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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED APRIL 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-21226
------------------------------
SEAMAN FURNITURE COMPANY, INC.
------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 11-2751205
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
300 CROSSWAYS PARK DRIVE
WOODBURY, NEW YORK 11797
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (516) 496-9560
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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
-------------------- -----------------------------------------
COMMON STOCK, $.01 PAR VALUE NASDAQ NATIONAL MARKET
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
- ------
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED,
TO THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K.[_]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS
AND REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY A COURT.
YES X NO
- ------
AS OF JULY 15, 1997, THE AGGREGATE MARKET VALUE OF VOTING STOCK HELD BY
NON-AFFILIATES OF THE REGISTRANT WAS $20,578,012 BASED ON THE LAST REPORTED SALE
PRICE OF THE REGISTRANT'S COMMON STOCK ON THE NASDAQ NATIONAL MARKET SYSTEM.
4,536,839 SHARES OF COMMON STOCK WERE OUTSTANDING ON JULY 15, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
LOCATION IN FORM 10-K INCORPORATED DOCUMENT
--------------------- ---------------------
PART III PROXY STATEMENT FOR THE COMPANY'S
CONSISTING OF ITEMS 10, 11, 12 AND 13 1997 STOCKHOLDERS MEETING
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ITEM 1. BUSINESS
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GENERAL
Seaman Furniture Company, Inc. (the "Company" or "Seaman's") believes
that it is the largest regional specialty furniture retailer in the northeastern
United States in terms of sales and that it has the leading market position in
the greater New York metropolitan area. The Company currently operates a chain
of 41 stores. Of these, 27 are in the New York, New Jersey and Connecticut
Tri-State Area, 8 are in the Philadelphia metropolitan area and 6 are in the
Cleveland/Akron, Ohio metropolitan area. The move into the Cleveland/Akron area,
was the Company's first expansion beyond the Northeast. Seaman's stores sell a
variety of living room, bedroom, dining room and other home furniture and
accessories in contemporary, traditional, country and casual styles. The Company
was incorporated in Delaware in June 1985 as a successor to the business founded
by Julius Seaman, who opened the first "Seaman's" store in Brooklyn, New York in
1933.
Seaman's retailing philosophy targets the broad sector of middle-income,
value-oriented consumers by providing value pricing, quality products, enhanced
customer service, quick delivery and in-store credit. This philosophy is
conveyed to consumers through Seaman's high-impact television, radio and
newspaper advertising.
MARKETING AND MERCHANDISING
Seaman's retailing philosophy is driven by its "narrow and deep"
merchandising strategy. The basis of this strategy is to carry and display in
each store a similar variety of furniture styles and models in a carefully
limited selection of fabrics, colors and finishes pre-selected by Seaman's
buyers. The "narrow and deep" merchandising strategy allows the Company to
purchase merchandise in large quantities at substantial savings to the Company
and, ultimately, the customer. The ability to purchase items in large quantities
also enables the Company to work with its suppliers to customize merchandise so
that the Company can offer items that are often exclusive to its trading area.
Seaman's also is able to offer quick delivery of merchandise to its customers
since less than 2% of Seaman's sales are special order items, with the balance
being items that are usually stocked in Seaman's warehouses. Pricing decisions,
including the timing and amount of promotions and markdowns, are made centrally
by Seaman's management and its buyers.
"The Package(R)" is an important element of Seaman's merchandising
strategy. In the 1970s, Seaman's stores implemented "The Package(R)" concept,
which encourages the purchase of a collection of complementary furniture items
at a significant savings compared to the already competitive prices of the
individual items in the collection. In the stores, furniture is displayed in
model room settings that present the furniture as coordinated collections in a
home environment, which enables customers to more easily envision the furniture
in their own homes, in addition to encouraging the purchase of multiple pieces
of furniture in one transaction. Seaman's mass media advertising campaigns
emphasize the value in this merchandising concept. The majority of the
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dollar value of all merchandise sold over each of the last three fiscal years
was sold as part of a package of merchandise.
The Company carries contemporary, high-fashion, European-style
furniture, traditional, country and casual styles of furniture in its stores in
order to attract a base of customers with different style preferences. The
Company's store design strategy emphasizes this product mix by tailoring the
environment of each model room setting to the style of the furniture and by
creating distinct sales areas for each style of furniture. The Company currently
displays substantially the same merchandise mix in all of its stores. However,
it makes changes in a particular region's stores' merchandise mix based on local
nuances and preferences reported to the Company by regional and store
management.
The Company believes that it maintains relatively low inventories of
merchandise in relation to its sales by use of its inventory control system in
particular through use of the radio frequency, bar-code system in its 2 largest
warehouses. Seaman's buyers monitor inventory regularly to maintain levels
required by its most recent sales trends. Daily computer reports are available
that show, among other things, sales by category and style of furniture, which
help the Company understand local preferences and market conditions. The Company
takes advantage of rapid merchandise turnover to continually update and refresh
the styles, fabrics, colors and finishes available. Seaman's average inventory
turnover, including store display samples, is approximately five times per year,
which the Company believes is among the highest in its industry.
All of Seaman's stores are generally open seven days a week. Each
location is staffed with trained management and sales personnel who are familiar
with the Company's merchandise, promotions and credit programs. Management
personnel are compensated on a salary and potential bonus basis, and sales
personnel are compensated on a salary and commission basis.
The Company provides a one-year limited warranty on all of the furniture
it sells. Pursuant to this limited warranty, the Company generally replaces or
repairs any defective merchandise or offers a merchandise certificate or refund
at the customer's option. The Company generally requires that its suppliers
stand behind its warranty. The Company could bear the cost, however, if a
supplier did not honor the warranty obligation.
STORE REDESIGN AND RENOVATION
The Company has been redesigning and renovating its existing stores and
designing its new stores to provide a more attractive in-store atmosphere. This
has been achieved by professionally redesigning and redecorating selling space
in existing stores and designing new stores in order to improve the consumer's
shopping experience and to enhance the appearance of displayed merchandise.
Seaman's design strategy focuses on partitioning store selling space to create
multiple room settings that include furniture, lamps and other accessories
suggesting how merchandise might look in the customer's home. Since May 1993,
the Company has invested approximately $4.9 million to renovate its existing
stores, and expects to invest approximately $1 million on store renovations
through fiscal 1998. Currently, 35 of Seaman's 41 stores have been
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renovated or were initially designed under these new guidelines, and the Company
expects to complete the redesign and renovation of 3 more stores in fiscal 1998.
COMPETITION
All aspects of the retail furniture business are highly competitive.
Business practices such as credit availability, its terms and selection of
merchandise vary widely among the Company's competitors. The Company believes
that the principal areas of competition with respect to its business are price,
delivery time and selection, and that it competes effectively in these areas.
The Company's competitors include individual furniture stores, department and
discount stores and chain stores, some of which have been established in the
same geographic areas as the Company's stores for long periods of time. Some of
the Company's competitors derive revenue from sales of products other than
furniture.
SUPPLIERS
The Company purchases all of its merchandise directly from approximately
170 domestic and foreign suppliers. The Company does not manufacture any of the
furniture it sells. Over the last three fiscal years, no supplier has provided
the Company with merchandise representing more than 6.5% of the Company's
purchases, and the Company is not dependent upon any single supplier for
merchandise. In fiscal 1997, the Company purchased approximately 80% of its
merchandise from 40 of its suppliers. The Company is diversified in all of its
product categories, with a minimum of at least three suppliers in all primary
categories. Although the Company has no long-term contracts or commitments with
any supplier, the Company has had long-term relationships with many of its
suppliers and believes that it is viewed as a valued customer due to its prompt
payment history, its low rate of merchandise returns because of its use of
clearance centers to liquidate slow-selling merchandise and its practice of
purchasing merchandise in large quantities. This ability to purchase items in
large quantities also enables the Company to work with its suppliers to
customize its merchandise in order to offer items that are often exclusive to
its trading area. While management believes that alternative sources of supply
are available for all merchandise purchased, purchases from these alternative
sources may be more costly both with respect to price and payment terms.
Foreign suppliers provide the Company with approximately 30% of its
merchandise. The Company imports merchandise principally from suppliers in
Canada, Italy and the Far East. All of the Company's purchases from foreign
suppliers are based on U.S. dollar values and are paid in U.S. dollars without
adjustments for currency rate fluctuations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations-Overview."
WAREHOUSING, DISTRIBUTION AND DELIVERY
Seaman's purchasing strategy of pre-selecting and stocking specific
merchandise in its warehouses together with the size of its warehouses enables
the Company to take advantage of purchasing efficiencies and to store large
amounts of certain merchandise in order to ensure quick delivery. The majority
of items sold in Seaman's stores are delivered to the customer within two
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weeks of the date of the written sale, or in some instances within a few days.
The Company believes that such quick delivery provides it with a distinct
advantage in its competitive markets.
The Company operates three warehouses to store its inventories of
merchandise which are located in Woodbridge, New Jersey (the "Woodbridge
warehouse"), Central Islip, New York (the "Islip warehouse") and Cleveland, Ohio
(the "Cleveland warehouse"). The Woodbridge warehouse, which is approximately
450,000 square feet, is a leased facility. It services Seaman's 7 New Jersey
stores, its 8 Philadelphia area stores and 5 of its New York stores.
Approximately 39% of Seaman's sales in fiscal 1997 were delivered from this
facility. The Islip warehouse is owned and operated by the Company and has
approximately 248,000 square feet that services Seaman's stores in Connecticut
and its remaining New York stores. Approximately 30% of the Company's sales in
fiscal 1997 were delivered from this facility. The Cleveland warehouse, which is
a leased facility, is approximately 100,000 square feet and services the Ohio
stores. Approximately 5% of Seaman's sales were delivered from this facility.
The term on this lease expires on May 30, 1998. See "Properties". The balance of
the inventory is stored with and delivered from either a public warehouse or
certain suppliers who store and deliver goods for the Company. The Company
believes that these warehouses will be sufficient to support Seaman's deliveries
in its existing market areas over the next two fiscal years.
In April 1996 the Company converted its Islip warehouse to a full radio
frequency inventory control system ("RF System"). The Company converted its
Woodbridge warehouse to a similar RF System in August 1996. The Company has no
plans to connect its Cleveland warehouse to an RF System in the near future.
Merchandise is delivered from the Woodbridge, Islip and Cleveland
warehouses to customers by two delivery companies, which acting as agents for
the Company, also collect cash balances due from customers. The Company has
written contracts with the delivery companies whereby the amounts paid by the
Company to these companies vary depending on the volume of merchandise delivered
and the distance traveled. The contracts with these delivery companies are
material to the Company. If one of the delivery companies were to cease doing
business with the Company, the second delivery company could replace it or
another delivery company could be found without a material impact on the
delivery process. It would be difficult, however, to replace both delivery
companies at the same time due to the start-up time necessary to familiarize a
new delivery company with the Company's operations.
The Company also permits customers to pick up some merchandise directly
from its stores, clearance centers and warehouses. Certain merchandise,
particularly store display items, discontinued styles and clearance items, is
delivered directly from Seaman's stores and clearance centers by small
independent truckers.
ADVERTISING AND PROMOTIONS
The Company believes it enjoys widespread name recognition in its
current market areas, primarily due to intensive, ongoing mass media advertising
campaigns utilizing the Company's trademarks "Seaman's(R)," "See Seaman's
First(R)," "Seaman's Plus(R)" and "The Package(R)."
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Advertising and sales promotions are important parts of Seaman's overall
merchandising strategy, emphasizing the reputation of the Company as a quality
retailer and the value of "The Package(R)" concept of merchandising. See
"Business - Marketing and Merchandising." Approximately 59% of Seaman's
advertising budget for fiscal 1997 was for advertising in major New York,
Philadelphia and Cleveland metropolitan area newspapers and for the distribution
of color circulars in newspapers, while the majority of the remaining 41% was
for local television and radio advertising. Historically, the Company has not
used direct mail as a significant part of its advertising programs.
The Company continues to offer and advertise credit and product
promotions on a regular basis. Seaman's product promotions usually offer
discounted prices on specific individual items and on items that are
merchandised together in "The Package(R)" approach.
One of Seaman's most successful promotions has been its "No/No/No"
campaign, which offers qualifying customers the use of the Company's proprietary
credit card with no down payment (exclusive of sales tax and delivery charges),
deferred payments and interest free terms for a specified period, generally
three to four months, on certain purchases. These promotions not only serve to
bolster sales but have the added effects of providing additional customers for
the Company's credit card program and an increased possibility that customers
will become repeat customers through continued use of their Seaman's credit
card. See "Business - Credit Operations."
INFORMATION SYSTEMS
The Company operates a computer system which was installed in July 1994.
The system integrates Seaman's financial, purchasing and inventory functions and
enables management to access credit, sales and inventory information quickly,
while providing many operating efficiencies for the Company. The Company
installed an RF System in its Islip warehouse in April 1996 and completed
installation of a similar system in its Woodbridge warehouse in August 1996.
CREDIT OPERATIONS
The Company offers its customers the option to make purchases using
cash, the Company's own proprietary credit card or other major credit and charge
cards (MasterCard, Visa, Optima and Discover credit cards and the American
Express card). Unless the Company finances the customer's purchase, the Company
requires a deposit covering sales tax and delivery charges when a sale is made,
with the balance payable upon or prior to delivery of the merchandise.
The Company has provided in-house credit for its customers since the
early 1980s. The Company's proprietary credit card is offered to qualified
customers for the purchase of merchandise at any of Seaman's stores. The Company
currently offers special credit terms to its cardholders on a promotional basis,
such as no down payment on the furniture, deferred payments and interest free
promotions under the "No/No/No" program. See "Business Advertising and
Promotions." Those customers who are approved for credit and utilize the
Company's own proprietary credit card, may spend up to their approved credit
limit on furniture purchases with a
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nominal down-payment. Convenient, in-store credit approvals for Seaman's
customers are processed in a matter of minutes. The Company uses an outside
service to process applications and provide billing and collection services on
it's credit card.
SEASONALITY AND CYCLICALITY
The Company's business generally is not subject to significant seasonal
variations. However, the Company's business is significantly influenced by the
general economy, consumer confidence and disposable income, and the housing
markets in the areas where its stores are located.
TRADEMARKS
The Company's name is well established in the current markets served by
the Company's stores, and management believes that the reputation of that trade
name is important. The Company and its subsidiaries do not have any material
patents or trademarks, except for the Company's trademarks "The Package(R),"
"See Seaman's First,(R)" "Seaman's Plus(R)" and "Fabric Bond." The Company is in
the process of registering an additional trademark, "The Sensible Way to a
Beautiful Home.(TM)"
EMPLOYEES
As of April 30, 1997, the Company had 1,104 full-time employees. Four
collective bargaining agreements with Local 875 of the International Brotherhood
of Teamsters ("Local 875") are currently in force. Contracts covering the
employment of the New York, New Jersey, Connecticut and Philadelphia sales
staff, the New York, New Jersey, Connecticut, Philadelphia store porters and
certain Islip and Woodbridge warehouse staff are due to expire on January 2,
2000, March 1, 2000, December 29, 1998 and August 15, 1997, respectively. The
Company will commence negotiations with the Local 875 to renew the Woodbridge
contract toward the end of July 1997. Except for the Islip union members, who
receive health coverage from a Company sponsored plan under the collective
bargaining agreements with Local 875 the Company contributes to the union's
welfare and pension funds. For its nonunion employees, the Company provides
health, dental, life and disability insurance coverage. The Company also has a
defined contribution 401(k) savings plan covering nonunion employees. The
Company has never had a strike or work stoppage.
1988 LEVERAGED BUYOUT AND SUBSEQUENT REORGANIZATION
Following an initial public offering of Seaman's common stock in 1985
and a secondary offering in 1986, the Company was taken private in a leveraged
buyout (the "LBO") by affiliates of Kohlberg Kravis Roberts & Co., L.P. in 1988,
incurring debt of approximately $360 million. The Company experienced a
considerable, unanticipated decline in sales volume, operating income and
liquidity in the years 1989 through 1991 due, among other things, to changes in
business philosophy (including cutting merchandise margins, de-emphasizing "The
Package(R)" concept and expanding Seaman's emphasis on sales events in its
advertising) and the debt burden
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that resulted from the LBO, and was exacerbated further by a significant
economic recession in the United States that was especially severe in the
northeastern United States. Thereafter, the Company filed for bankruptcy
protection under Chapter 11 ("Chapter 11") of the United States Bankruptcy Code
in January 1992. The Company emerged from Chapter 11 proceedings in October
1992, with its outstanding indebtedness having been reduced from approximately
$360 million to approximately $13 million. As part of its Chapter 11
proceedings, the Company adopted "fresh start reporting." Current senior
management of the Company was appointed by the Board of Directors immediately
following Seaman's emergence from Chapter 11 proceedings.
PROPOSAL TO TAKE THE COMPANY PRIVATE
A group consisting of the Company's senior management and majority
stockholders, M. D. Sass Associates, Inc., T. Rowe Price Recovery Fund, L.P.,
and Carl Marks Management Co., submitted a proposal to the Company's Board of
Directors in July 1997 to purchase, through a one-step merger transaction, the
approximately 20% of the Company's outstanding common stock, par value $.01 per
share, not already owned by the group for $24.00 a share. The group's proposal
is subject to certain conditions, including among other things, obtaining
acceptable financing and negotiation of mutually agreeable terms of a definitive
merger agreement. The Company has named a special committee of the board of
directors to review and respond to the proposal but has not established a
timeline for its response.
ITEM 2. PROPERTIES
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The Company currently operates 41 stores: 27 stores in the New York, New
Jersey and Connecticut Tri-State Area, 8 stores in the Philadelphia metropolitan
area and 6 stores in the Cleveland/Akron metropolitan area. Most of Seaman's
stores are located near heavily populated areas, shopping malls or other retail
operations and are near major highways or other major thoroughfares. Seaman's
stores range in size from approximately 10,000 to 47,000 square feet, and most
of each store is devoted to selling space. The average selling space per store
is approximately 23,000 square feet. No store accounted for more than 10% of the
Company's net sales for fiscal 1997.
The opening of the stores in the Cleveland/Akron area was the Company's
initial expansion beyond the Northeast. The Cleveland stores range in size from
approximately 23,000 square feet to 37,000 square feet.
All of Seaman's stores are leased. See Note 7 of the Notes to
Consolidated Financial Statements for information with respect to specific
leases. The terms for the 41 leases expire at various times in the years from
1998 through 2023 with many having options to renew for additional periods.
There can be no assurances that the leases that expire will be renewed or
renegotiated on the same terms.
As discussed above, the Company operates three warehouse facilities: the
Woodbridge, New Jersey warehouse, the Central Islip, New York warehouse and the
Cleveland, Ohio warehouse. The Woodbridge warehouse, which is approximately
450,000 square feet, is leased.
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This lease expires in 2002 with an option to renew for eight additional years.
The Islip warehouse, which is approximately 248,000 square feet, is owned by the
Company and was financed, in part, by a $6.0 million industrial revenue bond
which was issued by the Town of Islip, New York. On November 8, 1996, the
Company prepaid the industrial revenue bond, which had an outstanding principal
balance of approximately $3.7 million, with proceeds received from Fleet Bank
N.A. in the amount of approximately $6.2 million pursuant to a Mortgage Note
("Note") issued by the Company to Fleet. The Note, payable monthly and maturing
on November 8, 2003, is secured by a Mortgage, Security Agreement and Assignment
of Lease Rights covering the Company's Central Islip Warehouse. The balance of
the proceeds was used to reduce the outstanding borrowing under the Loan
Agreement (as hereinafter defined). The Cleveland warehouse, which is
approximately 100,000 square feet, is leased on a year to year basis. The
Company believes that the Islip, Woodbridge and Cleveland warehouses have
sufficient capacity to support Seaman's near term planned expansion in the
current market areas they serve. See "Business - Warehousing, Distribution and
Delivery."
The Company's executive offices are located in a 40,000 square foot
leased facility located in Woodbury, New York. This lease expires in 2002 with
an option to renew for five additional years. The Company believes that its
executive offices are sufficient to accommodate current anticipated growth.
The Company also owns approximately 16 acres of undeveloped land located
in Bridgeport, New Jersey, which property is being marketed for sale.
ITEM 3. LEGAL PROCEEDINGS
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None.
ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
---------------------------
None.
PART II.
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MARKETS
-------------------------------------
The Company's common stock, par value $0.01 per share (the "Common
Stock") became listed on the Nasdaq National Market on June 8, 1993. Prior to
that it was quoted on the National Quotation System's "pink sheets." The common
stock closed at $22 3/4 on July 15, 1997.
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The following table sets forth (as reported by Nasdaq National Market)
for the periods indicated the prices of the common stock.
FISCAL 1997 HIGH LOW CLOSE
----------- ---- --- -----
4th Quarter 20 1/4 19 19 1/2
3rd Quarter 21 1/4 18 1/4 20
2nd Quarter 21 1/4 16 7/8 18 1/2
1st Quarter 19 3/8 16 1/4 16 3/4
FISCAL 1996 HIGH LOW CLOSE
----------- ---- --- -----
4th Quarter 19 3/4 15 18 1/2
3rd Quarter 19 1/2 17 1/2 18 3/8
2nd Quarter 19 3/4 16 3/4 19 3/4
1st Quarter 21 18 3/4 18 3/4
These quotations reflect inter-dealer prices, without retail markups,
markdowns or commissions.
The number of record holders of the Company's Common Stock as of July
15, 1997 was 259. Pursuant to the Company's Amended and Restated Stock Option
Plan, 1,015,595 shares of the Common Stock are subject to outstanding options at
April 30, 1997. See "The Company's Proxy Statement for 1997 Annual Stockholders
Meeting."
The Company has never paid any cash dividends on its stock.
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ITEM 6. FINANCIAL INFORMATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(Amounts in Thousands)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
Proforma
Year Year Year Year Twelve-month
ended ended ended ended Period ended
April 30, 1997 April 30, 1996 April 30, 1995 April 30, 1994 April 30, 1993 (1)
----------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenues:
Net Sales $251,175 $229,505 $215,857 $170,348 $162,576
Net Finance Charge Income 12,809 14,036 12,364 7,865 8,490
----------- ------------- ------------ ------------ ------------
Total 263,984 243,541 228,221 178,213 171,066
----------- ------------- ------------ ------------ ------------
Operating Costs & Expenses:
Cost of sales, including
Buying and Occupancy costs 167,430 152,982 138,038 112,648 109,904
Selling, General and
Administrative 87,206 83,094 74,691 60,159 63,171
----------- ------------- ------------ ------------ ------------
Total 254,636 236,076 212,729 172,807 173,075
----------- ------------- ------------ ------------ ------------
Income (Loss) from Operations 9,348 7,465 15,492 5,406 (2,009)
Interest Expense (2,247) (1,748) (1,707) (1,854) (1,347)
Interest Income 65 878 561 694 507
Reorganization Charges - - - - (8,033)
----------- ------------- ------------ ------------ ------------
Income (Loss) before Income Tax
and Extraordinary Credits 7,166 6,595 14,346 4,246 (10,882)
Income Tax (Expense)/Benefit (3,081) (2,700) (5,738) 2,694 -
----------- ------------- ------------ ------------ ------------
Income (Loss) before
Extraordinary Credits 4,085 3,895 8,608 6,940 (10,882)
Extraordinary Credits - - - - 353,569
----------- ------------- ------------ ------------ ------------
Net Income $4,085 $3,895 $8,608 $6,940 $342,687
</TABLE>
(1) Combines arithmetically the five month period ended September 30, 1992 and
the seven month period ended April 30, 1993. The 1993 twelve-month period
includes five months of activities while the Company operated as a
Debtor-in-Possession and seven months of activities after emergence from
Chapter 11 and debt discharge.
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The following table sets forth for the periods indicated certain items in
selected financial data as a percentage of sales, and the percentage change
of such items from the indicated prior period.
<TABLE>
<CAPTION>
Percentage of Net Sales Percentage Increase (Decrease)
------------------------------------------------------- ------------------------------
Proforma Year Ended April 30,
Year Year Year Year Twelve-month 1997 1996 1995
ended ended ended ended Period ended vs vs vs
4/30/97 4/30/96 4/30/95 4/30/94 4/30/93 (1) 1996 1995 1994
------------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Net Sales 100.0 100.0 100.0 100.0 100.0 9.4 6.3 26.7
Net Finance Charge Income 5.1 6.1 5.7 4.6 5.2 -8.7 13.5 57.2
Cost of sales, including
Buying and Occupancy costs 66.7 66.7 63.9 66.1 67.6 9.4 10.8 22.5
Selling, General and Administrative 34.7 36.2 34.6 35.3 38.9 4.9 11.3 24.2
Income (Loss) from Operations 3.7 3.3 7.2 3.2 -1.3 25.2 -51.8 186.6
Interest Expense -0.9 -0.8 -0.8 -1.1 -0.8 28.5 2.4 -7.9
Interest Income 0.0 0.4 0.3 0.4 0.3 -92.6 56.5 -19.2
Reorganization Charges -- -- -- -- -4.9 -- -- --
Income (Loss) before Income Tax
and Extraordinary Credits 2.8 3.0 6.7 2.5 -6.7 8.7 -54.0 237.9
Income Tax (Expense)/Benefit -1.2 -1.2 -2.7 1.6 -- 14.1 -52.9 313.0
Income (Loss) before
Extraordinary Credits 1.6 1.7 4.0 4.1 -6.7 4.9 -54.8 24.0
Extraordinary Credits -- -- -- -- 217.5 -- -- --
Net Income 1.6 1.7 4.0 4.1 210.8 4.9 -54.8 24.0
</TABLE>
(1) Combines arithmetically the five month period ended September 30, 1992 and
the seven month period ended April 30, 1993. The 1993 twelve-month period
includes five months of activities while the Company operated as a
Debtor-in-Possession and seven months of activities after emergence from
Chapter 11 and debt discharge.
11
<PAGE>
<TABLE>
<CAPTION>
(Amounts in Thousands)
-----------------------------------------------------------------------------------
at at at at at
April 30, April 30, April 30, April 30, April 30,
1997 1996 1995 1994 1993
----------- ------------ ----------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash & Cash Equivalents $6,423 $3,436 $20,431 $23,512 $26,353
Other Current Assets 103,808 101,142 80,585 68,207 54,455
Current Liabilities 42,724 37,631 43,350 35,841 25,635
Working Capital 67,507 66,947 57,666 55,878 55,173
Total Assets 161,222 159,251 153,334 136,586 113,436
Long-term Debt 12,878 20,085 12,328 12,915 13,278
Stockholders' Equity $105,620 $101,535 $97,656 $87,830 $74,523
</TABLE>
12
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
----------------------------------------------
The following discussion and analysis of the Company's financial
condition and results of operations should be read in conjunction with "Selected
Consolidated Financial Information," the Consolidated Financial Statements and
Notes thereto and the other information included elsewhere in this Form 10-K.
The Company's fiscal year ends on April 30. Fiscal years are identified
according to the calendar year in which they end. For example, the fiscal year
ended April 30, 1997 is referred to as "fiscal 1997."
OVERVIEW
The Company is engaged in a single line of business, the retail sale of
residential furniture, and the Company's revenues are principally derived from
such sales. The Company also has a proprietary credit card program which is
operated to promote its furniture business. For fiscal 1997, net finance charge
income from the Company's credit card operations represented 5.1% of net sales.
The Company's most significant category of operating expenses is the
cost of sales, which includes the cost of goods sold, warehousing, distribution
and delivery (net of delivery charges to customers) expenses, rent and
depreciation for the stores and buying staff expenses, including payroll. The
category of selling, general and administrative expenses is the other
significant element in the Company's cost structure. This includes store
(excluding rent and depreciation) expenses, advertising, corporate
administration (excluding buying staff) expenses and the costs of the credit
card program, including write-offs.
The Company imports a substantial amount of merchandise directly from
foreign suppliers. Imported merchandise represented approximately 30% to 35% of
the Company's purchases during the periods discussed herein. The Company pays
for all of such imported merchandise in U.S. dollars based on U.S. dollar prices
fixed at the time of the Company's order. The Company does not issue open
purchase orders as to price and therefore does not bear foreign currency
exchange rate fluctuation risk in connection with such import purchases; that
risk is borne by the Company's suppliers. While foreign currency exchange rates
affect the U.S. dollar prices that suppliers quote to the Company, the Company
is not obligated to purchase merchandise if a supplier seeks to increase the
price established at the time of the Company's order. The Company is able to
purchase replacement merchandise from both domestic and foreign suppliers.
In connection with the LBO in February 1988, the Company incurred debt
of approximately $360 million, which influenced both strategic and day-to-day
management decisions. The Company then experienced a considerable, unanticipated
decline in sales volume, operating income and liquidity in the years 1989
through 1991 due, inter alia, to changes in
13
<PAGE>
business philosophy (including, for example, reducing retail gross margin,
de-emphasizing "The Package(R)" concept and expanding Seaman's emphasis on sales
events in its advertising) and the debt burden that resulted from the LBO. The
Company's situation was exacerbated by a significant economic recession that was
especially severe in the northeastern United States. Although the LBO debt was
restructured in November 1989, in December 1991 the Company was facing possible
cross-defaults under its senior and subordinated debt obligations and, in
January 1992, filed for Chapter 11 bankruptcy protection. See "Business - 1988
LBO and Subsequent Reorganization." Shortly after filing for bankruptcy
protection, the Company closed 15 of its then 37 stores. The Company emerged
from Chapter 11 proceedings in October 1992 with its outstanding indebtedness
having been reduced from approximately $360 million to approximately $13
million. As part of its Chapter 11 proceedings, the Company also adopted "fresh
start reporting." Current senior management of the Company was appointed by the
Board of Directors immediately following the Company's emergence from Chapter
11.
For the five months ended September 30, 1992 (during which the Company
operated under Chapter 11 bankruptcy protection), the Company incurred an
operating loss of $3.6 million; for the seven months ended April 30, 1993 (after
the Company had emerged from its Chapter 11 proceedings), the Company had an
operating profit of $1.6 million. For fiscal 1994, the Company's operating
profit was $5.4 million, for fiscal 1995 it was $15.5 million, for fiscal 1996
it was $7.5 million, and for fiscal 1997 it was $9.3 million.
RESULTS OF OPERATIONS
Fiscal Year Ended April 30, 1997 Compared to Fiscal Year Ended April 30, 1996
- -----------------------------------------------------------------------------
Net sales for fiscal 1997 of $251.2 million increased by $21.7 million
(or 9.4%) compared to net sales for fiscal year 1996. The increase resulted
primarily from the full fiscal year sales of nine new stores opened at various
times during fiscal 1996. Comparable store sales for fiscal 1997 were $233.7
million, an increase of $4.2 million (or 1.8%) compared to comparable store
sales of $229.5 million for fiscal 1996.
Net finance charge income of $12.8 million for fiscal 1997 decreased by
$1.2 million (or 8.7%) from fiscal 1996, primarily due to an increased amount of
deferred interest credit promotions in fiscal 1997. Proprietary credit card
sales have grown from 30% of total sales in fiscal 1994 to 39% in fiscal 1997,
having peaked at 46% of total sales in fiscal 1995.
As a result of the foregoing increases, total revenues for fiscal 1997
were $264 million, an increase of $20.4 million (or 8.4%) over the comparable
prior year period.
Cost of sales increased by $14.4 million (or 9.4%) between the two
periods, principally due to the increase in net sales.
Selling, general and administrative expenses increased by $4.1 million
(or 4.9%) between the two periods, principally due to the increase in the
number of stores that were operating throughout fiscal 1997.
14
<PAGE>
As a result of the foregoing, income from operations was $9.3 million
for fiscal 1997 compared to $7.5 million for fiscal 1996.
Net interest expense of $2.2 million for fiscal 1997 increased $1.3
million (150.8%) from $870,000 for fiscal 1996. This is primarily attributed to
decreased interest income due to the Company's lower cash balances during the
fiscal year despite having a higher cash balance at year end and to increased
interest expense associated with the revolving credit line entered into in April
1996 and increased capital lease interest expense.
The provision for income taxes for fiscal 1997 is based upon an
effective income tax rate of 43% as compared to 41% for fiscal 1996. As of April
30, 1997, the Company had a long-term deferred tax asset of $10.8 million and a
current deferred tax asset of $5.0 million. The long-term deferred tax asset is
primarily related to operating losses that occurred following the LBO. There are
limitations on the time periods during which these deferred tax assets can be
used and on the amounts that the Company can use each year. See Note 4 of Notes
to Consolidated Financial Statements.
As a result of the foregoing, the Company's net income for fiscal 1997
was $4.1 million compared to net income of $3.9 million for fiscal 1996.
Fiscal Year Ended April 30, 1996 Compared to Fiscal Year Ended April 30, 1995
- -----------------------------------------------------------------------------
Net sales for fiscal 1996 of $229.5 million increased by $13.6 million
(or 6.3%) compared to net sales for fiscal year 1995. The increase resulted from
the opening of nine new stores commencing in September 1995. Comparable store
sales for fiscal 1996 were $204.8 million, a decrease of $11.1 million (or
- -5.1%) compared to comparable store sales of $215.9 million for fiscal 1995.
Management believes that this decrease is primarily attributable to the weak
sales environment in the furniture industry and severe winter weather conditions
in the Company's markets.
Net finance charge income of $14.0 million for fiscal 1996 increased by
$1.7 million (or 13.5%) from fiscal 1995, primarily due to an increase in the
average accounts receivable balance in fiscal 1996 compared to fiscal 1995.
Since the Company instituted the "Seaman's Plus(R)" credit card in April 1994,
proprietary credit sales grew from 30% of total sales in fiscal 1994 to 46% in
fiscal 1995 and have more recently leveled off at 40% in fiscal 1996.
As a result of the foregoing increases, total revenues for fiscal 1996
were $243.5 million, an increase of $15.3 million (or 6.7%) over the comparable
prior year period.
Cost of sales increased by $14.9 million (or 10.8%) between the two
periods, principally due to the increase in net sales, the opening of nine new
stores and a warehouse, and decreased gross margins due to the competitive
retail environment.
15
<PAGE>
Selling, general and administrative expenses increased by $8.4 million
(or 11.3%) between the two periods, principally due to the opening of nine
stores and an increase in the allowance for bad debts due to the higher customer
accounts receivable balance. The Company also incurred increased advertising
expenses due to its entrance into a new market.
As a result of the foregoing, income from operations was $7.5 million
for fiscal 1996 compared to $15.5 million for fiscal 1995.
Net interest expense of $870,000 for fiscal 1996 decreased as compared
to fiscal 1995 due to increased interest income attributed to higher cash
balances. The Company's interest expense primarily consists of interest on its
capital leases and on the mortgage it holds for its Islip warehouse.
The provision for income taxes for fiscal 1996 is based upon an
effective income tax rate of 41%. As of April 30, 1996, the Company had a
long-term deferred tax asset of $11.9 million and a current deferred tax asset
of $5.7 million. The long-term deferred tax asset is primarily related to
operating losses that occurred following the LBO. There are limitations on the
time periods during which these deferred tax assets can be used and on the
amounts that the Company can use each year. See Note 4 of Notes to Consolidated
Financial Statements.
As a result of the foregoing, the Company's net income for fiscal 1996
was $3.9 million compared to net income of $8.6 million for fiscal 1995.
Fiscal Year Ended April 30, 1995 Compared to Fiscal Year Ended April 30, 1994
- -----------------------------------------------------------------------------
Net sales for fiscal 1995 of $215.9 million increased by $45.5 million
(or 26.7%) compared to net sales for fiscal year 1994. Of such increase, $16.1
million resulted from the opening of five new stores commencing in September
1994 and the balance was primarily attributable to the implementation of new
management strategies, including a redirected advertising focus and an increased
emphasis on the Company's credit card operations, including the implementation
of the "Seaman's Plus(R)" credit card. Comparable store sales for fiscal 1995
were $198.2 million, an increase of $28.3 million (or 16.7%) compared to
comparable store sales of $169.9 million for fiscal 1994. Management believes
that this increase is primarily attributable to the redirected advertising
focus, customer acceptance of the "Seaman's Plus(R)" credit card, the ongoing
store redesign and renovation program and the use of a broadened merchandise mix
in the Company's stores.
Finance charge income of $12.4 million for fiscal 1995 increased by $4.5
million (or 57.2%) from fiscal 1994, primarily due to an increase in sales made
on the "Seaman's Plus(R)" credit card of $16.0 million in fiscal 1995 compared
to fiscal 1994. Sales made on the "Seaman's Plus(R)" credit card increased to
approximately 46% of net sales in fiscal 1995 from approximately 30% of net
sales in fiscal 1994.
As a result of the foregoing increases, total revenues for fiscal 1995
were $228.2 million, an increase of $50.0 million (or 28.1%) over the comparable
prior year period.
16
<PAGE>
Cost of sales increased by $25.4 million (or 22.5%) between the two
periods, principally due to the increase in net sales, but decreased as a
percentage of net sales from 66.1% for fiscal 1994 to 63.9% for fiscal 1995. The
decrease as a percentage of net sales was primarily due to the Company's
operating leverage, which supported the increase in net sales without
corresponding increases in fixed operating costs (in particular, warehousing
expenses), and an improvement in retail gross margin.
Selling, general and administrative expenses increased by $14.5 million
(or 24.2%) between the two periods, principally due to the opening of five
stores and an increase in the allowance for bad debts due to the higher customer
accounts receivable balance. As a percentage of net sales, however, selling,
general and administrative expenses decreased from 35.3% for fiscal 1994 to
34.6% for fiscal 1995. The decrease as a percentage of net sales was principally
due to operating leverage, in particular with respect to advertising and
corporate administration expenses. Additionally, the Company maintained cost
controls while continuing to increase its net sales volume.
As a result of the foregoing, income from operations improved to $15.5
million for fiscal 1995 compared to $5.4 million for fiscal 1994.
Net interest expense of $1.2 million for fiscal 1995 remained constant
as compared to fiscal 1994. The Company's interest expense primarily consists of
interest on its capital leases and on the mortgage it holds for its Islip
warehouse.
The provision for income taxes for fiscal 1995, is based upon an
effective income tax rate of 40%. As of April 30, 1995, the Company had a
long-term deferred tax asset of $13.4 million and a current deferred tax asset
of $5.6 million. The long-term deferred tax asset is primarily related to
operating losses that occurred following the LBO. There are limitations on the
time periods during which these deferred tax assets can be used and on the
amounts that the Company can use each year. In fiscal 1994, the Company recorded
a non-recurring income tax benefit of $4.2 million, which was principally a
result of the utilization of tax operating loss carryforwards. See Note 7 of
Notes to Consolidated Financial Statements.
As a result of the foregoing, the Company's net income for fiscal 1995
was $8.6 million compared to net income of $6.9 million for fiscal 1994.
LIQUIDITY AND CAPITAL RESOURCES
At April 30, 1997, the Company had working capital of $67.5 million. The
Company's principal sources of liquidity are earnings before income taxes,
depreciation and amortization, and borrowings, if any, under the $40 million
Revolving Credit and Security Agreement (the "Loan Agreement") with the Bank of
New York Commercial Corporation and Fleet Bank, N.A. (as Successor-by-Merger to
NatWest Bank N.A.) as lenders (the "Lenders"). The Company's principal uses of
cash are working capital needs, capital expenditures and debt service
obligations,
17
<PAGE>
including capitalized lease costs.
The Company's cash and cash equivalents increased in fiscal 1997 but had
decreased in fiscal 1996, 1995 and 1994. Without the proceeds from the Loan
Agreement, the Company could experience negative cash flows principally because
of potential increases in the customer accounts receivable balances, capital
expenditures and potential increases in inventory to support higher sales
volume.
The Company's working capital increased from $66.9 million at April 30,
1996 to $67.5 million at April 30, 1997. Cash and cash equivalents increased
from $3.4 million at April 30, 1996 to $6.4 million at April 30, 1997. As of
April 30, 1997, the Company had stockholders' equity of $105.6 million. The
Company's largest asset at such date was accounts receivable of $68.9 million
(net of bad debt reserves). At April 30, 1997, $2 million was outstanding under
the Loan Agreement consisting primarily of letters of credit. At April 30, 1997,
the Company had $12.9 million in long term debt, consisting of capitalized lease
obligations and a mortgage in connection with its Central Islip, New York
warehouse facility. See "Properties."
The Company entered into the $40 million Loan Agreement on April 29,
1996. The term of the Loan Agreement is three years. The Loan Agreement includes
provisions for issuance of up to $5 million aggregate amount of letters of
credit. The Company granted to the Lenders a security interest in the Company's
customer receivables and all General Intangibles as defined in the Loan
Agreement. The loan agreement contains covenants and provisions which are
customary for a secured revolving credit facility. The funds available under the
Loan Agreement will be used primarily for capital expenditures and general
corporate purposes.
At the same time that the Company entered into the Loan Agreement, it
redeemed certain receivables- backed securities designated "8.10% Class A Credit
Card Participation Certificates, Series 1995-1" in the amount of $20 million,
from a third party investor not affiliated with the Company. These Certificates
were issued in April 1995 by the Seaman Furniture Credit Card Master Trust which
originated by Seaman Receivables Corporation, a wholly owned special purpose
finance subsidiary of the Company.
Capital expenditures during fiscal 1994, fiscal 1995, fiscal 1996 and
fiscal 1997 were $4.5 million, $6.5 million, $8 million and $2.9 million,
respectively. Capital expenditures during fiscal 1995, 1996 and 1997 were
principally for new store openings, store renovations and a radio frequency
system for the Islip and Woodbridge warehouses. See "Business - Store Redesign
and Renovation."
Unless a customer is making a purchase using the Company's proprietary
credit card, the Company generally requires customers to make a down payment
(generally 30% of the sales price) at the time an order is placed, with the
balance payable upon or prior to delivery of the merchandise. The percentage of
sales paid with cash, check or major credit cards (for which customers are
generally required to provide a down payment absent a special promotion) has
changed from approximately 54% in fiscal 1995 to approximately 60% in fiscal
1996 and 1997. The balance of the Company's sales for each of such periods was
financed internally from working capital on the Company's proprietary credit
card.
18
<PAGE>
Customer deposits at April 30, 1995, April 30, 1996 and April 30, 1997
were $7.5 million, $9.3 million and $8.5 million, respectively. The relatively
low level of customer deposits on a given date compared to net sales for a
period reflects both the Company's quick delivery policy and customer use of the
Company's proprietary credit card. If the Company generates more sales with the
Company's proprietary credit card, the level of customer deposits is not
expected to change in tandem with changes in net sales.
When the Company opens a new store in an existing market, it is able to
leverage its fixed costs for advertising and corporate administration to cover
the new store. While its fixed costs for distribution may not increase (if there
is existing warehouse capacity), increased expansion even in existing markets
will ultimately lead to increased distribution costs. As the Company opens
stores in new markets, however, the Company's fixed costs for distribution,
advertising and corporate administration are likely to increase as existing
warehousing facilities are not likely to be able to service new, geographically
distant markets; existing advertising programs will not promote the Company and
its merchandise in such new markets; and new personnel will likely be needed to
manage the new market areas. However, additional expansion in a new market area
should not result in greater fixed costs as the new warehouse facilities,
advertising programs and administrative framework should be sufficient to
support reasonable, planned expansion in such markets. In addition, as the
Company expands into urban areas that are less populated than the greater New
York metropolitan area, and as the Company opens stores in suburban areas in new
and existing markets, the Company expects average sales per store and sales per
square foot of selling space to be less than that of existing stores due to
differences in population density and size of local market.
The Company currently expects that the borrowings under the Loan
Agreement together with the cash from operations, will be sufficient to meet the
Company's planned capital expenditures, long-term debt (composed of capital
lease obligations and principal on the Company's mortgage and repayments on the
revolving line) and currently anticipated working capital requirements through
the end of fiscal 1999 without consideration of uncertainties surrounding the
going private proposal being considered by the Company. See "Business - Proposal
to take the Company Private."
INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS
With the exception of the historical information contained in this
report, the matters described herein contain forward-looking statements that
involve risk and uncertainties including but not limited to economic and
competitive factors outside of the control of the Company. These factors more
specifically include: competition form other retail stores, continuing strong
economic conditions, especially in the northeastern United States and the
Company's ability to identify consumer preferences with regard to its
merchandise mix. Forward-looking statements are typically identified by the
words "believe," "expect," "anticipate" "intend," "estimate," and similar
expressions. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates.
19
<PAGE>
INFLATION
Inflation has not had a material impact on the Company's operating and
occupancy costs.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
See Index to Financial Statements and Exhibits, which appears on Page
F-1 hereof.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
--------------------------------------
None.
PART III.
---------
Information required by Item 10 "Directors and Executive Officers of the
Registrant," Item 11 "Executive Compensation," Item 12 "Security Ownership of
Certain Beneficial Owners and Management" and Item 13 "Certain Relationships and
Related Transactions" of Regulation S-K are herein incorporated by reference to
the Proxy Statement for the 1997 Annual Meeting of Stockholders of The Company.
PART IV.
--------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 10-K
------------------------
(a) Financial Statements
--------------------
See Index to Financial Statements and Schedules which appears on page
F-1 hereof.
(b) Reports on Form 8-K
-------------------
The Company filed a report on Form 8-K on July 10, 1997 regarding the
proposal by the Company's senior management and majority stockholders to take
the Company private for $24 a share.
(c) Exhibits
--------
The exhibits listed on the Exhibit Index following the signature page
hereof are filed herewith in response to this Item.
20
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
SEAMAN FURNITURE COMPANY, INC.
By: /s/ Alan Rosenberg
--------------------------------------
Alan Rosenberg, President and
Chief Executive Officer
Date: July 25, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Alan Rosenberg
- ---------------------------------------------------------
Alan Rosenberg, President, Chief Executive Officer Date: July 25, 1997
and Director
/s/ Peter McGeough
- ---------------------------------------------------------
Peter McGeough, Executive Vice President, Chief Financial Date: July 25, 1997
and Administrative Officer
/s/ Steven H. Halper
- ---------------------------------------------------------
Steven H. Halper, Executive Vice President, Date: July 25, 1997
Chief Operating Officer and Secretary
/s/ Coleen A. Colreavy
- ---------------------------------------------------------
Coleen A. Colreavy, Vice President, Corporate Controller Date: July 25, 1997
and Chief Accounting Officer
21
<PAGE>
SIGNATURES
----------
/s/ Barry J. Alperin
- -----------------------------------------
Barry J. Alperin, Director Date: July 25, 1997
/s/ Kim Z. Golden
- -----------------------------------------
Kim Z. Golden, Director Date: July 25, 1997
/s/ Leo Peraldo
- -----------------------------------------
Leo Peraldo, Director Date: July 25, 1997
/s/ James B. Rubin
- -----------------------------------------
James B. Rubin, Director Date: July 25, 1997
/s/ Robert C. Ruocco
- -----------------------------------------
Robert C. Ruocco, Director Date: July 25, 1997
22
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ---- -----------
*2 First Amended Joint Plan of Reorganization dated July 21, 1992.
*3.1 Amended and Restated Certificate of Incorporation effective as of
February 12, 1993.
*3.2 Amended and Restated By-Laws effective as of February 12, 1993.
4.1(a) Article IV and VI of the Amended and Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.1 filed as part
of the Registration Statement on Form 10 filed by the Company on
February 13, 1993) and Articles II and VI of the Amended and Restated
By-Laws (incorporated by reference to Exhibit 3.2 filed as part of the
Registration Statement on Form 10 filed by the Company on February 13,
1993).
4.3 Amended and Restated 1992 Stock Option Plan (incorporated by reference
to Exhibit 4.3 filed as part of the Registration Statement on Form S-8
filed by the Company on February 4, 1994.
**10.1 (a) Delivery Service Agreement dated as of September 12, 1994 between
the Company and Merchants Home Delivery Service, Inc.
(b) Delivery Service Agreement dated as of May 12, 1993 between
the Company and Joseph Eleto Transfer, Inc.
**10.2 Lease Agreement dated June 14, 1991 between the Company and Mack
Woodbridge Industrial.
***10.3 (a) Employment Agreement dated as of May 1, 1995 between the Company
and Alan Rosenberg.
(b) Employment Agreement dated as of May 1, 1995 between the Company
and Steven H. Halper.
(c) Employment Agreement dated as of May 1, 1995 between the Company
and Peter McGeough.
*10.4 1992 Stock Option Plan.
10.5 Form of Nonqualified Stock Option Agreement.
23
<PAGE>
10.6 **(a) Agreement dated as of August 16, 1994 between the Company and
Local 875 affiliated with the International Brotherhood of Teamsters,
Warehousemen and Helpers of America.
**(b) Agreement dated as of January 1995 between the Company and
Local 875 affiliated with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America.
(c) Agreement dated as of January 3, 1997 between the Company and
Local 875 affiliated with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America.
(d) Agreement dated as of March 1, 1997 between the Company and
Local 875 affiliated with the International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America.
24
<PAGE>
*10.7 Form Indemnification Agreement.
10.8 Pooling and Servicing Agreement dated as of
March 15, 1995, among Seaman Receivables
Corporation, as transferor, Seaman Furniture
Company, Inc. as servicer, and the Bank of New
York, as trustee. (Incorporated by reference to
Exhibit 10.1 filed as part of the Current Report
on Form 8-K filed by the Company on April 22,
1995).
10.9 Revolving credit and Security Agreement dated as
of April 29, 1996 with the Bank of New York
Credit Corp. and NatWest Bank N.A. as Co-
Lenders. (Incorporated by reference to Exhibit 7
filed as part of the current report on Form 8-K
filed by the Company on May 14, 1996).
21 Subsidiaries.
* Incorporated by reference to the exhibit with the corresponding exhibit
number filed as part of the Registration Statement on Form 10 filed by the
Company on February 13, 1993.
** Incorporated by reference to the exhibit with the corresponding exhibit
number filed as part of the 10-K filed by The Company on July 28, 1995.
*** Incorporated by reference to the exhibit with the corresponding exhibit
number filed as part of the 10-K filed by The Company on July 30, 1996.
25
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND
SUBSIDIARIES
- -----------------------------------------------
CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS
ENDED APRIL 30, 1997, 1996 AND 1995
AND INDEPENDENT AUDITORS' REPORT
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
Index to Financial Statements and Schedules
Page No.
--------
Financial Statements:
Independent Auditors' Report F-2
Consolidated Balance Sheets, for the Years Ended
April 30, 1997 and 1996 F-3
Statements of Consolidated Operations, for the
Years Ended April 30, 1997, 1996 and 1995 F-4
Statements of Stockholders' Equity, for the
Years Ended April 30, 1997, 1996 and 1995 F-5
Statements of Consolidated Cash Flows, for the
Years Ended April 30, 1997, 1996 and 1995 F-6
Notes to Consolidated Financial Statements F-7
Schedules:
SCHEDULES OMITTED
Schedules not filed herewith are omitted because of the absence of
conditions under which they are required or because the information called for
is shown in the financial statements or notes thereto.
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
- -----------------------------
The Board of Directors and Shareholders
Seaman Furniture Company, Inc.:
We have audited the accompanying consolidated balance sheets of Seaman Furniture
Company, Inc. and Subsidiaries (collectively, the "Company") as of April 30,
1997 and 1996 and the related statements of consolidated operations,
stockholders' equity and consolidated cash flows for each of the three fiscal
years in the period ended April 30, 1997. These consolidated financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company at April 30, 1997 and 1996 and the results of their operations and their
cash flows for the three fiscal years in the period ended April 30, 1997 in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
June 27, 1997, except for Note 9,
for which the date of our report
is July 9, 1997
F-2
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
- -----------------------------------------------
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1997 AND 1996 (IN THOUSANDS)
- --------------------------------------
ASSETS NOTES 1997 1996
- ------ ----- ---- ----
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents 2 $ 6,423 $ 3,436
Accounts receivable (less allowance for
doubtful accounts of $8,104 and
$8,983, respectively) 2,6 68,916 65,716
Merchandise inventories 2 28,782 27,796
Prepaid expenses and other current assets 1,133 1,921
Deferred income tax benefit 4 4,977 5,709
--------- ---------
Total current assets 110,231 104,578
PROPERTY AND EQUIPMENT - at cost: 2
Land 2,324 2,724
Buildings and improvements 15,145 15,145
Furniture, fixtures and office equipment 13,519 13,199
Leaseholds and leasehold improvements 17,084 15,992
--------- ---------
Total 48,072 47,060
Less - Accumulated depreciation and
amortization (16,681) (13,909)
--------- ---------
Property and equipment - net 31,391 33,151
PROPERTY FINANCED BY
CAPITAL LEASES (less accumulated
amortization of $3,777 and $3,366,
respectively) 2,3 4,727 5,138
Deferred Income Tax Benefit 4 10,834 11,935
OTHER ASSETS (principally deposits) 4,039 4,449
--------- ---------
TOTAL $ 161,222 $ 159,251
========= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY NOTES 1997 1996
- -------------------- ----- ---- ----
CURRENT LIABILITIES:
Accounts payable - trade $ 13,167 $ 11,022
Accrued expenses and other 19,947 16,670
Current portion of long-term debt 3 1,123 673
Customer deposits 2 8,487 9,266
--------- ---------
Total current liabilities 42,724 37,631
--------- ---------
LONG-TERM DEBT 3 12,878 20,085
--------- ---------
COMMITMENTS AND
CONTINGENCIES 7
STOCKHOLDERS' EQUITY:
Common stock-$.01 par value;
authorized 15,000,000 shares;
issued 5,004,575 shares
at April 30, 1997 50 50
Additional paid-in capital 5 86,817 86,817
Retained earnings 24,310 20,225
--------- ---------
111,177 107,092
Less: Treasury Stock, at cost
(467,534 shares at April 30, 1997 and 1996) (5,557) (5,557)
--------- ---------
Stockholders' equity - net 105,620 101,535
--------- ---------
TOTAL $ 161,222 $ 159,251
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
- -----------------------------------------------
STATEMENTS OF CONSOLIDATED OPERATIONS
FOR THE YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(IN THOUSANDS EXCEPT PER COMMON SHARE AMOUNTS)
- -------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
NOTES APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1995
----- -------------- -------------- --------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales 2 $ 251,175 $ 229,505 $ 215,857
Net finance charge income 12,809 14,036 12,364
---------- ---------- ---------
Total 263,984 243,541 228,221
---------- ---------- ---------
OPERATING COSTS AND EXPENSES:
Cost of sales, including buying and occupancy costs 167,430 152,982 138,038
Selling, general and administrative 2 87,206 83,094 74,691
---------- ---------- ---------
Total 254,636 236,076 212,729
---------- ---------- ---------
INCOME FROM OPERATIONS 9,348 7,465 15,492
INTEREST EXPENSE (2,247) (1,748) (1,707)
INTEREST INCOME 65 878 561
---------- ---------- ---------
INCOME BEFORE PROVISION
FOR INCOME TAXES 7,166 6,595 14,346
PROVISION FOR INCOME TAXES 4 (3,081) (2,700) (5,738)
---------- ---------- ---------
NET INCOME $ 4,085 $ 3,895 $ 8,608
========== ========== =========
NET INCOME PER COMMON SHARE 2 $ 0.82 $ 0.78 $ 1.68
========= ========== =========
Weighted average common and common
equivalent shares outstanding 4,991,875 4,979,152 5,129,441
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
F-4
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
- -----------------------------------------------
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED APRIL 30, 1997, 1996 AND 1995
(IN THOUSANDS)
- -------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
---------------------- PAID-IN RETAINED TREASURY
SHARES AMOUNT CAPITAL EARNINGS STOCK
--------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balances at May 1, 1994 5,002,500 $ 50 $ 82,594 $ 7,722 $ (2,536)
Issued common stock 2,075 19
Repurchase of treasury stock (3,005)
Reversal of Valuation Allowance for deferred
tax assets originating prior to emergence
from Chapter 11 4,204
Net income for the year ended April 30, 1995 8,608
--------- ---------- ---------- ---------- ----------
Balances at April 30, 1995 5,004,575 50 86,817 16,330 (5,541)
Repurchase of treasury stock (16)
Net income for the year ended April 30, 1996 3,895
--------- ---------- ---------- ---------- ----------
Balances at April 30, 1996 5,004,575 50 86,817 20,225 (5,557)
Net income for the year ended April 30, 1997 4,085
--------- ---------- ---------- ---------- ----------
Balances at April 30, 1997 5,004,575 $ 50 $ 86,817 $ 24,310 $ (5,557)
========== ========== ========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
F-5
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
- -----------------------------------------------
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE YEAR ENDED APRIL 30, 1997, 1996 AND 1995
(IN THOUSANDS)
- ------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
April 30, 1997 April 30, 1996 April 30, 1995
-------------- -------------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 4,085 $ 3,895 $ 8,608
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, amortization and writedown of land 5,118 4,156 3,143
Deferred income taxes 1,833 1,369 613
Provision for bad debts 9,797 12,716 8,739
Changes in certain assets and liabilities:
Accounts receivable (12,997) (7,367) (35,954)
Merchandise inventories (986) (4,373) (4,021)
Prepaid expenses and other assets 1,198 (1,415) (1,820)
Accounts payable 2,145 422 1,367
Accrued expenses and other 3,277 (7,991) 5,336
Customer deposits (779) 1,764 890
-------- -------- --------
Net cash provided by (used in) operating activities 12,691 3,176 (13,099)
-------- -------- --------
INVESTING ACTIVITIES:
Purchase of equipment (2,947) (7,998) (6,472)
-------- -------- --------
FINANCING ACTIVITIES:
Securitization of accounts receivable -- (20,000) 20,000
Borrowings (Repayments) under Debt obligations 1,659 (587) (505)
Purchase of Treasury Stock -- (16) (3,005)
(Repayments) Borrowings on lines of credit (8,416) 8,430 --
-------- -------- --------
Net cash (used in) provided by financing activities (6,757) (12,173) 16,490
-------- -------- --------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2,987 (16,995) (3,081)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 3,436 20,431 23,512
-------- -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,423 $ 3,436 $ 20,431
======== ======== ========
SUPPLEMENTAL DISCLOSURES:
- ------------------------
Interest paid $ 870 $ 448 $ 401
======== ======== ========
Income taxes paid $ 983 $ 2,220 $ 3,596
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
F-6
<PAGE>
SEAMAN FURNITURE COMPANY, INC. AND SUBSIDIARIES
- -----------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
Seaman Furniture Company, Inc. (the "Company"), a Delaware corporation, is
one of the largest regional specialty furniture retailers in the
Northeastern United States. As of April 30, 1997, the Company operated a
chain of 38 stores in the greater New York, Philadelphia and Cleveland
metropolitan areas. The Company was incorporated in 1985 as a successor to
the business founded by Julius Seaman, who started the business in
Brooklyn in 1933.
2. SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial
---------------------------
statements include the accounts of Seaman Furniture Company, Inc. and its
wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation.
SALES AND CUSTOMER DEPOSITS - Sales are recorded upon the delivery of
---------------------------
merchandise to customers. Customer deposits are recorded as a liability
until delivery of the merchandise to customers or until the deposit is
forfeited. Income from forfeited deposits is recorded using estimates
determined from the Company's experience with prior forfeitures.
CASH EQUIVALENTS - Cash equivalents consist of highly liquid investments
----------------
primarily in commercial paper and certificates of deposit, all of which
have a maturity of three months or less. All securities, which are held to
maturity, are stated at cost, adjusted for previous amortized or discount
accreted, if any. The Company has the intent and ability to hold such
securities to maturity. As of April 30, 1997 and 1996, the Company did not
hold any available-for-sale securities. Interest earned on investment
securities is included in interest income.
ACCOUNTS RECEIVABLE - Accounts receivable consist principally of
-------------------
interest-bearing amounts due from retail customers under financing
agreements which provide for monthly payments over various terms,
substantially all of which are between 24 and 33 months. Accounts
receivable installments due in more than one year are included in current
assets in accordance with standard industry practices. It is not
practicable to determine the amount of such installments.
The activity in the allowance for doubtful accounts for each of the
periods presented follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1995
-------------- -------------- --------------
<S> <C> <C> <C>
Balance, beginning of period $ 8,983 $ 8,786 $ 5,494
Provision 9,797 12,716 8,739
Write-offs (13,039) (14,558) (6,987)
Recoveries 2,363 2,039 1,540
--------- -------- --------
Balance, end of period $ 8,104 $ 8,983 $ 8,786
========= ======== ========
</TABLE>
F-7
<PAGE>
FINANCE CHARGE INCOME
Gross finance charge revenue and the related expense are as follows:
<TABLE>
<CAPTION>
April 30,
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Finance charge revenues $ 12,980 $ 16,078 $ 12,495
Finance expenditures 171 2,042 131
--------- -------- --------
Net finance charge income $ 12,809 $ 14,036 $ 12,364
========= ======== ========
</TABLE>
MERCHANDISE INVENTORIES - The Company values its inventories under the
-----------------------
first-in, first-out cost flow assumption.
PROPERTY AND EQUIPMENT - Property and equipment is stated at cost less
----------------------
accumulated depreciation and amortization. Depreciation of buildings and
improvements and furniture, fixtures and office equipment is computed
using the straight-line method over their estimated useful lives which
are: buildings and improvements, 30 to 31.5 years and furniture, fixtures
and office equipment, 5 to 10 years. Leaseholds and leasehold improvements
are amortized over the terms of the related leases or their estimated
useful lives, whichever are shorter. In 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121
("SFAS 121"), "Accounting For the Impairment of Long-Lived Assets and For
Long-Lived Assets To Be Disposed Of". SFAS 121 prescribes the accounting
treatment for long-lived assets, identifiable intangibles and goodwill
related to those assets when there are indications that the carrying
values of those assets may not be recoverable. The adoption of SFAS 121
did not have a material effect on the Company's results of operations or
its financial position at April 30, 1997.
PROPERTY FINANCED BY CAPITAL LEASES - Property financed by capital leases
-----------------------------------
is amortized on the straight-line basis over the shorter of their
estimated useful lives or the remaining terms of the leases.
INCOME TAXES - The Company follows the provisions of Statement of
------------
Financial Accounting Standards No. 109. "Accounting for Income Taxes"
("SFAS No. 109"), which requires recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have
been included in the company's financial statements or tax returns. Under
this method, deferred tax assets and liabilities are determined based on
the differences between the financial accounting and tax bases of assets
and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse.
OPERATING LEASES - Rent expense relating to stores which are classified as
----------------
operating leases due to the terms of the respective leases is recognized
on the straight-line method.
STORE OPENING EXPENSES - Expenses (other than those relating to capital
----------------------
improvements) associated with new store openings are charged to operations
in the period in which such expenses are incurred.
NET INCOME PER SHARE- Net income per share is based on the weighted
--------------------
average number of common and common equivalent shares outstanding during
the period. Employee stock options are considered to be common stock
equivalents and, accordingly, the calculation includes approximately
454,834, 442,111 and 455,981 common stock equivalent shares
F-8
<PAGE>
using the treasury stock method for the years ended April 30, 1997, 1996
and 1995, respectively. Also, the weighted average common and common
equivalent shares outstanding used to calculate net income per share were
4,991,875, 4,979,152, and 5,129,441 for fiscal 1997, 1996 and 1995,
respectively.
PERVASIVENESS OF ESTIMATES - The preparation of financial statements in
--------------------------
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
RECLASSIFICATIONS - Certain reclassifications have been made to prior
-----------------
consolidated financial statements to conform with the April 30, 1997
presentation.
DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS - Management of the
-------------------------------------------------
Company believes that the fair value of the Company's financial
instruments approximates their recorded value due to the short maturities
of these instruments as of April 30, 1997 and 1996.
3. LONG-TERM DEBT
LONG-TERM DEBT - At April 30, 1997 and 1996, long-term debt, consisted of
--------------
the following in thousands of dollars:
APRIL 30,
---------------------
1997 1996
--------- -------
Industrial Revenue Bonds (A) $ - $ 3,962
Fleet Mortgage (A) 5,819 -
Revolving Credit Agreement (B) 14 8,430
Capital Leases (C) 8,168 8,366
-------- ---------
Total 14,001 20,758
-------- ---------
Less:
Current portion 1,123 673
-------- ---------
Long-term debt $ 12,878 $ 20,085
======== =========
(A)FLEET MORTGAGE/INDUSTRIAL REVENUE BOND - On November 8, 1996, the
--------------------------------------
Company entered into a $6,187,500 mortgage loan with a bank to
refinance a $6,000,000 Town of Islip Development Bond ("IDA") held by
the bank. Approximately $3,738,000 was outstanding on the IDA as of the
transaction date. The Company is obligated to pay equal monthly
installments of approximately $73,660 through November 1, 2003. The
interest rate on such agreement was 8.49 percent at April 30, 1997. The
loan is collateralized by land and a building in Central Islip, NY with
a carrying value of approximately $11 million at April 30, 1997.
(B)REVOLVING TERM LOAN AGREEMENT - On April 26, 1996, the Company entered
-----------------------------
into a revolving term loan agreement with two banks, under which the
banks were committed to lend up to $40 million to the Company. The
Company is obligated to pay a commitment fee of .25 percent per annum
of the unused balance under these agreements. Borrowings under these
agreements bear interest at variable rates based upon the net income of
the Company, as defined in the agreement. Interest on these borrowings
was 9.0 percent at April 30, 1997.
F-9
<PAGE>
The loan agreements contain certain covenants which include (i)
maintenance of certain financial ratios; (ii) maintenance of certain
amounts of net income, working capital and net worth; (iii) limitations
on capital expenditures; (iv) limitations on the payment of dividends;
(v) limitations on other indebtedness; (vi) restrictions on the
disposal of assets; and (vii) limitations on corporate reorganizations.
At April 30, 1997, the Company was in compliance with each of the
covenants mentioned above.
(C)CAPITAL LEASES - The obligations relative to capital leases at April
--------------
30, 1997 relate to two store leases and are payable in varying monthly
installments.
LONG-TERM MATURITIES - Long-term obligations are scheduled to mature as
--------------------
follows (in thousands of dollars):
YEAR ENDED APRIL 30, AMOUNT
--------------------------- ---------
1998 $ 2,376
1999 2,513
2000 2,593
2001 2,656
2002 2,723
Thereafter 16,586
---------
Total 29,447
Less interest on capital leases 15,447
---------
Total $ 14,000
=========
4. INCOME TAXES
The Company records deferred tax assets or liabilities at the end of each
period which is determined using the currently enacted tax rate expected
to apply to taxable income in the periods in which the deferred tax asset
or liability is expected to be settled or realized.
The income tax provision is as follows (in thousands of dollars):
YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1995
-------------- -------------- --------------
Current:
Federal $1,067 $ 911 $3,821
State & Local 553 420 1,304
Deferred 1,461 1,369 613
------ ------ ------
Total $3,081 $2,700 $5,738
====== ====== ======
The Company's effective income tax rate differs from the Federal statutory
rate. The reasons for this difference are as follows (dollar amounts in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1995
---------------------- ---------------------- -------------------
AMOUNT % AMOUNT % AMOUNT %
------ ---- -------- --- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Federal statutory rate $2,436 34.0 $2,243 34.0 $4,878 34.0
Increases (reductions) due to:
State & local taxes - net of
Federal income tax benefit 645 9.0 457 7.0 860 6.0
------ ---- ------ ---- ------ ----
Effective rate $3,081 43.0 $2,700 41.0 $5,738 40.0
====== ==== ====== ==== ====== ====
</TABLE>
F-10
<PAGE>
The significant elements of gross deferred tax assets and liabilities at
April 30, 1997 and 1996 are as follows (dollar amounts in thousands):
<TABLE>
<CAPTION>
APRIL 30, 1997 APRIL 30, 1996
-------------------- --------------------
DEFERRED TAX DEFERRED TAX
ASSETS/(LIABILITIES) ASSETS/(LIABILITIES)
-------------------- --------------------
<S> <C> <C>
Allowance for doubtful accounts $ 3,734 $ 4,193
Allowances for obsolete and
slow-moving inventories 1,300 1,489
Customer deposit forfeitures 5 72
Other (62) (45)
-------- --------
Total current portion 4,977 5,709
-------- --------
Capital leases 1,421 1,367
Accelerated depreciation (570) (1,132)
Other 815 487
Net operating loss carryforwards 9,168 11,213
-------- --------
Noncurrent portion 10,834 11,935
-------- --------
Total $ 15,811 $ 17,644
======== ========
</TABLE>
At April 30, 1997, the Company had Federal tax loss carryforwards
aggregating approximately $21 million, which expire in 2007. Net operating
loss carryforwards of approximately $3 million were utilized during the
fiscal year ended April 30, 1997.
5. SHAREHOLDERS' EQUITY
The Company's amended and restated Certificate of Incorporation provides
that the authorized capital stock of the Company consists of 15 million
shares of Common Stock, par value $.01 per share.
The holders of the common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Holders
of common stock are entitled to receive ratably such dividends as may be
declared by the Board of Directors out of funds legally available
therefor.
STOCK OPTIONS
-------------
The Company has a compensatory stock option plan (the "Plan") which
provides for the issuance of incentive or non-qualified stock options to
certain senior executives and other executives. The aggregate options
which may be granted under the Plan is 1,500,000. The Plan is administered
by the Compensation Committee of the Company's Board of Directors.
Under the Plan, the Company grants options at the approximate fair market
value. The Company's stock options become exercisable over varying terms,
as specified by the Compensation Committee. The options granted to certain
senior executives (see Note 7) are exercisable in full any time after the
granting date. The options granted to other executives vest over a two- or
three-year period. Stock options are subject to forfeiture in certain
circumstances.
F-11
<PAGE>
The Company continues to account for the Option Plan using the intrinsic
value method in accordance with Accounting Principles Board No. 25,
"Accounting For Stock Issued To Employees" and its related
interpretations. Effective with fiscal 1997, the Company is subject to the
provisions of Statement of Financial Accounting Standards No. 123,
"Accounting For Stock-Based Compensation" ("SFAS 123"). SFAS 123
established a fair value method of calculating compensation expense
related to stock-based compensation plans, and requires the disclosure of
the pro forma effects of recording such expense. Under SFAS 123, the fair
value of stock-based awards to employees is calculated through the use of
option pricing models, even though such models were developed to estimate
the fair value of freely tradable, fully transferable options without
vesting restrictions, which significantly differ from the Company's stock
option awards. These models also require subjective assumptions, including
future stock price volatility and expected time to exercise, which greatly
affect the calculated values. The Company's calculations were made using
the Black-Scholes option pricing model with the following assumptions:
Volatility Rate 5%
Risk-Free Interest Rate 9%
Dividend Rate 0%
Expected Term of Option In Years 5 years
On a pro forma basis, net income and earnings per common share for fiscal
1997 and 1996 would have been $3,941 and $.79 and $3,895 and $.78,
respectively.
A summary of activity under the Company's stock option plans for the year
ended April 30, 1997 is as follows:
NUMBER OF EXERCISE
SHARES PRICE RANGE
---------- -----------------
Balance - May 1, 1993 555,555 $5.01
Granted 37,000 $9.00
---------- =================
Balance - April 30, 1994 592,555 $ 5.01 - $ 9.00
========== =================
Granted 93,000 $12.50 - $18.75
Exercised (2,075) $9.00
---------- -----------------
Balance - April 30, 1995 683,480 $ 5.01 - $18.75
========== =================
Granted 322,500 $20.50 - $35.00
Exercised (10,041) $ 9.00 - $12.50
Canceled (19,734) $20.50
---------- -----------------
Balance - April 30, 1996 976,205 $ 5.01 - $35.00
========== =================
Granted 213,000 $18.125-$28.00
Exercised (2,400) $ 9.00
Cancelled (169,710) $20.50 - $35.00
---------- -----------------
Balance - April 30, 1997 1,017,095 $ 5.01 - $28.00
========== =================
6. SALE OF ACCOUNTS RECEIVABLE
In April 1995, the Company entered into an agreement with a third party to
sell, with limited recourse, $20 million of its eligible, as defined,
trade accounts receivable. The rate associated with that agreement was 8.1
percent per annum. In April 1996, the Company redeemed and terminated the
1995 series of Class A Securitization Certificates in the amount of $20
million.
F-12
<PAGE>
7. COMMITMENTS AND CONTINGENCIES
OPERATING LEASES
----------------
The Company is obligated under various noncancelable operating leases
covering stores and two warehouses which provide for minimum rentals plus,
in certain instances, real estate taxes, other expenses and additional
rentals based on sales levels. Future minimum lease payments under these
operating leases are as follows (in thousands of dollars):
YEAR ENDING APRIL 30, AMOUNT
--------------------- ------
1998 $ 14,134
1999 14,321
2000 13,999
2001 13,576
2002 13,001
2003 - 2007 37,485
2008 - 2012 14,389
2013 - 2017 4,875
2018 - 2022 2,232
2023 155
---------
Total $ 128,167
=========
RENT EXPENSE
------------
Rent expense for operating leases aggregated approximately $13,697,000,
$13,197,000, $10,883,000 (net of sub-lease income of approximately
$507,000, $541,000 and $495,000) for the years ended April 30, 1997, 1996
and 1995, respectively. These amounts include additional rental payments
of approximately zero, $12,000 and $51,000, respectively, which are based
on store sales.
RETIREMENT PLANS
----------------
The Company has a defined contribution pension plan which is qualified
under Section 401(k) of the Internal Revenue Code. Such plan is available
to substantially all employees not covered by collective bargaining
agreements. The Company may make contributions to match a portion of
participant contributions.
The Company also participates in a multi-employer union-sponsored pension
plan. Information concerning benefits and assets available to pay benefits
for this plan is not available. Under the Employee Retirement Income
Security Act of 1974, as amended, an employer, upon withdrawal from a
multi-employer plan, is required to continue funding its proportionate
share of the plan's unfunded vested benefits, if any. The Company has no
current intention of withdrawing from the plan.
Total expenses related to these plans aggregated approximately $1,751,000,
$1,658,000 and $1,497,000, respectively, for the years ended April 30,
1997, 1996 and 1995.
LITIGATION
----------
The Company is involved in various proceedings incidental to the normal
course of their business. Management does not expect that any of such
proceedings will have a material adverse effect on the Company's
consolidated financial position or results of operations.
F-13
<PAGE>
EMPLOYMENT AGREEMENTS
---------------------
The Company, in May 1995, renewed its three-year employment agreements
with certain senior executives of the Company. Such employment agreements,
all of which terminate in April 1998, required first year annual
compensation in the aggregate of $770,000 with annual increases subject to
a Consumer Price Index formula, as defined in the agreements, or the
discretion of the Board of Directors.
Also, such executives were granted 165,000, 55,000 and 30,000 options
during fiscal 1997, 1996 and 1995, respectively to purchase shares of
common stock issuable pursuant to the 1992 Stock Option Plan, which was
adopted by the Company. Such options vest over a three-year period.
In addition, during a prior year, such executives were granted 555,555
options (at the then fair values) to purchase shares of common stock
issuable pursuant to the 1992 Stock Option Plan, which was adopted by the
Company. Such options vest at the sole discretion of the Board of
Directors, but in any event, no later than ten years from the date of
grant. Approximately one-half of such options were issued and fully vested
at the date of grant. Subsequent thereto, an additional 23,150 and 162,035
options became vested in June 1994 and May 1995, respectively. At April
30, 1997, 92,591 options remained unvested.
8. QUARTERLY FINANCIAL DATA (UNAUDITED)
YEAR ENDED FIRST SECOND THIRD FOURTH
APRIL 30, 1997 QUARTER QUARTER QUARTER QUARTER TOTAL
--------------------- -------- --------- -------- -------- -----------
Sales $62,659 $ 63,722 $63,294 $ 61,500 $251,175
Gross Margin $20,361 $ 21,138 $21,249 $ 20,997 $ 83,745
Net Income $ 445 $ 1,059 $ 968 $ 1,613 $ 4,085
Net Income Per Share $ 0.09 $ 0.21 $ 0.19 $ 0.33 $ 0.82
YEAR ENDED FIRST SECOND THIRD FOURTH
APRIL 30, 1996 QUARTER QUARTER QUARTER QUARTER TOTAL
--------------------- -------- --------- -------- -------- -----------
Sales $57,468 $ 57,966 $56,292 $ 57,779 $229,505
Gross Margin $19,927 $ 19,885 $18,048 $ 18,663 $ 76,523
Net Income $ 1,534 $ 1,504 $ 335 $ 522 $ 3,895
Net Income Per Share $ 0.31 $ 0.30 $ 0.07 $ 0.10 $ 0.78
Quarterly and total year earnings per share are calculated independently
based on the weighted average number of shares and share equivalents
outstanding during each period.
9. SUBSEQUENT EVENT
On July 9, 1997, the Company announced that it has received a proposal
from a group consisting of its senior management and majority stockholders
to purchase, through a one-step merger transaction, the approximately 20%
of the Company's outstanding Common Stock, par value $.01 per share, owned
by the public for $24.00 per share.
F-14
<PAGE>
10. SUPPLEMENTAL INFORMATION
Advertising expense for the years ended April 30, 1997, 1996 and 1995 was
approximately $23,581,000, $23,273,000, and $20,097,000, respectively.
* * * * * *
F-15
<PAGE>
EXHIBIT 10.5
FORM
----
SEAMAN FURNITURE COMPANY, INC.
Nonqualified Stock Option Agreement
-----------------------------------
WHEREAS, (the "Optionee") is of Seaman Furniture
------------- ------------
Company, Inc. (the "Company");
WHEREAS, the execution of a Nonqualified Stock Option Agreement substantially
in the form hereof has been duly authorized by a resolution of the Board of
Directors (the "Board") of the Company duly adopted as of
--------------------
"Date of Grant") and incorporated herein by reference; and
WHEREAS, the option granted hereby is intended as a nonqualified stock option
and shall not be treated as an "incentive stock option" within the meaning of
that term under Section 422 of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, pursuant to the Company's 1992 Stock Option Plan (the "Plan"),
the Company hereby grants to the Optionee an option to purchase shares
--------
of Common Stock, par value $.01 per share, of the Company at the exercise price
of ($ ) per share, and agrees to cause
----------------------- -------
certificates for any shares purchased hereunder to be delivered to the Optionee
upon full payment of the option exercise price, subject to the terms and
conditions of the Plan and the terms and conditions hereinafter set forth.
1. This option (until terminated as hereinafter provided) shall be
exercisable in full at any time after the Date of Grant. To the extent
exercisable, this option may be exercised in whole or in part from time to time.
2. The option exercise price shall be payable (a) in cash or by check
acceptable to the Company, (b) by transfer to the Company of shares of Common
Stock that have
<PAGE>
been owned by the Optionee for more than six months prior to the date of
exercise and have a fair market value on the date of exercise equal to the
option exercise price, or (c) by a combination of any of the foregoing methods
of payment. The requirement of payment in cash shall be deemed satisfied if the
Optionee shall have made arrangements satisfactory to the Company with a broker
who is a member of the National Association of Securities Dealers, Inc. to sell
a sufficient number of the shares being purchased so that the net proceeds of
the sale transaction will at least equal the option exercise price and pursuant
to which the broker undertakes to deliver the full option exercise price to the
Company not later than the date on which the sale transaction will settle in the
ordinary course of business. For the purposes of this Section 2 and Section 9
hereof, "fair market value" shall be as determined by the Committee from time to
time.
3. (a) If the Optionee desires to sell all or any portion of the shares
of Common Stock owned by him pursuant to any exercise of any option granted
under the Plan, the Optionee shall give written notice to the Company of his
intention to dispose of such shares, which notice shall specify the number of
shares of Common Stock proposed to be disposed of, the minimum price proposed to
be asked therefor on a per share basis (the "First Refusal Price"), in the case
of a private sale the intended purchaser of such shares, if known, and if not
known, a written explanation as to the reason the Optionee does not know the
identity of the intended purchaser, and the other terms and conditions of the
proposed sale. Such notice shall constitute an offer to sell to the Company all
of the shares of Common Stock set forth in such notice, at the aggregate First
Refusal Price and on the terms other than price set forth in such notice (the
"First Refusal Offer").
(b) The First Refusal Offer may be accepted, in whole only, by the
Company by giving notice of acceptance to the Optionee within 2 business days
after receiving the First
<PAGE>
Refusal Offer, which notice of acceptance shall specify the number of shares of
Common Stock to be purchased by the Company.
(c) The closing of any purchase pursuant to this Paragraph 3 shall be
held within 10 business days following the date the Company gives its notice of
acceptance, at such date, time and/or place as the parties may agree. At any
such closing, the Optionee shall deliver to the Company a certificate or
certificates representing the number of shares of Common Stock specified in the
Company's notice of acceptance, duly endorsed or accompanied by stock powers
duly executed in blank and otherwise in proper form for transfer on the books of
the Company, together with stamps for any applicable stock transfer tax or
provision for payment thereof, and the Company shall deliver to the Optionee a
certified check or bank draft payable to the order of the Optionee in an amount
equal to the product of the First Refusal Price and the number of shares of
Common Stock being purchased by the Company.
(d) If the Company does not exercise the First Refusal Offer, the
Optionee may, within 10 business days immediately following the expiration of
such 2 business days, sell all or any portion of the balance of the shares of
Common Stock covered by the First Refusal Offer which are not covered by a
notice of acceptance of the Company at a price per share not less than the First
Refusal Price and on the same terms and conditions (including as to manner of
payment) as those set forth in the First Refusal Offer. If the Optionee does not
make such disposition within such 10 business days, no subsequent disposition of
any of the Optionee's shares of Common Stock may be made without again complying
with this Paragraph 3.
(e) If the Optionee fails to comply with this Paragraph 3 with respect
to any of his shares of Common Stock, any attempted or purported sale,
assignment, transfer, or other disposition of such shares shall be void and of
no effect, and all dividends and other distributions
<PAGE>
of any kind whatsoever (whether pursuant to liquidation or otherwise) shall be
deemed to have been waived, and the voting rights of such shares on any matter
whatsoever shall be suspended, during the period commencing with the Optionee's
initial failure of compliance with this Paragraph 3 and ending when the Company
has agreed in writing to terminate such suspension and permit such sale,
assignment, transfer, hypothecation, pledge, encumbrance or other disposition.
4. Upon the Optionee's ceasing to be an employee of the Company or a
Subsidiary for any reason, including death or retirement or following permanent
disability (a "Termination"), the Company shall have the right upon a written
notice (the "Repurchase Notice") given to the Optionee within 30 days of such
Termination, to repurchase from the Optionee all or any portion of the Common
Stock then owned by the Optionee and acquired hereunder and to require the
Optionee to surrender to the Company for cancellation all or any portion of this
option then remaining exercisable upon payment to the Optionee, from any source
of funds legally available therefor, of the purchase price as hereinafter
provided.
If there is a public trading market for the Common Stock, the purchase
price for any repurchase shall be determined within 2 business days of the date
of the Repurchase Notice and shall be payable in cash within 10 business days
following the date of such determination. If there is not a public trading
market for the Common Stock, the purchase price for any repurchase shall be
determined within 90 days after the Repurchase Notice and shall be payable in
cash within 10 business days following the date of such determination. With
respect to the Common Stock, the purchase price shall be determined by (a)
multiplying the number of shares of Common Stock being repurchased by the
Company by (b) the Current Market Price (as defined below) per share of Common
Stock as of the date of the Repurchase Notice. With respect to the surrender of
<PAGE>
options, the purchase price shall be determined by (a) multiplying the number of
shares of Common Stock subject to such options or portion thereof being
surrendered to the Company by (b) the difference between the Current Market
Price (as defined below) per share of Common Stock as of the date of the
Repurchase Notice and the option exercise price per share of Common Stock as of
the date of the Repurchase Notice.
"Current Market Price" shall mean, in respect of any share of Common
Stock on any date herein specified, the average of the daily market prices for
the previous 10 consecutive business days for a listing on the National Market
System ("NMS") or the previous 30 consecutive business days for a listing on
NASDAQ. The daily market price for each such business day shall be the last
reported closing price if listed on the NMS or the average of the last reported
closing bid and asked prices on such day on NASDAQ, as furnished by the National
Association of Securities Dealers Automatic Quotation System or the National
Quotation Bureau, Inc., or if neither corporation is reporting such prices, as
furnished by any member of the NASD which is making a market in the Common
Stock. In the event there is no market for the shares or the Committee, in its
sole discretion, determines that on account of the lack of trading volume, the
Current Market Price cannot be determined from the daily market prices, the
Current Market Price shall mean the amount determined by an investment banker
selected by the Optionee from a list of at least three disinterested qualified
investment bankers provided by the Committee.
5. This option shall terminate on the earliest of the following dates:
(a) Except with respect to any portion of this option subject to a
Repurchase Notice given pursuant to Section 4, ninety days after the date of a
Termination other than on account of death; provided, however, if the date
-------- -------
of Termination occurs within the initial three
<PAGE>
months and one day after the date of grant of the option, the ninety-day period
shall be extended through the fifth business day after the six-month anniversary
of the date of grant of the option;
(b) Except with respect to any portion of this option subject to a
Repurchase Notice given pursuant to Section 4, one year after the date of
Optionee's death; and
(c) Ten years from the Date of Grant.
Nothing contained in this option shall limit in any way whatsoever any
right that the Company or a Subsidiary may otherwise have to terminate the
employment of the Optionee at any time.
6. This option is not transferable by the Optionee except by will or
the laws of descent and distribution and may be exercised during the lifetime of
the Optionee only by the Optionee or, in the event of his legal incapacity to do
so, by his guardian or legal representative acting on behalf of the Optionee in
a fiduciary capacity under state law and court supervision.
7. Notwithstanding any other provision of this Nonqualified Stock
Option Agreement, this option shall not be exercisable if the exercise would
involve a violation of any applicable federal or state securities law, and the
Company hereby agrees to make reasonable efforts to comply with all such laws.
8. The Committee shall make such adjustments in the option price and in
the number or kind of shares of Common Stock or other securities covered by this
option as the Committee may in good faith determine to be equitably required in
order to prevent dilution or expansion of the rights of the Optionee that
otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company, (b) any merger, consolidation, spin-off, spin-out, split-off, split-up,
reorganization or
<PAGE>
partial or complete liquidation or other distribution of assets involving the
Company or (c) any other corporate transaction or event having an effect similar
to any of the foregoing.
9. If the Company shall be required to withhold any federal, state or
local tax in connection with the Optionee's exercise of this option, it shall be
a condition to such exercise that the Optionee pay or make provision
satisfactory to the Company for payment of all such taxes. The Optionee may
elect with the consent of the Committee that all or any part of such withholding
requirement be satisfied by retention by the Company of a portion of the shares
purchased upon exercise of this option. If such election is made, the shares so
retained shall be credited against such withholding requirement at the then fair
market value on the date of exercise as defined in Section 2 hereof.
10. For the purposes of this Nonqualified Stock Option Agreement, (a)
the term "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 80% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain, and (b) the continuous
employment of the Optionee with the Company or a Subsidiary shall not be deemed
interrupted, and the Optionee shall not be deemed to have ceased to be an
employee of the Company or any Subsidiary, by reason of the transfer of his
employment among the Company and its Subsidiaries.
EXECUTED as of the ___ day of , .
------------ -----
SEAMAN FURNITURE COMPANY, INC.
By _____________________________
Title:
<PAGE>
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Nonqualified Stock Option Agreement and accepts the option
granted hereunder.
---------------------------------
Optionee
<PAGE>
EXHIBIT 10.6(c)
SEAMAN FURNITURE COMPANY, INC. and LOCAL 875, Affiliated
with the INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA
COLLECTIVE BARGAINING AGREEMENT
--------------------------------------------------------
ARTICLE I GOOD FAITH.................................... 2
- --------- ----------
ARTICLE II RECOGNITION................................... 2
- ---------- -----------
ARTICLE III UNION SECURITY................................ 3
- ----------- --------------
ARTICLE IV CHECK-OFF..................................... 4
- ---------- ---------
ARTICLE V HOURS OF WORK................................. 5
- --------- -------------
ARTICLE VI OVERTIME...................................... 6
- ---------- --------
ARTICLE VII HOLIDAYS/SUNDAYS.............................. 6
- ----------- ----------------
ARTICLE VIII PERSONAL DAYS................................. 8
- ------------ -------------
ARTICLE IX VACATIONS..................................... 8
- ---------- ---------
ARTICLE X WAGE INCREASES................................ 9
- --------- --------------
ARTICLE XI COMMISSIONS................................... 10
- ---------- -----------
ARTICLE XII SICK BENEFITS WELFARE FUND.................... 11
- ----------- --------------------------
ARTICLE XIII PENSION FUND.................................. 13
- ------------ ------------
ARTICLE XIV GRIEVANCE PROCEDURE........................... 14
- ----------- -------------------
ARTICLE XV SENIORITY..................................... 16
- ---------- ---------
ARTICLE XVI NOTICE TO AND FROM UNION...................... 17
- ----------- ------------------------
ARTICLE XVII BULLETIN BOARD................................ 20
- ------------ --------------
ARTICLE XVIII LIE DETECTOR TEST............................. 20
- ------------- -----------------
ARTICLE XIX NON-DISCRIMINATION............................ 20
- ----------- ------------------
ARTICLE XX SAFETY AND SANITARY CONDITIONS................ 21
- ---------- ------------------------------
ARTICLE XXI VISITATION.................................... 21
- ----------- ----------
ARTICLE XXII LEAVE OF ABSENCE.............................. 21
- ------------ ----------------
ARTICLE XXIII EXISTING PRACTICES............................ 22
- ------------- ------------------
<PAGE>
ARTICLE XXIV NO STRIKE - NO LOCKOUT........................ 22
- ------------ ----------------------
ARTICLE XXV GUARANTEED WORK............................... 23
- ----------- ---------------
ARTICLE XXVI JOB POSTINGS AND TRANSFERS.................... 24
- ------------ --------------------------
ARTICLE XXVII SEVERANCE PAY................................. 24
- ------------- -------------
ARTICLE XXVIII DISCHARGES.................................... 25
- -------------- ----------
ARTICLE XXIX COLLECTIVE BARGAINING......................... 26
- ------------ ---------------------
ARTICLE XXX SUBCONTRACTING................................ 26
- ----------- --------------
ARTICLE XXXI PROTECTION OF RIGHTS.......................... 27
- ------------ --------------------
ARTICLE XXXII ASSIGNABILITY................................. 27
- ------------- -------------
ARTICLE XXXIII EFFECTIVE DATE................................ 27
- -------------- --------------
ARTICLE XXXIV SEPARABILITY.................................. 27
- ------------- ------------
ARTICLE XXXV POOL COMMISSIONS.............................. 28
- ------------ ----------------
ARTICLE XXXVI GENERAL....................................... 28
- ------------- -------
ARTICLE XXXVII SPECIAL SALE NOTICE........................... 28
- -------------- -------------------
ARTICLE XXXVIII SICK DAYS..................................... 28
- --------------- ---------
ARTICLE XXXIX RESELECTS......................................29
- ------------- ---------
ARTICLE XL SERVICE CHARGEBACKS........................... 30
- ---------- -------------------
ARTICLE XLI PREPARATION TO WORK SALES FLOOR............... 30
- ----------- -------------------------------
ARTICLE XLII NO COMMISSION PAID/ONE YEAR RULE.............. 30
- ------------ --------------------------------
ARTICLE XLIII PETTY CASH.................................... 31
- ------------- ----------
ARTICLE XLIV PERFORMANCE CLAUSE............................ 31
- ------------ ------------------
ARTICLE XLV BEREAVEMENT PAY............................... 33
- ----------- ---------------
ARTICLE XLVI CREDIT APPLICATION............................ 33
- ------------ ------------------
ARTICLE XLVII JOB DESCRIPTION............................... 33
- ------------- ---------------
ARTICLE XLVIII SHORTAGES..................................... 34
- -------------- ---------
ARTICLE XLIX DURATION.......................................34
- ------------ --------
<PAGE>
THIS AGREEMENT made and entered into as of January 3, 1997, by and
between SEAMAN FURNITURE COMPANY, INC., 300 Crossways Park Drive, Woodbury, New
York 11797, a Delaware Corporation, hereinafter designated as the Employer or
Company, and LOCAL 875, affiliated with the INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, hereinafter
designated as the Union.
WHEREAS, the Employer is engaged in the business of retail sale of
furniture and
WHEREAS, the Union represents the majority of the Sales Employees
hereinafter designated as Sales Associates of the Employer and
WHEREAS, the parties hereto desire to cooperate in establishing
conditions in the Employer's stores which will tend to secure to the Sales
Associates a living wage, improve the standards of labor, abolish unfair
competition insofar as labor is concerned, and provide methods for a fair and
peaceful adjustment of all disputes that may arise between the parties hereto.
NOW, THEREFORE, in consideration of one dollar and other good and
valuable consideration to each in hand paid by the other, and in consideration
of the mutual promises and obligations herein assumed and made, the parties
hereby agree as follows:
1
<PAGE>
ARTICLE I GOOD FAITH
- --------- ----------
The Employer and the Union hereby agree that they will in good faith
live up to the provisions of this Agreement, and that this Agreement is entered
into by the Union and the Employer on behalf of the Sales Associates of the
Employer, now employed or hereafter to be employed, in the bargaining unit as
defined in ARTICLE II hereof.
ARTICLE II RECOGNITION
- ---------- -----------
The Employer agrees to and does hereby recognize the Union as the sole
and exclusive bargaining agent for all Sales Associates, excluding clerical and
office employees, guards, professional employees, warehousemen and supervisors
as defined in the Labor Management Relations Act of 1947.
This Agreement shall cover all future plants which the Company may
operate during the term of this Agreement or any extension thereof, including
all stores operated as the result of expansion or change. This Agreement shall
apply to the Company's stores should there be any shift of geographical
location. This clause shall inure to the benefit of the Local herein only, but
not its successors or assigns.
2
<PAGE>
ARTICLE III UNION SECURITY
- ----------- --------------
All Sales Associates who are members of the Local Union on the effective
date of this subsection or on the date of execution of this Agreement, whichever
is the later, shall remain members of the Local Union in good standing as a
condition of employment. All present Sales Associates who are not members of the
Local Union and all Sales Associates who are hired hereafter shall become and
remain members in good standing of the Local Union as a condition of employment
by the 31st day following the effective date of this subsection or the date of
their employment, whichever is the later. This provision shall be made and
become effective as of such time as it may be made and become effective under
the provisions of the National Labor Relations Act, but not retroactively.
The failure of any Sales Associates to become a member of the Union at
the required time shall obligate the Employer, upon written notice from the
Union to such effect and to the further effect that Union membership was
available to such person on the same terms and conditions generally available to
other members, to forthwith discharge such person. Further, the failure of any
Sales Associate to maintain his/her Union membership in good standing as
required herein shall, upon written notice to the Employer by the Union to such
effect, obligate the Employer to discharge such Sales Associate.
3
<PAGE>
In the event of any change in the law during the terms of this
Agreement, the Employer agrees that the Union will be entitled to receive the
maximum Union security which may be lawfully permissible.
No provision of this Article shall apply in any state to the extent that
it may be prohibited by State Law. If under applicable State Law, additional
requirements must be met before any such provision may become effective, such
additional requirements shall first be met.
If any provisions of this Article are invalid under the law of any state
wherein this Agreement is executed, such provisions shall be modified to comply
with the requirements of State Law or shall be re-negotiated for the purpose of
adequate replacement. If such negotiations shall not result in a mutually
satisfactory agreement, the Union shall be permitted all legal or economic
recourse.
ARTICLE IV CHECK-OFF
- ---------- ---------
The Employer agrees to deduct, on the first pay day of each month, from
the salary or wages of the Sales Associates covered by this Agreement such Union
dues and initiation fees as the Union, by written notice, advises the Employer
are regularly due as such from the Sales Associates, and will turn such monies
over to the Union on or before the TENTH DAY of each month,
4
<PAGE>
covering the current month in advance, together with its listing of the Sales
Associates and amount, from whom such monies have been deducted, provided,
however, that the Employer will make such deduction only from wages of those
Sales Associates who submit individual written authorization to the Employer
directing and authorizing the Employer to make such deductions.
Any monies deducted from the Sales Associates are to remain the property
of the Union and in no event shall the Employer be permitted to use said monies
for any other purpose.
ARTICLE V HOURS OF WORK
- --------- -------------
Except as noted herein, stores shall be open to the public during the
following hours:
Monday through Friday: 10:00 A.M. through 9:30 P.M.
Saturday: 10:00 A.M. through 9:00 P.M.
All Sales Associates shall be available to work during the above hours.
Sunday: 12:00 Noon through 6:00 P.M.
For Sundays' staffing, Sales Associates will continue to be scheduled on
a voluntary rotational basis, as is the current practice.
5
<PAGE>
The Company reserves the right to extend or reduce the hours of work
during special advertised promotional events and /or on Holidays.
The Company reserves the right to schedule three (3) separate shifts on
Saturdays.
The Company may require Sales Associates to attend store meetings one-
half (1/2) hour prior to the starting time of their scheduled shifts.
The provisions of Article XXXVII of this contract shall remain in
effect.
ARTICLE VI OVERTIME
- ---------- --------
Overtime compensation shall be paid at the rate of time and one-half the
base rate of pay for all hours exceeding forty (40) hours in any week excluding
Sundays and holidays for which payment is covered in ARTICLE VII.
ARTICLE VII HOLIDAYS/SUNDAYS
- ----------- ----------------
The Employer shall not require its Sales Associates to work on the
following holidays, and shall pay them for such holidays:
New Year's Day Labor Day
Washington's Birthday Thanksgiving Day
Memorial Day Christmas Day
July 4th
6
<PAGE>
To be eligible for holiday pay, the Sales Associate must work at least
four (4) hours the day before and at least four (4) hours the day after the said
holiday, unless that Sales Associate is on lay-off, verified illness, plant
shutdown or Act of God. All work performed on holidays shall be paid for at the
premium flat rate of $80.00 per day plus eight (8) hours of base pay and bonuses
and commissions, if any. Holiday pay for the Sales Associates who do not work on
the foregoing holidays shall be eight (8) hours base pay.
All work performed on Sundays shall be paid for at the premium flat rate
of $80.00 per day plus bonuses and commissions, if any.
a) If any of said holidays shall fall on Saturday, then even though no
work shall be performed, the Sales Associates shall be paid at straight time for
that day.
b) If any of said holidays shall fall on Sunday, then the Monday
following shall be considered the holiday, and even though no work shall have
been performed on such Monday, the Sales Associates shall be paid for that day.
c) If any of the above holidays shall fall within the Sales Associate's
vacation period, his/her vacation shall be extended one (1) day with pay.
7
<PAGE>
d) Sales Associates absent because of a compensable illness or injury
shall be entitled to full holiday pay, provided illness is temporary and does
not exceed six (6) weeks duration.
ARTICLE VIII PERSONAL DAYS
- ------------ -------------
The Employer agrees to grant Sales Associates three (3) personal days
per year at base pay. There are no partial personal days; personal days can be
taken only in full day segments. A personal day is a planned day off and thereby
requires Management's advance approval. There is no carry over of personal days
from one calendar year to the next.
Newly hired Sales Associates will be eligible for personal days upon
completion of their probationary period (120 days).
ARTICLE IX VACATIONS
- ---------- ---------
The Employer shall grant vacation with pay for all its Sales Associates
in accordance with provisions of this paragraph as set forth below:
Based on the Sales Associate's prior year W-2 on a pro-rata basis
excluding bonuses.
All Sales Associates shall receive not less than his/her pro-rated
vacation provided he/she does have the following eligibility:
8
<PAGE>
All full time Sales Associates who have been in the employ of the Employer for
one (1) year shall receive one (1) week vacation with pay; all Sales Associates
who have been in the employ of the Employer for two (2) years or more shall
receive two (2) weeks vacation with pay. Sales Associates with seven (7) years
or more of employment shall receive three (3) weeks vacation with pay. Sales
Associates with thirteen (13) years of service shall receive four (4) full
weeks' vacation with pay.
The Employer shall pay to all its Sales Associates their vacation pay
prior to the employee going on his or her vacation.
Sales Associates who have been employed for one year or more, who are
laid off at any time during the term of this Agreement, shall be paid a pro-rata
vacation at the time of their job severance. Sales Associates who have been
employed less than three (3) years and are discharged for cause shall not be
entitled to pro-rata vacation pay.
Vacation pay shall be issued via a separate paycheck.
ARTICLE X WAGE INCREASES
- --------- --------------
a) Effective as of January 3, 1997, there shall be a general wage
increase of $5.00 per week (40 hour work week) for all Sales Associates covered
by this Agreement who by such date have completed thirty (30) calendar days.
9
<PAGE>
b) Effective as of January 3, 1998, there shall be a general wage
increase of $8.00 per week (40 hour work week) for all Sales Associates covered
by this Agreement who by such date have completed thirty (30) calendar days.
c) Effective as of January 3, 1999, there shall be a general wage
increase of $10.00 per week (40 hour work week) for all Sales Associates covered
by this Agreement who by such date have completed thirty (30) calendar days.
d) Sales Associates who are not actually working as of, or on the
effective date of the weekly wage increase provided herein shall be entitled to
receive such increase on their return to work.
e) There will be a $10.00 per week (40 hour work week) wage increase
for newly-hired Sales Associates upon completion of 30 days of employment.
ARTICLE XI COMMISSIONS
- ---------- -----------
The Company shall pay the following minimum commission rate on sales
delivered on or after February 1, 1997:
ITEM COMMISSION
---- ----------
Bedding, Lamps and Accessories.......10%
Table Pads...........................11%
Fabric Bond and Leather Bond.........14.5%
Floor Samples.........................8%
Clearance Center Merchandise:
Any Item sold for $150.01 or more...5%
Any Item sold for $150.00 or less...7%
10
<PAGE>
Commissions on all other merchandise shall be paid at the rate of 3.77%
of the selling price. These commission rates apply to all merchandise whether
advertised or not.
ARTICLE XII SICK BENEFITS WELFARE FUND
- ----------- --------------------------
In order to protect and promote the health and welfare of the Sales
Associates in the industry, the Union has the WELFARE FUND, which is
administered under a Declaration of Trust adopted by its members.
a) The Company, effective as of January 3, 1997, shall pay monthly to
the Local 875 LOUIS HIRSCH MEMORIAL WELFARE FUND the sum of $278.00 for each
Sales Associates covered by this Agreement. Effective January 3, 1998, the
contribution amount shall be $283.00 per Sales Associate per month. Effective
January 3, 1999 and remaining for the duration of the contract, the contribution
amount shall be $293.00 per Sales Associate per month. These monies shall be
used for the purpose of securing hospitalization and surgical benefits, Life
Insurance, and other Welfare benefits for its Sales Associates, employees of the
Union, the PENSION FUND AND this WELFARE FUND, in accordance with the Trust
Agreements covering such funds. This contribution is due and payable on the
tenth (10th) day of each month for the current month payable in advance.
b) Such payments shall not be in lieu of any other payments required to
be made by the Employer such as any applicable
11
<PAGE>
state disability payments, State Unemployment Insurance, Social Security,
Workers' Compensation, etc.
c) Holiday and vacation time shall be considered time worked for the
purpose of this Article at the rate of eight (8) hours per day.
d) The Company shall forfeit all rights under this Agreement and the
Sales Associates may cease to work if the Company fails to pay its contributions
as provided above and/or the matter may be treated as a grievance hereunder.
e) With its monthly remittance, the Company will forward to the LOUIS
HIRSCH MEMORIAL WELFARE FUND (Local 875) the names of the Sales Associates
covered and such other information as may be required by the Trustees of the
Fund for the administration of the Fund.
f) If the Employer is delinquent in his payments to the Fund, claims
for payment may be prosecuted in the name of the Union, on behalf of the Sale
Associate(s) concerned, or in the name of the Fund and may be submitted to
arbitration.
The Arbitrator may schedule a hearing for any date on or after
expiration of twenty-four (24) hours notice sent by the Union to the Company,
and the Arbitrator shall render an award as quickly as possible. If the Company
fails to appear, the Arbitrator shall proceed without the Company being present.
In the absence of proof otherwise by the Company, which shall bring to such
hearing all books and records pertaining to the matter to be heard, the
12
<PAGE>
Arbitrator shall determine the amount due to the Fund, on the petition of the
Union or of the Welfare Fund as to the amounts due and payable. In the absence
of other proof by the Union, all Welfare Fund payments due shall be based on the
average number of Sales Associates and hours worked by each such Sale Associates
as contained in the two highest reports thereof submitted by the Company to the
Union during the two (2) year period preceding.
g) The Union may elect not to proceed before the Arbitrator and may
proceed in any other manner provided by law, as if the provisions of ARTICLE XIV
were not contained in this Agreement. In such event the amounts due and payable
shall be determined in such other proceedings or proceeding in the same manner
as is provided above for determining such amounts before the Arbitrator, in the
absence of the Company from such hearing.
ARTICLE XIII PENSION FUND
- ------------ ------------
In order to protect and promote security for Sales Associates in the
industry, the Union has established a PENSION FUND, which is administered under
a Declaration of Trust adopted by its members.
a) The Employer shall continue to pay to LOCAL 875 - PENSION FUND the
sum of $8.00 per week or 8% of the gross earnings, whichever is greater, for
each Sales Associate covered by this Agreement.
13
<PAGE>
b) All clauses under ARTICLE XII, 12b, 12c, 12e, 12f, and 12g are
incorporated herein and such clauses shall be deemed to apply to the Pension
Fund for the Sales Associates eligible under ARTICLE XII.
c) Pension Fund contributions are due and payable on the 10th day of
each month for the prior month.
ARTICLE XIV GRIEVANCE PROCEDURE
- ----------- -------------------
Section 1: A grievance is hereby jointly defined to be any controversy,
- ----------
complaint, misunderstanding, or dispute.
Any grievance arising between the Company and the UNION shall be settled
in the following manner:
a) The aggrieved Sales Associate must present the grievance to the Shop
Steward within five (5) working days after the reason for the grievance has
occurred, except that no time limit shall apply in case of violation of wage
provisions of this Agreement. If a satisfactory settlement is not effected with
the management within three (3) working days, the Shop Steward and Sales
Associate shall submit such grievance in writing to the Union's Business
Representative.
b) The Union Business Representative shall then take the matter up with
a representative of the Company with authority to act upon such grievance. A
decision must be made within five (5) working days.
14
<PAGE>
c) If the Company fails to comply with any settlement of the grievance
or fails to comply with the procedures of this Article, the Union has the right
to take all legal and economic action to enforce its demands.
Section 2: Any Regional Shop Steward shall be permitted to leave his or her
- ----------
work to investigate and adjust the grievance of any Sales Associate within his
or her jurisdiction, after prior notification to his Supervisor, and approval by
both the Union and Director of Human Resources and/or Director of Stores and/or
Regional Director, who shall not unreasonably withhold his/her consent. Sales
Associates shall have the Shop Steward or a representative of the Union present
during the discussion of any grievance with representatives of the Company.
Section 3: a) The dispute shall then be submitted to an Arbitrator appointed
- ----------
by the New York State Board of Mediation or a mutually agreed upon arbitrator.
b) Expense of the Arbitrator selected or appointed shall be borne
equally by the Company and the Union, unless arbitration is requested because of
the Employer's failure to make remittances as required by this Agreement, in
which event the Employer shall pay the total cost.
Section 4: The Arbitrator shall not have the authority to amend or modify
- ----------
this Agreement or establish new terms or conditions under this Agreement. The
Arbitrator shall determine any question of arbitrability. In the event the
position of the Union is
15
<PAGE>
sustained, the aggrieved party shall be entitled to all the benefits of this
Agreement which would have accrued to him/her had there been no grievance.
Section 5: Both parties agree to accept the decision of the Arbitrator as
- ----------
final and binding. If the Company fails to comply with the award of the
Arbitrator or with the procedures of this Article, the Union has a right to take
all legal and economic action to enforce compliance.
It is agreed that the number of sales personnel on any selling floor
shall be subject to the grievance procedure, but not to the arbitration process.
ARTICLE XV SENIORITY
- ---------- ---------
a) The Employer recognizes the principle of seniority. For the purpose
of lay-off and rehiring, seniority shall be on a company-wide basis, in that the
last Sales Associate hired in a company-wide basis shall be the first Sales
Associate laid off and the last Sales Associate laid off shall be the first
Sales Associate rehired.
b) It is agreed by the Company and the Union that all Shop Stewards and
officers of the Union have seniority over all Sales Associates in the plant
providing they can do the work that is to be done.
16
<PAGE>
c) Any Sales Associate who is laid off eight (8) consecutive months
shall lose his/her seniority. However, if he/she is rehired within the eight (8)
month period, such Sales Associate shall return with his/her original seniority.
d) The rights of seniority in re-employment shall be accorded to a laid
off Sales Associate prior to new Sales Associate being hired provided such laid
off Sales Associate responded to a call to report for work not more than ten
(10) working days after notice has been sent to him/her by registered mail,
return receipt requested, to his/her last-known post office address.
e) Seniority rights to a laid off Sales Associate will continue to
accumulate while he/she is laid off.
f) Preference in choice of work schedule, vacation scheduling and
choice of new jobs shall be given to Sales Associate having higher seniority.
New jobs shall be defined as jobs having a higher rate of pay. This section
shall not limit the Employer's right to transfer or run its operation.
ARTICLE XVI NOTICE TO AND FROM THE UNION
- ----------- ----------------------------
a) A seniority list, including name, category, rate of pay, and
starting date, shall be submitted every other month.
b) Remittance sheets, including names, new Sales Associates starting
date, old Sales Associates termination date, gross wages earned for the
preceding month for each Sales
17
<PAGE>
Associate, the amounts of dues and initiation checked-off, contributions to
fringe benefit funds, and for what monthly periods, shall be remitted once a
month, within ten (10) days after the 1st day of each month, together with
checks made payable to the proper fringe benefit fund and dues and initiation to
Local 875 I.B.T.
c) All necessary cards, properly signed, to the fringe benefit funds,
from a new Sales Assoicate, must be submitted with the remittance sheet.
d) For failure to submit the remittance sheet within ten (10) days
after it is due, then in such event, the Union, at its option, may take economic
action until it is submitted, and the Employer shall pay to Sales Associates for
all time out on strike or work stoppage their regular rate of pay.
e) If the Employer fails to notify the Union of the hiring of a new
Sales Associate and/or the rehiring of a Sales Associate, then in such event,
the Employer shall be responsible from the first day due, for all monies as if
he collected same to the Union for dues, initiations and contributions to all
fringe benefit funds as described herein.
f) For failure to remit monies due to the Union for dues, initiations
and any fringe benefit fund before the 61st day of accrual, the Union, at its
option, may charge a bookkeeping fee of two (2%) percent per month or any part
thereof until it is remitted, provided that not less than ten (10) days written
notice
18
<PAGE>
of the proposed charge is given to the Employer and the Employer fails to remit
within ten (10) days.
g) If the Employer fails to notify the Union of the termination of a
Sales Associate, for any reason, then in such event, the Employer shall be
responsible for all monies, as if he collected same, to the Union for dues,
initiation and contributions to all fringe benefit funds, if any, as described
herein.
h) The Welfare and/or Pension Fund may audit the Employer's payroll
books and records after giving reasonable notice to the Employer, and if
contributions are incorrect, the Employer shall pay the cost of such audit and
all legal fees necessary and incident to collect the same.
i) In the event of default by the Employer in the payment of
contributions to the Funds mentioned in this Agreement, the Trustees may take
legal action to obtain payment, including but not limited to, the commencement
of arbitration proceedings for such purposes before an Arbitrator, selected by
the appropriate Trustees. All expenses thereof, including but not limited to,
the fee and expenses of the Arbitration and any filing or other administrative
fee plus reasonable attorney's fees fixed at twenty (20%) percent of the
indebtedness, together with interest at a reasonable rate on any monies
determined to be due, shall be chargeable to, and an obligation of, the
contributing Employer against whom such arbitration proceeding is commenced. The
19
<PAGE>
Arbitrator may schedule a hearing on twenty-four (24) hours notice by regular or
certified mail.
ARTICLE XVII BULLETIN BOARD
- ------------ --------------
The Employer will provide the Union with a Bulletin Board in an
appropriate location in the plant to be used by the Union for posting of all
Union notices and literature.
ARTICLE XVIII LIE DETECTOR TEST
- ------------- -----------------
The Company shall not require, request or suggest that a Sale Associate
take a polygraph or any other form of lie detector test.
ARTICLE XIX NON-DISCRIMINATION
- ----------- ------------------
No Sales Associate shall be discriminated against, directly or
indirectly, because of his/her membership in or activity on behalf of the Union,
nor will the Employer, directly or indirectly, discourage membership in the
Union, and the provisions of this Agreement shall apply to all Sales Associates
without discrimination as to sex, color, race, creed, age, national origin,
handicap or disability.
20
<PAGE>
ARTICLE XX SAFETY AND SANITARY CONDITIONS
- ---------- ------------------------------
The Company shall furnish and maintain safe and healthful sanitary
conditions, including clean and adequate locker accommodations, washing
facilities and toilets.
ARTICLE XXI VISITATION
- ----------- ----------
Union representatives shall be given the right to enter the plant
premises at all reasonable times for the purpose of investigating grievances and
to secure the enforcement of the contract and for such other purposes as may be
necessary; provided however, that prior to entering the plant property they
shall first advise the front office of their presence and intention to enter the
plant property.
ARTICLE XXII LEAVE OF ABSENCE
- ------------ ----------------
A. In accordance with the Family and Medical Leave Act of 1993 (the
"FMLA"), a Sales Associate who has been employed by the Employer for at least
twelve (12) months (at the time the leave commences) and has worked at least
1,250 compensable hours during the twelve (12) months prior to the leave is
entitled to a total of twelve (12) weeks of unpaid leave during any twelve (12)
month period for the reasons listed in the FMLA. A Sales Associate who takes a
leave of absence under FMLA is required to use his or her accrued vacation, sick
or personal days during the leave period.
21
<PAGE>
For example, when two weeks of accrued paid leave is used by a Sales Associate
for FMLA purposes, the Employer will provide ten (10) weeks unpaid leave to
total twelve (12) weeks. A leave of absence under FMLA will be granted in
accordance with Employer's then existing procedures. The FMLA and the
regulations promulgated thereunder will govern the procedures for a leave of
absence unless state law provides greater family and medical leave rights in
which case the state law will govern.
B. Any Sale Associate upon application in writing shall be granted a
leave of absence without pay not to exceed one (1) month because of official
Union business.
ARTICLE XXIII EXISTING PRACTICES
- ------------- ------------------
All benefits of employment in existence at the effective date of this
Agreement and not modified by the Agreement shall be continued without
modification.
ARTICLE XXIV NO STRIKE - NO LOCKOUT
- ------------ ----------------------
During the term of this Agreement, the Employer agrees that they will
not declare or authorize a lockout unless the Union failed to comply with an
arbitration award within forty-eight (48) hours after the award has been made,
and the Union agrees that no strike shall take place unless the Employer fails
to comply with an arbitration award within forty-eight (48) hours after the
award has
22
<PAGE>
been made. Neither the Union nor its Officers, agents or representatives shall
be liable for any acts of any person or any Sales Associates participating in
any strike or work stoppage unless such act or strike or work stoppage has been
expressly authorized by the Union and in conformance with the provisions of the
Constitution of the Union and the provisions of the International Union
Constitution. The parties further agree that any strike, slowdown or stoppage
not authorized as herein specified shall not be deemed a violation of this
Agreement.
In the event of an unauthorized slowdown or work stoppage, the Union
agrees within twenty-four (24) hours after receipt of notice thereof from the
Employer solely to endeavor in good faith to bring about a return to work of its
members who have stopped work. Upon failure of the Sales Associates to return to
work within the said twenty-four (24) hours, the Employer may take appropriate
action with respect to such Sales Associate or Sales Associates. Compliance by
the Union in good faith herewith shall be deemed full compliance with the
Union's obligation hereunder .
ARTICLE XXV GUARANTEED WORK
- ----------- ---------------
Sales Associates regularly scheduled for full-shift work shall be given
four (4) hours' work or the monetary equivalent thereof unless notified on the
previous day not to report, except in cases of power failure, Acts of God or
other such circumstances beyond the Employer's control.
23
<PAGE>
ARTICLE XXVI JOB POSTINGS AND TRANSFERS
- ------------ --------------------------
a) In the event the Company opens a new store, all sales openings in
the new store shall be posted on a bulletin board in each existing store. All
Sales Associates employed by the Company can apply for a job opening(s) in a new
store. The Company will consider a Sales Associate application for such
opening(s) based on Company wide sales staffing needs and the applicant's entire
employment record with the Company including, but not limited to, his/her sales
performance history.
b) In the event the Company transfers a Sales Associate involuntarily,
the affected Sales Associate shall be given at least 72 hours' notice of such
transfer. No Sales Associate employed by the Company for fifteen (15) years or
more will be subject to an involuntary transfer.
ARTICLE XXVII SEVERANCE PAY
- ------------- -------------
In the event that the Employer liquidates, moves or terminates his
business or a Sales Associate is made to retire by the Employer, the Employer
shall be liable for one (1) week's pay pro-rata to his Sales Associates.
24
<PAGE>
ARTICLE XXVIII DISCHARGES
- -------------- ----------
No Sales Associate shall be discharged except for just and sufficient
cause.
Just cause for discharge shall include but not be limited to the
following:
a) Theft of Company property.
b) Wanton destruction of Company property.
c) Drunkenness on the job.
d) Excessive lateness and absenteeism.
e) Drinking on the premises.
f) Illegal use of drugs on the job.
Whenever the Union disputes and/or disagrees with the justification of
the discharge of any Sales Associate, the Union shall provide the Employer with
a written notice of its dispute and/or disagreement within one (1) working day
of the time that the individual is required to leave the plant premises or the
Union Business Agent receives official notification of the Employer's intention
to discharge the said Sales Associate, whichever occurs later. The dispute
and/or disagreement shall thereupon be adjusted between the parties in the
manner provided in ARTICLE XIV of this Agreement provided, however, that it
shall not be necessary to commence with subdivision a) of said paragraph but
institution of the dispute may be by immediate recourse to subdivision 3 of said
Article, and any Sales Associate who has been discharged and subsequently
reinstated as a result of invoking the machinery
25
<PAGE>
for resolving dispute as set forth in ARTICLE XIV shall be reinstated to his/her
former job with full back pay.
New Sales Associates shall have a one hundred twenty (120) day
probationary period during which time the Employer reserves the right to
discharge, and such discharge shall not be subject to the grievance procedure.
Any new Sales Associate retained beyond the one hundred twenty (120) day trial
shall be entitled to all the rights and privileges of this Agreement, effective
as of the date of commencement of his/her employment, but in no event shall new
Sales Associates be paid less than the minimum rate of pay established under
this Agreement.
ARTICLE XXIX COLLECTIVE BARGAINING
- ------------ ---------------------
The Company agrees that it will negotiate with the Union during the term
of this Agreement concerning any matter involving the wages, hours and working
conditions of the Sales Associates, which is not specifically provided for in
this Agreement and which is not subject of any grievance.
ARTICLE XXX SUBCONTRACTING
- ----------- --------------
The Company will not, so long as equipment and personnel are available,
subcontract work which is customarily performed by Sales Associates in the
bargaining unit to any other company.
26
<PAGE>
ARTICLE XXXI PROTECTION OF RIGHTS
- ------------ --------------------
Picket Line - It shall not be a violation of this Agreement and shall
not be cause for discharge or disciplinary action in the event a Sales Associate
refuses to enter upon any property of his/her Employer involved in a lawful
primary labor dispute, or refuses to go through or work behind any lawful
primary picket lines at his/her Employer's places of business, including picket
lines of Unions, parties to this Agreement.
ARTICLE XXXII ASSIGNABILITY
- ------------- -------------
This Agreement shall be binding upon the parties hereto, their
successors and assigns.
ARTICLE XXXIII EFFECTIVE DATE
- -------------- --------------
All the terms and conditions of this Agreement shall be effective as of
January 3, 1997, except as otherwise indicated.
ARTICLE XXXIV SEPARABILITY
- ------------- ------------
It is understood and agreed that if any provision of the Agreement or
the application of such provision to any person or circumstances shall be held
invalid, the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby.
27
<PAGE>
ARTICLE XXXV POOL COMMISSIONS
- ------------ ----------------
All commissions on sales performed by managers, administrative staff,
and other salaried employees, shall go into a pool which shall be divided among
the Sales Associates who are present in the store at the time the sale was
written. The Employer shall furnish all Sales Associates a monthly statement of
all commissions on sales.
ARTICLE XXXVI GENERAL
- ------------- -------
All tickets shall be premarked in all stores.
The Employer shall appoint an ombudsman person to hear commission
grievances.
ARTICLE XXXVII SPECIAL SALE NOTICE
- -------------- -------------------
The Employer shall notify its Sales Associates at least seventy-two (72)
hours in advance prior to any special sale during which the regularly scheduled
working hours have been changed.
ARTICLE XXXVIII SICK DAYS
- --------------- ---------
The Employer agrees to grant to all Sales Associates hired prior to
January 3, 1991, seven (7) days sick leave with pay each year, provided that if
not used, the monetary equivalent of the unused portion shall be paid to the
Sales Associates before the end of the calendar year. A sick day shall be paid
at the rate of
28
<PAGE>
one (1) sick day equaling one (1) day of salary at base pay.
Sales Associates hired after January 3, 1991, and thereafter shall
receive the following sick days:
1st year of employment 3 days
2nd year of employment 5 days
5th year of employment 7 days
and thereafter
ARTICLE XXXIX RESELECTS
- ------------- ---------
A copy of all authorized reselects will be sent to the store where the
original purchase was made.
All authorized reselects will be handled by the "Up Person". The Sales
Associate that handles the customer writes the credit memo and the new sale. The
credit memo is written as an Unknown (House) and the new sale will be paid in
full to the new Sales Associate. If a reselect is handled by management, the
credit memo and the new sale will both be written as Unknown (House).
All authorized reselects are to be completed at all times even if the
original purchase was made in a different location. Customers are not to be
referred back to the original store of record. There will be no chargeback to
sales associates on a credit memo, except those caused by wrong merchandise
being delivered to the customer due to input errors, sales associate errors,
and/or incorrect pulls; along with mattress test rest.
29
<PAGE>
ARTICLE XL SERVICE CHARGEBACKS
- ---------- -------------------
The Employer agrees not to charge back Sales Associates for service
chargebacks after sixty (60) days of original delivery to the customer.
ARTICLE XLI PREPARATION TO WORK SALES FLOOR
- ----------- -------------------------------
A Sales Associate must have the following items with him/her and on
his/her person in order to work on the sales floor:
a) Name badge on lapel
-------------------
b) Pen
---
c) Copy of advertising notes
-------------------------
d) Tape measure
------------
ARTICLE XLII NO COMMISSION PAID/ONE YEAR RULE
- ------------ --------------------------------
No commission will be paid to a Sales Associate if either (i) the
merchandise is sold at lower than ticket price or (ii) the posted delivery
charge is not included in the sale, unless approved in writing by management.
The Sales Associate keeps the sale for one (1) year. However, a Sales
Associate who resigns or is terminated for any reason shall keep the sale for
one hundred twenty (120) days. After one (1) year in any event or one hundred
twenty (120) days, if the salesperson is no longer in the Company employ, the
total one hundred percent (100%) commission will be paid to a Sales Associate
who completes the sale.
30
<PAGE>
ARTICLE XLIII PETTY CASH
- ------------- ----------
The Employer will provide a petty cash box and adequate change.
ARTICLE XLIV PERFORMANCE CLAUSE
- ------------ ------------------
Each Sales Associate employed a minimum of one (1) year will be required
to ship at least fifty-five (55%) percent of the tenth highest sales shipper in
the Big Store, Middle Store or Small Store Category in a 12-month period. The
Sales Associates performance comparison will be determined by his/her store
category.
Big stores will be defined at the beginning of the Fiscal Year as those
stores doing 50% or more of the largest store's volume. Middle stores will be
defined at the beginning of the Fiscal Year as those stores doing less than 50%
of the largest store's annual shipped volume down to four million one
($4,000,001) dollars annual volume. Small Stores will be defined at the
beginning of the Fiscal year as those stores doing less than four million
($4,000,000) total annual shipped volume. New stores will initially be assigned
to Middle Store category. These categories will be posted annually at the
beginning of each fiscal year.
The Company will, on a quarterly basis, post in each store, 55% of the
tenth highest sales shipper's number for each of the three store categories.
31
<PAGE>
The Sales Associate will receive quarterly counseling and notification
prior, but in any event, will be counseled if he/she is below 55% of the tenth
highest shipper minimum. Starting with the fiscal year beginning May 1, 1997 and
ending April 30, 1998, at the end of the third quarter in a fiscal year any
Sales Associate who is below 55% of the tenth highest shipper minimum in his/her
category, upon his/her request, will be permitted to attend a sales training
program, to be provided by the Company, during his or her non-scheduled work
hours.
At the end of a fiscal year any Sales Associate who has failed to meet
the minimum performance standard for his/her category, upon his/her request,
will be permitted to attend a sales training program, to be provided by the
Company, during his or her non-scheduled work hours.
Should the Sales Associate fail to meet the minimum performance standard
for any two quarters in the following twelve-month period (fiscal year), he/she
may be discharged.
Any Sales Associate absent due to sickness or injury for 30 consecutive
days or more will have that amount of time added to the end of the fiscal year
in which the absence occurred for the purpose of determining his/her performance
clause status.
This performance clause does not apply to free standing clearance
centers.
32
<PAGE>
ARTICLE XLV BEREAVEMENT PAY
- ----------- ---------------
The Employer shall pay up to three (3) consecutive days' pay at base
rate for those days scheduled to work to Sales Associate(s) who suffer a loss in
their immediate family. Immediate family shall be defined as Parent,
Grandparent, Spouse, Current In-law, Child or Sibling. In order to receive
payment, proof of death and relationship may be required.
ARTICLE XLVI CREDIT APPLICATION
- ------------ ------------------
The Company and Union agree that at least twice per month, dates to be
determined by management, the credit applications shall be handled by clerical
staff in the store. It is understood that no Sales Associate shall refuse to
handle a credit application in the event a clerical/service representative is
not available within a reasonable amount of time.
ARTICLE XLVII JOB DESCRIPTION
- ------------- ---------------
The Company and Union recognize that the primary responsibility of Sales
Associates is to consummate the sale. The parties recognize that other
reasonable non-sales responsibilities exist. Management retains its right to
continue to run its operation but realizes that reasonable non-selling
responsibilities shall not interfere with the selling process. Salespersons are
responsible for visual inspections and reports to management, but
33
<PAGE>
are not responsible for unreasonable maintenance, e.g., changing/repairing
ceiling light bulbs, shoveling snow, taking out trash, cleaning toilets, etc.
The Company agrees to explain the above clause to its managers provided the
Union explains the above clause to its members.
ARTICLE XLVIII SHORTAGES
- -------------- ---------
Sales Associates will not be required to personally reimburse the
Company for cash shortages. Management reserves the right to take appropriate
disciplinary action with just cause.
ARTICLE XLIX DURATION
- ------------ --------
The foregoing Agreement between the Employer and the Union shall
continue in full force and effect from January 3, 1997, and expire as of 11:59
P.M. on January 2, 2000, and shall be automatically renewed from year to year
thereafter unless at least sixty (60) days prior to any expiration date either
party desiring to terminate or modify this Agreement shall so notify the other
party in writing.
34
<PAGE>
IN WITNESS WHEREOF, the parties have caused these presents to be signed.
SEAMAN FURNITURE COMPANY, INC. LOCAL 875, Affiliated with the
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN AND HELPERS OF
AMERICA
By:___________________________ By:___________________________
35
<PAGE>
EXHIBIT 10.6(d)
SEAMAN FURNITURE COMPANY, INC. and LOCAL 875, Affiliated
with the INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA
COLLECTIVE BARGAINING AGREEMENT
--------------------------------------------------------
ARTICLE I GOOD FAITH.................................... 3
- --------- ----------
ARTICLE II RECOGNITION................................... 4
- ---------- -----------
ARTICLE III UNION SECURITY................................ 4
- ----------- --------------
ARTICLE IV CHECK-OFF..................................... 6
- ---------- ---------
ARTICLE V HOURS OF WORK................................. 6
- --------- -------------
ARTICLE VI OVERTIME...................................... 7
- ---------- --------
ARTICLE VII HOLIDAYS...................................... 8
- ----------- --------
ARTICLE VIII PERSONAL DAYS................................. 9
- ------------ -------------
ARTICLE IX VACATIONS.....................................10
- ---------- ---------
ARTICLE X WAGES & WAGE INCREASES........................11
- --------- ----------------------
ARTICLE XI SICK BENEFITS WELFARE FUND....................12
- ---------- --------------------------
ARTICLE XII PENSION FUND..................................15
- ----------- ------------
ARTICLE XIII GRIEVANCE PROCEDURE...........................15
- ------------ -------------------
ARTICLE XIV SENIORITY.....................................17
- ----------- ---------
ARTICLE XV NOTICE TO AND FROM UNION......................18
- ---------- ------------------------
ARTICLE XVI BULLETIN BOARD................................20
- ----------- --------------
ARTICLE XVII LIE DETECTOR TEST.............................20
- ------------ -----------------
ARTICLE XVIII NON-DISCRIMINATION............................21
- ------------- ------------------
ARTICLE XIX SAFETY AND SANITARY CONDITIONS................21
- ----------- ------------------------------
ARTICLE XX VISITATION....................................21
- ---------- ----------
ARTICLE XXI LEAVE OF ABSENCE..............................22
- ----------- ----------------
ARTICLE XXII EXISTING PRACTICES............................23
- ------------ ------------------
1
<PAGE>
ARTICLE XXIII NO STRIKE - NO LOCKOUT........................23
- ------------- ----------------------
ARTICLE XXIV GUARANTEED WORK...............................24
- ------------ ---------------
ARTICLE XXV PROBATIONARY PERIOD...........................24
- ----------- -------------------
ARTICLE XXVI DISCHARGES....................................24
- ------------ ----------
ARTICLE XXVII COLLECTIVE BARGAINING.........................26
- ------------- ---------------------
ARTICLE XXXVIII SUBCONTRACTING................................26
- --------------- --------------
ARTICLE XXVIX PROTECTION OF RIGHTS..........................26
- ------------- --------------------
ARTICLE XXX ASSIGNABILITY.................................27
- ----------- -------------
ARTICLE XXXI EFFECTIVE DATE................................27
- ------------ --------------
ARTICLE XXXII SEPARABILITY..................................27
- ------------- ------------
ARTICLE XXXIII MINIMUM STARTING WAGE.........................27
- -------------- ---------------------
ARTICLE XXXIV SICK LEAVE....................................28
- ------------- ----------
ARTICLE XXXV UNIFORMS......................................28
- ------------ --------
ARTICLE XXXVI SAFETY BELTS..................................29
- ------------- ------------
ARTICLE XXXVII MOVING OF FURNITURE OR OTHER HEAVY OBJECTS....29
- -------------- ------------------------------------------
ARTICLE XXXVIII BEREAVEMENT LEAVE.............................30
- --------------- -----------------
ARTICLE XXXIX TOOLS.........................................30
- ------------- -----
ARTICLE XL DURATION......................................30
- ---------- --------
THIS AGREEMENT made and entered into as of March 1, 1997, by and between SEAMAN
FURNITURE COMPANY, INC., 300 Crossways Park Drive, Woodbury, New York 11797, a
Delaware Corporation, hereinafter designated as the Employer or Company, and
LOCAL 875, affiliated with the INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
2
<PAGE>
CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, hereinafter designated as the
Union.
WHEREAS, the Employer is engaged in the business of retail sale of furniture
and
WHEREAS, the Union represents the majority of the Houseman Employees of the
Employer and
WHEREAS, the parties hereto desire to cooperate in establishing conditions in
the Employer's stores which will tend to secure to the workers a living wage,
improve the standards of labor, abolish unfair competition insofar as labor is
concerned, and provide methods for a fair and peaceful adjustment of all
disputes that may arise between the parties hereto.
NOW, THEREFORE, in consideration of one dollar and other good and valuable
consideration to each in hand paid by the other, and in consideration of the
mutual promises and obligations herein assumed and made, the parties hereby
agree as follows:
ARTICLE I GOOD FAITH
- --------- ----------
The Employer and the Union hereby agree that they will in good faith live up
to the provisions of this Agreement, and that this Agreement is entered into by
the Union and the Employer on behalf of the employees of the Employer, now
employed or hereafter to be employed, in the bargaining unit as defined in
ARTICLE II hereof.
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<PAGE>
ARTICLE II RECOGNITION
- ---------- -----------
The Employer agrees to and does hereby recognize the Union as the sole and
exclusive bargaining agent for all maintenance associates (hereinafter
"associates" or "Housemen"), excluding clerical and office employees, guards,
professional employees, and supervisors as defined in the Labor Management
Relations Act of 1947.
This Agreement shall cover all future plants which the Company may operate
during the term of this Agreement or any extension thereof, including all stores
operated as the result of expansion or change. This Agreement shall apply to
the Company's stores should there be any shift of geographical location. This
clause shall inure to the benefit of the Local herein only, but not its
successors or assigns.
ARTICLE III UNION SECURITY
- ----------- --------------
All associates who are members of the Local Union on the effective date of
this subsection or on the date of execution of this Agreement, whichever is the
later, shall remain members of the Local Union in good standing as a condition
of employment. All present associates who are not members of the Local Union and
all associates who are hired hereafter shall become and remain members in good
standing of the Local Union as a condition of employment by the 31st day
following the effective date of this subsection or the date of their employment,
whichever is the later. This provision
4
<PAGE>
shall be made and become effective as of such time as it may be made and become
effective under the provisions of the National Labor Relations Act, but not
retroactively.
The failure of any person to become a member of the Union at the required time
shall obligate the Employer, upon written notice from the Union to such effect
and to the further effect that Union membership was available to such person on
the same terms and conditions generally available to other members, to forthwith
discharge such person. Further, the failure of any person to maintain his Union
membership in good standing as required herein shall, upon written notice to the
Employer by the Union to such effect, obligate the Employer to discharge such
person.
In the event of any change in the law during the terms of this Agreement, the
Employer agrees that the Union will be entitled to receive the maximum Union
security which may be lawfully permissible.
No provision of this Article shall apply in any state to the extent that it
may be prohibited by State Law. If under applicable State Law, additional
requirements must be met before any such provision may become effective, such
additional requirements shall first be met.
If any provisions of this Article are invalid under the law of any state
wherein this Agreement is executed, such provisions shall be modified to comply
with the requirements of
5
<PAGE>
State Law or shall be re-negotiated for the purpose of adequate replacement. If
such negotiations shall not result in a mutually satisfactory agreement, the
Union shall be permitted all legal or economic recourse.
ARTICLE IV CHECK-OFF
- ---------- ---------
The Employer agrees to deduct, on the first pay day of each month,
from the salary or wages of the associates covered by this Agreement such Union
dues and initiation fees as the Union, by written notice, advises the Employer
are regularly due as such from the associates, and will turn such monies over to
the Union on or before the TENTH DAY of each month covering the current month in
advance, together with its listing of the associates and amount, from whom such
monies have been deducted, provided, however, that the Employer will make such
deduction only from wages of those associates who submit individual written
authorization to the Employer directing and authorizing the Employer to make
such deductions.
Any monies deducted from the associates are to remain the property of
the Union and in no event shall the Employer be permitted to use said monies for
any other purpose.
ARTICLE V HOURS OF WORK
- --------- -------------
Each regular shift shall consist of not more than eight (8) hours per
day, and shall constitute a regular work day. The regular work week shall
consist of five (5) days. For all associates hired before March 1, 1994, there
shall be a Monday
6
<PAGE>
through Friday work week, and a Tuesday through Saturday work week. For those
associates hired on March 1, 1994 and thereafter, the work week shall be Monday
through Saturday with a day off scheduled by the Store Manager.
ARTICLE VI OVERTIME
- ---------- --------
a) Work performed in excess of forty (40) hours per week shall be
considered as overtime work and shall be paid for at the rate of time and one-
half the regular rate of pay. Work performed on Sundays and holidays shall be
paid for at the rate of double time for Sundays and holidays as such, in
addition to the holiday pay. In any week during which a holiday occurs, the
holiday shall be regarded as a regular day worked, and overtime shall commence
after thirty-two (32) hours of work that week.
b) Associates shall be required to work a reasonable amount of
overtime. The employer shall offer overtime by seniority first. If overtime
requirements are still not met, the Employer shall require the least senior
associate or associates within each store, to work overtime, provided there is
eight (8) hours' notice, unless an emergency exists. On the next occasion that
an associate is required to work overtime, the next least senior associate will
be required to work. This method will act to equitably distribute required
overtime.
7
<PAGE>
ARTICLE VII HOLIDAYS
- ----------- --------
The Employer shall not require its associates to work on the following
holidays, and shall pay them for such holidays. For all associates hired before
March 1, 1997:
New Year's Day July 4th
Martin Luther King's Birthday Labor Day
Washington's Birthday Thanksgiving Day
Good Friday Christmas Day
Memorial Day Employee's Birthday
Day after Thanksgiving Day
For those associates hired on March 1, 1997 and thereafter, they will be
required to work on Martin Luther King's Birthday and Good Friday. For those
associates hired on March 1, 1997 and thereafter, the Day after Thanksgiving and
the associate's birthday will be given as holidays, only after completion of one
year of employment.
To be eligible for holiday pay, the associate must work the full
schedule day before and the full schedule day after the said holiday, unless the
associate has a verified illness, is on layoff or there is an Act of God or
shutdown prohibiting work.
Holiday pay for the associates who do not work on the foregoing holidays
shall be eight (8) hours pay.
8
<PAGE>
a) If any of said holidays shall fall on Saturday, then, even though no
work shall be performed, the associates shall be paid at straight time for that
day.
b) If any of said holidays shall fall on Sunday, then the Monday
following shall be considered the holiday, and even though no work shall have
been performed on such Monday, the associates shall be paid for that day.
c) If any of the above holidays shall fall within the associate vacation
period, his vacation shall be extended one (1) day with pay.
d) Associates absent because of a compensable illness or injury shall be
entitled to full holiday pay, provided illness is temporary and does not exceed
six (6) weeks duration.
ARTICLE VIII PERSONAL DAYS
- ------------ -------------
The employer agrees to grant all associates hired before March 1, 1997,
three (3) personal days per year at base pay. There are no partial personal
days; personal days can be taken only in eight (8) hour segments. A personal day
is a planned day off and thereby requires Management's advance approval. There
is no carry over of personal days from one calendar year to the next.
Those associates hired on March 1, 1997 or thereafter, will receive
three (3) personal days at base pay upon completing one year of employment.
9
<PAGE>
ARTICLE IX VACATIONS
- ---------- ---------
The Employer shall grant vacation with pay for all its associates in
accordance with provisions of this paragraph as set forth below:
For all associates the following vacation schedule applies:
One week's vacation for all associates with one (1) year or more but less
than two (2) years in the employ of the Employer.
Two weeks' vacation with pay for all associates with two (2) years or
more (up to seven (7) years) in the employ of the Employer.
Three weeks' vacation with pay for all associates with seven (7) years or
more (up to fourteen (14) years) in the employ of the Employer.
Four weeks vacation with pay for all associates with fourteen (14) years
or more in the employ of the employer.
The employer shall pay to all its associates their vacation pay prior
to the employee going on his or her vacation.
Associates who have been employed for one year or more, who are laid
off at any time during the term of this Agreement, shall be paid a pro-rata
vacation at the time of their job severance.
Associates who have been employed more than three (3) years and are
discharged for cause shall be entitled to pro-rata
10
<PAGE>
vacation pay. Such pro-rata vacation shall be based upon the vacation provisions
above set forth.
ARTICLE X WAGES AND WAGE INCREASES
- --------- ------------------------
a) Effective as of March 1, 1997, there shall be a general wage increase
of $20.00 per week for all associates currently covered by this Agreement.
b) Effective as of March 1, 1998, there shall be a general wage increase
of $17.00 per week for all associates hired prior to March 1, 1997.
c) Effective as of March 1, 1999, there shall be a general wage increase
of $17.00 per week for all associates hired before March 1, 1997.
d) Effective as of March 1, 1998 there shall be a general wage increase
of $6.00 per week for those associates hired on March 1, 1997 and thereafter.
e) Effective as of March 1, 1999 there shall be a general wage increase
of $6.00 per week for those associates hired on March 1, 1997 and thereafter.
f) Associates who shall not actually be working as of or on the
effective date of the wage increase provided herein shall be entitled to receive
such increase on their return or recall to work.
g) Increases in wages granted by virtue of this Agreement shall be given
to the associates on dates specified
11
<PAGE>
herein over and above any increases in wages decreed by New York State and/or
Federal Agencies having jurisdiction thereof during the terms of this Agreement.
ARTICLE XI SICK BENEFITS WELFARE FUND
- ---------- --------------------------
In order to protect and promote the health and welfare of the employees
in the industry, the Union has established the WELFARE FUND, which is
administered under a Declaration of Trust adopted by its members.
a) The Company, effective as of March 1, 1997, shall pay monthly to the
Local 875 LOUIS HIRSCH MEMORIAL WELFARE FUND the sum of Two Hundred Seventy-
Eight Dollars ($278.00) for each associate covered by this Agreement. The
Company, effective March 1, 1998, shall pay monthly to the Local 875 LOUIS
HIRSCH MEMORIAL FUND the sum of Two Hundred Eighty-Three Dollars ($283.00) for
each associate covered by this Agreement. The Company, effective as of March 1,
1999, shall pay monthly to the Local 875 LOUIS HIRSCH MEMORIAL FUND the sum of
Two Hundred Ninety-Three Dollars ($293.00) for each associate covered by this
Agreement. These monies shall be used for the purpose of securing
hospitalization and surgical benefits, Life Insurance, and other Welfare
benefits for its associates, employees of the Union, the PENSION FUND AND this
WELFARE FUND, in accordance with the Trust Agreements covering such Fund. The
Employer shall segregate from such contributions and pay by separate check such
sum as designated by the Trustees of the
12
<PAGE>
Plan to the Local 875 Pre-Paid Legal Plan, which sum shall be utilized by the
Trustees in accordance with the Trust Indenture covering such entity. The
Trustees of the fund may, in their discretion, allocate the total amounts paid
between the two (2) Funds in any proportion which sound accounting practices
dictate, so long as the total amounts do not exceed the original figures set
forth in the Collective Bargaining Agreement.
b) Such payments shall not be in lieu of any other payments required to
be made by the Employer such as New York Disability payments, New York
Unemployment Insurance, Social Security, Workers' Compensation, etc.
c) Holiday and vacation time shall be considered time worked for the
purpose of this Article at the rate of eight (8) hours per day.
d) The Company shall forfeit all rights under this Agreement and the
associates may cease to work if the Company fails to pay its contributions as
provided above and/or the matter may be treated as a grievance hereunder.
e) With its monthly remittance, the Company will forward to the LOUIS
HIRSCH MEMORIAL WELFARE FUND (Local 875) the names of the associates covered and
such other information as may be required by the Trustees of the Fund for the
administration of the Fund.
f) If the Employer is delinquent in his payments to the Fund, claims for
payment may be prosecuted in the name of the
13
<PAGE>
Union, on behalf of the associate(s) concerned, or in the name of the Fund and
may be submitted to arbitration.
The Arbitrator may schedule a hearing for any date on or after
expiration of twenty-four (24) hours notice sent by the Union to the Company,
and the Arbitrator shall render an award as quickly as possible. If the Company
fails to appear, the Arbitrator shall proceed without the Company being present.
In the absence of proof otherwise by the Company, which shall bring to such
hearing all books and records pertaining to the matter to be heard, the
Arbitrator shall determine the amount due to the Fund, on the petition of the
Union or of the Welfare Fund as to the amounts due and payable. In the absence
of other proof by the Union, all Welfare Fund payments due shall be based on the
average number of associates and hours worked by each such associates as
contained in the two highest reports thereof submitted by the Company to the
Union during the two (2) year period preceding.
g) The Union may elect not to proceed before the Arbitrator and may
proceed in any other manner provided by law, as if the provisions of ARTICLE XIV
were not contained in this Agreement. In such event the amounts due and payable
shall be determined in such other proceedings or proceeding in the same manner
as is provided above for determining such amounts before the Arbitrator, in the
absence of the Company from such hearing.
14
<PAGE>
ARTICLE XII PENSION FUND
- ----------- ------------
In order to protect and promote security for associates in the industry,
the Union has established a PENSION FUND, which is administered under a
Declaration of Trust adopted by its members.
a) Effective as of March 1, 1997, the Employer shall pay to LOCAL 875 -
PENSION FUND the sum of $8.00 per week or 8% of the gross earning, whichever is
greater, for each associate covered by this Agreement.
b) All clauses under ARTICLE XI, (b), (c), (e), (f) and (g) are
incorporated herein and such clauses shall be deemed to apply to the Pension
Fund for the associates eligible under ARTICLE XI.
ARTICLE XIII GRIEVANCE PROCEDURE
- ------------ -------------------
Section 1: A grievance is hereby jointly defined to be any controversy,
- ----------
complaint, misunderstanding, or dispute.
Any grievance arising between the Company and the UNION shall be settled
in the following manner:
a) The aggrieved associate or associates must present the grievance to
the Shop Steward within five (5) working days after the reason for the grievance
has occurred, except that no time limit shall apply in case of violation of wage
provisions of this Agreement. If a satisfactory settlement is not effected with
15
<PAGE>
the foreman within three (3) working days, the Shop Steward and associate shall
submit such grievance in writing to the Union's Business Representative.
b) The Business Representative shall then take the matter up with a
representative of the Company with authority to act upon such grievance. A
decision must be made within five (5) working days.
c) If the Company fails to comply with any settlement of the grievance
or fails to comply with the procedures of this Article, the Union has the right
to take all legal and economic action to enforce its demands.
Section 2: Any Shop Steward shall be permitted to leave his or her work to
- ----------
investigate and adjust the grievance of any employee within his or her
jurisdiction, after prior notification to his Supervisor, and approval by both
the Union and Director of Human Resources and/or Director of Stores, who shall
not unreasonably withhold his/her consent. Associates shall have the Shop
Steward or a representative of the Union present during the discussion of any
grievance with representatives of the Company.
Section 3: a) The dispute shall then be submitted to an Arbitrator appointed
- ----------
by the New York State Board of Mediation or a mutually agreed upon arbitrator.
b) Expense of the Arbitrator selected or appointed shall be borne
equally by the Company and the Union, unless arbitration is requested because of
the Employer's failure
16
<PAGE>
to make remittances as required by this Agreement, in which event the Employer
shall pay the total cost.
Section 4: The Arbitrator shall not have the authority to amend or modify
- ----------
this Agreement or establish new terms or conditions under this Agreement. The
Arbitrator shall determine any question of arbitrability. In the event the
position of the Union is sustained, the aggrieved party shall be entitled to all
the benefits of this Agreement which would have accrued to him had there been no
grievance.
Section 5: Both parties agree to accept the decision of the Arbitrator as final
- ---------
and binding. If the Company fails to comply with the award of the Arbitrator or
with the procedures of this Article, the Union has a right to take all legal and
economic action to enforce compliance.
ARTICLE XIX SENIORITY
- ----------- ---------
a) The Employer recognizes the principle of seniority. For the purpose
of lay-off and rehiring, seniority shall be on a company-wide basis, in that the
last associate hired in a company-wide basis shall be the first associate laid
off and the last associate laid off shall be the first associate rehired.
b) It is agreed by the Company and the Union that all Shop Stewards and
officers of the Union have seniority over all associates in the plant providing
they can do the work that is to be done.
17
<PAGE>
c) Any associate who is laid off six (6) consecutive months shall lose
his seniority. However, if he is rehired thereafter, such associate shall return
with his original seniority.
d) The rights of seniority in re-employment shall be accorded to a laid
off associate prior to new associates being hired provided such laid off
associate responded to a call to report for work not more than ten (10) working
days after notice has been sent to him by registered mail, return receipt
requested, to his last-known post office address.
e) Preference in assignment to shift work and choice of new jobs shall
be given to associates having higher seniority. New jobs shall be defined as
jobs having a higher rate of pay. This section shall not limit the Employer's
right to transfer or run its operation.
f) Seniority rights to a laid off associate will continue to accumulate
while he is laid off.
ARTICLE XV NOTICE TO AND FROM THE UNION
- ---------- ----------------------------
a) A seniority list, including name, category, rate of pay, and starting
date, shall be submitted every other month.
b) Remittance sheets, including names, new associates starting date, old
associates termination date, gross wages earned for the preceding month for each
associate, the amounts of dues and initiation checked-off, contributions to
fringe benefit funds, and
18
<PAGE>
for what monthly periods, shall be remitted once a month, for the prior month,
within ten (10) days after the 1st day of each month, together with checks made
payable to the proper fringe benefit fund and dues and initiation to Local 875
I.B.T.
c) All necessary cards, properly signed, to the fringe benefit funds,
from a new associate, must be submitted with the remittance sheet.
d) For failure to submit the remittance sheet within ten (10) days after
it is due, then in such event, the Union, at its option, may take economic
action until it is submitted, and the Employer shall pay to associates for all
time out on strike or work stoppage their regular rate of pay.
e) If the Employer fails to notify the Union of the hiring of a new
associate and/or the rehiring of the associate, then in such event, the Employer
shall be responsible from the first day due, for all monies as if he collected
same to the Union for dues, initiations and contributions to all fringe benefit
funds as described herein.
f) For failure to remit monies due to the Union for dues, initiations
and any fringe benefit fund before the 61st day of accrual, the Union, at its
option, may charge a bookkeeping fee of two (2%) percent per month or any part
thereof until it is remitted, provided that not less than ten (10) days written
notice of the proposed charge is given to the Employer and the Employer fails to
remit within ten (10) days.
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<PAGE>
g) If the Employer fails to notify the Union of the termination of an
associate, for any reason, then in such event, the Employer shall be responsible
for all monies, as if he collected same, to the Union for dues, initiation and
contributions to all fringe benefit funds, if any, as described herein.
h) The Welfare and/or Pension Fund may audit the Employer's payroll
books and records after giving reasonable notice to the Employer, and if
contributions are incorrect, the Employer shall pay the cost of such audit and
all legal fees necessary and incident to collect the same.
i) In the event of default by the Employer in the payment of
contributions to the Funds mentioned in this Agreement, the Trustees may take
legal action to obtain payment, including but not limited to, the commencement
of arbitration proceedings for such purposes before an Arbitrator, selected by
the appropriate Trustees. All expenses thereof, including but not limited to,
the fee and expenses of the Arbitration and any filing or other administrative
fee plus reasonable attorney's fees fixed at twenty (20%) percent of the
indebtedness, together with interest at a reasonable rate on any monies
determined to be due, shall be chargeable to, and an obligation of, the
contributing Employer against whom such arbitration proceeding is commenced. The
Arbitrator may schedule a hearing on twenty-four (24) hours notice by regular or
certified mail.
20
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ARTICLE XVI BULLETIN BOARD
- ----------- --------------
The Employer will provide the Union with a Bulletin Board in an
appropriate location in the plant to be used by the Union for posting of all
Union notices and literature.
ARTICLE XVII LIE DETECTOR TEST
- ------------ -----------------
The Company shall not require, request or suggest that an associate take
a polygraph or any other form of lie detector test.
ARTICLE XVIII NON-DISCRIMINATION
- ------------- ------------------
No associate shall be discriminated against, directly or indirectly,
because of his membership in or activity on behalf of the Union, nor will the
Employer, directly or indirectly, discourage membership in the Union, and the
provisions of this Agreement shall apply to all employees without discrimination
as to sex, color, race, creed, age, national origin, pregnancy or disability.
ARTICLE XIX SAFETY AND SANITARY CONDITIONS
- ----------- ------------------------------
The Company shall furnish and maintain safe and healthful sanitary
conditions, including clean and adequate locker accommodations, washing
facilities and toilets.
21
<PAGE>
ARTICLE XX VISITATION
- ---------- ----------
Union representatives shall be given the right to enter the plant
premises at all reasonable times for the purpose of investigating grievances and
to secure the enforcement of the contract and for such other purposes as may be
necessary; provided however, that prior to entering the plant property they
shall first advise the front office of their presence and intention to enter the
plant property.
ARTICLE XXI LEAVE OF ABSENCE
- ----------- ----------------
a) In accordance with the Family and Medical Leave Act of 1993 (the
"FMLA"), an associate who has been employed by the Employer for at least twelve
(12) months (at the time the leave commences) and has worked at least 1,250
compensable hours during the twelve (12) months prior to the leave is entitled
to a total of twelve (12) weeks of unpaid leave during any twelve (12) month
period for the reasons listed in the FMLA. An associate who takes a leave of
absence under FMLA is required to use his or her accrued vacation, sick or
personal days during the leave period. For example, when two weeks of accrued
paid leave is used by an associate for FMLA purposes, the Employer will provide
ten (10) weeks unpaid leave to total twelve (12) weeks. A leave of absence
under FMLA will be granted in accordance with Employer's
22
<PAGE>
then existing procedures. The FMLA and the regulations promulgated thereunder
will govern the procedures for a leave of absence unless state law provides
greater family and medical leave rights in which case the state law will govern.
b) Any associate upon application in writing shall be granted a leave
of absence without pay not to exceed one (1) month because of official Union
business.
ARTICLE XXII EXISTING PRACTICES
- ------------ ------------------
All benefits of employment in existence at the effective date of this
Agreement and not modified by the Agreement shall be continued without
modification.
ARTICLE XXIII NO STRIKE - NO LOCKOUT
- ------------- ----------------------
During the term of this Agreement, the Employer agrees that they will
not declare or authorize a lockout unless the Union failed to comply with an
arbitration award within forty-eight (48) hours after the award has been made,
and the Union agrees that no strike shall take place unless the Employer fails
to comply with an arbitration award within forty-eight (48) hours after the
award has been made. Neither the Union nor its Officers, agents or
representatives shall be liable for any acts of any person or any associates
participating in any strike or work stoppage unless such act or strike or work
stoppage has been expressly authorized by the Union and in conformance with the
provisions of the Constitution of
23
<PAGE>
the Union and the provisions of the International Union Constitution. The
parties further agree that any strike, slowdown or stoppage not authorized as
herein specified shall not be deemed a violation of this Agreement.
In the event of an unauthorized slowdown or work stoppage, the Union
agrees within twenty-four (24) hours after receipt of notice thereof from the
Employer solely to endeavor in good faith to bring about a return to work of its
members who have stopped work. Upon failure of the associates to return to work
within the said twenty-four (24) hours, the Employer may take appropriate action
with respect to such associate or associates. Compliance by the Union in good
faith herewith shall be deemed full compliance with the Union's obligation
hereunder.
ARTICLE XXIV GUARANTEED WORK
- ------------ ---------------
Associates regularly scheduled for full-shift work shall be given four
(4) hours' work or the monetary equivalent thereof unless notified on the
previous day not to report, except in cases of power failure, Acts of God or
other such circumstances beyond the Employer's control. This clause shall not
apply to part time or premium work except that associates directed to report on
Saturday or Sunday shall be guaranteed at least four (4) hours' work or the
monetary equivalent thereof; and on the sixth (6th) day of work, associates
shall be guaranteed four (4) hours' work at a rate of time and one-half their
regular hourly wage.
24
<PAGE>
ARTICLE XXV PROBATIONARY PERIOD
- ----------- -------------------
The parties agree to a ninety (90) day probationary period for all
associates. The Employer shall be entitled to discharge the newly hired
associate for any cause during this probationary period.
ARTICLE XXVI DISCHARGES
- ------------ ----------
No associate shall be discharged except for just and sufficient cause.
In the event any associate engages in the following conduct, it shall be
grounds for immediate discharge and shall be deemed to be just and sufficient
cause. However, any associate, if he is discharged, shall be granted an
interview with his shop steward.
Just cause for discharge shall include but not be limited to the
following:
a) Theft of Company property.
b) Wanton destruction of Company property.
c) Drunkenness or being under the influence of drugs while on the job.
d) Excessive lateness and absenteeism.
25
<PAGE>
Whenever the Union disputes and/or disagrees with the justification of
the discharge of any associate, the Union shall provide the Employer with a
written notice of its dispute and/or disagreement within one (1) working day of
the time that the individual is required to leave the plant premises or the
Chief Steward receives official notification of the Employer's intention to
discharge the said associate, whichever occurs later. The dispute and/or
disagreement shall thereupon be adjusted between the parties in the manner
provided in ARTICLE XIII of this Agreement provided, however, that it shall not
be necessary to commence with subdivision "a" of said paragraph but institution
of the dispute may be by immediate recourse to Section 3 of said Article, and
any associate who has been discharged and subsequently reinstated as a result of
invoking the machinery for resolving dispute as set forth in ARTICLE XIII shall
be reinstated to his former job with full back pay.
Any new associates retained beyond the ninety (90) day trial shall be
entitled to all the rights and privileges of this Agreement, effective as of the
date of the commencement of his employment, but in no event shall new associates
be paid less than the minimum rate of pay established under this Agreement.
ARTICLE XXVII COLLECTIVE BARGAINING
- ------------- ---------------------
The Company agrees that it will negotiate with the Union during the term
of this Agreement concerning any matter involving
26
<PAGE>
the wages, hours and working conditions of the associates, which is not
specifically provided for in this Agreement and which is not subject of any
grievance.
ARTICLE XXVIII SUBCONTRACTING
- -------------- --------------
The Company will not, so long as equipment and personnel are available,
subcontract work which is customarily performed by associates in the bargaining
unit to any other company.
ARTICLE XXIX PROTECTION OF RIGHTS
- ------------ --------------------
Picket Line - It shall not be a violation of this Agreement and shall
not be cause for discharge or disciplinary action in the event an associate
refuses to enter upon any property of his Employer involved in a lawful primary
labor dispute, or refuses to go through or work behind any lawful primary picket
lines at his Employer's places of business, including picket lines of Unions,
parties to this Agreement.
ARTICLE XXX ASSIGNABILITY
- ----------- -------------
This Agreement shall be binding upon the parties hereto, their
successors and assigns.
ARTICLE XXXI EFFECTIVE DATE
- ------------ --------------
All the terms and conditions of this Agreement shall be effective as of
March 1, 1997, except as otherwise indicated.
27
<PAGE>
ARTICLE XXXII SEPARABILITY
- ------------- ------------
It is understood and agreed that if any provision of the Agreement or
the application of such provision to any person or circumstances shall be held
invalid, the remainder of this Agreement or the application of such provision to
other persons or circumstances shall not be affected thereby.
ARTICLE XXXIII MINIMUM STARTING WAGES
- -------------- ----------------------
The Employer agrees that in no event shall it pay its associates less
than the minimum wages decreed by New York State and/or Federal Agencies having
jurisdiction thereof during the term of this Agreement.
ARTICLE XXXIV SICK LEAVE
- ------------- ----------
All associates who were hired prior to March 1, 1997, shall continue to
receive payment for seven (7) sick days not worked each year. All associates
hired subsequent to March 1, 1997, shall continue to receive payment for sick
days not worked according to the following schedule:
(1) In the first year of employment an associate will accrue one (1)
sick day every ninety (90) days up to a maximum of three (3) days.
28
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(2) In the second year of employment and each year thereafter, up to
five (5) years, an associate will accrue one (1) sick day every sixty
(60) days up to a maximum of five (5).
(3) Those associates with five (5) years or more in the employ of the
Employer will receive seven (7) days of sick leave.
If not used, the monetary equivalent of the unused days shall be paid to
the associates two (2) weeks before Christmas of each calendar year.
ARTICLE XXXV UNIFORMS
- ------------ --------
The Employer agrees to furnish each associate two (2) sets of two-piece
uniforms (pants and shirts) each year. Each associate shall be responsible for
the cleaning and maintenance of his or her uniforms.
ARTICLE XXXVI SAFETY BELTS
- ------------- ------------
The Employer agrees to furnish a safety belt to each associate who will
be responsible for the proper care and maintenance of the safety belt. In the
event the safety belt is damaged or lost, the cost of the replacement safety
belt will be assumed by the associate.
Upon termination of employment from Seaman Furniture Company, the
associate must return the safety belt in good and usable condition to the
Employer. If the terminating associate is
29
<PAGE>
unable to do so, the associate must reimburse Seaman Furniture Company for the
replacement cost.
All associates are required to wear a safety belt at all time whenever
lifting any object.
ARTICLE XXXVII MOVING OF FURNITURE OR OTHER HEAVY OBJECTS
- -------------- ------------------------------------------
The Company recognizes the burden which is imposed on a single associate
by requiring his moving substantial items (e.g., large, sofas, bedroom suites,
etc.) without assistance. Consequently, the Company will make reasonable efforts
to schedule these tasks when two or more associates are available. However, the
Union and Company recognize that there will be extenuating circumstances when it
may be necessary to require an associate to move such items to the best of his
ability.
ARTICLE XXXVIII BEREAVEMENT PAY
- --------------- ---------------
All associates covered by this Agreement shall be granted up to three
(3) days off from work, with pay, if scheduled, in the event of a death in the
asssociate's immediate family. The leave must be taken consecutively, just
subsequent to the death in the associate's immediate family. "Immediate family"
is defined as an associate's spouse, mother, father, brother, sister, children,
grandparents and grandchildren. Proof of death and of relationship to the
deceased may be required.
30
<PAGE>
ARTICLE XXXIX TOOLS
- ------------- -----
Associates shall be provided with all tools necessary to perform their
duties.
ARTICLE XL DURATION
- ---------- --------
The foregoing Agreement between the Employer and the Union shall
continue in full force and effect from March 1, 1997, and expire as of 11:59
P.M. on March 1, 2000, and shall be automatically renewed from year to year
thereafter unless at least sixty (60) days prior to any expiration date either
party desiring to terminate or modify this Agreement shall so notify the other
party in writing.
IN WITNESS WHEREOF, the parties have caused these presents to be signed.
SEAMAN FURNITURE COMPANY, INC. LOCAL 875, Affiliated with the
INTERNATIONAL BROTHERHOOD OF
TEAMSTERS, CHAUFFEURS,
WAREHOUSEMEN AND HELPERS OF
AMERICA
By:___________________________ By:___________________________
31
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<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> APR-30-1997 APR-30-1996
<PERIOD-START> MAY-01-1996 MAY-01-1995
<PERIOD-END> APR-30-1997 APR-30-1996
<CASH> 6,423 3,436
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<PP&E> 48,072 47,060
<DEPRECIATION> 16,681 13,909
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<INTEREST-EXPENSE> 2,182 870
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<INCOME-CONTINUING> 4,085 3,895
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