<PAGE> 1
As filed with the Securities and Exchange Commission on December 1, 1998.
Registration No.____________
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------
LADD FURNITURE, INC.
(Exact name of issuer as specified in its charter)
North Carolina 56-1311320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Post Office Box 26777
Greensboro, North Carolina 27417-6777
(Address of principal executive offices) (Zip Code)
LADD FURNITURE, INC.
MANAGEMENT DEFERRED COMPENSATION PLAN
(Full title of the plan)
William S. Creekmuir
Executive Vice President, Secretary, Treasurer
and Chief Financial Officer
LADD Furniture, Inc.
Post Office Box 26777
Greensboro, North Carolina 27417-6777
(336) 315-4001
(Name, address and telephone number of agent for service)
Copies to
Robert E. Esleeck, Esq.
Kilpatrick Stockton LLP
1001 West Fourth Street
Winston-Salem, North Carolina 27101
Approximate date of proposed commencement of sales pursuant to the plan:
Promptly after the effectiveness of this Registration Statement.
---------------------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Offering Amount of
to be Registered(1) Registered(2) Per Security Price(3) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deferred Compensation Obligations $7,500,000 $1.00 $7,500,000 $2,085.00
===========================================================================================================================
</TABLE>
(1) The deferred compensation obligations are unsecured obligations of the
Registrant to pay deferred compensation in the future in accordance
with the terms of the LADD Furniture, Inc. Management Deferred
Compensation Plan (the "Plan").
(2) The deferred compensation obligations being registered represent the
amount of compensation deferrals that the Registrant estimates will be
made by Participants in the Plan during the 60-month period following
the initial date of deferrals under this Registration Statement.
(3) The amount set forth herein is estimated solely for the purposes of
calculating the registration fee in accordance with Rule 457(h)(i) of
the Securities Act of 1933, as amended (the "Act").
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Item 1. Plan Information *
Item 2. Registrant Information and Employee Plan Annual Information *
* The documents containing the information required by Part I of
Form S-8 will not be filed with the Commission as part of this
Registration Statement. See Exhibit 4 attached hereto for a
copy of the LADD Furniture, Inc. Management Deferred
Compensation Plan.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by LADD Furniture, Inc. (the "Company")
with the Securities and Exchange Commission are incorporated in this
Registration Statement by reference: (i) the Annual Report of the Company filed
on Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 for the year ended January 3, 1998, containing audited consolidated
financial statements for the fiscal year of the Company then ended; (ii) the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended April 3,
1998, July 4, 1998 and October 3, 1998; (iii) the Company's amended Quarterly
Report on Form 10-Q/A-1 for the fiscal quarter ended October 3, 1998 as filed on
December 1, 1998; and (iv) the Company's Current Reports on Form 8-K dated
February 10, 1998, April 20, 1998, May 15, 1998, July 20, 1998 and October 13,
1998. In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that the
deferred compensation obligations provided herein have been fully satisfied,
shall be deemed to be incorporated by reference in this Registration Statement
and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities
The following description of the securities offered hereby is qualified
by reference to the LADD Furniture, Inc. Management Deferred Compensation Plan
(the "Plan"). Capitalized terms used herein and not otherwise defined are used
as defined in the Plan. The Plan is an unfunded, nonqualified deferred
compensation plan intended to be exempt from Parts 1, 2, 3 and 4 of Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
securities represent obligations of the Company to pay Plan Participants certain
compensation amounts that have been credited to Participants' accounts under the
Plan.
Participation in the Plan is limited to eligible employees who are
selected by the committee appointed by the Board of Directors to administer the
Plan (the "Committee") who are management or highly-compensated employees. An
eligible employee may elect to participate in the Plan with respect to any
Deferral Period by submitting a Participation Election to the Committee before
the beginning of the Deferral Period on a date selected by the Committee. All
account balances shall remain in the Plan until they can be distributed
according to benefit payment terms (see below).
A deferral shall be a portion of the Compensation payable by the
Company to the Participant during the Deferral Period. A Participant may elect a
deferral by stating the amount to be deferred as a percentage of Compensation.
The Committee may change the minimum or maximum deferral amounts from time to
time by giving written notice to all Participants. Participants' accounts will
be indexed to one or more investment options chosen by each
3
<PAGE> 4
Participant at the time of the Participation Election. Such options include an
index based on the value of the Company's common stock. If a Participant's
employment with the Company ends, the Deferral Period shall end on the date of
termination.
The elected Deferral Contribution shall remain in effect for the
applicable Deferral Period once a Participant has submitted a Participation
Election. Such an election shall generally be irrevocable except as provided in
the Plan with respect to Participant-elected accelerated distributions.
The Plan permits the Company to make Matching Contributions to the
Participant's Matching Contributions Account after each Compensation Payment
Date.
Each Participant shall be 100% vested at all times in the amounts
credited to such Participant's Deferral Contributions Account, including
earnings. The Matching Contributions shall vest in accordance with the vesting
schedule under the Company's 401(k) Plan. A Participant shall also be 100%
vested in the amounts credited to both such accounts upon the date of a Change
in Control.
A Participant's account shall be distributed to the Participant upon
the earlier of the date specified in the Participant's Participation Election or
the Participant's termination of employment. While still employed, a Participant
shall be entitled to receive an accelerated lump-sum distribution of all vested
account balances within 30 days following the receipt of the Participant's
written request to the Committee for withdrawal; provided, however, that ten
percent (10%) of all vested account balances shall be forfeited to the Company
as a penalty.
If a Participant terminates employment with the Company prior to age 65
for any reason, including death or Disability, the Company shall pay to the
Participant (or the Participant's beneficiary) benefits equal to the balance in
the vested accounts within 30 days following the Participant's termination date.
If a Participant terminates employment with the Company after attaining the age
of 65, the Participant's account balance shall be paid as elected in his
participation election(s) prior to each Deferral Period; provided, that the
Participant may elect to change the form of benefit payment at any time up to 12
months before the date benefit payments commence. Alternative forms of benefit
payment shall be either a lump-sum amount equal to the applicable account
balance, or quarterly installments of the account balance amortized over a
period of up to ten years. The account balance shall be reamortized each year,
so that the amount of each installment payment will depend on the earnings
credited or debited to the account during the prior year. Regardless of the form
elected, if the Participant's total account is $100,000 or less, the benefit
shall be paid in a lump sum.
The Committee administering the Plan is the same committee that
administers the Company's 401(k) Plan, and it shall administer the Plan under
the same rules prescribed by the Company's 401(k) Plan to the extent such rules
are applicable. The Plan is not subject to the fiduciary duty requirements of
ERISA, and its expenses shall be paid out of the general assets of the Company.
4
<PAGE> 5
The Board may, at any time, amend the Plan in whole or in part by
written instrument, as long as it does not reduce the amount credited to any
account maintained under the Plan as of the date of the amendment. The Committee
may approve amendments to the Plan, without prior approval or subsequent
ratification by the Board, if the amendment: (i) does not significantly change
the benefits provided under the Plan; (ii) does not significantly increase the
costs of the Plan; and (iii) the amendment is intended either to enable the Plan
to remain in compliance with the requirements of the Code, ERISA, or other
applicable law, to facilitate administration of the Plan, or to improve its
operation.
The Board may terminate the Plan at any time. The Board may partially
terminate the Plan by instructing the Committee not to accept any additional
Participation Elections in such a way as to allow the Plan to continue to
operate and be effective with regard to Participation Elections entered into
prior to the effective date of such partial termination. The Board may
completely terminate the Plan by instructing the Committee not to accept any
additional Participation Elections, and by terminating all ongoing Participation
Elections. The Plan shall then cease to operate and the Company shall pay out to
each Participant the vested balance in his account. Payment shall be made as a
lump sum, unless the Committee determines otherwise. The Board may terminate the
Plan and make no further benefit payments or remove certain employees as
Participants if it is determined by the United States Department of Labor, a
court of competent jurisdiction, or an opinion of counsel that the Plan
constitutes an employee pension benefit plan within the meaning of Section 3(2)
of ERISA.
Participants and their beneficiaries, heirs, successors and assigns
shall have no secured legal or equitable rights, interest or claims in any
property or assets of the Company, nor shall they be beneficiaries of, or have
any rights, claims or interests in any property which may be acquired by the
Company. The Company may establish a trust for the purpose of providing for the
payment of benefits due under the Plan. Although such trust may be irrevocable,
its assets shall be held for payment of all of the Company's general creditors
in the event of insolvency. Any and all of the Company's assets and policies are
and shall be the general, unpledged, unrestricted assets of the Company. The
Company's obligation under the Plan shall be that of an unfunded and unsecured
promise to pay money in the future.
Item 5. Interests of Named Experts and Counsel
Certain legal matters in connection with this offering will be passed
upon for the Company by Kilpatrick Stockton LLP, Winston-Salem, North Carolina.
Kilpatrick Stockton LLP serves as general counsel to the Company and has
received and is expected to receive payment for legal services rendered or to be
rendered on an ongoing basis to the Company. As of November 25, 1998, attorneys
at Kilpatrick Stockton LLP owned 12,363 shares of the common stock of the
Company.
5
<PAGE> 6
Item 6. Indemnification of Directors and Officers
Article VII of the Company's bylaws provides for the indemnification of
officers and directors to the fullest extent permitted under North Carolina
corporate law, as follows:
ARTICLE VII
INDEMNIFICATION AND REIMBURSEMENT
OF DIRECTORS AND OFFICERS
1. Indemnification for Expenses and Liabilities.
(a) Any person who at any time serves or has served:
(1) as a director, officer, employee or agent of the Corporation, (2)
at the request of the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, or (3) at the
request of the Corporation as a trustee or administrator under an
employee benefit plan, shall have a right to be indemnified by the
Corporation to the fullest extent from time to time permitted by law
against Liability and Expenses in any Proceeding (including without
limitation a Proceeding brought by or on behalf of the Corporation
itself) arising out of his status as such or activities in any of the
foregoing capacities or results from him being called as a witness at a
time when he was not a named defendant or respondent to any Proceeding.
(b) The Board of Directors of the Corporation shall
take all such action as may be necessary and appropriate to authorize
the Corporation to pay the indemnification required by this provision,
including, without limitation, to the extent needed, making a good
faith evaluation of the manner in which the claimant for indemnity
acted and of the reasonable amount of indemnity due him.
(c) Any person who at any time serves or has served
in any of the aforesaid capacities for or on behalf of the Corporation
shall be deemed to be doing or to have done so in reliance upon, and as
consideration for, the rights provided for herein. Any repeal or
modification of these indemnification provisions shall not affect any
rights or obligations existing at the time of such repeal or
modification. The rights provided for herein shall inure to the benefit
of the legal representatives of any such person and shall not be
exclusive of any other rights to which such person may be entitled
apart from this provision.
(d) The rights granted herein shall not be limited by
the provisions contained in Sections 55-8-51 through 55-8-56 of the
North Carolina Business Corporation Act or any successor to such
statutes.
6
<PAGE> 7
2. Advance Payment of Expenses. The Corporation shall (upon
receipt of an undertaking by or on behalf of the Director, officer,
employee or agent involved to repay the Expenses described herein
unless it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation against such Expenses) pay Expenses
incurred by such Director, officer, employee or agent in defending a
Proceeding or appearing as a witness at a time when he has not been
named as a defendant or a respondent with respect thereto in advance of
the final disposition of such Proceeding.
3. Insurance. The Corporation shall have the power to purchase
and maintain insurance on behalf of any person who is or was a
Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
partner, trustee, employee, or agent of another domestic or foreign
corporation, partnership, joint venture, trust, or other enterprise or
as a trustee or administrator under an employee benefit plan against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him or her against such
liability.
4. Definitions. The following terms as used in this Article
shall have the following meanings. "Proceeding" means any threatened,
pending or completed action, suit, or proceeding and any appeal therein
(and any inquiry or investigation that could lead to such action, suit,
or proceeding), whether civil, criminal, administrative, investigative
or arbitrative and whether formal or informal. "Expenses" means
expenses of every kind, including counsel fees. "Liability" means the
obligation to pay a judgment, settlement, penalty, fine (including an
excise tax assessed with respect to an employee benefit plan),
reasonable expenses incurred with respect to a Proceeding and all
reasonable expenses incurred in enforcing the indemnification rights
provided herein. "Director," "officer," "employee," and "agent" include
the estate or personal representative of a Director, officer, employee,
or agent. "Corporation" shall include any domestic or foreign
predecessor of this Corporation in a merger or other transaction in
which the predecessor's existence ceased upon consummation of the
transaction.
Item 7. Exemption from Registration Claimed
Not Applicable.
7
<PAGE> 8
Item 8. Exhibits
The following exhibits, listed in accordance with the number assigned
to each in the exhibit table of Item 601 of Regulation S-K, are included in Part
II of this Registration Statement. Exhibit numbers omitted are not applicable.
<TABLE>
<CAPTION>
Exhibit No. Exhibits
- ----------- --------
<S> <C>
4 LADD Furniture, Inc. Management Deferred Compensation Plan.
5 Form of legal opinion of Kilpatrick Stockton LLP with respect to the
legality of the securities being registered hereunder.
24.a Consent of KPMG Peat Marwick LLP.
24.b Consent of Kilpatrick Stockton LLP (Contained in their opinion filed as
Exhibit 5 hereto.)
24.c Power of Attorney
</TABLE>
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement;
(i) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of
8
<PAGE> 9
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be in the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Greensboro, State of North Carolina, on December 1,
1998.
LADD FURNITURE, INC.
By /s/William S. Creekmuir
----------------------------------------
William S. Creekmuir, Executive Vice
President, Secretary, Treasurer and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Richard R. Allen Director December 1, 1998
- ------------------------------------
Richard R. Allen
/s/J. Patrick Danahy Director December 1, 1998
- ------------------------------------
J. Patrick Danahy
/s/Charles R. Eitel Director December 1, 1998
- ------------------------------------
Charles R. Eitel
/s/David A. Jones Director December 1, 1998
- ------------------------------------
David A. Jones
/s/Dr. Thomas F. Keller Director December 1, 1998
- ------------------------------------
Dr. Thomas F. Keller
/s/Ian J. McCarthy Director December 1, 1998
- ------------------------------------
Ian J. McCarthy
/s/Zenon S. Nie Director December 1, 1998
- ------------------------------------
Zenon S. Nie
/s/L. Glenn Orr, Jr. Director December 1, 1998
- ------------------------------------
L. Glenn Orr, Jr.
/s/Fred L. Schuermann, Jr. Chairman of the Board, President, December 1, 1998
- ------------------------------------ Chief Executive Officer and Director
Fred L. Schuermann, Jr.
/s/William S. Creekmuir Executive Vice President, December 1, 1998
- ------------------------------------ Secretary, Treasurer and Chief
William S. Creekmuir Financial Officer
/s/Daryl B. Adams Vice President, Corporate December 1, 1998
- ------------------------------------ Controller, Assistant Secretary and
Daryl B. Adams Assistant Treasurer (Principal
Accounting Officer)
</TABLE>
<PAGE> 1
Exhibit 4
LADD FURNITURE, INC.
MANAGEMENT DEFERRED COMPENSATION PLAN
Effective December 1, 1998
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
1. PURPOSE; EFFECTIVE DATE...............................................1
2. DEFINITIONS...........................................................1
2.1. 401(k) Plan.......................................................1
2.2. Account...........................................................1
2.3. Beneficiary.......................................................1
2.4. Board.............................................................1
2.5. Change in Control.................................................1
2.6. Code..............................................................2
2.7. Committee.........................................................2
2.8. Company...........................................................2
2.9. Compensation......................................................2
2.10. Compensation Payment Date........................................2
2.11. Deferral Contributions...........................................2
2.12. Deferral Contributions Account...................................3
2.13. Deferral Period..................................................3
2.14. Determination Date...............................................3
2.15. Disability (or Disabled).........................................3
2.16. Earnings.........................................................3
2.17. Effective Date...................................................3
2.18. Employee.........................................................3
2.19. ERISA............................................................3
2.20. Executive Officer................................................3
2.21. Investment Index.................................................4
2.22. LADD Stock Index.................................................4
2.23. Matching Contributions...........................................4
2.24. Matching Contributions Account...................................4
2.25. Participant......................................................4
2.26. Participation Election...........................................4
2.27. Plan.............................................................4
2.28. Plan Year........................................................4
2.29. Subaccount.......................................................5
2.30. Subsidiary.......................................................5
2.31. Termination......................................................5
3. PARTICIPATION AND DEFERRALS...........................................5
3.1. Eligibility and Participation.....................................5
3.2. Form of Deferral..................................................5
3.3. Limitations on Deferrals..........................................6
3.4. Termination of Employment.........................................6
3.5. Continuation of Deferral Amount...................................6
(i)
<PAGE> 3
PAGE
----
4. DEFERRAL CONTRIBUTIONS................................................6
4.1. Withholding of Deferral Contributions.............................6
4.2. Timing of Credits; Tax and Other Withholding......................6
5.MATCHING CONTRIBUTIONS.................................................7
5.1. Matching Contributions............................................7
5.2. Vesting of Accounts...............................................7
5.3. Timing of Credits; Tax and Other Withholding......................7
6. ACCOUNTS..............................................................7
6.1. Account...........................................................7
6.2. Determination of Accounts and Subaccounts.........................8
6.3. Selection of Investment Index (Indices)...........................8
6.4. Statement of Accounts.............................................9
7.BENEFIT PAYMENTS.......................................................9
7.1. Early Withdrawals.................................................9
7.2. Accelerated Distribution..........................................9
7.3. Termination of Employment Prior to Age 65........................10
7.4. Termination of Employment On or After Age 65.....................10
7.5. Withholding; Payroll Taxes.......................................10
7.6. Covered Employee.................................................11
7.7. Payment to Guardian..............................................11
8. BENEFICIARY DESIGNATION..............................................11
8.1. Beneficiary Designation..........................................11
9. ADMINISTRATION.......................................................11
9.1. Committee........................................................11
10. AMENDMENT AND TERMINATION OF PLAN...................................12
10.1. Amendment.......................................................12
10.2. Company's Right to Terminate....................................12
11. MISCELLANEOUS.......................................................13
11.1. Unfunded Plan...................................................13
11.2. Unsecured General Creditor......................................13
11.3. Trust Fund......................................................13
11.4. Nonassignability................................................13
11.5. Not a Contract of Employment....................................14
11.6. Governing Law...................................................14
(ii)
<PAGE> 4
PAGE
----
11.7. Validity........................................................14
11.8. Successors......................................................14
11.9. Captions........................................................14
11.10. Arbitration of Disputes........................................14
11.11. Unclaimed Benefit..............................................14
11.12. Discharge of Obligations.......................................15
11.13. Limitations on Liability.......................................15
11.14. Entire Agreement...............................................15
(iii)
<PAGE> 5
LADD FURNITURE, INC.
MANAGEMENT DEFERRED COMPENSATION PLAN
1. PURPOSE; EFFECTIVE DATE
The purpose of this Management Deferred Compensation Plan is to
provide current tax planning opportunities as well as supplemental
funds for retirement or death for certain employees of the Company. It
is intended that the Plan will aid in attracting and retaining
employees of exceptional ability by providing them with these benefits.
The Plan is a nonqualified deferred compensation plan intended to be an
unfunded plan as described in Sections 201(2), 301(a)(3) and 401(a)(1)
of the Employee Retirement Income Security Act of 1974. The Plan shall
be effective as of the Effective Date.
2. DEFINITIONS
Whenever used in this document, the following terms shall have
the meanings set forth in this Article unless a contrary or different
meaning is expressly provided:
2.1. 401(k) Plan
"401(k) Plan" means the Retirement Savings Plan for Salaried
Employees of LADD Furniture, Inc., and any successor plan, as it may be
amended from time to time.
2.2. Account
"Account" means the separate account established and maintained
for each Participant which represents his or her vested and unvested
interest in the Plan as of any date, and which consists of the sum of
the following Subaccounts, as adjusted for allocations of Earnings,
distributions, and other factors that may affect the value of such
Subaccounts: Deferral Contributions Account and Matching Contributions
Account.
2.3. Beneficiary
"Beneficiary" means the person, persons or entity entitled under
Section 8 to receive any Plan benefits payable after a Participant's
death.
2.4. Board
"Board" means the Board of Directors of the Company.
2.5. Change in Control
"Change in Control" means the date on which the earlier of the
following Events occurs:
(a) The acquisition by any entity, person or group of beneficial
ownership, as that term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, of more than 30% of the outstanding capital stock
of the Company entitled to vote for the election of directors ("Voting
Stock");
PAGE 1 - MANAGEMENT DEFERRED COMPENSATION PLAN
<PAGE> 6
(b) The merger or consolidation of the Company with one or more
corporations as a result of which the holders of the outstanding Voting
Stock of the Company immediately prior to such a merger or
consolidation hold less than 60% of the Voting Stock of the surviving
or resulting corporation;
(c) The transfer of substantially all of the property of the
Company other than to an entity of which the Company owns at least 80%
of the Voting Stock; or
(d) The election to the Board of Directors of the Company of
three directors without the recommendation or approval of the incumbent
Board of Directors of the Company.
2.6. Code
"Code" means the Internal Revenue Code of 1986, as amended, or
any other provision of law of similar purpose as may at any time be
substituted therefor.
2.7. Committee
"Committee" means the Corporate Benefits Committee or such other
committee appointed by the Board to administer the Plan pursuant to
Section 9.
2.8. Company
"Company" means LADD Furniture, Inc., a North Carolina
corporation, and any successor thereto which assumes its obligations
under this Plan.
2.9. Compensation
"Compensation" means, with respect to a Participant for the
period specified, base salary, payments under the Management Incentive
Plan, and payments under the Long-Term Incentive Plan. The amount
considered "Compensation", specifically includes any amounts that would
be paid to the Participant, but for a compensation reduction agreement
pursuant to Code Section 125 or pursuant to the 401(k) Plan.
2.10. Compensation Payment Date
"Compensation Payment Date" means, with respect to a Plan Year
and a Participant, each date during that Plan Year on which
Compensation is paid to that Participant (or would be paid to the
Participant, but for an election pursuant to a Participation Election
to have the Compensation otherwise payable on that date reduced). For
example, each date on which a regular payroll check for a payroll
period is given to a Participant is a Compensation Payment Date.
2.11. Deferral Contributions
"Deferral Contributions" means the compensation deferred by
Participants and allocated to Participants' Deferral Contributions
Account, pursuant to Section 4.2.
PAGE 2 - MANAGEMENT DEFERRED COMPENSATION PLAN
<PAGE> 7
2.12. Deferral Contributions Account
"Deferral Contributions Account" means the Subaccount recording
Deferral Contributions of the Participant, pursuant to Section 4.2, as
adjusted for allocations of Earnings, distributions, and other factors
affecting the value of such Subaccount.
2.13. Deferral Period
"Deferral Period" means the twelve (12) month period ending
December 31; provided, however, the first "Deferral Period" shall be
the shorter period beginning with the Effective Date and ending
December 31, 1998.
2.14. Determination Date
"Determination Date" means the last business day of each month.
2.15. Disability (or Disabled)
"Disability" (or "Disabled") means a disability as determined
under the Company's long-term disability plan.
2.16. Earnings
"Earnings" for each Subaccount means the rate of growth credited
or debited to the Subaccount on each Determination Date in a Plan Year,
which shall be credited or debited at the rates described in the
definition of Investment Index in Section 2.21. "Earnings" for an
Account shall mean the aggregate Earnings for each Subaccount making up
the Account.
2.17. Effective Date
"Effective Date" means December 1, 1998.
2.18. Employee
"Employee" means a person classified by the Company as an
employee of the Company or its Subsidiaries, regardless of the person's
classification by any federal, state or local government, or any of
their agencies.
2.19. ERISA
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time or any successor statute.
2.20. Executive Officer
"Executive Officer" means an individual named as an executive
officer in the Company's most recent proxy statement, any individuals
assuming such status since the most recent proxy statement, the
Company's principal financial officer and the Company's principal
accounting officer.
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<PAGE> 8
2.21. Investment Index
"Investment Index" means each index selected by a Participant to
be used as an earnings index pursuant to Section 6. The Investment
Indices available to Participants shall be listed in Appendix A. The
Committee may select different Indices from time to time.
2.22 LADD Stock Index
"LADD Stock Index" means the Investment Index based on the
current value of a share of LADD Furniture, Inc. common stock. Current
value means the closing price, as reported in the Wall Street Journal
or other reliable public source, for that day. If dividends are
declared additional stock units representing dividend shares shall be
credited, as if the stock units were actually shares of LADD common
stock.
2.23. Matching Contributions
"Matching Contributions" means the contributions, if any,
allocated to a Participant's Matching Contribution Account, pursuant to
Section 5.1.
2.24. Matching Contributions Account
"Matching Contributions Account" means the Subaccount recording
Matching Contributions made to the Plan on behalf of the Participant,
pursuant to Section 5.1, as adjusted for allocations of Earnings,
distributions, and other factors affecting the value of such
Subaccount.
2.25. Participant
"Participant" means a person for whom a Deferral Contributions
Account is maintained.
2.26. Participation Election
"Participation Election" means the election submitted by a
Participant to the Committee prior to the beginning of a Deferral
Period, subject to Section 3.1(c), specifying the amount to be deferred
for such Deferral Period. Such election may be submitted in any form
permitted by the Committee, including, but not limited to, submission
through an interactive voice response system, the Internet, electronic
mail, or writing.
2.27. Plan
"Plan" means this Management Deferred Compensation Plan as
amended from time to time.
2.28. Plan Year
"Plan Year" means the calendar year, except for the first Plan
Year, which shall begin the Effective Date and end December 31, 1998.
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<PAGE> 9
2.29. Subaccount
"Subaccount" means one or more of the Deferral Contributions
Account and Matching Contributions Account.
2.30. Subsidiary
"Subsidiary" means a subsidiary of the Company, of which the
Company beneficially owns, directly or indirectly, more than 50% of the
aggregate voting power of all outstanding classes and series of stock.
2.31. Termination
"Termination" means leaving employment with the Company prior to
attaining age 65.
3. PARTICIPATION AND DEFERRALS
3.1. Eligibility and Participation
(a) Eligibility. Eligibility to participate in the Plan shall be
limited to those Employees who are selected by the Committee and who
are management or highly-compensated employees.
(b) Participation. An eligible Employee may elect to participate
in the Plan with respect to any Deferral Period by submitting a
Participation Election to the Committee by the date selected by the
Committee, which date shall precede the beginning of the Deferral
Period.
(c) Part-Year Participation. Employees who become newly eligible
to participate in the Plan may begin their participation in the Plan as
of a date or dates determined under rules to be established by the
Committee. A Participation Election must be submitted to the Committee
no later than prescribed by the Committee. If no Participation Election
is submitted prior to such day, the Employee shall next be eligible to
participate beginning January 1st of the next following calendar year.
(d) Change in Employment Status. If a Participant is no longer a
member of the eligible group of Employees, any current Participation
Election shall be continued to the end of the Deferral Period but no
new Participation Election may be made by such Participant. All account
balances shall remain in the Plan until they are distributed under the
terms of Section 7.
3.2. Form of Deferral
A Participant may elect a deferral in the Participation Election
as follows:
(a) A deferral shall be a portion of the Compensation payable by
the Company to the Participant during the Deferral Period.
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<PAGE> 10
(b) The amount(s) to be deferred shall be stated as a
percentage, not to exceed the maximums and not to be less than the
minimums described in Section 3.3.
3.3. Limitations on Deferrals
The following limitations shall apply to deferrals:
(a) Maximum. The Committee shall establish the maximum percentage
of Compensation or the maximum percentages of different types of
Compensation that may be deferred for each Plan Year prior to the
beginning of such Plan Year.
(b) Minimum. The minimum percentage of Compensation (excluding
amounts payable under this Plan) that may be deferred shall be one
percent (1%) of base salary; provided, however, that there shall be no
minimum for any deferral of a distribution from the 401(k) Plan.
(c) Changes in Minimum or Maximum. The Committee may change the
minimum or maximum deferral amounts from time to time by giving written
notice to all Participants. No such change may affect the amount
specified in a Participation Election made prior to the Committee's
action.
3.4. Termination of Employment
If a Participant terminates employment with the Company prior to
the end of the Deferral Period, the Deferral Period shall end at the
date of termination.
3.5. Continuation of Deferral Amount
Once a Participant has submitted a Participation Election, the
elected deferral amount shall remain in effect for the applicable
Deferral Period. The election shall be irrevocable except as provided
in Section 7.2, relating to accelerated distribution.
4. DEFERRAL CONTRIBUTIONS
4.1. Withholding of Deferral Contributions
For each Plan Year, the Participant's Deferral Contributions
shall be withheld each Compensation Payment Date in the percentage
amount elected in the Participant's Participation Election for that
Plan Year.
4.2. Timing of Credits; Tax and Other Withholding
A Participant's Deferral Contributions shall be credited to the
Deferral Contributions Account in accordance with rules established by
the Committee and by such deadlines as the Committee shall establish,
in its discretion. Any withholding of taxes or other amounts, including
FICA and Medicare taxes, with respect to Deferral Contributions that is
required by state, federal or local law shall be withheld from the
Participant's corresponding nondeferred Compensation.
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<PAGE> 11
5. MATCHING CONTRIBUTIONS
5.1. Matching Contributions
(a) The Company shall allocate Matching Contributions, if any, to
the Participant's Matching Contributions Account. No Matching
Contribution shall be allocated with respect to Deferral Contributions
that represent deferrals of payments otherwise payable under this Plan.
(b) The Committee shall determine the amount of the Matching
Contribution, if any, which the Company shall allocate with respect to
Deferral Contributions. As of the Effective Date of the Plan, the
Matching Contribution allocation formula shall be as follows: a
Participant shall be allocated a Matching Contribution for the Plan
Year equal to (a) the amount that would be allocated under the 401(k)
Plan formula if it were applied to the sum of the deferrals under both
the 401(k) Plan and this Plan, less (b) the maximum amount of matching
contributions that was or could have been allocated the Participant
under the 401(k) Plan.
5.2. Vesting of Accounts
(a) Each Participant shall be one hundred percent (100%) vested
at all times in the amounts credited to such Participant's Deferral
Contributions Account, including Earnings.
(b) The interest of a Participant in his or her Matching
Contributions Account shall vest in accordance with the vesting
schedule applicable to matching contributions under the 401(k) Plan. A
Participant shall be one hundred percent (100%) vested in his or her
Matching Contributions Account upon the date of a Change in Control.
5.3. Timing of Credits; Tax and Other Withholding
Company Matching Contributions shall be credited to the Matching
Contributions Account as soon as practicable after the end of the Plan
Year. Any withholding of taxes or other amounts with respect to
Matching Contributions that is required by state, federal or local law
shall be withheld from the Participant's nondeferred Compensation.
6. ACCOUNTS
6.1. Account
For record-keeping purposes only, a Participant's Deferral
Contributions, Matching Contributions, and Earnings on each shall be
credited to the Participant's respective Subaccounts, and, in the
aggregate, to the Participant's Account. The Account and Subaccounts
shall be bookkeeping devices utilized for the sole purpose of
determining the benefits payable under the Plan and shall not
constitute a separate fund of assets.
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6.2. Determination of Accounts and Subaccounts
Each Participant's Account and Subaccount(s) as of each
Determination Date shall consist of the balance of the Account and
Subaccount(s) as of the immediately preceding Determination Date,
adjusted as follows:
(a) Deferral Contributions. The Account and Subaccount(s) shall
be increased by any Deferral Contributions credited since such
Determination Date.
(b) Matching Contributions. The Account and Subaccount(s) shall
be increased by any Matching Contributions, if any, credited since such
Determination Date.
(c) Distributions. The Account and Subaccount(s) shall be
reduced by any benefits distributed to the Participant since such
Determination Date.
(d) Earnings. The Account and Subaccount(s) shall be increased or
decreased by the Earnings credited on the average daily balance in the
Account and each Subaccount since such Determination Date.
6.3. Selection of Investment Index (Indices)
(a) Initial Selection. At the time a Participant first elects a
deferral under Section 3.2, the Participant shall also select the
Investment Index or Indices in which the Participant wishes to have the
amount of Deferral Contributions deemed invested. The Participant may
select any combination of one (1) or more of the Investment Indices in
one percent (1%) increments, or as further limited by the Committee.
The Participant may elect a different Index or set of Indices as
permitted by the Committee.
If the initial selection of Investment Indices includes
the LADD Stock Index, such selection must comply with the "Statement of
Company Policy - Trades By Company's Personnel of the Company's
Securities." In addition, a Participant who is deemed to be an
Executive Officer may only elect to have his Account deemed invested in
the LADD Stock Index if such election is made during the period
beginning September 1 and ending February 14 of the following Plan
Year. A Participant who is deemed to be an Executive Officer and who
first becomes eligible to select an Investment Index after February 14
and before August 15 of a Plan Year may not select the LADD Stock Index
until August 15 of such Plan Year. Such selection shall be effective at
the beginning of the next Plan Year (January 1).
(b) Long-Term Incentive Plan Exception. Notwithstanding paragraph
(a), to the extent the Participant elects to defer a payment that would
otherwise be made in LADD common stock under the Long-Term Incentive
Plan, such Deferral Contribution shall have its earnings credited or
debited in accordance with the LADD Stock Index. The Participant may
elect to change such index in accordance with Section 6.3(d) below;
provided, however, that an election to move Deferral Contributions
attributable to LADD common stock under the Long-Term Incentive Plan
out of the LADD Stock Index shall not be effective until 12 months
after the Deferral Contribution is allocated to the Participant's
Account under the Plan, or such later time selected by the Committee.
(c) Matching Contributions Exception. Also notwithstanding
paragraph (a), all Matching Contributions shall have earnings credited
or debited in accordance with the
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<PAGE> 13
LADD Stock Index. No Participant will be permitted to elect a different
index for Matching Contributions.
(d) Subsequent Selections. After a Participant has made an
initial investment election pursuant to Section 6.3(a), the Participant
may thereafter revise his investment election once annually during the
period of August 15-September 1 of each Plan Year, subject to Sections
6.3(b) and (c) above. Any such election shall be effective at the
beginning of the next Plan Year (January 1).
6.4. Statement of Accounts
The Committee shall give to each Participant a statement showing
the balances in the Participant's Account and Subaccount(s) on a
quarterly basis and at such other times as may be determined by the
Committee.
7. BENEFIT PAYMENTS
7.1. Early Withdrawals
A Participant's Account may be distributed to the Participant
before termination of employment as follows, or in accordance with
Section 7.2:
(a) Election for In-Service Withdrawal. A Participant may elect
in a Participation Election to withdraw all or any portion of the
amount deferred, including any earnings and vested Matching
Contributions credited thereon, by that Participation Election as of a
date specified in the election. Such date shall not be sooner than
three (3) years after the date the Deferral Period commences.
(b) Payment. The amount payable under this Section shall be paid
in a lump sum within thirty (30) days following the date selected by
the Participant and shall be charged to the Participant's Account as a
distribution.
7.2. Accelerated Distribution
Notwithstanding any other provision of the Plan, a Participant
shall be entitled to receive, upon written request to the Committee, a
lump-sum distribution of all of the vested Account balance, subject to
the following:
(a) Penalty. Ten percent (10%) of the vested Account shall be
forfeited and ninety percent (90%) of the vested Account shall be paid
to the Participant. Any unvested Account balance shall be permanently
forfeited.
(b) Suspension of Participation. A Participant who receives a
distribution under this Section will be prohibited from deferring for
the rest of the current calendar year and for the immediately
succeeding calendar year.
(c) Payment. The Account balance shall be as of the Determination
Date immediately preceding the date on which the Committee receives the
written request. The Committee shall pay the amount payable under this
Section in a lump sum within thirty (30) days following the receipt of
the Participant's written request.
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<PAGE> 14
(d) Restrictions on Timing of Accelerated Distribution Election.
If any portion of the Participant's Account is measured by the LADD
Stock Index, an election by any Participant to receive an accelerated
distribution pursuant to this Section must be made in conformity with
the "Statement of Company Policy - Trades By Company's Personnel of the
Company's Securities." In addition, a Participant who is deemed to be
an Executive Officer and who makes such a request must do so no earlier
than six months after the Participant has made an election under
Section 6.3 to have some or all of his Account measured by the LADD
Stock Index.
7.3. Termination of Employment Prior to Age 65
If a Participant terminates employment with the Company for any
reason prior to attainment of age 65, including death or Disability,
the Company shall pay to the Participant (or the Participant's
Beneficiary, in case of death) benefits equal to the balance in the
vested Account on the Determination Date corresponding to the
Participant's termination date. The Committee shall pay the vested
Account balance in a lump sum within thirty (30) days following the
Participant's termination date.
7.4. Termination of Employment On or After Age 65
If a Participant terminates employment with the Company on or
after attainment of age 65, the Participant's Account balance, subject
to the forfeiture provision of Section 5.3(d), shall be paid as elected
in his or her Participation Election(s) prior to each Deferral Period
or as elected pursuant to Subsection (c) below.
(a) Alternative Forms. Alternative forms of benefit payment
shall be:
(i) A lump-sum amount which is equal to the applicable
Account balance.
(ii) Quarterly installments of the Account balance
amortized over a period of up to 10 years. Earnings on the unpaid
balance shall continue to be credited to Subaccounts at the
appropriate Investment Index rate. The Account balance shall be
reamortized each year, so that the amount of each installment
payment will depend on the Earnings credited or debited to the
Account during the prior year.
(b) Small Amounts. Notwithstanding the form elected, if the
Participant's total Account is one hundred thousand dollars ($100,000)
or less on the applicable Determination Date, the benefit shall be paid
in a lump sum.
(c) Change in Form of Benefits. A Participant may elect to change
the form of benefit payment at any time up to twelve (12) months before
the date benefit payments commence. Any changes made to the form of
benefit payment within twelve (12) months of the date benefit payments
commence will not be valid.
7.5. Withholding; Payroll Taxes
The Company shall withhold from payments hereunder any taxes
required to be withheld from such payments under federal, state or
local law. A Beneficiary, however, may elect not to have withholding of
federal income tax pursuant to Section 3405 of the Internal Revenue
Code, or any successor provision thereto.
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<PAGE> 15
7.6. Covered Employee
Notwithstanding any other provision of this Plan except early
withdrawals under Section 7.1 and accelerated distributions under
Section 7.2, if any portion of a payment in a calendar year would be
disallowed as a deduction to the Company because the Participant is an
employee for that calendar year subject to Section 162(m) (the 1
million dollar limitation on compensation deduction) of the Code, or
any successor provision to such Section, that portion shall instead be
paid in the first following calendar year during which the Participant
is not subject to Section 162(m) of the Code or any successor
provision, by January 30th of such year.
7.7. Payment to Guardian
If a distribution is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of
property, the Committee may direct payment to the guardian, legal
representative, or person having the care and custody of such minor,
incompetent, or person. The Committee may require proof of
incompetency, minority, incapacity or guardianship, as it may deem
appropriate prior to distribution. The Company may withhold payment
under the Plan upon a dispute as to the proper payee(s) or in any other
situation in which the proper payee(s) may be in question, until the
proper payee(s) are finally determined in a court of law. Distribution
of any benefit under the Plan shall completely discharge the Committee
from all liability with respect to such benefit.
8. BENEFICIARY DESIGNATION
8.1. Beneficiary Designation
Each Participant shall have the right, at any time, to designate
one (1) or more persons or an entity as Beneficiary (both primary as
well as secondary) to whom benefits under this Plan shall be paid in
the event of a Participant's death prior to complete distribution of
the Participant's Account. In the event that no separate Beneficiary
designation is made under this Plan, the Participant's Beneficiary
designation made under the 401(k) Plan shall determine to whom benefits
under this Plan shall be paid in the event of a Participant's death. If
no election is made under either Plan, then the default provisions of
the 401(k) Plan shall determine the payment of benefits.
9. ADMINISTRATION
9.1. Committee
(a) The Committee shall administer this Plan.
(b) The Committee shall be the Corporate Benefits Committee
or such other committee as may be appointed by the
Board.
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<PAGE> 16
(c) The Committee shall have the authority to make, amend,
interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and to
decide or resolve any and all questions including
interpretations of this Plan, in its sole discretion, as
may arise in connection with the Plan.
10. AMENDMENT AND TERMINATION OF PLAN
10.1. Amendment
(a) The Board may, at any time, amend the Plan in whole or in
part by written instrument, provided that no amendment shall reduce the
amount credited to any Account maintained under the Plan as of the date
of the amendment. Any change in the manner that Earnings are credited
to Accounts shall not become effective before the first day of the Plan
Year that follows the adoption of the amendment, provided, however,
that the selection of Investment Indices by the Committee may be
changed at any time as long as Participants are given the opportunity
to change their selection of Investment Indices prior to the time the
Indices are changed.
(b) Generally, the Company shall amend the Plan by action of the
Board. However, the Committee may approve amendments to the Plan,
without prior approval or subsequent ratification by the Board, if the
amendment: (i) does not significantly change the benefits provided
under the Plan (except as required by a change in applicable law); (ii)
does not significantly increase the costs of the Plan; and (iii) the
amendment is intended either to enable the Plan to remain in compliance
with the requirements of the Code, ERISA, or other applicable law, to
facilitate administration of the Plan, or to improve the operation of
the Plan. A duly authorized officer of the Company shall execute the
amendment, evidencing the Company's adoption of the amendment.
10.2. Company's Right to Terminate
The Board may, at any time, partially or completely, terminate
the Plan.
(a) Partial Termination. The Board may partially terminate the
Plan by instructing the Committee not to accept any additional
Participation Elections. If such a partial termination occurs, the Plan
shall continue to operate and be effective with regard to Participation
Elections entered into prior to the effective date of such partial
termination.
(b) Complete Termination. The Board may completely terminate the
Plan by instructing the Committee not to accept any additional
Participation Elections, and by terminating all ongoing Participation
Elections. If such a complete termination occurs, the Plan shall cease
to operate and the Company shall pay out to each Participant the vested
balance in his or her Account. If termination of the Plan occurs after
a Change of Control, payment shall be made in a lump sum; otherwise
payment shall be made in a lump sum, unless the Committee determines
otherwise. Earnings at an interest rate determined by the Board shall
be credited on any unpaid balance in each Account.
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<PAGE> 17
11. MISCELLANEOUS
11.1. Unfunded Plan
This Plan is an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of
"management or highly-compensated employees" within the meaning of
Sections 201, 301 and 401 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and therefore is exempt from the
provisions of Parts 2, 3 and 4 of Title I of ERISA. Accordingly, the
Board may terminate the Plan and make no further benefit payments or
remove certain employees as Participants if it is determined by the
United States Department of Labor, a court of competent jurisdiction,
or an opinion of counsel that the Plan constitutes an employee pension
benefit plan within the meaning of Section 3(2) of ERISA (as currently
in effect or hereafter amended) which is not so exempt.
11.2. Unsecured General Creditor
Participants and their Beneficiaries, heirs, successors,
and assigns shall have no secured legal or equitable rights, interest
or claims in any property or assets of the Company, nor shall they be
Beneficiaries of, or have any rights, claims or interests in any
property or asset which may be acquired by the Company. Except as
provided in Section 11.3, assets of the Company shall not be held under
any trust for the benefit of Participants, their Beneficiaries, heirs,
successors or assigns, or held in any way as collateral security for
the fulfilling of the obligations of the Company under this Plan. Any
and all of the Company's assets and policies shall be, and remain, the
general, unpledged, unrestricted assets of the Company. The Company's
obligation under the Plan shall be that of an unfunded and unsecured
promise to pay money in the future.
11.3. Trust Fund
At its sole discretion, the Company may establish one (1) or more
trusts, with such trustees as the Board may approve, for the purpose of
providing for the payment of benefits owed under the Plan. Although
such a trust may be irrevocable, its assets shall be held for payment
of all the Company's general creditors in the event of insolvency. To
the extent any benefits provided under the Plan are paid from any such
trust, the Company shall have no further obligation to pay them. If not
paid from any trust, such benefits shall remain the obligation of the
Company. Notwithstanding the existence of such a trust, it is intended
that the Plan be unfunded for tax purposes and for purposes of Title I
of ERISA.
11.4. Nonassignability
Neither a Participant nor any other person shall have any right
to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to
be unassignable and nontransferable. Except as may otherwise be
required by law or order of a court of competent jurisdiction, no part
of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other
person,
PAGE 13 - MANAGEMENT DEFERRED COMPENSATION PLAN
<PAGE> 18
nor be transferable by operation of law in the event of a Participant's
or any other person's bankruptcy or insolvency.
11.5. Not a Contract of Employment
This Plan shall not constitute a contract of employment between
the Company and the Participant. Nothing in this Plan shall give a
Participant the right to be retained in the service of the Company or
to interfere with the right of the Company to discipline or discharge a
Participant at any time.
11.6. Governing Law
The provisions of this Plan shall be construed and interpreted
according to the laws of the State of North Carolina, except as
preempted by federal law.
11.7. Validity
In case any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal and invalid provision had never been
inserted herein.
11.8. Successors
The provisions of this Plan shall bind and inure to the benefit
of the Company, its Subsidiaries, and their successors and assigns. The
term successors as used herein shall include any corporate or other
business entity, which shall, whether by merger, consolidation,
purchase or otherwise acquire all or substantially all of the business
and assets of the Company, and successors of any such corporation or
other business entity.
11.9. Captions
The captions of the articles, Sections, and paragraphs of this
Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
11.10. Arbitration of Disputes
Any controversy or claim arising out of, or in any way relating
to this Plan shall be settled by arbitration in the city of Greensboro,
North Carolina, in accordance with the rules then in force of the
American Arbitration Association.
11.11. Unclaimed Benefit
Each Participant shall keep the Company informed of his current
address and the current address of his spouse. The Company shall not be
obligated to search for the whereabouts of any person. If the location
of a Participant is not made known to the Company within three (3)
years after the date on which payment of the Participant's benefit
under the Plan may first be made, payment may be made as though the
Participant had died at the end of the three-year period. If, within
one additional year
PAGE 14 - MANAGEMENT DEFERRED COMPENSATION PLAN
<PAGE> 19
after such three-year period has elapsed, or, within three years after
the actual death of a Participant, the Company is unable to locate any
surviving spouse of the Participant, then the Company shall have no
further obligation to pay any benefit hereunder to such Participant or
surviving spouse or any other person and such benefit shall be
irrevocably forfeited.
11.12. Discharge of Obligations
Any payment made under this Plan in good faith by the Company
shall completely discharge the Company of any liability to any other
individual who asserts a claim to such payment.
11.13. Limitations on Liability
Notwithstanding any of the preceding provisions of the Plan,
neither the Company nor any individual acting as an employee or agent
of the Company shall be liable to any Participant, former Participant,
surviving spouse or any other person for any claim, loss, liability or
expense incurred in connection with the Plan.
11.14. Entire Agreement
This Plan document represents the entire agreement between the
Company and any Participant in this Plan. This agreement supersedes any
and all prior agreements between the Company and any Participant,
whether such agreement or agreements were written or oral. Any
amendment or modification to the terms of this Plan must be in writing
and signed by an authorized officer of the Company. No Participation
Election shall in any way amend, modify, alter or revise this Plan. In
the event the terms of the Participation Election conflict with the
terms of the Plan, the terms of the Plan shall be controlling.
IN WITNESS WHEREOF, the authorized officers of the Company have
signed this document and have affixed the corporate seal on
_______________, 1998, to be effective upon the Effective Date.
LADD Furniture, Inc.
Attest:
By____________________________
Its___________________________
By_______________________
Its______________________ (Corporate Seal)
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<PAGE> 20
APPENDIX A
- --------------------------------------------------------------------------------
Index Definition
- --------------------------------------------------------------------------------
Fixed Rate Index Prime rate of Bank of America, or any successor
company.
- --------------------------------------------------------------------------------
LADD Stock Index An Index based on the current value of a share
of LADD Furniture, Inc. common stock. Current
value means the closing price, as reported in
the Wall Street Journal or other reliable public
source, for that day. If dividends are declared
additional stock units representing dividend
shares shall be credited, as if the stock units
were actually shares of LADD common stock.
- --------------------------------------------------------------------------------
<PAGE> 1
Exhibit 5
OPINION OF KILPATRICK STOCKTON LLP
LADD Furniture, Inc.
4620 Grandover Parkway
Greensboro, North Carolina 27417-6777
Re: Management Deferred Compensation Plan -- Registration Statement
on Form S-8
Sir/Madam:
At your request, we have examined the Registration Statement on Form
S-8 (the "Registration Statement"), which LADD Furniture, Inc., a North Carolina
corporation (the "Company"), intends to file with the Securities and Exchange
Commission in connection with the registration under the Securities Act of 1933,
as amended, of $7,500,000 in deferred compensation obligations (the
"Obligations") of the Company under the LADD Furniture, Inc. Management Deferred
Compensation Plan (the "Plan"). We are familiar with the proceedings undertaken
in connection with the authorization of the Plan and the Obligations.
Additionally, we have examined such questions of law and fact as we have
considered necessary or appropriate for purposes of this opinion.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted to us as
copies.
We are opining herein as to the effect on the subject transaction only
of the federal securities law of the United States and the laws of the State of
North Carolina, and we express no opinion with respect to the applicability
thereto, or the effect thereon, of any other laws.
Based on the foregoing, we are of the opinion that the Obligations have
been duly authorized, and upon the issuance of the Obligations under the terms
of the Plan, such Obligations will be legally valid and binding obligations of
the Company, except as may be limited by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors; the effect of
general principles of equity, whether enforcement is considered in a proceeding
in equity or at law, and the discretion of the court before which any proceeding
therefor may be brought; and the effect of the laws of usury or other laws or
equitable principles relating to or limiting the interest rate payable on
indebtedness.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Kilpatrick Stockton LLP
KILPATRICK STOCKTON LLP
<PAGE> 1
Exhibit 24.a
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
LADD Furniture, Inc.:
We consent to incorporation by reference in the Registration Statement filed on
December 1, 1998 on Form S-8 of LADD Furniture, Inc. of our report dated
February 6, 1998, relating to the consolidated balance sheets of LADD Furniture,
Inc. and subsidiaries as of December 28, 1996 and January 3, 1998, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the years in the three-year period ended January 3, 1998,
which report is included in the January 3, 1998 annual report on Form 10-K of
LADD Furniture, Inc.
Greensboro, North Carolina
December 1, 1998
<PAGE> 1
Exhibit 24.c
POWER OF ATTORNEY
Each officer or director whose signature appears below hereby appoints
William S. Creekmuir his true and lawful attorney-in-fact to sign on his behalf,
as an individual and in the capacity stated below, any amendment or
post-effective amendment to this Registration Statement which said
attorney-in-fact may deem appropriate or necessary.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Richard R. Allen Director December 1, 1998
- ------------------------------------
Richard R. Allen
/s/J. Patrick Danahy Director December 1, 1998
- ------------------------------------
J. Patrick Danahy
/s/Charles R. Eitel Director December 1, 1998
- ------------------------------------
Charles R. Eitel
/s/David A. Jones Director December 1, 1998
- ------------------------------------
David A. Jones
/s/Dr. Thomas F. Keller Director December 1, 1998
- ------------------------------------
Dr. Thomas F. Keller
/s/Ian J. McCarthy Director December 1, 1998
- ------------------------------------
Ian J. McCarthy
/s/Zenon S. Nie Director December 1, 1998
- ------------------------------------
Zenon S. Nie
/s/L. Glenn Orr, Jr. Director December 1, 1998
- ------------------------------------
L. Glenn Orr, Jr.
/s/Fred L. Schuermann, Jr. Chairman of the Board, President, December 1, 1998
- ------------------------------------ Chief Executive Officer and Director
Fred L. Schuermann, Jr.
/s/William S. Creekmuir Executive Vice President, December 1, 1998
- ------------------------------------ Secretary, Treasurer and Chief
William S. Creekmuir Financial Officer
/s/Daryl B. Adams Vice President, Corporate December 1, 1998
- ------------------------------------ Controller, Assistant Secretary and
Daryl B. Adams Assistant Treasurer (Principal
Accounting Officer)
</TABLE>
