EXHIBIT 10.79
MOHAWK INDUSTRIES, INC.
1997 NON-EMPLOYEE DIRECTOR STOCK COMPENSATION PLAN
ARTICLE 1
Purpose of the Plan
Section 1.1. Purpose. The purpose of the Mohawk Industries, Inc.
1997 Non-Employee Director Stock Compensation Plan is to promote the long-
term growth of Mohawk Industries, Inc. by providing a vehicle for Non-
Employee Directors to increase their proprietary interest in Mohawk
Industries, Inc. and to attract and retain highly qualified and capable Non-
Employee Directors.
ARTICLE 2
Definitions
Unless the context clearly indicates otherwise, the following terms
shall have the following meanings:
Section 2.1. "Annual Retainer" means the annual cash retainer fee
(excluding any meeting fees) payable by the Corporation to a Non-Employee
Director for services as a director (and, if applicable, as the chairman of
a committee of the Board) of the Corporation, as such amount may be changed
from time to time.
Section 2.2. "Board" means the Board of Directors of the Corporation.
Section 2.3. "Business Day" shall mean a day on which the Nasdaq
National Market or any national securities exchange or over-the-counter
market on which the Shares are traded is open for business.
Section 2.4. "Cash Election" has the meaning assigned such term in
Section 6.3.
Section 2.5. "Committee" means the Compensation Committee of the
Board.
Section 2.6. "Corporation" means Mohawk Industries, Inc.
Section 2.7. "Election Period" has the meaning assigned such term
in Section 6.1.
Section 2.8. "Fair Market Value per Share" as of a particular date
means the closing sales price of one Share on such date as reported on the
Nasdaq National Market or, in the absence of reported sales on such date,
the closing sales price on the immediately preceding date on which sales
were reported.
Section 2.9. "Non-Employee Director" means a director of the
Corporation who is not an employee of the Corporation or any subsidiary of
the Corporation.
Section 2.10. "Plan" means the Mohawk Industries, Inc. 1997 Non-
Employee Director Stock Compensation Plan.
Section 2.11. "Shares" means shares of the common stock, par value
$0.01 per share, of the Corporation.
Section 2.12. "Shares Election" has the meaning assigned such term
in Section 6.2.
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ARTICLE 3
Administration of the Plan
Section 3.1. Administrator of the Plan. The Plan shall be
administered by the Committee.
Section 3.2. Authority of Committee. The Committee shall have full
power and authority to: (i) interpret and construe the Plan and adopt such
rules and regulations as it shall deem necessary and advisable to implement
and administer the Plan, and (ii) designate persons other than members of
the Committee or the Board to carry out its responsibilities, subject to
such limitations, restrictions and conditions as it may prescribe, such
determinations to be made in accordance with the Committee's best business
judgment as to the best interests of the Corporation and its stockholders
and in accordance with the purposes of the Plan. The Committee may delegate
administrative duties under the Plan to one or more agents as it shall deem
necessary or advisable.
Section 3.3. Effect of Committee Determinations. No member of the
Committee or the Board shall be personally liable for any action or
determination made in good faith with respect to the Plan or as to any
settlement of any dispute between a Non-Employee Director and the
Corporation. Any decision or action taken by the Committee or the Board with
respect to the administration or interpretation of the Plan shall be
conclusive and binding upon all persons.
ARTICLE 4
Eligibility
Section 4.1. Eligibility. Non-Employee Directors of the Corporation
shall be eligible to participate in the Plan in accordance with Article 6.
ARTICLE 5
Shares Subject to the Plan
Section 5.1. Shares Subject to the Plan. Subject to adjustment as
provided in Article 8, the maximum number of Shares which may be granted
under the Plan is 25,000 Shares. The Shares distributable under the Plan
must be previously issued and repurchased Shares and may not be original
issue Shares.
ARTICLE 6
Elective Receipt of Shares
Each Non-Employee Director shall be granted Shares subject to the
following terms and conditions:
Section 6.1. Election Period. The Election Period shall be the period
designated by the Compensation Committee each year during which Non-Employee
Directors may elect to receive Shares in lieu of their Annual Retainer, or
elect to receive cash in a subsequent year, provided however, that such
period (the "Election Period") shall end on or before December 31 of each
year.
Section 6.2. Election to Receive Shares. On the first Business Day of
each fiscal quarter of each year, Shares shall be granted to each
Non-Employee Director who either (i) during the Election Period for such
year, filed with the Committee or its designee a written irrevocable
election to receive Shares in lieu of all (but not less than all) of such
Non-Employee Director's Annual Retainer payable with respect to such year (a
"Shares Election"), or (ii) filed a Shares Election for any prior year and
did not file a Cash Election (as described in Section 6.3 below) with
respect to the current year.
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Section 6.3. Subsequent Elections to Receive Cash. Once a Non-Employee
Director files a Shares Election for any year, that election will carry
forward into subsequent years unless, within the Election Period for any
subsequent year, the Non-Employee Director files an election to receive his
Annual Retainer for such subsequent year in cash (a "Cash Election"). A Cash
Election shall be valid for one year only. A new Cash Election will be
required to be filed for any year in which the Non-Employee Director desires
to receive his or her Annual Retainer in cash. Once a Non-Employee Director
files a Shares Election for any year, then thereafter for any year for which
a Cash Election is not timely filed, the election will automatically revert
to an election to receive Shares.
Section 6.4. Number of Shares. The number of Shares to be granted
pursuant to this Article 6 on each quarterly grant date shall be the number
of whole Shares equal to (i) one quarter (1/4) of the Annual Retainer
amount which the Non-Employee Director has elected to be payable in Shares,
divided by (ii) the Fair Market Value per Share on the date the Shares are
awarded. In determining the number of Shares to be granted, any fraction of
a share will be disregarded and the remaining amount of such quarterly
installment of the Annual Retainer shall be paid in cash.
ARTICLE 7
Holding Period
Section 7.3. Holding Period. To the extent necessary to qualify for
the exemptions provided by Rule 16b-3 under the Securities Exchange Act of
1934, as the same may be amended from time to time, Shares acquired under
the Plan cannot be sold or otherwise transferred for a period of six-months
from the date of grant.
ARTICLE 8
Amendment and Termination
Section 8.1. Amendment, Suspension or Early Termination. The Board
may suspend or terminate the Plan at any time; provided, however, that the
Board may condition any amendment or modification on the approval of
stockholders of the Corporation if such approval is necessary or deemed
advisable with respect to tax, securities or other applicable laws, policies
or regulations.
ARTICLE 9
Miscellaneous
Section 9.1. Right to Service. Except as provided in the Plan, no
Non-Employee Director shall have any claim or right to be granted Shares
under the Plan. Neither the Plan nor any action pursuant thereto shall be
construed as giving any Non-Employee Director a right to be retained in the
service of the Corporation. The adoption of this Plan shall not affect any
other compensation, retirement or other benefit plan or program in effect
for the Corporation.
Section 9.2. Validity. In the event that any provision of the Plan is
held to be invalid, void or unenforceable, the same shall not affect, in any
respect whatsoever, the validity of any other provision of the Plan.
Section 9.3. Inurement of Rights and Obligations. The rights and
obligations under the Plan and any related agreements shall inure to the
benefit of, and shall be binding upon the Corporation, its successors and
assigns, and the Non-Employee Directors and their beneficiaries.
Section 9.4. Titles. Titles are provided herein for convenience
only and are not to serve as a basis for interpretation or construction of
the Plan.
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Section 9.5. Governing Law. The Plan shall be construed, governed
and enforced in accordance with the law of Georgia, except as such laws are
preempted by applicable federal law.
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