<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-8498
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HAVERTY FURNITURE COMPANIES, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 58-0281900
------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
866 WEST PEACHTREE STREET, N.W., ATLANTA, GEORGIA 30308
------------------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 881-1911
--------------
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
The number of shares outstanding of the registrant's two classes of $1
par value common stock as of August 12, 1996 were: Common Stock -- 8,753,744;
Class A Common Stock -- 2,941,749.
<PAGE> 2
H A V E R T Y F U R N I T U R E C O M P A N I E S , I N C .
I N D E X
<TABLE>
<CAPTION> Page No.
<S> <C> <C>
Part I. Financial Information:
Condensed Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995 1
Condensed Consolidated Statements of Income -
Quarter and six months ended June 30, 1996 and 1995 3
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1996 and 1995 4
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II. Other Information 8
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
-------------- --------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,486 2,146
Accounts receivable
187,371 179,982
Less allowance for doubtful accounts 7,105 7,105
-------- --------
180,266 172,877
Inventories, at LIFO 83,157 73,597
Other current assets 4,837 5,852
Deferred income taxes 2,938 2,938
-------- --------
TOTAL CURRENT ASSETS 272,684 257,410
Property and equipment 177,821 168,151
Less accumulated depreciation and amortization 60,951 55,746
-------- --------
116,870 112,405
Other assets 2,033 1,963
-------- --------
$391,587 $371,778
======== ========
</TABLE>
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<PAGE> 4
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable to banks $ 81,200 $ 53,400
Accounts payable and accrued expenses 29,823 36,100
Current portion of long-term debt and 8,034 7,973
capital lease obligations -------- --------
TOTAL CURRENT LIABILITIES 119,057 97,473
Long-term debt and capital lease obligations,
less current portion 125,168 129,233
Deferred income taxes 1,786 1,786
Other liabilities 2,305 2,331
Stockholders' Equity
Capital stock, par value $1 per share --
Preferred Stock, Authorized: 1,000,000 shares;
Issued: None
Common Stock, Authorized: 1996 and 1995 --
50,000,000 shares; Issued: 1996 -- 9,242,447 shares;
1995 -- 9,154,780 shares (including shares in treasury:
1996 -- 494,328; 1995 -- 498,948) 9,242 9,155
Convertible Class A Common Stock, Authorized:
1996 and 1995 -- 15,000,000 shares; Issued: 1996 --
3,195,379 shares; 1995 -- 3,217,411 shares (including
shares in treasury: 1996 and 1995 -- 249,055) 3,195 3,217
Additional paid-in capital 33,025 32,494
Retained earnings 103,352 101,666
-------- --------
148,814 146,532
Less cost of Common Stock and
Convertible Class A Common Stock in treasury 5,543 5,577
-------- --------
143,271 140,955
-------- --------
$391,587 $371,778
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 5
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30 June 30
-------------------------- -------------------------
1996 1995 1996 1995
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $103,341 $88,678 $214,091 $183,061
Cost of goods sold 54,279 47,010 112,369 96,925
-------- ------- -------- --------
Gross profit 49,062 41,668 101,722 86,136
Credit service charges 3,150 3,021 6,445 6,084
-------- ------- -------- --------
52,212 44,689 108,167 92,220
Costs and expenses:
Selling, general and administrative
46,132 39,473 93,849 79,571
Interest 3,734 2,772 7,092 5,268
Provision for doubtful accounts 981 667 1,879 1,300
-------- ------- -------- --------
50,847 42,912 102,820 86,139
-------- ------- -------- --------
Other income, net 40 1,605 59 1,703
-------- ------- -------- --------
INCOME BEFORE INCOME TAXES 1,405 3,382 5,406 7,784
Income taxes 520 1,285 2,000 2,958
-------- ------- -------- --------
NET INCOME $ 885 $ 2,097 $ 3,406 $ 4,826
======== ======= ======== ========
Average number of common and common
equivalent shares outstanding 11,689 11,540 11,663 11,519
======== ======= ======== ========
Earnings per share $0.08 $0.18 $0.29 $0.42
======== ======= ======== ========
Cash dividends per common share:
Common Stock $ .0750 $ .0750 $ .1500 $ .1500
Class A Common Stock .0700 .0700 .1400 .1400
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 6
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30
----------------------------------------
1996 1995
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<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,406 $ 4,826
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 6,276 5,027
Provision for doubtful accounts 1,879 1,300
Loss (gain) on sale of property and equipment 24 (450)
Gain from destruction of a retail location --- (1,177)
------------ ------------
Subtotal 11,585 9,526
Changes in operating assets and liabilities:
Accounts receivable (9,268) 1,413
Inventories (9,560) (9,582)
Other current assets 1,015 (549)
Accounts payable and accrued expenses (4,269) (4,811)
Income taxes (2,008) (3,332)
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (12,505) (7,335)
------------ ------------
INVESTING ACTIVITIES
Purchases of property and equipment (10,839) (20,301)
Proceeds from sale of property and equipment 74 1,971
Insurance proceeds --- 206
Other investing activities (70) 88
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (10,835) (18,036)
------------ ------------
FINANCING ACTIVITIES
Net increase in short-term borrowings 27,800 100
Proceeds from issuance of long-term debt --- 30,000
Payment of long-term debt and capital lease obligations (4,004) (4,001)
Exercise of stock options 568 398
Dividends paid (1,720) (1,698)
Other financing activities 36 29
------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 22,680 24,828
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (660) (543)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,146 1,925
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,486 $ 1,382
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE> 7
HAVERTY FURNITURE COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and, therefore,
do not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. The financial
statements include the accounts of the Company and its wholly owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included and all such
adjustments are of a normal recurring nature.
NOTE B - Interim LIFO Calculations
An actual valuation of inventory under the LIFO method can be made only at the
end of each year based on the inventory levels and costs at that time.
Accordingly, interim LIFO calculations must necessarily be based on
management's estimates of expected year-end inventory levels and costs. Since
these are affected by factors beyond management's control, interim results are
subject to the final year-end LIFO inventory valuation.
NOTE C - Supplementary Cash Flow Information
The Company made total cash payments for interest (including capitalized
interest) of approximately $6,800,000 and $6,005,000 for the six months ended
June 30, 1996 and 1995, respectively.
The Company made total income tax payments of $3,930,000 and $6,290,000 for the
six months ended June 30, 1996 and 1995, respectively.
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the second quarter and six months ended June 30, 1996 increased
16.5% and 17.0% over the same periods for 1995, respectively. Comparable-store
sales (sales from stores in operation or expanded for a full year or more)
increased 3.9% and 4.8% over the year-earlier periods, respectively.
Gross margin as a percentage of net sales increased to 47.5% from 47.0% and
47.5% from 47.1% for the quarter and six months ended June 30, 1996,
respectively. The LIFO reserve impact as a percentage of net sales was flat
compared to the prior-year periods at 0.2% for the second quarter and 0.1% for
the six-month period.
Credit service charges increased 4.3% and 5.9% in absolute dollars for the
quarter and six-month period, respectively. The provision for doubtful
accounts increased 0.1% and 0.2% as a percentage of net sales for the quarter
and the six- month period, respectively. Management believes that this
percentage will remain at this slightly higher level during the phase-in and
early periods of the consolidation of the Company's credit operations.
Selling, general and administrative expenses increased 0.1% and 0.3% as a
percentage of net sales for the quarter and the six months over the year-ago
periods, respectively. This increase was primarily related to depreciation and
amortization charges reflecting the Company's increased investment in property
and equipment and other costs such as advertising and pre-opening expenses
associated with ten new stores. These increases were partially offset by a
decrease in administrative costs as a percentage of net sales.
Interest expense increased 0.5% and 0.4% as a percentage of net sales for the
quarter and six-month period, respectively. The Company's effective interest
rate decreased 35 basis points to 7.2% for the quarter and decreased 26 basis
points to 7.1% for the six-month period. The average debt levels increased
26.1% and 28.6% for the quarter and six-month period, respectively, to fund
physical expansions.
Other income in the year-ago periods included gains of $1.2 million for
insurance recoveries on the loss of a retail location destroyed by a tornado
and $.4 million in gains from other real estate transactions.
LIQUIDITY AND SOURCES OF CAPITAL
The Company has used internally generated funds and bank borrowings to finance
its continuing operations and growth. Net cash used in operations was $12.5
million during the first six months of 1996. The accounts receivable and
inventories increases of $9.3 million and $9.6 million, respectively, were
partially offset by depreciation and amortization of $6.3 million.
Investing activities used $10.8 million in cash which was used for planned
capital expenditures. During the six months, the Company completed the
construction of three new stores, the expansion of three existing stores and
the remodeling of an acquired store.
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<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
Financing activities provided $22.7 million of cash during the first six months
primarily from $27.8 million in short-term borrowings.
The Company has arrangements with banks under line-of-credit agreements. At
June 30, 1996, of these agreements, $94 million were committed lines ($20.2
million unused) and $30 million were uncommitted lines ($7.6 million unused).
Borrowings accrue interest at competitive money-market rates and all lines are
reviewed annually for renewal. The Company has a revolving credit/term loan
agreement with a commercial bank providing for borrowings of $15 million
through 1998, at which time it converts to a term loan, maturing in 1998. If
utilized, this facility would replace a $15 million short-term committed line.
The Company's financial covenants under various loan agreements allow for
securitization of up to approximately one-half of the outstanding balances of
accounts receivable. The Company plans to enter into a financing transaction
of this type in 1996, the effect of which would reduce accounts receivable and
notes payable to banks.
In addition to cash flow from operations, the Company uses bank lines of credit
on an interim basis to finance capital expenditures and repay long-term debt.
Longer-term transactions such as lease transactions, private placements and
mortgage financing may be used to reduce short-term borrowings and manage
interest-rate risk. The Company pursues a diversified approach to its
financing requirements and balances its overall capital structure with
fixed-rate or capped-rate debt as determined by the interest rate environment
(68% of total debt was interest-rate protected at June 30, 1996). The
Company's average effective interest rate on all borrowings (excluding capital
leases) was 6.9%.
Capital expenditures for the remainder of 1996 are presently expected to
include the remodeling of a new retail location and scheduled expenditures for
additional stores and remodelings to be completed in 1997. The estimate of
capital expenditures remaining for these projects in 1996 is $6.2 million. In
addition, the Company has committed to lease three stores and a distribution
center commencing in 1996 under operating lease agreements. Minimum lease
commitments, including guaranteed residual values, are expected to aggregate
$31 million for the initial five-year term. Funds available from operations,
bank lines of credit and other possible financing transactions are expected to
be adequate to finance the Company's planned expenditures.
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<PAGE> 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The 1996 Annual Meeting of Stockholders of the Company was held on April 26,
1996.
At the meeting the following persons were elected by the holders of Common
Stock to serve for a term of one year and until their successors are elected:
William A. Parker, Jr.
Robert R. Woodson
L. Phillip Humann
John T. Glover
The number of votes cast "for" or "withheld" was as follows: Mr. Parker = For
- -- 7,928,172, Withheld -- 96,882; Mr. Woodson = For -- 7,928,908, Withheld --
96,146; Mr. Humann = For -- 7,928,808, Withheld -- 96,246; Mr. Glover = For
7,929,182, Withheld -- 95,872.
The holders of Class A Common Stock elected the following persons to serve for
a term of one year and until their successors are elected:
<TABLE>
<S> <C>
Rawson Haverty Lynn H. Johnston
John E. Slater, Jr. Clarence H. Smith
John Rhodes Haverty, M.D. Rawson Haverty, Jr.
Clarence H. Ridley Frank S. McGaughey, III
Fred J. Bates
</TABLE>
The number of votes cast for each of the above nominees standing for election
by the holders of Class A Common Stock was as follows: For -- 2,874,270;
Withheld -- 12,944.
A proposal to approve the Directors' Compensation Plan to provide for the
payment of all or a portion of the annual retainer fees paid to directors in
shares of the Company's Common Stock was approved by a 99.6% affirmative vote
of the 36,897,194 total votes cast at the meeting, as follows:
<TABLE>
<CAPTION>
Total Votes Abstentions
Cast at the Votes Votes and Broker
Class Meeting For Against Non-Votes
-------------------- ----------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Class A Common Stock 28,872,140 28,845,850 19,250 7,040
(ten votes per share)
Common Stock 8,025,054 7,920,951 38,979 65,124
---------- ---------- ------ ------
(one vote per share)
Total combined vote 36,897,194 36,766,801 58,229 72,164
========== ========== ====== ======
</TABLE>
-8-
<PAGE> 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders. (continued)
A proposal to approve the Directors' Deferred Compensation Plan, as Amended and
Restated, to allow (at the election of the individual directors) for deferment
of the payment of semi-annual or annual retainer fees that are to be made in
shares of Common Stock of the Company to a future date for distribution was
approved by a 99.6% affirmative vote of the 36,897,194 total votes cast at the
meeting, as follows:
<TABLE>
<CAPTION>
Total Votes Abstentions
Cast at the Votes Votes and Broker
Class Meeting For Against Non-Votes
--------------------- ----------- ------------ --------- -----------
<S> <C> <C> <C> <C>
Class A Common Stock 28,872,140 28,842,910 22,190 7,040
(ten votes per share)
Common Stock 8,025,054 7,914,068 43,181 67,805
---------- ---------- ------ ------
(one vote per share)
Total combined vote 36,897,194 36,756,978 65,371 74,845
========== ========== ====== ======
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this report.
10.1.2 -- Second Amendment and Restatement of Directors' Deferred
Compensation Plan (incorporated by reference from
Registration Statement on Form S-2, File No. 33-59400,
Exhibit 10.1.1).
10.11 -- Directors' Compensation Plan as of April 26, 1996.
27 -- Financial Data Schedule (for SEC use only).
(b) Reports on Form 8-K.
None.
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<PAGE> 12
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAVERTY FURNITURE COMPANIES, INC.
(Registrant)
Date August 14, 1996 By /s/ Dennis L. Fink
------------------------ --------------------------------
Dennis L. Fink,
Executive Vice President and
Chief Financial Officer
(principal financial officer)
By /s/ Hugh G. Wells
--------------------------------
Hugh G. Wells, Vice President
& Treasurer
By /s/ Dan C. Bryant
---------------------------------
Dan C. Bryant, Controller
(principal accounting officer)
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<PAGE> 1
EXHIBIT 10.1.2
HAVERTY FURNITURE COMPANIES, INC
DIRECTORS' DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED ON APRIL 26, 1996
<PAGE> 2
DIRECTORS' DEFERRED COMPENSATION PLAN
OF
HAVERTY FURNITURE COMPANIES,INC.
SECTION I
ESTABLISHMENT AND PURPOSE OF PLAN
1.1 Establishment and Duration of Plan: The Directors' Deferred
Compensation Plan of Haverty Furniture Companies, Inc., was initially
established by the Board of Directors of the Company as of December 15, 1982,
and was amended and restated as of August 3, 1990. On February 6, 1996, the
Board of Directors of the Company authorized a further amendment and
restatement of the Plan incorporating the provisions set forth below, subject
to approval by the stockholders of the Company. The Plan, as amended and
restated, shall continue until terminated by the Board of Directors of the
Company, subject to the provisions of Section VII below.
1.2 Purpose of Plan: The purpose of the Directors' Deferred
Compensation Plan is to provide those Directors of the Company who elect to do
so the opportunity to defer to a future date the receipt of their compensation
as Directors and as members of Committees of the Board of Directors.
SECTION II
DEFINITIONS
2.1 "Account" means the Account (comprised of Cash Compensation
Sub-Account and a Stock Compensation Sub-Account) being administered for the
benefit of a Member under Section IV below. Accounts shall not actually be
funded, but will be bookkeeping accounts established for each Member on the
Company's records with respect to the amount, if any, of Compensation deferred
by the applicable Member pursuant to such Member's election as hereinafter
provided.
2.2 "Annual Period" means each twelve-month period beginning on
May 1 and ending on April 30.
2.3 "Business Day" means a day other than a Saturday, Sunday, or
legal holiday on which the principal administrative offices of the Company are
open for business.
2.4 "Calendar Quarter" means each successive three-month period
during a Fiscal Year.
2.5 "Cash Compensation" means the amount in dollars of a
Participant's Compensation for the applicable Annual Period which, after giving
effect to any applicable election by such Participant with respect to the
receipt of a portion of such Compensation in the form of Company Common Stock
but without regard to any deferred election hereunder, is payable by the
Company in cash. Cash
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<PAGE> 3
Compensation shall be comprised of Cash Fee Compensation and Cash Retainer
Compensation.
2.6 "Cash Compensation Sub-Account" means that Sub-Account within
a Member's Account in which entries are recorded to reflect the amounts, if
any, of Cash Compensation deferred by such Member from time to time hereunder,
with interest accrued thereon, and distributions therefrom, as applicable.
2.7 "Cash Fee Compensation" means, with respect to any Annual
Period, the amount in dollars of a Member's Cash Compensation which is
attributable to fees payable by the Company for such Member's attendance at
meetings of the Company's Board of Directors or Board Committees during such
Annual Period.
2.8 "Cash Retainer Compensation" means, with respect to any Annual
Period, the amount in dollars of a Member's Cash Compensation which is
attributable to the retainer payable by the Company for such Member's service
as a director of the Company during such Annual Period.
2.9 "Committee" means the Executive Committee of the Board of
Directors of the Company.
2.10 "Common Stock" means the class of $1.00 par value common stock
of the Company known as "Common Stock."
2.11 "Compensation" means the retainer fees and meeting fees
payable to Directors by the Company in their capacity as Directors or as
members of Committees of the Board of Directors, without reduction for any
required withholding taxes and exclusive of the value of any fringe benefits
which any Director may receive or may be entitled to receive as a Director.
2.12 "Company" means Haverty Furniture Companies, Inc., a Maryland
corporation or any successor thereto.
2.13 "Director" means any duly elected member of the Board of
Directors of the Company.
2.14 "Dividend Equivalent Amount" means the amount to be credited
to the Stock Compensation Sub-Account of a Member from time to time upon the
payment by the Company of a dividend on its Common Stock (other than a dividend
payable in shares of such Common Stock). The Dividend Equivalent Amount with
respect to any such dividend paid by the Company shall be an amount equal to
the product of (i) the per share amount of the applicable dividend paid by the
Company (if such dividend is not payable in cash, such amount to be based on
the fair market value of the property distributed) and (ii) the number of
shares of Common Stock reflected in the Member's Stock Compensation Sub-Account
as of the record date of such dividend.
2.15 "Elective Distribution Date" shall have the meaning ascribed
thereto in Section 3.2 hereof.
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<PAGE> 4
2.16 "Fiscal Year" means the twelve-month period from January 1
through the next following December 31.
2.17 "Fractional Share Equivalent Amount" means the cash amount, if
any, to be credited to the Stock Compensation Sub-Account of a Member as of
May 1 of any year to reflect that portion, if any, of the Member's Stock
Compensation deferred hereunder and otherwise payable on such date which
remains after crediting such Sub-Account with the number of whole shares of
Company Common Stock determined by dividing such deferred Stock Compensation by
the applicable Market Price.
2.18 "Initial Election Form" means, with respect to any Member, the
election form complying with the then applicable requirements of Section III
hereof pursuant to which such Member first elects (or elected, as applicable)
to defer any Compensation under the Plan.
2.19 "Market Price" means, as of any date, the closing bid price of
the Common Stock of the Company (or such other securities as result from an
adjustment pursuant to Section 4.5 hereof) on such date as quoted by the
National Association of Securities Dealers Automated Quotation System (or, if
the Common Stock of the Company (or such other securities) is then traded on a
different securities market or exchange, the closing price of such Common Stock
(or such other securities) as quoted on such market or exchange).
2.20 "Member" means any Participant or former Participant who has
an amount credited to an Account for his or her benefit under the Plan.
2.21 "Participant" means each Director who elects to participate in
the Plan.
2.22 "Plan" means the Directors' Deferred Compensation Plan of
Haverty Furniture Companies, Inc., or any successor thereto, as described
herein and as the same may hereafter from time to time be amended.
2.23 "Service Termination Date" means, for any Member, the date of
termination of such Member's service as a director of the Company for any
reason other than the death of such Member.
2.24 "Stock Compensation" means the amount in dollars of a
Participant's Compensation for the applicable Annual Period which, after giving
effect to any applicable election by such Participant with respect to the
receipt of a portion of such Compensation in the form of Company Common Stock
but without regard to any deferral election hereunder, is payable by the
Company in Common Stock.
2.25 "Stock Compensation Sub-Account" means that Sub-Account within
a Member's Account in which entries are recorded to reflect: (i) the number
of shares of Company Common Stock
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<PAGE> 5
attributable to the amounts, if any, of Stock Compensation deferred by such
Member from time to time hereunder as determined for each deferral in
accordance with Section 4.2(a) hereof; (ii) the number of shares of Company
Common Stock attributable to any dividend paid by the Company in the form of
shares of its Common Stock in accordance with Section 4.2(c) hereof; (iii) the
number of shares of Company Common Stock as determined in accordance with
Section 4.2(e) hereof; (iv) any Dividend Equivalent Amounts and Fractional
Share Equivalent Amounts; (v) any interest accrued on any cash balance in such
Stock Compensation Sub-Account pursuant to Section 4.4 hereof; and, (vi)
distributions therefrom, and adjustments thereto, as applicable, as provided
herein.
2.26 "Triggering Event" means, for any Member, the date of
termination of such Member's service as a director of the Company for any
reason other than the death of such Member.
SECTION III
PARTICIPATION
3.1 Each Director may, not later than October 31 each year, elect
to become a Participant in the Plan for the next Annual Period commencing after
such October 31 and for each Annual Period thereafter, until such election is
revoked or revised in the manner hereinafter provided, and thereby have all or
a portion of his or her Compensation for each such Annual Period deferred and
credited to an Account for his or her benefit under the Plan as and to the
extent provided below in Section 3.2 hereof. Any such election may be revoked
or revised by filing with the Secretary of the Company a written revocation or
election form complying with the requirements of Section 3.2 hereof. Any such
revocation or revised election shall first be effective with respect to the
Annual Period which first begins after the later to occur of (i) the filing of
such revocation or revised election with the Secretary of the Company or (ii)
the next occurring October 31. A Director who revokes a previous election may
again elect participation in the Plan for deferral of future Compensation in
later Annual Periods by electing participation in the manner provided above.
3.2 Any such election (either initial or revised) or revocation
shall be filed with the Secretary of the Company, shall be made in writing on
such form or forms as the Committee shall from time to time prescribe, and
shall specify the amount and type of Compensation which the Participant wishes
to defer hereunder. For any Annual Period, a Participant may elect in
accordance with the terms hereof to defer hereunder the following amounts of
his or her Compensation: (i) all or none of such Participant's Cash Fee
Compensation; (ii) all or none of such Participant's Cash Retainer
Compensation; and, (iii) all or none of such Participant's Stock Compensation.
An election form which specifies a deferral amount which is not permitted
hereunder for any type of Compensation (i.e., more than none, but less than
all) shall be deemed to specify that no portion of the applicable type of
Compensation be deferred for any Annual Periods to which such election applies
-5-
<PAGE> 6
pursuant to the terms hereof. If a Participant desires to have the balance in
his or her Account distributed prior to such Participant's death or Service
Termination Date, such Participant may specify the date for such distribution
on such Participant's Initial Election Form, which specified date shall
constitute the Participant's "Elective Distribution Date," and no election or
revocation form filed subsequent to such Participant's Initial Election Form
shall be effective to change or revoke such Elective Distribution Date;
provided that, with respect to any Member who was a Participant in the Plan
prior to the effective date of the amendment and restatement of the Plan in
1996, such Members Elective Distribution Date shall be the date, if any, most
recently specified by such Member (other than a specification of the date of
such Member's retirement from or termination of service on the Board of
Directors of the Company) in an election form properly filed with the Secretary
of the Corporation prior to the effective date of such Plan amendment and
restatement, and no election or revocation form subsequently filed by such
member shall be effective to change or revoke such Elective Distribution Date.
SECTION IV
ADMINISTRATION OF ACCOUNTS
4.1 Compensation to be credited to a Member's Account by reason of
an election made under Section III above shall be credited to such Account on
the same day such Compensation would normally have been paid to such Member.
All Cash Compensation deferred hereunder by a Member shall be credited
to such Member's Cash Compensation Sub- Account and all Stock Compensation
deferred hereunder by a Member shall be credited to such Member's Stock
Compensation Sub-Account as provided in Section 4.2 hereof.
4.2 Each Member's Stock Compensation Sub-Account shall be credited
from time to time with the number of shares of Company Common Stock and cash
amounts as set forth below:
(a) on May 1 of each year, the number of whole shares of
Company Common Stock determined by dividing (i) the total
amount of the Member's Stock Compensation to be deferred
by such Member for the applicable Annual Period by (ii)
the Market Price as of May 1 of the applicable Annual
Period (or, if such May 1 is not a day on which trading is
conducted on the securities market or exchange on which
the Common Stock of the Company is then traded, as of the
last such trading day occurring before such May 1);
provided that no fractional share shall be credited to
such Stock Compensation Sub-Account, and, in lieu thereof,
the Member's Stock Compensation Sub-Account shall be
credited with the Fractional Share Equivalent Amount
remaining after such determination;
-6-
<PAGE> 7
(b) on the date of payment of any dividend on the Common Stock
of the Company (other than a dividend payable in shares of
such Common Stock), the Dividend Equivalent Amount with
respect to such dividend;
(c) on the date of payment of any dividend on the Common Stock
of the Company which is payable in shares of such Common
Stock, the number of shares determined by multiplying (i)
the per share dividend amount times (ii) the number of
shares of Common Stock credited to such Member's Stock
Compensation Sub-Account as of the record date of such
dividend; provided that no fractional shares shall be
credited to such Stock Compensation Sub-Account as the
result of any dividend, and, in lieu thereof, an
appropriate adjustment shall be made to the cash balance
held in the applicable Stock Compensation Sub-Account;
(d) any adjustment to the cash balance of such Stock
Compensation Sub-Account required pursuant to Section 4.5
hereof; and
(e) on May 1 of each year, the number of whole shares of
Company Common Stock determined by dividing (i) the sum of
(1) any Fractional Share Equivalent Amount credited to
such Stock Compensation Sub- Account as of such date
pursuant to clause (a) above; (2) any cash amounts
credited to such Stock Compensation Sub-Account pursuant
to clause (c) or clause (d) above during the Annual Period
ending immediately prior to such date; (3) any Dividend
Equivalent Amounts credited to such Stock Compensation
Sub-Account during the Annual Period ending immediately
prior to such date; (4) the balance of any cash amount
remaining as a credit in such Stock Compensation
Sub-Account as of the immediately preceding May 1 after
giving effect to the reduction required pursuant to
Section 4.3 hereof; and, (5) the interest accrued on the
amounts set forth in sub-clauses (2), (3), and (4) of this
clause (e) during the immediately preceding Annual Period
by (ii) the Market Price as of such date (or, if such date
is not a day on which trading is conducted on the
securities market or exchange on which the Common Stock of
the Company is then traded, as of the last such trading
day occurring before such date); provided that no
fractional share shall be credited to such Stock
Compensation Sub-Account.
4.3 On May 1 of each year, the cash balance of each Member's Stock
Compensation Sub-Account (after giving effect to any amount to be credited to
such Stock Compensation Sub-Account on such date pursuant to Section 4.2(a)
hereof) shall be reduced by an amount equal to the product of (i) the number of
whole shares of Company
-7-
<PAGE> 8
Common Stock credited to such Stock Compensation Sub-Account on such date
pursuant to Section 4.2(e) hereof and (ii) the applicable Market Price used in
the determination of such number of shares pursuant to such section.
4.4 Amounts credited to a Member's Cash Compensation Sub-Account
and any cash balance in a Member's Stock Compensation Sub-Account shall bear
interest computed and credited as follows: (i) the annual interest rate (the
"Applicable Rate") shall be fixed in advance by the Committee at the beginning
of each Fiscal Year based upon the 13- week Federal Treasury Bill rate at
year-end for the prior Fiscal Year; and (ii) interest shall accrue at the
Applicable Rate on the amount in such Cash Compensation Sub-Account and on the
cash balance in such Stock Compensation Sub-Account from time to time during
each Calendar Quarter and such interest will be credited to the Member's Cash
Compensation Sub- Account or Stock Compensation Sub-Account, as applicable, on
the last day of each Calendar Quarter.
4.5 In the event that the outstanding shares of Common Stock of
the Company are hereinafter increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company, in
any such case by reason of a recapitalization, reclassification, stock split,
or combination of shares (but not by reason of a dividend payable in shares of
Common Stock of the Company), an appropriate adjustment shall be made to the
Stock Compensation Sub-Accounts of all Members; provided, that no fractional
shares shall be credited to any such Stock Compensation Sub-Account as the
result of any such adjustment, and, in lieu thereof, an appropriate adjustment
shall be made to the cash balance held in the applicable Stock Compensation
Sub-Account.
In the event that the Company shall be a party to any reorganization
involving merger, consolidation, acquisition of the stock, or acquisition of
the assets of the Company, the Stock Compensation Sub-Account of each Member
shall be adjusted to reflect the same number and type of securities of the
resulting corporation to which the number of shares of Company Common Stock
then credited to such Stock Compensation Sub-Account would entitle a
shareholder of the Company in such reorganization (and, if the consideration in
such reorganization includes cash as well as securities, the amount of such
cash).
In the event that the Common Stock of the Company ceases to be
publicly traded in circumstances not otherwise addressed in this Section 4.5,
then any amount credited to a Member's Stock Compensation Sub-Account in the
form of a number of shares of Company Common Stock (or such other securities as
resulted from an adjustment pursuant to this Section 4.5) shall be converted to
a cash amount computed by multiplying (i) the number of shares of Company
Common Stock (or such other securities) credited to such Sub-Account as of the
last day on which such Common Stock (or such other securities) was publicly
traded by (ii) the highest of (a) the Market Price of such last trading day,
(b) the last offer price in any tender offer for the Common Stock of the
Company (or such
-8-
<PAGE> 9
other securities) which resulted in such Common Stock (or such other
securities) no longer being publicly traded, and (c) the cash price paid
pursuant to a merger or other acquisition of all of the outstanding capital
stock of the Company in which the consideration paid to shareholders of the
Company is comprised entirely of cash.
SECTION V
DISPOSITION OF MEMBER'S ACCOUNTS
5.1 Subject to the other provisions of this Section V, amounts
credited to a Member's Account, whether in the form of cash or Company Common
Stock, shall be paid to such Member as provided below. The amount credited to
such Account shall be paid either in one lump sum, or, in the sole discretion
of the Member, in no more than ten (10) equal annual installments (pro rata
from the Member's Cash Compensation Sub-Account and the Member's Stock
Compensation Sub- Account), as specified by such Member in his or her Initial
Election Form; or, in the case of a Member who was a Participant in the Plan
prior to the effective date of the amendment and restatement of the Plan in
1996, as most recently specified by such Member in an election form properly
filed with the Secretary of the Company prior to the effective date of such
Plan amendment and restatement, and no election or revocation form subsequently
filed by such member shall be effective to change or revoke such method of
distribution; and, provided further, that if the aggregate value then credited
to the Member's Account in the form of cash and Company Common Stock (or such
other securities as resulted from an adjustment pursuant to Section 4.5
hereof), based in the case of such Common Stock (or such other securities) on
the then current Market Price, is less than $50,000, the entire balance in such
Account shall be paid in a lump sum within the time period set forth below.
If the first Triggering Event to occur is such Member's: (a) death,
such amounts shall be paid in a lump sum to such Member's designated
beneficiary or to such Member's estate, as applicable, within 30 days of such
Member's death; (b) Service Termination Date, such amounts (or, if such Member
has elected payment in installments as provided below, the first such
installment) shall be paid to such Member within 30 days of such Service
Termination Date; or, (c) Elective Distribution Date, such amounts (or, if
such Member has elected payment in installments as provided below, the first
such installment) shall be paid to such Member on such Elective Distribution
Date, or, if such Elective Distribution Date is not a Business Day, on the
first Business Day occurring after such Elective Distribution Date.
All amounts credited to the Member's Cash Compensation Sub-Account and
any cash balance in the Member's Stock Compensation Sub-Account shall be paid
in cash; and all amounts credited to the Member's Stock Compensation
Sub-Account as a number of shares of Company Common Stock (or such other
securities into which such shares were converted pursuant to an adjustment
under Section 4.5 hereof) shall be paid in the form of shares of Company Common
Stock
-9-
<PAGE> 10
(or such other securities as may result from an adjustment pursuant to Section
4.5 hereof). All elections made pursuant to this Section 5.1 shall be in
writing on such form as may from time to time be prescribed by the Committee
and delivered to the Secretary of the Company. If the Member has failed to
elect a manner of payment (lump sum or installment) in such Member's Initial
Election Form, the Member's Account shall be paid in a lump sum in accordance
with the provisions of this Section 5.1.
5.2 If a Member dies prior to distribution of all the amounts
credited to his or her Account under the Plan, any amounts otherwise payable to
him or her under the Plan shall be distributed to such deceased Member's
designated beneficiary or beneficiaries, and any reference to a Member in this
Section V shall then be deemed to include such designated beneficiary or
beneficiaries. Notwithstanding anything to the contrary herein contained, any
amounts which would otherwise become payable in installments to a beneficiary
in accordance with the foregoing provision will instead be paid to such
beneficiary in a lump sum within the applicable time period provided in Section
5.1 hereof. All beneficiary designations shall be in such form and subject to
such limitations as may from time to time be prescribed by the Committee and
communicated in writing to the Secretary of the Company. A Member may from
time to time revoke or change any beneficiary designation by filing a new
written designation with the Secretary. If there is no effective beneficiary
designation filed with the Secretary at the time of the Member's death,
distribution of amounts otherwise payable to the deceased Member under this
Plan shall be paid to the Member's estate. If a beneficiary designated by the
Member to receive his or her benefits shall survive the Participant but die
before receiving distribution of the Participant's Account balance hereunder,
the balance thereof shall be paid to such deceased beneficiary's estate, unless
the deceased beneficiary designates otherwise by a written beneficiary
designation filed with the Secretary of the Company, in which case such
designation shall govern.
5.3 The Company shall deduct from the distributions to be made to
a Member, or to his or her designated beneficiary or beneficiaries under this
Plan, any Federal, State, or local withholding or other taxes or charges which
the Company is from time to time required to deduct under applicable law. In
the event that the amount of any such required withholding exceeds the amount
then payable to the applicable Member in cash, the Company may condition the
delivery of any Company Common Stock (or other securities, as the case may be)
to such Member hereunder on the receipt by the Company from such Member of an
amount in cash sufficient to pay the taxes required to be withheld.
SECTION VI
RIGHTS AND DUTIES OF PARTICIPANTS AND MEMBERS
6.1 A Member's interest in this Plan and that of his or her
designated beneficiary is an unsecured claim against the general
-10-
<PAGE> 11
assets of the Company, and neither the Member nor any other person shall have
any interest in any fund or in any specific asset or assets of the Company by
reason of any amounts credited to any Account hereunder, or any right to
receive any distributions under the Plan, except as and to the extent expressly
provided in the Plan. The right of a Member to have any amount credited to his
or her Account, as the result of events such as the declaration of a dividend
on Company Common Stock, does not constitute the right of such Member to
receive any amount with respect to any Common Stock except as and to the extent
set forth herein. No Member shall have any rights as a Stockholder with
respect to any shares of Common Stock credited to such Member's Stock
Compensation Sub-Account until the date of issuance of a certificate for such
shares to such Member at the time of distribution of the Account.
6.2 Each Director shall be entitled to receive an updated copy of
the Plan and, so long as he or she remains a Member, shall be entitled to
receive copies of any amendments to the Plan within ten (10) days after their
adoption.
6.3 To the extent permitted by law, the right of any Member or any
beneficiary to receive any payment hereunder shall not be subject to
alienation, transfer, sale, assignment, pledge, attachment, garnishment, or
encumbrance of any kind. Any attempt to alienate, sell, transfer, assign,
pledge, or otherwise encumber any such payments, whether presently or
thereafter payable, shall be void. Any payments due hereunder shall not in any
manner be subject to debts or liabilities of any Member or beneficiary.
6.4 If any Member shall bring any legal or equitable action
against the Company by reason of being a Member under this Plan, or if it is
necessary for the Company to bring any legal or equitable action under this
Plan against any Member or any person claiming any interests by or through such
Member, the results of which shall be adverse to the Member or the person
claiming an interest by or through such Member, the cost of defending or
bringing such action shall be charged directly to and deducted from the Account
of the Member to the extent of the amount then or thereafter credited to such
Account.
6.5 Every person receiving or claiming payments under the Plan
shall be conclusively presumed to be mentally competent until the date on which
the Committee receives a written notice in a form and manner acceptable to the
Committee that such a person is incompetent and that a guardian, conservator,
or other person legally vested with the interest of his or her estate has been
appointed. In the event a guardian or conservator of the estate of any person
receiving or claiming payments under the Plan shall be appointed by a court of
competent jurisdiction, payments under this Plan may be made to such guardian
or conservator provided that the proper proof of appointment and continuing
qualification is furnished in a form and manner acceptable to the Committee.
Any such payments so made shall be a complete discharge of any liability or
obligation of the Company or the Committee regarding such payments.
-11-
<PAGE> 12
6.6 Each person entitled to receive a payment under this Plan,
whether a Member, a duly designated beneficiary, a guardian or otherwise, shall
provide the Committee with such information as it may from time to time deem
necessary or in its best interests in administering the Plan. Any such person
shall also furnish the Committee with such documents, evidence, data, or other
information as the Committee may from time to time deem necessary or advisable.
SECTION VII
COMMITTEE
7.1 The Plan shall be administered by the Committee. A Member who
is also a member of the Committee shall not participate in any decision
involving an election made by him or relating in any way to his individual
rights, duties, and obligations as a Member under the Plan.
7.2 A majority of the Committee shall constitute a quorum for the
transaction of business. All actions taken by the Committee at a meeting shall
be by the vote of a majority of those present at such meeting, but any action
may be taken by the Committee without a meeting upon written consent signed by
all of the members of the Committee. No action by unanimous written consent
may be taken by the Committee in the event such action involves a Member who
is also a member of the Committee.
7.3 The Committee may from time to time establish rules and
regulations for the administration of the Plan and adopt standard forms for
such matters as elections, beneficiary designations, and applications for
benefits, provided such rules and forms are not inconsistent with the
provisions of the Plan.
7.4 All determinations of the Committee, irrespective of their
character or nature, including but not limited to, all questions of
construction and interpretations, shall be final, binding, and conclusive on
all parties. In constructing or applying the provisions of this Plan, the
Company shall have the right to rely upon a written opinion of legal counsel,
which may be independent legal counsel or legal counsel regularly employed by
the Company, whether or not any question or dispute has arisen as to any
distribution from the Plan.
7.5 The Company and/or the Committee may consult with legal
counsel, who may be independent counsel or counsel regularly employed by the
Company, with respect to its obligations and duties hereunder or with respect
to any action or proceeding or any other questions of law and shall not be
liable for any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
7.6 The Committee shall be responsible for maintaining books and
records for the Plan. Said books and records shall only be open for
examination by a Member or a duly designated beneficiary to the extent that
they specifically involve the Account created for his or her benefit or any
payments which are to be made to him
-12-
<PAGE> 13
or her or to his or her beneficiary hereunder. Each Member shall be notified
annually of the balance in his or her Account (including the balances in the
Member's Cash Compensation Sub-Account and Stock Compensation Sub-Account).
7.7 Neither the Committee nor any member of the Committee nor the
Company nor any other person who is acting on behalf of the Committee or the
Company shall be liable for any act or failure to act hereunder except for
gross negligence or fraud.
SECTION VIII
AMENDMENT OR TERMINATION
8.1 The Company hereby reserves the right to amend, modify,
terminate, or discontinue the Plan at any time; provided however, no such
action shall reduce the amounts then credited to any Account of any Member, nor
change the time and manner of payment of such amount as set forth in Section V
hereof, without the consent of the Member concerned, or his or her beneficiary
if the Member is not living.
SECTION IX
CONSTRUCTION AND EXPENSE
9.1 Whenever the context so requires, words in the masculine
include the feminine and words in the feminine include the masculine, and the
definition of any term in the singular may include the plural.
9.2 All Expenses of administering the Plan shall be paid by the
Company except as expressly provided herein to the contrary.
9.3 The Plan shall be construed, administered, and governed in all
respects under and by the applicable laws of the State of Georgia.
IN WITNESS WHEREOF, the Company has caused this Plan, adopted by the
Board of Directors of the Company effective December 15, 1982, amended by the
Board of Directors of the Company on August 3, 1990, and authorized for further
amendment by the Board of Directors on February 6, 1996, subject to approval by
the stockholders of the Company on April 26, 1996, to be restated and to be
duly executed, sealed, and attested as of April 26, 1996.
Attested: HAVERTY FURNITURE COMPANIES, INC.
- ---------------------------- -------------------------------------
Christine M. Jones John E. Slater, Jr.
Vice President and Secretary President and Chief Executive Officer
[Corporate Seal]
-13-
<PAGE> 1
EXHIBIT 10.11
HAVERTY FURNITURE COMPANIES, INC.
DIRECTORS' COMPENSATION PLAN
ADOPTED BY THE BOARD OF DIRECTORS ON
FEBRUARY 6, 1996,
AND
APPROVED BY STOCKHOLDERS ON
APRIL 26, 1996
<PAGE> 2
HAVERTY FURNITURE COMPANIES, INC.
DIRECTORS' COMPENSATION PLAN
1. Purpose. The name of this Plan is the Haverty Furniture
Companies, Inc., Directors' Compensation Plan (the "Plan"). The purpose of the
Plan is to enable Haverty Furniture Companies, Inc. (the "Company") to
compensate directors who contribute to the Company's success by their abilities,
ingenuity and industry, and to better ensure that the interests of such
directors are more closely aligned with the interests of the Company's
stockholders.
2. Mandatory Payment of One-Half of Annual Retainer in Common
Stock. Commencing on May 1, 1996, and on each May 1 thereafter, one-half of
each director's annual retainer fee shall be paid in shares of the $1.00 par
value class of common stock of the Company known as Common Stock (the "Common
Stock"). As of the effective date of this Plan, the dollar amounts of the
annual retainer fees (such annual retainer fees being divided into two equal
semi-annual payments on May 1 and November 1 each year) are $15,000 with respect
to non-employee directors and $3,000 with respect to employee directors.
Therefore, effective May 1, 1996, and on each May 1 thereafter, non-employee
directors shall be paid $7,500 in Company Common Stock and employee directors
shall be paid $1,500 in Company Common Stock until such time as the dollar
amounts of the annual retainer fees to be paid to non-employee and employee
directors are increased or decreased by action of the Company's Board of
Directors.
3. Discretionary Election to Receive Entire Retainer in Common
Stock. In the discretion of each director, effected by a written election made
annually by such director on or before October 31 of each year, each director
may elect to be paid the entire amount of his annual retainer fee in shares of
Company Common Stock, which entire annual retainer fee shall be paid on the next
succeeding May 1. Such election shall be irrevocable with respect to the next
year's annual retainer fee and shall be effective for the next succeeding May 1
payment date.
4. Other Compensation. In addition to payment of the annual
retainer fee provided for in Sections 2 and 3, each non-employee director shall
be paid such additional fees in cash for attendance at Board and Board Committee
meetings as shall be approved by the Company's Board of Directors from time to
time. As of the effective date of this Plan, each non-employee director is paid
$600 for each Board and Board Committee meeting that he or she attends, except
that a non-employee director who serves as chairman of a Board Committee is paid
$700 for each such Board Committee meeting that he or she chairs. Employee
directors are not paid fees for attending meetings of the Board or Board
Committees.
-2-
<PAGE> 3
5. Determination of Number of Shares of Common Stock Issuable. On
May 1 of each year, the number of whole shares of Company Common Stock to be
paid to a director in respect of such director's semi-annual retainer fee due to
be paid on that date (or, annual retainer fee, if the director had elected to be
paid the entire amount of his annual retainer in shares of Company Common Stock)
shall be determined by dividing the dollar amount of the semi-annual retainer
fee (or, annual retainer fee, as the case may be) to be paid in Company Common
Stock by the Market Price of the Common Stock (as hereinafter defined) at the
close of the Market on May 1 (or, if May 1 is not a day on which trading is
conducted on the securities market or exchange on which the Company's Common
Stock is then traded, then as of the last such trading day occurring before May
1). No fractional share shall be paid pursuant to this section and, in lieu
thereof, the director shall be paid the cash equivalent of any such fractional
share.
For the purpose of this section, "Market Price" shall mean, as of any
date, the closing bid price of the Common Stock of the Company on such date as
quoted by the National Association of Securities Dealers Automated Quotation
System (or, if the Common Stock of the Company is then traded on a different
securities market or exchange, the "Market Price" shall mean the closing price
of the Common Stock of the Company as quoted on such market or exchange on such
date).
6. Issuance of Common Stock. The shares of Company Common Stock
to be paid to directors under this Plan shall be issued from shares held in the
Company's treasury; or, if no shares (or, an insufficient number of shares) are
held in the treasury for such payment, then from authorized and unissued shares.
7. Six Months' Holding Period. Any shares of Common Stock issued
to a director under this Plan must be held for six months from the date of
issuance prior to any disposition of such shares of Common Stock by such
director.
8. Amendments. The provisions of Sections 2 and 3 of this Plan
shall not be amended by the Company's Board of Directors more frequently than
once every six months, except as permitted by Section 10 hereof. This Plan may
be amended, modified, or terminated by the Company's Board of Directors subject
to the provisions of this Section.
9. Effective Date. The Effective Date of this Plan shall be the
date on which such Plan is approved by the Company's stockholders, which is
anticipated to be April 26, 1996.
10. Adjustment to Shares of Stock Issuable Pursuant to Plan. In
the event of any change in the outstanding shares of Common Stock of the Company
by reason of any stock split, stock split-up, stock dividend, recapitalization,
merger, consolidation,
-3-
<PAGE> 4
combination or exchange of shares, or other similar change in corporate
structure or change affecting the capitalization of the Company, an equitable
adjustment shall be made to the number of shares issuable under this Plan as
the Company's Board of Directors determines is necessary or appropriate, in its
discretion, to give proper effect to such corporate action. Any such
adjustment determined in good faith by the Company's Board of Directors shall
be conclusive and binding for all purposes of this Plan.
IN WITNESS WHEREOF, the Company has caused this Plan, adopted by the Board
of Directors of the Company on February 6, 1996, subject to approval by the
stockholders of the Company on April 26, 1996, to be duly executed, sealed, and
attested as of April 26, 1996.
Attested: HAVERTY FURNITURE COMPANIES, INC.
- ---------------------------- -------------------------------------
Christine M. Jones John E. Slater, Jr.
Vice President and Secretary President and Chief Executive Officer
[Corporate Seal]
-4-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF HAVERTY FURNITURE COS. INC. AND
SUBSIDIARIES AS OF JUNE 30, 1996 AND FOR THE PERIOD THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 1,486
<SECURITIES> 0
<RECEIVABLES> 187,371
<ALLOWANCES> 7,105
<INVENTORY> 83,157
<CURRENT-ASSETS> 272,684
<PP&E> 177,821
<DEPRECIATION> 60,951
<TOTAL-ASSETS> 391,587
<CURRENT-LIABILITIES> 119,057
<BONDS> 125,168
0
0
<COMMON> 12,437
<OTHER-SE> 27,482
<TOTAL-LIABILITY-AND-EQUITY> 391,587
<SALES> 214,091
<TOTAL-REVENUES> 220,536
<CGS> 112,369
<TOTAL-COSTS> 112,369
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,879
<INTEREST-EXPENSE> 7,092
<INCOME-PRETAX> 5,406
<INCOME-TAX> 2,000
<INCOME-CONTINUING> 3,406
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,406
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
