fees billed or accrued for professional services rendered for the audit of the Company’s annual financial statements, audit of the Company’s effectiveness of internal control over financial reporting, review of the interim financial statements included in quarterly reports, and services that are normally provided by BDO USA in connection with statutory and regulatory filings.
	(2)	“Audit-Related Fees” consist of fees billed or accrued primarily for employee benefit plan audits and other attestation services.
	(3)	“Tax Fees” consist of fees billed or accrued for professional services rendered for tax compliance, tax advice and tax planning, both domestic and international.
	(4)	“All Other Fees” consist of fees billed or accrued for those services not captured in the audit, audit-related and tax categories. The Company generally does not request such services from the independent auditors.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Consistent with the Securities and Exchange Commission policies regarding auditor independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the Company’s independent auditors. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and non-audit services provided by the independent auditors.

These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for and detailed as to the particular services or category of services and is generally subject to a specific budget. None of the services rendered by the independent auditors under the categories “Audit-Related Fees”, “Tax Fees” and “All Other Fees” described above were approved by the Audit Committee after services were rendered pursuant to the de minimis exception established by the Commission.

Vote Required and Recommendation of the Board

Under the Company’s Bylaws, the proposal to ratify the appointment of BDO USA to act as the Company’s independent auditors for fiscal year 2016 is approved if the affirmative votes cast by the holders of the Company’s outstanding shares of Common Stock entitled to vote and represented (in person or by proxy) at the meeting exceed the negative votes. THE BOARD OF DIRECTORS RECOMMENDS A VOTEFOR THE PROPOSAL, AND THE PROXY SUBMITTED BY TELEPHONE OR INTERNET OR PROXY CARD WILL BE VOTED IN THIS MANNER UNLESS THE SHAREHOLDER SUBMITTING THE PROXY SPECIFICALLY VOTES TO THE CONTRARY (OR ABSTAINS).

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SECTION16(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 CommissionSEC and the Nasdaq Stock 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 2015year 2021 all filing requirements applicable to its directors, executive officers and greater than 10% beneficial owners were met, except that Mr. Gable filedfor a late Form 5 filed by Mr. Poppens on February 16, 2022 to report a holding of 1,152 shares that were inadvertently omitted from his Form 3 filed on November 23, 2020.

PROHIBITION ON HEDGING AND PLEDGING

The Company’s insider trading policy generally prohibits directors, officers and employees of the Company from engaging in speculative trading with respect to a gift of 1,563 shares on November 20, 2014.

AUDITCOMMITTEE REPORT

The Audit Committee operates pursuantthe Company’s securities, including “short sales” and trading in puts, calls and other options or derivatives with respect to an Audit Committee Charter that was adopted by the Board of Directors. (A copysecurities of the Audit Committee Charter may be viewed on the Company’s website,www.interfaceglobal.com/Investor-Relations/Corporate-Governance/Audit-Committee-Charter.aspx.) The Company’s management is responsible for its internal accounting controls and the financial reporting process. The Company’s independent auditors, BDO USA, are responsible for performing an audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States. The independent accountants also are responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles, and on the effectiveness of the Company’s internal control over financial reporting. 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 USA.Company. In addition, the Audit Committee has discussed with BDO USA the matters required to be discussed by the Public Company Accounting Oversight Board’s Auditing Standard No. 16, “Communications with Audit Committees,” as currently in effect. In addition, the Audit Committee has received the written disclosuresdirectors, officers and the letter from BDO USA required by applicable Public Company Accounting Oversight Board rules regarding the independent accountant’s communications with the audit committee concerning independence, and has discussed with the independent accountants their independence. The Audit Committee has also considered whether the provision of any services discussed above in Item 3 under the caption “Ratification of Appointment of Independent Auditors – Audit and Non-Audit Fees” by BDO USA is compatible with maintaining BDO USA’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 the Nasdaq Stock Market as currently in effect. Although 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), the Board of Directors determined that each of Messrs. Gable and Miller does qualify as an “audit committee financial expert” as defined by Item 407(d)(5) of Regulation S-K. Members of the Audit Committee rely, without independent verification, on the information provided to them and on the representations made by management and BDO USA. 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 statementsemployees of the Company be included inmay not pledge the Company’s Annual Report on Form 10-Ksecurities as collateral for the year ended January 3, 2016 for filing with the Securities and Exchange Commission.a loan or other obligation.

 

		THE AUDIT COMMITTEE
		Carl I. Gable (Chair)
		James B. Miller, Jr.
		Harold M. Paisner

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SHAREHOLDERPROPOSALS

 

Proposals of shareholders intended to be presented at the Company’s 20172023 annual meeting must be received by the Company no later than December 7, 2016,2022, 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 20172023 annual meeting, including in the case of a nominee for director, must be presented to the Board of Directors by no later than 90 days prior to that annual meeting, with such deadline for presentation of proposals estimated to be February 15, 2017.14, 2023.

 

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COMMUNICATINGWITH THE BOARD

 

Shareholders wishing to communicate with the Board of Directors may send communications via U.S. mail to the following address:

 

Chairman of the Board

Interface, Inc.

2859 Paces Ferry Road

Suite 20001280 West Peachtree Street NW

Atlanta, GA 3033930309

 

From time to time, the Board may change the process by which shareholders may communicate with the Board or its members. The Company’s website,www.interface.com,, will reflect any changes to the process.

 

Attendance of Board members at annual meetings is left to the discretion of each individual Board member. One Board member attended the 20152021 annual meeting.

 

“HOUSEHOLDING” OF PROXY MATERIALS

 

The Securities and Exchange Commission has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. The Company and some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, please notify your broker if your shares are held in a brokerage account or us if you hold shares as the registered holder. You can notify us by sending a written request to Interface, Inc., Attn: Secretary, 2859 Paces Ferry Road, Suite 2000,1280 West Peachtree Street NW, Atlanta, Georgia 30339.30309.

 

SAFE HARBOR STATEMENT FOR FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements, including, without limitation, statements about Interface’s plans, strategies and prospects and the information set forth in the section titled “Our Growth and Value Creation Strategy”. These forward-looking statements are based on the Company’s current assumptions, expectations and projections about future events. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that these expectations will prove to be correct or that savings or other benefits anticipated in the forward-looking statements will be achieved. Important factors, some of which may be beyond the Company’s control, that could cause actual results to differ materially from management’s expectations are the risks and uncertainties associated with economic conditions in the commercial interiors industry as well as the risks and uncertainties discussed under the heading “Risk Factors” included in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2022, filed with the SEC, which discussion is hereby incorporated by reference. Forward-looking statements speak only as of the date made. The Company assumes no responsibility to update or revise forward-looking statements and cautions readers not to place undue reliance on any such statements

OTHERMATTERS THAT MAY COME BEFORE THE MEETING

 

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/ David B. Foshee
	/s/Raymond S. WillochDavid B. Foshee
	Raymond S. Willoch
	Secretary
March 31, 2016April 6, 2022

 

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APPENDIX A – RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

 

This Proxy Statement includes, as additional information for investors, the Company’s adjusted EPS, adjusted operating income, adjusted gross profit, adjusted SG&A expenses, adjusted earnings before interest taxes, depreciation and amortization (“EBITDA”), and net debt, as well as comparative information between periods for each. These measures are not in accordance with financial measures calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), and may be different from similarly titled non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be used as a substitute for, or considered superior to, GAAP financial measures.

Adjusted EPS and adjusted operating income exclude nora purchase accounting amortization, goodwill and intangible asset impairment charges, changes in equity award forfeiture accounting, restructuring charges, asset impairment, severance and other charges and an SEC settlement fine. Adjusted EPS also excludes the loss associated with a warehouse fire, loss on the extinguishment of debt, loss on the discontinuance of interest rate swaps, and tax expenses/benefits associated with previously discontinued operations. Adjusted gross profit excludes nora purchase accounting amortization. Adjusted SG&A expenses exclude changes in equity award forfeiture accounting, asset impairment, severance and other charges and an SEC settlement fine. Net debt is total debt less cash on hand. Adjusted EBITDA is GAAP net income excluding interest expense, income tax expense, depreciation and amortization, stock compensation amortization, goodwill and intangible asset impairment, restructuring charges, asset impairment, severance and other charges, nora purchase accounting amortization and transaction and integration expenses, an SEC settlement fine and the loss associated with a warehouse fire.

The Company excludes certain effects from adjusted income measures because it believes these items were a unique and/or one-time event and did not arise from or constitute normal ongoing operations. Similarly, since the Company engages in acquisitions only episodically, and not as an everyday matter, the Company believes presenting certain measures excluding the effects of acquisitions facilitates focus on normal ongoing operations.

Since the Company engages in acquisitions only episodically, and not as an everyday matter, the Company believes presenting certain measures excluding the effects of acquisitions facilitates focus on normal ongoing operations. The Company generally believes reporting its adjusted results helps investors’ understanding of historical operating trends, because it facilitates comparison to prior periods during which unique events affecting more recent results may not have occurred (or vice versa).  The Company also believes that adjusted results provide supplemental information for comparisons to other companies which may not have experienced the same events underlying the adjustments.  Furthermore, the Company uses adjusted results internally as supplemental information to evaluate its own performance, for planning purposes and in connection with its compensation programs.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures appear in the following tables (see next page).

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(in millions, except ratios and per share amounts)

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