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UNITED STATES 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 December 31, 1998
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 1-13970
CHROMCRAFT REVINGTON, INC.
(Exact name of registrant as specified in its charter)
Delaware 35-1848094
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1100 North Washington Street, Delphi, IN 46923
(Address, including zip code, of registrant's principal executive offices)
(765) 564-3500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each
Title of each class exchange on which registered
Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 9, 1999, there were 10,771,748 shares of the Company's common
stock ($.01 par value) outstanding. The aggregate market value of the voting
stock held by nonaffiliates of the Company as of March 9, 1999 was $71.6
million.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the annual shareholders meeting to be
held April 30, 1999 are incorporated by reference into Part III.
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INDEX
Page Number
PART I -----------
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 5
Item 4. Submission of Matters to a Vote of Security Holders . . . 6
Executive Officers of the Registrant . . . . . . . . . . . . . . . 6
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . . 6
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . 7
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 8
Item 8. Financial Statements and Supplementary Data . . . . . . . 11
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . . 11
PART III
Item 10. Directors and Executive Officers of the Registrant . . . . 11
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . 11
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . . 11
Item 13. Certain Relationships and Related Transactions . . . . . . 12
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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PART I
Item 1. Business
- - ----------------
General
Chromcraft Revington, Inc. ("Chromcraft Revington"), incorporated in 1992
under the laws of Delaware, is engaged in the design, manufacture and sale of
residential and commercial furniture through its wholly-owned subsidiaries,
Chromcraft Corporation ("Chromcraft"), Peters-Revington Corporation ("Peters-
Revington"), Silver Furniture Co., Inc. ("Silver Furniture") and Cochrane
Furniture Company, Inc. ("Cochrane Furniture"). Chromcraft Revington is
headquartered in Delphi, Indiana.
In 1992, Chromcraft Revington acquired all of the outstanding common stock of
Chromcraft and Peters-Revington from Consolidated Furniture Corporation
(formerly Mohasco Corporation) pursuant to merger agreements. Concurrently,
Chromcraft Revington completed its initial public offering and restructured
its long-term debt. Chromcraft Revington had no operations prior to 1992.
Chromcraft, a manufacturer of casual dining and commercial furniture, is
located in Senatobia, Mississippi. Peters-Revington, a manufacturer of
occasional furniture, is located in Delphi, Indiana. Chromcraft and Peters-
Revington were both founded in 1946.
On April 3, 1995, Chromcraft Revington acquired Silver Furniture, a
manufacturer and importer of occasional tables. Silver Furniture has
manufacturing and warehousing operations in Knoxville, Tennessee. On
November 8, 1996, Chromcraft Revington acquired Cochrane Furniture, a
manufacturer of dining room, bedroom and upholstered furniture. Cochrane
Furniture has manufacturing facilities in Lincolnton and Warrenton, North
Carolina.
Chromcraft Revington and its subsidiaries (collectively the "Company") have
several operating segments which are aggregated into one reportable segment,
in accordance with Financial Accounting Standards Board Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information." No
material amount of the Company's sales is dependent upon a single customer.
Sales outside of the United States represent approximately 1% of total sales.
Products and Distribution
Occasional Furniture
The Company designs, manufactures and sells medium-priced occasional
furniture, including tables, bookcases, entertainment centers, library and
modular wall units, curio cabinets and home office furniture in traditional,
contemporary and country styles under the Peters-Revington brand name.
These products are manufactured primarily from American hardwoods, such as
oak, cherry and maple. Many Peters-Revington table collections include twelve
or more pieces in matching styles. In addition, different products incorporate
the same design and styling themes, thereby enabling consumers to coordinate
several pieces of furniture for the same room. Peters-Revington products are
sold in the United States and Canada through independent sales representatives
primarily to independent furniture retailers and regional furniture stores.
The Company also designs, manufactures, imports and sells entry level-to-medium
priced occasional tables and entertainment centers under the Silver Furniture
brand name. These products are generally designed with a contemporary appeal,
utilizing special finishes and unique styling. Silver Furniture tables are
constructed using a variety of materials, including wood, medium density fiber
board, glass and metal. The Company sources its internally designed imported
furniture mainly from factories located in the Far East and Mexico. Silver
Furniture products are sold primarily in the United States and Canada through
2 <PAGE>
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company sales personnel to national and regional furniture retailers and through
independent sales representatives to independent furniture retailers.
Bedroom Furniture
The Company manufactures and sells solid wood bedroom furniture primarily in
oak, cherry or maple under the Cochrane Furniture brand name. Bedroom furniture
includes beds, dressers, night stands and mirrors primarily in traditional
styling. Cochrane Furniture competes primarily at the medium price points in
bedroom furniture. Products are sold mainly in the United States through
independent sales representatives to national, regional and independent
furniture retail stores.
Dining Room Furniture
The Company manufactures and sells casual dining furniture under the Chromcraft
brand name. Casual dining furniture is designed for use in dining rooms, family
rooms, recreation rooms, kitchens and apartments without formal dining areas.
The product line consists primarily of coordinated dining suites in a
contemporary or traditional style that include tables with laminated, wood or
glass table tops, stationary and tilt-swivel chairs, pedestal chairs and
barstools. Chairs are upholstered in a variety of fabrics and vinyls, while
tables are manufactured from metal, wood, glass, faux marble and other
materials, and come in a variety of shapes. Chromcraft competes at the medium-
to-higher price points in casual dining. Chromcraft's casual dining furniture
is sold in the United States through company sales personnel and independent
sales representatives to national, regional, independent and specialty dining
retail furniture stores.
The Company manufactures and sells medium-priced solid wood dining room
furniture primarily in oak, cherry and maple under the Cochrane Furniture brand
name mainly in traditional or country styling. Dining room tables are offered
in solid wood or a high pressure laminate table top with a solid wood edge.
Cochrane offers a broad line of armed and side chairs, buffets, chinas and
serving pieces. Products are sold primarily in the United States through
independent sales representatives to national, regional and independent
furniture retail stores.
Upholstered Furniture
The Company manufactures and sells upholstered sofas, chairs and ottomans under
the Cochrane Furniture brand name. Styled in traditional or contemporary
patterns in a wide selection of fabrics, Cochrane generally uses a heat tempered
coil seat construction to evenly distribute body weight. Cochrane uses
primarily hardwoods in the construction of its furniture frames. Seat cushions
are made with high-density, high-resilience polyurethane foam, wrapped in
polyester fiber for consistent comfort. Cochrane upholstered furniture competes
at the mid-to-higher price points. Products are sold through independent sales
representatives to national, regional and independent furniture retail stores.
Commercial Furniture
The Company's commercial furniture products, sold under the Chromcraft brand
name, include stationary and tilt-swivel office chairs, conference and meeting
room tables and lounge-area seating products for airports and other public
waiting areas. Chairs are offered in both contemporary and transitional styles
and are upholstered in various grades and colors of fabric or leather. They
include executive models with high backs, management models, ergonomic computer
task chairs and secretarial models with no arm rests. Products are sold through
company sales personnel and independent sales representatives to office product
dealers, wholesalers/distributors and various contract customers.
3 <PAGE>
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Manufacturing
The Company's manufacturing operations include cutting, shaping, sanding,
lacquering, finishing and final assembly of wood furniture, metal fabricating,
plating, powder-coat painting, chair foam production for its casual dining
furniture and cutting and sewing of upholstery fabric. The Company also
operates a rough mill and woodworking plant which processes green lumber into
parts for internal use in the Company's bedroom, dining room and upholstered
furniture production.
Raw Materials
Major raw materials are wood, steel, fabrics, glass, medium-density fiber board,
wood finishing materials, cartons, foam for cushions and paddings, and
mechanisms. Suppliers are selected for their ability to deliver high quality
products on a timely basis and at competitive prices. The Company believes that
supplies of raw materials are available in sufficient quantities from an
adequate number of suppliers. The Company did not experience any significant
shortage of raw materials during 1998.
Inventory and Seasonal Requirements
The Company maintains a finished goods inventory for occasional, dining and
bedroom furniture in order to respond quickly to customer delivery needs. Most
casual dining, upholstered and commercial furniture is made to customer
specifications and, therefore, not carried in stock. The Company does maintain
a limited number of casual dining, upholstered and commercial furniture items
for quick delivery programs. The Company's sales have historically not been
subject to material seasonal fluctuations.
Competition
The Company encounters competition in the sale of all its products. Many of the
Company's competitors, some of which are larger and have greater financial
resources, produce a number of products which are not competitive with the
Company's products. In many cases, such companies do not disclose the portion
of their sales attributable to products similar to those manufactured by the
Company. It is, therefore, impractical to state with any certainty the
Company's relative position in a particular product line. Competition in the
Company's products is in the form of the quality of its products, service and
selling prices.
Backlog
The Company's backlog of sales orders was approximately $21.4 million at
December 31, 1998, as compared to approximately $25.0 million at December 31,
1997. Order backlog at any particular time is not necessarily indicative of the
level of future shipments.
Environment
The Company believes it is in compliance in all material respects with all
federal, state and local environmental laws and regulations which impose
limitations on the discharge of pollutants into the air and water, and establish
standards for the treatment of hazardous wastes.
4 <PAGE>
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Employees
The Company and its subsidiaries employ a total of approximately 2,400 people.
Production employees at the Company's Knoxville, Tennessee location are
represented by a labor union under a collective bargaining agreement. The
Company considers its relations with its employees to be good.
Item 2. Properties
- - ------------------
The following table summarizes the Company's facilities as of December 31, 1998.
Square Type of Owned/
Location Feet Operations Furniture Leased
- - -------------- ------- -------------- -------------- --------------
Delphi, IN 490,000 Manufacturing/ Occasional Owned
warehousing
Knoxville, TN 160,000 Manufacturing/ Occasional Owned
warehousing
Knoxville, TN 117,000 Warehousing Occasional Leased
(expires 2001)
Lincolnton, NC 368,000 Manufacturing/ Dining room/ Owned
warehousing bedroom
Lincolnton, NC 152,000 Manufacturing Upholstery Owned
Lincolnton, NC 159,000 Manufacturing/ Upholstery Owned
warehousing
Senatobia, MS 560,000 Manufacturing/ Casual dining/ Leased
warehousing commercial (expires 2061)
Warrenton, NC 166,000 Manufacturing Dining room/ Owned
bedroom
The Company also leases trucks, trailers and other transportation equipment and
showroom facilities in High Point, North Carolina and Chicago, Illinois.
Management believes the properties and equipment of its subsidiaries are well
maintained, in good operating condition and adequate to support present
operations.
Item 3. Legal Proceedings
- - -------------------------
The Company is not a party to any lawsuits, other than ordinary routine
litigation incidental to its business.
5 <PAGE>
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Item 4. Submission of Matters to a Vote of Security Holders
- - -----------------------------------------------------------
Not applicable.
Executive Officers of Chromcraft Revington, Inc.
- - ------------------------------------------------
Michael E. Thomas 57 President, Chief Executive Officer and Director
since the Company's organization in 1992.
H. Martin Michael 57 Executive Vice President and Director since the
Company's organization in 1992. President of
Chromcraft since July, 1990.
Frank T. Kane 45 Vice President-Finance, Chief Financial Officer
and Secretary since the Company's organization
in 1992.
PART II
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters
- - --------------------------------------------------------------------------------
The Company's common stock is traded on the New York Stock Exchange. The
following table sets forth the high and low sales prices of the Company's common
stock, as reported on the New York Stock Exchange, as adjusted for the two-for-
one stock split effective June 10, 1998.
1998 1997
-------------------- --------------------
High Low High Low
-------- -------- -------- --------
First quarter 18 11/16 13 13/16 15 3/4 13 13/16
Second quarter 20 1/16 17 1/2 14 13/16 13 1/8
Third quarter 19 5/16 13 11/16 15 3/16 13
Fourth quarter 18 1/4 14 3/4 16 5/16 15 1/8
As of March 9, 1999, there were approximately 61 security holders of record of
the Company's common stock.
The Company intends to retain cash for internal and external growth and
development of its business and currently does not anticipate paying cash
dividends. At December 31, 1998, unrestricted retained earnings available for
dividends were $29,698,000.
6 <PAGE>
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<TABLE>
<CAPTION>
Item 6. Selected Financial Data
- - -------------------------------
(Dollars in thousands, except per share data)
Year Ended December 31,
-----------------------------------------------------------------
1998 1997 1996 1995 1994
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Operating Results(1)
Sales $ 236,744 $ 225,629 $ 175,899 $ 152,609 $ 134,112
Cost of sales 176,988 169,802 128,217 111,787 96,567
--------- --------- --------- --------- ---------
Gross margin 59,756 55,827 47,682 40,822 37,545
Selling, general and
administrative expenses 31,964 30,200 24,235 20,478 18,316
--------- --------- --------- --------- ---------
Operating income 27,792 25,627 23,447 20,344 19,229
Interest expense, net 739 1,265 221 236 252
--------- --------- --------- --------- ---------
Earnings before income tax expense 27,053 24,362 23,226 20,108 18,977
Income tax expense 10,794 9,720 9,290 8,134 7,786
--------- --------- --------- --------- ---------
Net earnings $ 16,259 $ 14,642 $ 13,936 $ 11,974 $ 11,191
========= ========= ========= ========= =========
Earnings per share of common stock(2)
Basic $ 1.46 $ 1.28 $ 1.21 $ 1.05 $ .98
========= ========= ========= ========= =========
Diluted $ 1.41 $ 1.25 $ 1.19 $ 1.02 $ .96
========= ========= ========= ========= =========
Shares used in computing earnings per share(2)
Basic 11,137 11,418 11,474 11,453 11,428
Diluted 11,533 11,755 11,740 11,696 11,657
Financial Position (December 31,)(1)
Working capital $ 49,825 $ 43,931 $ 40,343 $ 21,920 $ 17,466
Total assets 129,645 126,144 129,942 85,825 69,257
Total debt 5,400 9,000 20,200 1,500 -
Stockholders' equity 97,117 90,906 77,925 63,782 51,622
Other Data(1)
Operating income (% of sales) 11.7% 11.4% 13.3% 13.3% 14.3%
Depreciation and amortization $ 4,534 $ 4,383 $ 3,729 $ 3,853 $ 4,415
Capital expenditures 3,388 2,712 3,060 5,514 3,393
</TABLE>
(1) Silver Furniture and Cochrane Furniture are included in the consolidated
results from their acquisition dates of April 3, 1995 and November 8, 1996,
respectively.
(2) Adjusted for the two-for-one stock split effective June 10, 1998.
7 <PAGE>
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- - -------------------------------------------------------------------------------
General
Chromcraft Revington designs, manufactures and sells residential and commercial
furniture through its wholly-owned subsidiaries, Chromcraft, Peters-Revington,
Silver Furniture and Cochrane Furniture. The Company's operating results
include the operations of Cochrane Furniture, acquired November 8, 1996, from
the date of its acquisition (see Note 2 to the consolidated financial statements
on page F-6).
The following table sets forth the Company's results of operations for the years
ended December 31, 1998, 1997 and 1996 expressed as a percentage of the
Company's sales.
Year Ended December 31,
--------------------------------------
1998 1997 1996
-------- -------- --------
Sales 100.0% 100.0% 100.0%
Cost of sales 74.8 75.3 72.9
-------- -------- --------
Gross margin 25.2 24.7 27.1
Selling, general and
administrative expenses 13.5 13.3 13.8
-------- -------- --------
Operating income 11.7 11.4 13.3
Interest expense .3 .6 .1
-------- -------- --------
Earnings before income tax expense 11.4 10.8 13.2
Income tax expense 4.5 4.3 5.3
-------- -------- --------
Net earnings 6.9% 6.5% 7.9%
======== ======== ========
1998 compared to 1997
Consolidated sales for the year ended December 31, 1998 increased 4.9% to
$236,744,000 from $225,629,000 reported in 1997. The sales increase was
primarily due to higher shipments of occasional, bedroom and commercial
furniture, partially offset by lower upholstered furniture sales. Upholstered
furniture sales were lower in 1998 as compared to the prior year period
primarily due to the elimination of low margin and nonprofitable products.
Dining room furniture sales were at approximately the same level as compared to
the prior year. The consolidated sales increase in 1998 was primarily due to
higher unit volume.
Gross margin as a percentage of sales increased to 25.2% from 24.7% in 1997.
The percentage increase in 1998 was primarily due to the improved operating
results at Cochrane Furniture, as a result of cost containment and improved
manufacturing processes. The gross margin improvement was partially offset by
manufacturing inefficiencies at the Company's Chromcraft subsidiary and higher
employee health care costs. The manufacturing inefficiencies were primarily due
to start-up costs incurred for new product introductions and employee attrition
resulting from tight labor market conditions.
Selling, general and administrative expenses increased $1,764,000 to
$31,964,000, or 13.5% of sales, in 1998 from $30,200,000, or 13.3% of sales, in
1997. The higher cost percentage in 1998 was mainly due to an increase in
incentive compensation.
Interest expense for the year ended December 31, 1998 was $739,000 as compared
to $1,265,000 for the prior year period. The decrease in interest expense for
1998 was primarily due to lower average bank borrowings. Interest rates were
slightly lower in 1998 as compared to 1997.
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The Company's effective tax rate was 39.9% for the years ended December 31, 1998
and 1997.
Diluted earnings per share increased 12.8% to $1.41 in 1998 as compared to $1.25
in 1997. Average common shares used in the calculation of diluted earnings per
share included dilutive potential common shares (stock options) of 396,000 in
1998 and 337,000 in 1997. Shares used in computing diluted earnings per share
for 1998 decreased 1.9% as compared to the prior year period. During 1998, the
Company retired 590,548 shares of its common stock acquired under a share
repurchase program. These stock purchases had the effect of increasing diluted
earnings per share by approximately $.02 for the year ended December 31, 1998.
1997 compared to 1996
Consolidated sales in 1997 increased 28.3% to $225,629,000 from $175,899,000 in
1996. The sales increase was mainly due to the Cochrane Furniture acquisition.
On a comparable basis, excluding the Cochrane Furniture operations, consolidated
sales for 1997 were slightly lower than the prior year period as a result of a
decrease in occasional furniture shipments. Sales of dining and commercial
furniture were slightly higher in 1997 as compared to the year ago period. The
Company increased selling prices during 1997 to offset slightly higher costs to
the extent possible in a competitive market.
Gross margin increased $8,145,000 to $55,827,000, or 24.7% of sales, in 1997,
from $47,682,000, or 27.1%, in 1996. The gross margin percentage decrease was
primarily attributable to the inclusion of Cochrane Furniture's operating
results. Raw material prices were slightly higher as compared to the prior year
period.
Selling, general and administrative expenses as a percentage of sales, for 1997,
were 13.3% as compared to 13.8% for the year earlier period. Excluding Cochrane
Furniture, the cost percentage decrease was due, in part, to lower incentive
compensation and a decrease in the provision for doubtful accounts.
Interest expense in 1997 was $1,265,000 as compared to $221,000 in 1996. The
increase in interest expense for 1997 was attributable to the Cochrane Furniture
indebtedness. Average interest rates on bank borrowings were slightly higher in
1997 as compared to 1996.
The effective tax rate in 1997 was 39.9% as compared to 40.0% in 1996.
Net earnings increased to $14,642,000 in 1997, or 6.5% of sales, as compared to
$13,936,000 in 1996, or 7.9% of sales. The decrease in the profitability margin
was primarily attributable to the inclusion of Cochrane Furniture's operating
results.
Diluted earnings per share were $1.25 in 1997 and $1.19 in 1996. Average common
shares used in the calculation of diluted earnings per share included dilutive
potential common shares (stock options) of 337,000 in 1997 and 266,000 in 1996.
Liquidity and Capital Resources
The operating activities of the Company provided $16,985,000 of cash for the
year ended December 31, 1998, an increase of $1,519,000 from the amount provided
in 1997. Cash generated from operations improved in 1998 due, in part, to an
increase in net earnings and higher depreciation expense. Inventories at
December 31, 1998 were $2,958,000 higher as compared to the year ago level. The
working capital investment in inventories was mainly due to an increase in
imported furniture and parts that requires longer lead times to insure timely
delivery to customers.
9 <PAGE>
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The investing activities used $3,337,000 and $2,605,000 of cash during the years
ended December 31, 1998 and 1997, respectively. Capital expenditures, primarily
for equipment purchases, were $3,388,000 and $2,712,000 for 1998 and 1997,
respectively. The majority of the expenditures for 1998 were for new computer-
controlled equipment for wood processing, metal bending and welding, and fabric
cutting. Capital expenditures in 1999 are expected to be approximately
$4,800,000. Capital expenditures for the year ended December 31, 1996 were
$3,060,000.
Financing activities used $13,648,000 of cash during 1998, primarily to acquire
shares of the Company's common stock and reduce bank indebtedness. During 1998,
the Company retired 590,548 shares of common stock purchased for $10,196,000
under its share repurchase program. At December 31, 1998, 267,852 shares were
available for purchase under the share repurchase program. On February 8, 1999
the Company's Board of Directors authorized the repurchase of up to an
additional 500,000 shares of the Company's common stock.
Cash used by financing activities during 1997 totalled $12,861,000, primarily
for the reduction of bank indebtedness. In addition, the Company retired
141,600 shares purchased for $1,895,000 under the share repurchase program.
The Company has a revolving credit facility with a commitment level of
$60,000,000 that matures December 20, 2000. The interest rate under the
facility is determined at the time of each borrowing and is based on one of a
variety of floating rate indices or a bank prime lending rate. Total borrowings
under the facility were $5,400,000 at December 31, 1998. Unused capacity under
the revolving credit facility, after reduction for outstanding letters of
credit, equalled $52,882,000 at the end of 1998.
Management expects that cash flow from operations and availability under its
revolving credit facility will continue to be sufficient to meet future business
needs. The Company plans to grow its businesses internally and through
acquisitions. Accordingly, the Company plans to retain cash in the business and
currently does not anticipate paying cash dividends on its common stock. In
1999, absent an acquisition, the Company expects to generate excess cash flow
from operations, which will be used to reduce bank indebtedness, to repurchase
Company common stock, or for general corporate purposes.
Year 2000 Issue
- - ---------------
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Company has
established committees at its operating subsidiaries to identify Year 2000
issues, including a review of information technology (IT) and non-IT systems.
The Company has determined that it will be required to modify or replace
portions of its computer software and hardware systems so that they will
properly utilize dates beyond December 31, 1999. The Company has initiated
remediation and testing, and estimates that the Year 2000 project will be
completed by the end of the third quarter 1999. For Year 2000 compliance, the
Company has spent $234,000 in 1998 and expects to spend approximately $650,000
in 1999, primarily for hardware and operating system replacement. Most of these
expenditures will be capitalized and funded through operating cash flow.
The Company has received information from significant suppliers or third party
service providers on their plans to address the Year 2000 issue. While the
Company expects a successful resolution of all issues, there can be no
assurances that the Company's systems or the systems of other companies on which
the Company's systems rely will be timely converted or that the failure to
convert by another company would not have an adverse effect on the operations of
the Company. The Company has initiated development of contingency plans in the
event of a business interruption due to the Year 2000 issue, including the
identification of alternate suppliers and manual workarounds.
10 <PAGE>
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Forward-Looking Statements
- - --------------------------
Certain matters included in this discussion are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Certain forward-looking statements are contained in "Management's Discussion and
Analysis of Financial Condition and Results of Operations," including
expenditures to address, and the impact of, Year 2000 computer issues. These
forward-looking statements can be generally identified as such because the
context of the statements includes words such as "plans," "may" and "expects" or
words of similar import. All forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those reported or expected as of the date of this report. Among the risks
and uncertainties that could cause actual results to differ materially from
those reported or anticipated are (i) general economic conditions, (ii) cyclical
nature of the furniture industry, and (iii) competition in the furniture
industry.
Item 8. Financial Statements and Supplementary Data
- - ---------------------------------------------------
The financial statements and schedule are listed in Part IV, Items 14(a) (1)
and (2).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
- - -----------------------------------------------------------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
- - -----------------------------------------------------------
The sections entitled "Election of Directors" on page 3 and "Common Stock
Beneficially Owned by Directors and Executive Officers" on pages 4 and 5 of the
Company's Proxy Statement dated April 2, 1999 are incorporated herein by
reference, and have been omitted pursuant to Instruction G of Form 10-K since
the Company intends to file with the Commission a definitive Proxy Statement
pursuant to Regulation 14A not later than 120 days following the end of its 1998
fiscal year.
Item 11. Executive Compensation
- - -------------------------------
The sections entitled "Executive Compensation" on pages 6 through 9,
"Compensation Committee Report on Executive Compensation" on pages 9 through 11
and "Stock Performance Graph" on page 12 of the Company's Proxy Statement dated
April 2, 1999 are incorporated herein by reference, and have been omitted
pursuant to Instruction G of Form 10-K since the Company intends to file with
the Commission a definitive Proxy Statement pursuant to Regulation 14A not later
than 120 days following the end of its 1998 fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- - -----------------------------------------------------------------------
The sections entitled "Common Stock Beneficially Owned by Directors and
Executive Officers" on pages 4 and 5 and "Voting Securities and Principal
Stockholders" on pages 1 and 2 of the Company's Proxy Statement dated April 2,
1999 are incorporated herein by reference, and have been omitted pursuant to
11 <PAGE>
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Instruction G of Form 10-K since the Company intends to file with the Commission
a definitive Proxy Statement pursuant to Regulation 14A not later than 120 days
following the end of its 1998 fiscal year.
Item 13. Certain Relationships and Related Transactions
- - -------------------------------------------------------
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
- - ------------------------------------------------------------------------
(a) 1. and 2. List of Financial Statements and Financial Statement Schedule:
The following Consolidated Financial Statements of the Company are included in
this report on Form 10-K:
Page Reference
--------------
Consolidated Statements of Earnings for the years ended
December 31, 1998, 1997, and 1996 F-1
Consolidated Balance Sheets at December 31, 1998 and 1997 F-2
Consolidated Statements of Stockholders' Equity for the years
ended December 31, 1998, 1997, and 1996 F-3
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996 F-4
Notes to Consolidated Financial Statements F-5
Independent Auditors' Report F-12
Quarterly Financial Information (unaudited) F-13
The following consolidated financial statement schedule of the Company
is included in response to Item 14(d):
Schedule II - Valuation and Qualifying Accounts S-1
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.
(a) 3. Listing of Exhibits
(3)(i) Certificate of Incorporation of the Registrant, as amended, filed
as Exhibit No. 3.1 to Form S-1, registration number 33-45902, as
filed with the Securities and Exchange Commission on February 21,
1992, is incorporated herein by reference.
12 <PAGE>
<PAGE>
(3)(ii) By-laws of the Registrant, filed as Exhibit No. 3.2 to Form S-1,
registration number 33-45902, as filed with the Securities and
Exchange Commission on February 21, 1992, is incorporated herein
by reference.
(4.7) Credit Agreement, dated December 20, 1995, among the Registrant,
the Banks party thereto and NBD Bank N.A., as agent for the Banks,
filed as Exhibit No. 4.7 to Form 10-K for the year ended December
31, 1995, is incorporated herein by reference.
(10.1) Lease, dated February 15, 1962, between the Board of Supervisors
of Tate County, Mississippi as Landlord and Chromcraft Corporation
as Tenant, filed as Exhibit No. 10.1 to Form S-1, registration
number 33-45902, as filed with the Securities and Exchange
Commission on February 21, 1992, is incorporated herein by
reference.
(10.3) Form of Registration Rights Agreement between the Registrant and
399 Venture Partners, Inc., formerly Citicorp Investments, Inc.,
filed as Exhibit No. 10.3 to Form S-1, registration number 33-
45902, as filed with the Securities and Exchange Commission on
February 21, 1992, is incorporated herein by reference.
(10.12) Contract, dated April 3, 1961, between the City of Senatobia, Tate
County, Mississippi, the Board of Supervisors of Tate County,
Mississippi, and Chromcraft Corporation, filed as Exhibit No.
10.12 to Form S-1, Pre-Effective Amendment No. 1, registration
number 33-45902, as filed with the Securities and Exchange
Commission on March 17, 1992, is incorporated herein by reference.
(10.13) Lease, dated September 9, 1966, between the Board of Supervisors
of Tate County, Mississippi as Landlord and Chromcraft Corporation
as Tenant, filed as Exhibit No. 10.13 to Form S-1, Pre-Effective
Amendment No. 1, registration number 33-45902, as filed with the
Securities and Exchange Commission on March 17, 1992, is
incorporated herein by reference.
(10.14) Contract, dated May 5, 1969, between the Board of Supervisors of
Tate County, Mississippi and Chromcraft Corporation, filed as
Exhibit No. 10.14 to Form S-1, Pre-Effective Amendment No. 1,
registration number 33-45902, as filed with the Securities and
Exchange Commission on March 17, 1992, is incorporated herein by
reference.
(10.15) Contract and Lease Agreement, dated April 17, 1972, between Tate
County, Mississippi as Landlord and Chromcraft Corporation as
Tenant, filed as Exhibit No. 10.15 to Form S-1, Pre-Effective
Amendment No. 1, registration number 33-45902, as filed with the
Securities and Exchange Commission on March 17, 1992, is
incorporated herein by reference.
Executive Compensation Plans and Arrangements
- - ---------------------------------------------
(10.4) Chromcraft Revington, Inc. 1992 Stock Option Plan, as amended,
filed as Exhibit No. 10.4 to Form 10-Q for the quarter ended June
27, 1998, is incorporated herein by reference.
(10.51) Chromcraft Revington, Inc. Short Term Executive Incentive Plan,
effective January 1, 1998.*
(10.55) Chromcraft Revington, Inc. Long Term Executive Incentive Plan,
effective January 1, 1998.*
13 <PAGE>
<PAGE>
(10.6) Chromcraft Revington Directors Deferred Compensation Plan,
effective January 1, 1999.*
(10.7) Chromcraft Revington, Inc. Supplemental Executive Retirement Plan,
as amended and restated, effective December 3, 1998.*
(10.75) Supplemental Executive Retirement Plan Trust Agreement, dated
April 16, 1993, between the Registrant and Bank One, Indianapolis,
National Association, filed as Exhibit No. 10.75 to Form 10-Q for
the quarter ended July 3, 1993, is incorporated herein by
reference.
(10.8) Employment Agreement, dated March 31, 1992, between the Registrant
and Michael E. Thomas, filed as Exhibit No. 10.8 to Form 10-K for
the year ended December 31, 1992, is incorporated herein by
reference.
(10.85) Supplemental Retirement Benefits Agreement, dated August 21, 1992,
between the Registrant and Michael E. Thomas, filed as Exhibit No.
10.85 to Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference.
(10.9) Employment Agreement, dated March 31, 1992, between the Registrant
and H. Martin Michael, filed as Exhibit No. 10.9 to Form 10-K for
the year ended December 31, 1992, is incorporated herein by
reference.
(10.95) Supplemental Retirement Benefits Agreement, dated August 21, 1992,
between the Registrant and H. Martin Michael, filed as Exhibit No.
10.95 to Form 10-K for the year ended December 31, 1992, is
incorporated herein by reference.
--------------------
(21.1) Subsidiaries of the Registrant.*
(23.1) Consent of Independent Auditors.*
(24.1) Powers of Attorney.*
(27.0) Financial Data Schedule.*
--------------------
* filed herewith.
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Commission during the fourth
quarter of 1998.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate section
of this report.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a separate section
of this report.
14 <PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Chromcraft Revington, Inc. has duly caused this annual report on
Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
Chromcraft Revington, Inc.
----------------------------
(Registrant)
Date: March 26, 1999 By: /s/ Michael E. Thomas
-------------- ----------------------------
Michael E. Thomas, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Chromcraft
Revington, Inc. and in the capacities and on the date indicated.
Signatures Title Date
- - --------------------- ---------------------------------- --------------
/s/ Michael E. Thomas President, Chief Executive March 26, 1999
- - --------------------- Officer and Director --------------
Michael E. Thomas
*H. Martin Michael Executive Vice President
- - --------------------- and Director
H. Martin Michael
/s/ Frank T. Kane Vice President - Finance March 26, 1999
- - --------------------- (principal accounting and --------------
Frank T. Kane financial officer)
*Bruce C. Bruckmann Director
- - ---------------------
Bruce C. Bruckmann
*David L. Kolb Director
- - ---------------------
David L. Kolb
*Larry P. Kunz Director
- - ---------------------
Larry P. Kunz
*M. Saleem Muqaddam Director
- - ---------------------
M. Saleem Muqaddam
*Warren G. Wintrub Director
- - ---------------------
Warren G. Wintrub
By: /s/ Michael E. Thomas March 26, 1999
- - ------------------------- --------------
Michael E. Thomas, Attorney-in-fact*
15 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Earnings
Chromcraft Revington, Inc.
(In thousands, except per share data)
Year Ended December 31,
-----------------------------------------
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Sales $ 236,744 $ 225,629 $ 175,899
Cost of sales 176,988 169,802 128,217
--------- --------- ---------
Gross margin 59,756 55,827 47,682
Selling, general and administrative expenses 31,964 30,200 24,235
--------- --------- ---------
Operating income 27,792 25,627 23,447
Interest expense 739 1,265 221
--------- --------- ---------
Earnings before income tax expense 27,053 24,362 23,226
Income tax expense 10,794 9,720 9,290
--------- --------- ---------
Net earnings $ 16,259 $ 14,642 $ 13,936
========= ========= =========
Earnings per share of common stock
Basic $ 1.46 $ 1.28 $ 1.21
========= ========= =========
Diluted $ 1.41 $ 1.25 $ 1.19
========= ========= =========
Shares used in computing earnings per share
Basic 11,137 11,418 11,474
Diluted 11,533 11,755 11,740
</TABLE>
See accompanying notes to the consolidated financial statements
F-1 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
Chromcraft Revington, Inc.
(In thousands, except share data)
December 31,
-------------------------
1998 1997
--------- ---------
<S> <C> <C>
Assets
Accounts receivable, less allowances of $1,211 and $1,462 $ 26,884 $ 26,905
Inventories 38,130 35,172
Deferred income taxes 1,231 1,942
Other assets 3,482 1,032
--------- ---------
Current assets 69,727 65,051
Property, plant and equipment, at cost,
less accumulated depreciation 37,094 37,445
Goodwill and tradenames, less accumulated amortization
of $6,969 and $6,137 21,296 22,128
Other assets 1,528 1,520
--------- ---------
Total assets $ 129,645 $ 126,144
========= =========
Liabilities and Stockholders' Equity
Accounts payable $ 6,939 $ 8,450
Accrued liabilities 12,963 12,670
--------- ---------
Current liabilities 19,902 21,120
Revolving credit facility 5,400 9,000
Deferred income taxes 2,196 2,014
Deferred compensation 3,093 620
Other liabilities 1,937 2,484
--------- ---------
Total liabilities 32,528 35,238
--------- ---------
Stockholders' equity
Common stock, $.01 par value, authorized 20,000,000 shares,
issued and outstanding 10,795,788 and 11,368,536 shares 108 114
Capital in excess of par value 9,232 19,274
Retained earnings 87,777 71,518
--------- ---------
Total stockholders' equity 97,117 90,906
--------- ---------
Total liabilities and stockholders' equity $ 129,645 $ 126,144
========= =========
</TABLE>
See accompanying notes to the consolidated financial statements
F-2 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Stockholders' Equity
Chromcraft Revington, Inc.
(Dollars in thousands)
Common Stock Capital in Total
--------------------- Excess of Retained Stockholders'
Shares Amount Par Value Earnings Equity
---------- ------ --------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1996 11,458,546 $ 115 $ 20,727 $ 42,940 $ 63,782
Exercise of stock options 26,000 - 207 - 207
Net earnings 13,936 13,936
---------- ----- -------- -------- --------
Balance at December 31, 1996 11,484,546 115 20,934 56,876 77,925
Repurchase and cancellation of stock (141,600) (1) (1,894) (1,895)
Exercise of stock options 25,590 - 234 - 234
Net earnings 14,642 14,642
---------- ----- -------- -------- --------
Balance at December 31, 1997 11,368,536 114 19,274 71,518 90,906
Repurchase and cancellation of stock (590,548) (6) (10,190) (10,196)
Exercise of stock options 17,800 - 148 - 148
Net earnings 16,259 16,259
---------- ----- -------- -------- --------
Balance at December 31, 1998 10,795,788 $ 108 $ 9,232 $ 87,777 $ 97,117
========== ===== ======== ======== ========
</TABLE>
See accompanying notes to the consolidated financial statements
F-3 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
Chromcraft Revington, Inc.
(In thousands)
Year Ended December 31,
--------------------------------------
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Operating Activities
Net earnings $ 16,259 $ 14,642 $ 13,936
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation and amortization 4,534 4,383 3,729
Deferred income taxes 893 1,782 (8)
Changes in assets and liabilities, net of effect of
acquired company
Accounts receivable 21 2,879 (960)
Inventories (2,958) (2,776) (1,837)
Accounts payable (1,511) (1,450) (5,886)
Accrued liabilities 293 (3,955) 736
Other (546) (39) (182)
-------- -------- --------
Cash provided by operating activities 16,985 15,466 9,528
-------- -------- --------
Investing Activities
Capital expenditures (3,388) (2,712) (3,060)
Disposal of property, plant and equipment 51 107 257
Investment in acquired company - - (3,483)
-------- -------- --------
Cash used in investing activities (3,337) (2,605) (6,286)
-------- -------- --------
Financing Activities
Net borrowing (repayment) under revolving credit facility (3,600) (11,200) 18,700
Refinance indebtedness of acquired company - - (22,149)
Repurchase and cancellation of stock (10,196) (1,895) -
Proceeds from exercise of stock options 148 234 207
-------- -------- --------
Cash used in financing activities (13,648) (12,861) (3,242)
-------- -------- --------
Net change in cash $ - $ - $ -
======== ======== ========
</TABLE>
See accompanying notes to the consolidated financial statements
F-4 <PAGE>
<PAGE>
Notes to Consolidated Financial Statements
Chromcraft Revington, Inc.
December 31, 1998
Note 1. Summary of Significant Accounting Policies
The consolidated financial statements include the accounts of Chromcraft
Revington, Inc. and its wholly-owned subsidiaries (together, the "Company").
All significant intercompany accounts and transactions have been eliminated.
The Company manufactures and sells residential and commercial furniture.
Products are sold primarily through furniture dealers throughout the United
States and Canada. The Company has several operating segments which are
aggregated into one reportable segment, in accordance with Financial Accounting
Standards Board Statement No. 131, "Disclosures about Segments of an Enterprise
and Related Information."
Use of Estimates
The preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Inventories
All inventories (materials, labor and overhead) are valued at the lower of cost
or market. Inventories valued using the last-in, first-out (LIFO) basis
represent approximately 70% and 67% of total inventories at December 31, 1998
and 1997, respectively. Remaining inventories are valued using the first-in,
first-out (FIFO) basis.
Property, Plant and Equipment
Property, plant and equipment is stated on the basis of cost. Depreciation is
computed principally by the straight-line method for financial reporting
purposes and by accelerated methods for tax purposes.
Revenue Recognition
Revenue from sales is recognized when the goods are shipped to the customer.
Intangibles
Intangible assets are stated on the basis of cost. The excess of purchase price
over the fair value of net assets acquired (goodwill) and tradenames are being
amortized on a straight-line basis principally over 40 years. The Company
reviews the carrying value of goodwill whenever changes in circumstances
indicate that the carrying amount may not be recoverable. When factors indicate
that the recoverability of goodwill should be evaluated, the Company uses an
estimate of the acquired business' undiscounted cash flows in determining
whether an impairment loss is required.
F-5 <PAGE>
<PAGE>
Deferred Income Taxes
Deferred income taxes are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.
Earnings per Share
Basic and diluted earnings per share is calculated in accordance with Financial
Accounting Standards Board Statement No. 128, "Earnings per Share." All
earnings per share amounts for all periods have been presented and, where
appropriate, restated to conform to the requirements of Statement No. 128.
Stock Options
The Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related Interpretations in accounting for stock
options and discloses the fair value of options granted as permitted by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation."
Financial Instruments
The carrying amounts reported in the balance sheets for accounts receivable,
accounts payable and borrowings under a bank revolving credit facility
approximate their fair values. Concentration of credit risk with respect to
trade accounts receivable is limited due to the large number of entities
comprising the Company's customer base.
Impact of Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The Company
expects to adopt the new Statement effective January 1, 2000. The Statement
will require the Company to recognize all derivatives on the balance sheet at
fair value. The Company does not anticipate that the adoption of this Statement
will have a significant effect on its results of operations or financial
position.
Note 2. Acquisition of Cochrane Furniture Company, Inc.
On November 8, 1996, the Company acquired Cochrane Furniture Company, Inc.
("Cochrane Furniture"), a manufacturer of dining room, bedroom and upholstered
furniture, for $3,483,000 in cash (including acquisition related expenses) and
the assumption of $38,756,000 of Cochrane Furniture's liabilities.
The operations of Cochrane Furniture are included in the Consolidated Statements
of Earnings from the date of acquisition. The transaction was accounted for as
a purchase, and the purchase price has been allocated to assets acquired and
liabilities assumed based on their fair market values at the date of
acquisition. The unaudited pro forma results of operations for the year ended
December 31, 1996, assuming the purchase of Cochrane Furniture had been
consummated as of the beginning of the period, are sales of $245,658,000, net
earnings of $11,409,000 and basic and diluted earnings per share of $0.99 and
F-6 <PAGE>
<PAGE>
$0.97, respectively. The pro forma information is presented for comparative
purposes only and is not necessarily indicative of the operating results that
would have occurred, nor is it necessarily indicative of subsequent operating
results.
Note 3. Inventories
Inventories at December 31, 1998 and 1997 consisted of the following:
(In thousands)
-----------------------
1998 1997
-------- --------
Raw materials $ 12,502 $ 11,033
Work-in-process 6,097 5,810
Finished goods 21,181 19,880
-------- --------
Inventories at FIFO cost 39,780 36,723
LIFO reserve (1,650) (1,551)
-------- --------
$ 38,130 $ 35,172
======== ========
Note 4. Property, Plant and Equipment
Property, plant and equipment at December 31, 1998 and 1997 consisted of the
following:
(In thousands)
-----------------------
1998 1997
-------- --------
Land $ 2,013 $ 2,013
Buildings and improvements 29,923 29,755
Machinery and equipment 39,323 37,415
Leasehold improvements 768 465
Construction in progress 662 205
-------- --------
72,689 69,853
Less accumulated depreciation and amortization (35,595) (32,408)
-------- --------
$ 37,094 $ 37,445
======== ========
Note 5. Accrued Liabilities
Accrued liabilities at December 31, 1998 and 1997 consisted of the following:
(In thousands)
-----------------------
1998 1997
-------- --------
Employee benefit plans $ 4,114 $ 3,999
Salaries, wages and commissions 1,837 1,497
Vacation and holiday pay 1,263 1,234
Workers' compensation plans 1,158 1,268
Other accrued liabilities 4,591 4,672
-------- --------
$ 12,963 $ 12,670
======== ========
F-7 <PAGE>
<PAGE>
Note 6. Income Taxes
Components of the provision for income taxes for the years ended December 31,
1998, 1997 and 1996 were as follows:
(In thousands)
--------------------------------------
1998 1997 1996
-------- -------- --------
Current:
Federal $ 8,666 $ 6,683 $ 7,902
State 1,235 1,255 1,396
-------- -------- --------
9,901 7,938 9,298
-------- -------- --------
Deferred:
Federal 738 1,517 (4)
State 155 265 (4)
-------- -------- --------
893 1,782 (8)
-------- -------- --------
Total provision for income taxes $ 10,794 $ 9,720 $ 9,290
======== ======== ========
A reconciliation of the provision for income taxes included in the Consolidated
Statements of Earnings and the amount computed by applying the U.S. Federal
income tax rate for the years ended December 31, 1998, 1997 and 1996 is
summarized below:
(In thousands)
--------------------------------------
1998 1997 1996
-------- -------- --------
Tax expense, at U.S. statutory rate $ 9,469 $ 8,527 $ 8,129
State taxes, net of federal benefit 1,030 967 915
Non-deductible amortization of goodwill 222 222 222
Other, net 73 4 24
-------- -------- --------
Total provision for income taxes $ 10,794 $ 9,720 $ 9,290
======== ======== ========
The tax effects of temporary differences that give rise to significant portions
of net deferred tax assets (liabilities) at December 31, 1998 and 1997 are
summarized below:
(In thousands)
-----------------------
1998 1997
-------- --------
Deferred tax assets attributable to:
Accounts receivable $ 680 $ 565
Assets held for sale 525 722
Accrued vacation and holiday pay 471 514
Deferred compensation 1,181 565
Net operating loss carryforwards 841 1,044
Other 1,859 2,445
-------- --------
Total gross deferred tax assets 5,557 5,855
-------- --------
Deferred tax liabilities attributable to:
Inventories (1,010) (827)
Property, plant and equipment (4,254) (4,075)
Other (1,258) (1,025)
-------- --------
Total gross deferred tax liabilities (6,522) (5,927)
-------- --------
Net deferred tax liabilities $ (965) $ (72)
======== ========
F-8 <PAGE>
<PAGE>
In connection with the acquisition of Cochrane Furniture, the Company acquired
certain net operating loss carryforwards with expiration dates through 2010.
Note 7. Revolving Credit Facility
The Company has an unsecured revolving loan facility (the "Facility") with a
group of banks that allows the Company to borrow up to $60,000,000 for working
capital requirements, capital expenditures and acquisitions. At December 31,
1998, the Company had $52,882,000 in availability under the Facility. The
interest rate under the Facility is determined at the time of borrowing, at the
Company's option, at either the bank prime rate or a rate based on the
certificate of deposit rate, the Fed Funds rate, or the London Interbank Offered
Rate (LIBOR). The weighted-average interest rate on borrowings outstanding as
of December 31, 1998 and 1997 was 5.51% and 6.62%, respectively. A commitment
fee, of up to .20% per annum, is payable on the unused portion of the credit
line. The Company had outstanding letters of credit under the Facility of
$1,718,000 and $1,881,000 at December 31, 1998 and 1997, respectively. The
Facility expires December 20, 2000.
The Facility requires compliance with certain financial loan covenants related
to net worth, interest and fixed charge coverages and debt leverage. At
December 31, 1998, unrestricted retained earnings available for dividends were
$29,698,000.
Note 8. Earnings Per Share of Common Stock
Weighted average shares used in the calculation of diluted earnings per share
included dilutive potential common shares (stock options) of approximately
396,000, 337,000 and 266,000 for the years ended December 31, 1998, 1997 and
1996, respectively.
Stock options to purchase 58,000 shares of common stock at $19.78 per share and
76,320 shares at $13.09 per share were outstanding during 1998 and 1996,
respectively, but were not included in the computation of diluted earnings per
share because the options' exercise prices were greater than the average market
price of the common shares for those years and, therefore, the effect would be
antidilutive.
Note 9. Stockholders Equity
The Company effected a two-for-one stock split in the form of a 100% stock
dividend to stockholders of record on May 27, 1998. The additional shares were
distributed to stockholders on June 10, 1998. All references to the number of
shares outstanding and per share amounts in the consolidated financial
statements and notes reflect the stock split.
The Company is authorized to issue up to 100,000 shares of $1.00 par value
preferred stock, none of which is outstanding.
The Company has entered into a Registration Rights Agreement dated April 23,
1992 (the "Agreement") between the Company and 399 Venture Partners, Inc.,
which owned 5,695,418 shares or 52.8% of the Company's outstanding common stock
at December 31, 1998. The Agreement permits 399 Venture Partners, Inc. and
transferees, as defined, to request certain registration rights under the
Securities Act of 1933 for all or part of their shares of common stock under
certain conditions. In connection with such registrations as may occur, the
Company will be obligated for the payment of all registration expenses incurred
in the performance of or compliance with this Agreement, subject to certain
limitations set forth therein.
F-9 <PAGE>
<PAGE>
Note 10. Employee Benefit Plans
The Company sponsors a number of tax-qualified defined contribution retirement
and savings plans. Employees may be eligible to participate in one or more of
these plans. Company contributions to these plans are based on either a
percentage of an employee's compensation or a matching portion of the employee's
contributions. The cost of these plans was $1,188,000 in 1998, $1,113,000 in
1997 and $1,034,000 in 1996.
The Company also provides supplemental retirement benefits and "make up"
benefits to key executives of the Company whose benefits are reduced by Internal
Revenue Service Code restrictions. Contributions and expenses under these
arrangements were $338,000 in 1998, $305,000 in 1997 and $221,000 in 1996.
Note 11. Stock Options
The Company's 1992 Stock Option Plan (the "Plan") provides for the granting of
either incentive stock options ("ISO's") or stock options which do not qualify
as incentive stock options ("non-ISO's"). In 1998, the stock-holders approved
an amendment to the Company's Plan to increase the number of shares of common
stock reserved for stock options under the Plan from 1,100,000 shares to
1,800,000 shares and to permit optionees to transfer non-ISO's granted to them
under the Plan to certain family members of the optionee, partnerships and
trusts. ISO's granted under the Plan vest over no greater than a 10-year
period, and are granted at exercise prices no less than the fair market value of
the Company's common shares as of the date of grant. Non-ISO's vest and are at
exercise prices as determined by the compensation committee of the Board of
Directors. At December 31, 1998 and 1997, there were 643,170 and 1,170 shares,
respectively, available for future grants.
The estimated per share weighted-average fair value of stock options granted
during 1998, 1997 and 1996 was $7.85, $6.36 and $5.64, respectively, on the date
of grant. The fair value of stock options on the date of grant was estimated
using the Black-Scholes model with the following weighted-average assumptions:
1998 1997 1996
-------- -------- --------
Expected life (years) 6 7 7
Interest rate 5.7% 6.3% 6.2%
Volatility 27.8% 28.0% 30.0%
The following table summarizes the pro forma effects assuming compensation cost
for such awards had been recorded based upon the estimated fair value:
<TABLE>
<CAPTION>
(In thousands, except per share data)
------------------------------------------------------------------------------
1998 1997 1996
---------------------- ---------------------- ----------------------
As Pro As Pro As Pro
Reported Forma Reported Forma Reported Forma
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net earnings $ 16,259 $ 15,875 $ 14,642 $ 14,345 $ 13,936 $ 13,670
Earnings per share
of common stock
Basic 1.46 1.43 1.28 1.26 1.21 1.19
Diluted 1.41 1.38 1.25 1.22 1.19 1.17
</TABLE>
F-10 <PAGE>
<PAGE>
A summary of the Company's stock option activity and related information for the
three years ended December 31, 1998 follows:
Weighted-
Average
Number Exercise
of Shares Price
--------- --------
1996
Outstanding at beginning of year 914,440 $ 8.12
Granted 55,000 $ 12.24
Exercised (26,000) $ 5.50
Outstanding at end of year 943,440 $ 8.43
Exercisable 646,196 $ 7.87
1997
Granted 42,862 $ 14.16
Exercised (25,590) $ 8.46
Cancelled (1,170) $ 13.09
Outstanding at end of year 959,542 $ 8.68
Exercisable 803,770 $ 7.95
1998
Granted 58,000 $ 19.78
Exercised (17,800) $ 7.25
Outstanding at end of year 999,742 $ 9.35
Exercisable 861,310 $ 8.38
Significant option groups outstanding at December 31, 1998 and related weighted-
average price and remaining life information follows:
Grant Options Options Exercise Remaining
Date Outstanding Exercisable Price Life (Years)
- - --------- ----------- ----------- -------- ------------
4-15-92 436,840 436,840 $ 5.50 3.3
2-19-93 119,400 119,400 9.50 4.1
1-11-94 146,000 146,000 11.63 5.0
All other 297,502 159,070 12.45 7.5
Note 12. Supplemental Cash Flow Information
Interest paid during the years ended December 31, 1998, 1997 and 1996 was
$774,000, $1,081,000 and $180,000, respectively. Income taxes paid during the
years ended December 31, 1998, 1997 and 1996 were $10,062,000, $8,510,000 and
$9,054,000, respectively.
F-11 <PAGE>
<PAGE>
Note 13. Rental Commitments
The Company leases certain showroom facilities and transportation equipment
under non-cancelable operating leases. The future minimum lease payments under
non-cancelable leases for the years ending December 31, 1999, 2000, 2001, 2002
and 2003 are $1,183,000, $668,000, $539,000, $377,000 and $263,000,
respectively. It is expected that, in the normal course of business, leases
that expire will be renewed or replaced.
Rental expense was $1,919,000, $1,932,000 and $1,248,000 for the years ended
December 31, 1998, 1997 and 1996, respectively.
Independent Auditors' Report
The Board of Directors and Stockholders
Chromcraft Revington, Inc.:
We have audited the consolidated financial statements of Chromcraft Revington,
Inc. and subsidiaries as listed in item 14(a) (1) and (2). In connection with
our audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in item 14(a) (1) and (2). These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall 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 financial position of Chromcraft
Revington, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1998, in conformity with generally accepted
accounting principles. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the
information set forth therein.
KPMG LLP
Indianapolis, Indiana
February 1, 1999
F-12 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
Quarterly Financial Information (unaudited)
Chromcraft Revington, Inc.
(In thousands, except per share data)
---------------------------------------------------------------------
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1998
Sales $ 60,802 $ 57,500 $ 56,337 $ 62,105 $ 236,744
Gross margin 15,314 14,307 14,477 15,658 59,756
Operating income 7,097 6,639 6,736 7,320 27,792
Net earnings 4,173 3,883 3,913 4,290 16,259
Earnings per share
of common stock
Basic .37 .35 .35 .39 1.46
Diluted .36 .33 .34 .38 1.41
1997
Sales $ 59,469 $ 54,074 $ 52,821 $ 59,265 $ 225,629
Gross margin 14,341 13,765 13,402 14,319 55,827
Operating income 6,498 5,757 6,242 7,130 25,627
Net earnings 3,708 3,246 3,551 4,137 14,642
Earnings per share
of common stock
Basic .32 .28 .31 .36 1.28
Diluted .31 .28 .30 .35 1.25
</TABLE>
F-13 <PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
Chromcraft Revington, Inc.
(In thousands)
Additions
-------------------------
Balance at Charged to Charged to Balance at
Beginning Costs and Other End
Classification of Period Expenses Accounts Deductions of Year
---------------- ----------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998
Allowance for doubtful
accounts $ 1,462 $ 328 $ - $ (579)(a) $ 1,211
Year ended December 31, 1997
Allowance for doubtful
accounts $ 1,781 $ 169 $ - $ (488)(a) $ 1,462
Reserve for excess and obsolete
inventory (b) $ 3,123 $ - $ - $(3,123) $ -
Year ended December 31, 1996
Allowance for doubtful
accounts $ 980 $ 760 $ 640(c) $ (599)(a) $ 1,781
Reserve for excess and obsolete
inventory (b) $ - $ 150 $ 2,973 $ - $ 3,123
</TABLE>
(a) Represents charge-offs, net of recoveries, to the allowance for doubtful
accounts.
(b) Represents the reserve for excess and obsolete inventory associated with
the Cochrane Furniture acquisition.
(c) Represents the allowance for doubtful accounts associated with the Cochrane
Furniture acquisition.
S-1 <PAGE>
<PAGE>
EXHIBIT (10.51)
CHROMCRAFT REVINGTON, INC.
SHORT TERM EXECUTIVE INCENTIVE PLAN
ARTICLE I
Introduction
1.1 Objective. The Short Term Executive Incentive Plan of Chromcraft
Revington, Inc. is designed to focus the efforts of the Key Executives of the
Company and its Subsidiaries on continued, improvement in the profitability of
the Company and its Subsidiaries with the objective of providing an adequate
return to shareholders on their investment in the Company. The Plan provides
for the payment of incentive compensation on an annual basis in the form of
current or deferred cash compensation.
1.2 Administration of the Plan. The Plan shall be administered by the
Committee. The Committee shall, subject to the limitations contained in the
Plan, have the discretion to determine the Performance Factors and Award Rates
and to establish the Performance Standards under the Plan. The Committee shall
also (i) adopt such rules and regulations as are appropriate for the proper
administration of the Plan, and (ii) make such determinations and take such
actions in connection with the Plan as it deems necessary, provided that the
Committee may take action only upon the vote of a majority of its members.
The Committee may, in its sole discretion, make such adjustments to Awards,
Award Rates and Performance Standards or Factors and such other terms and
conditions of the Plan that the Committee determines to be necessary and
reasonable to prevent the loss by Key Executives of the value of Awards granted
under the Plan on account of events which affect the value of the Awards but
which, in the judgment of the Committee, are outside the control of the Key
Executives.
While the Committee may appoint individuals to act on its behalf in the
administration of the Plan, it shall have the sole, final and conclusive
authority to administer, construe and interpret the Plan. The Committee's
determinations and interpretations shall be final and binding on all persons,
including the Company, its shareholders and persons having any interest in
Awards. Any notice or document required to be given to or filed with the
Committee will be properly given or filed if delivered or mailed, by certified
mail, postage prepaid, to the Committee at 1100 N. Washington Street, Delphi,
Indiana, 46923-0238.
Definitions
1.3 Definitions. Whenever the initial letter of the following words or
phrases is capitalized in the Plan, including any Supplements, they shall have
the respective meanings set forth below unless otherwise defined herein:
(a) "Award" means the cash compensation awarded to a Key Executive
pursuant to the Plan.
<PAGE>
<PAGE>
(b) "Award Rates" means the amount of cash, expressed as a
percentage, which ranges from zero percent (0.0%) to one hundred
fifty percent (150%) of Base Salary for a calendar year, as
determined by the Committee, applicable to a Key Executive.
(c) "Base Salary" means the regular base salary actually paid by
the Company or a Subsidiary to an employee while such employee is a
Key Executive during a calendar year, exclusive of additional forms
of compensation such as bonuses, payments under the Plan and under
the Chromcraft Revington, Inc. Long Term Executive Incentive Plan,
other incentive payments, automobile allowances, tax gross ups and
other fringe benefits. Base Salary shall be calculated without
regard to deductions pursuant to (i) Section 401(k) salary deferral
contributions under the Chromcraft Revington Savings Plan and the
Cochrane Furniture 401(k) Profit Sharing Plan; (ii) Section 125
salary deferral contributions under the Chromcraft Revington Earnings
Reduction Plan, the Silver Furniture Co., Inc. Employee Benefit Plan
and the Cochrane Furniture Company Flexible Benefits Plan; and (iii)
salary deferral contributions under the SERP or the Silver SERP.
(d) "Board" means the Board of Directors of the Company.
(e) A "Change in Control of the Company" as used herein shall be
deemed to have occurred when (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), other than 399
Venture Partners, Inc., shall be the beneficial owners, directly or
indirectly, of voting equity securities of the Company representing
more than twenty-five percent (25%) of the Company's then issued and
outstanding voting equity securities; (ii) any merger, consolidation
or combination of the Company occurs unless the Company is the
surviving entity, with no change in the Company's executive officers
or a majority of its directors; (iii) any sale or other disposition
of all or substantially all of the assets of the Company occurs; or
(iv) during any two (2) year period, a majority of the members of
the Board of Directors of the Company shall be changed by filling
vacancies or newly created directorships unless such change in the
membership is approved by a majority of the directors then in office.
(f) "Company" means, unless otherwise stated, Chromcraft Revington,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor (by merger, consolidation,
purchase or otherwise) to such corporation which shall have assumed
the obligations of such corporation under the Plan and the
Subsidiaries of the Company.
(g) "Committee" means the Compensation Committee of the Board.
(h) "EPS" means the Company's earnings per share for a calendar
year, on a diluted basis, as reflected on the Company's financial
statements for such year.
2 <PAGE>
<PAGE>
(i) "EBIT" means the earnings before net interest charges and taxes
of a Subsidiary for a calendar year as reflected on the Subsidiary's
financial statements for such year.
(j) "Effective Date" means January 1, 1998, which is the original
effective date of the Plan.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Financial Plan" means that portion of the financial plans of
the Company and each of its Subsidiaries which relates to a specified
period, as presented to and approved by the Board. It is noted that
the Company's Financial Plan is presented, and will be used under the
Plan, on a consolidated basis which takes into account the Financial
Plans of the Subsidiaries; and, the Financial Plan for each
Subsidiary is presented, and will be used under the Plan, solely with
respect to such Subsidiary.
(m) "For Cause" means:
(i) the willful and continued failure of a Key Executive to
perform his required duties as an officer or employee of
the Company or any Subsidiary;
(ii) any action by a Key Executive which involves willful
misfeasance or gross negligence;
(iii) the requirement of or direction by a federal or state
regulatory agency, which has jurisdiction over the Company
or any Subsidiary, to terminate the employment of the Key
Executive;
(iv) the conviction of the Key Executive of the commission of
any criminal offense which involves dishonesty or breach
of trust;
(v) any intentional breach by the Key Executive of a material
term, condition or covenant of any agreement between the
Key Executive and the Company or any Subsidiary; or
(vi) any breach by the Key Executive for a provision of his
employment agreement with the Company or Subsidiary which
requires the forfeiture of his benefits hereunder or under
the Option Plan.
(n) "Key Executive" means those executive employees of the Company
and Subsidiaries who are designated by the Committee as Key
Executives.
3 <PAGE>
<PAGE>
(o) "Performance Factors" means the financial performance factors
with respect to the Company and the Subsidiaries as determined by the
Committee for each calendar year.
(p) "Performance Standard(s)" means the threshold, target and
maximum financial performance levels with respect to the Company and
the Subsidiaries as determined by the Committee for each calendar
year.
(q) "Permanent and Total Disability" means any disability that would
qualify as permanent and total disability under the long term
disability plan sponsored by the Company.
(r) "Plan" means the short term executive incentive plan contained
in this instrument and any subsequent amendment to this instrument,
which shall have been adopted by the Board or Committee as provided
in Section 4.1, known as the Chromcraft Revington, Inc. Short term
Executive Incentive Plan.
(s) "Sales" means the net sales of the Company or Subsidiary, as may
be applicable, for a calendar year as reflected on the Company's or
Subsidiary's financial statements for such year.
(t) "SERP" means the Chromcraft Revington, Inc. Supplemental
Executive Retirement Plan and any amendments thereto.
(u) "Silver SERP" means the nonqualified deferred compensation plan
and any amendments thereto sponsored by Silver Furniture Co., Inc.
(v) "Subsidiary or Subsidiaries" mean Chromcraft Corporation
("Chromcraft"), Peters-Revington Corporation ("Peters-Revington"),
Cochrane Furniture Company, Inc. ("Cochrane"), Silver Furniture Co.,
Inc. ("Silver") and such other subsidiary corporations of the Company
which are designated by the Board or Committee.
ARTICLE II
Eligibility and Participation
Participation in the Plan is limited to Key Executives. Committee members
shall not be eligible to receive Awards under the Plan while serving as
Committee members. A Key Executive will become covered by the Plan effective as
of the Effective Date or the later to occur of the following dates:
(a) The Key Executive's date of hire; or
4 <PAGE>
<PAGE>
(b) The date on which an employee of the Company or Subsidiary is
appointed to a position which causes him to become a Key Executive.
A Key Executive who becomes covered by the Plan after the commencement of a
calendar year but who would otherwise be entitled to an Award for such year
shall be entitled, subject to the other provisions of the Plan, to a pro rata
portion of any Award based on the ratio that the number of calendar days in the
year he was actively employed as a Key Executive bears to three hundred sixty
(360).
ARTICLE III
Calculation of Awards
3.1 Components of Calculation of Awards. For each calendar year, the
Committee shall establish the following components for calculating Awards with
respect to the Company and the Subsidiaries:
(a) Performance Factors for the Company and Subsidiaries.
(b) The relative weight accorded each Performance Factor.
(c) The target, threshold and maximum Award Rates for each Key
Executive expressed as a percentage of Base Salary for a year.
(d) The Performance Standards which reflect the threshold, target
and maximum levels of the Company's consolidated or Subsidiary's
individual Performance Factors which must be satisfied for an Award
payment to be made.
3.2 Communication of Award Opportunity Level and Awards. The Award
Rates, Performance Factors (and their respective weightings), Performance
Standards of the Award and any requirements or other criteria thereunder shall
be communicated by the Committee in writing to Key Executives.
3.3 Form of Payment of Awards. Subject to the Key Executive's right to
defer the receipt of an Award as provided in Section 3.7, all Awards shall be
paid to eligible Key Executives in cash.
3.4 Time of Payment of Awards. Subject to the Key Executive's right to
defer the receipt of an Award as provided in Section 3.7, all Awards shall be
paid not later than forty-five (45) days after the end of the calendar year to
which the Awards relate.
3.5 Withholding of Taxes. Each Key Executive shall be solely responsible
for, and the Company will withhold from any amounts payable under the Plan, all
applicable federal, state, city and local income taxes and the Key Executive's
share of applicable employment taxes.
5 <PAGE>
<PAGE>
3.6 Limitation on Awards. The aggregate dollar amount of Award payments
under the Plan for any calendar year shall not exceed five percent (5%) of the
Company's consolidated EBIT for the calendar year prior to the year in which the
Award payments are scheduled to be made. In the event Award payments for any
year would exceed five percent (5%) of the Company's consolidated EBIT, the
dollar amount of each Award shall be reduced based on the ratio that the total
dollar amount of each Key Executive's Award for the year bears to the total
dollar amount of all Key Executives' Awards for such year. Provided further, if
the Company's consolidated EBIT does not exceed the greater of prior year's EBIT
or 90% of Financial Plan EBIT, then Awards to Subsidiary Key Executives for such
year will be limited to seventy-five percent (75%) of each Key Executive's
earned Award.
3.7 Deferred Payment of Cash Awards. A Key Executive who is also covered
by the SERP or Silver SERP may elect that any Award payment to which he is
entitled under the Plan be deferred under the SERP or Silver SERP. All
deferrals of Awards shall be governed by and subject to all of the applicable
provisions of the SERP and Silver SERP. To the extent any provision of the Plan
conflicts with any provision of the SERP or Silver SERP, the applicable
provisions of the SERP or Silver SERP shall control. In order for Awards to be
deferred under the SERP or Silver SERP, the Key Executive must execute and
deliver (i) an agreement which contains such terms and conditions as the
committee responsible for administering the SERP or Silver SERP shall prescribe,
and (ii) such documents, certificates and other writings as may be required by
the Committee or the committee which administers the SERP or Silver SERP.
3.8 Payment on Termination of Employment. If a Key Executive terminates
employment before the last day of a calendar year, he will not be entitled to
any Award under the Plan for such year unless one (1) or more of the following
circumstances apply:
(a) The Key Executive dies while actively employed.
(b) The Key Executive's termination is on account of Permanent and
Total Disability.
(c) Within thirty (30) days after his termination of employment, the
Key Executive commences or recommences employment with the Company or
a Subsidiary.
(d) The Key Executive's employment is terminated by the Company or
Subsidiary for reasons other than For Cause.
(e) The Key Executive retires on or after attaining age sixty-five
(65).
6 <PAGE>
<PAGE>
(f) The Key Executive's employment is terminated for any reason
except For Cause within one (1) year of a Change in Control of the
Company.
If the Key Executive's termination of employment is on account of one or
more of the circumstances described in subsections (a) through (f), he will be
entitled to a pro rata portion of the Award, as described in Section 3.3, to
which he would otherwise be entitled for the calendar year. The Award shall be
calculated based on the ratio that the number of days during the calendar year
in which he was actually employed bears to three hundred sixty-five (365).
3.9 Payment on Termination of Plan. Notwithstanding any other provision
of the Plan, if the Plan is terminated effective as of a date other than last
day of a calendar year, all Key Executives shall be entitled only to a pro rata
portion of the cash component of any Award, as described in Section 3.3, for the
calendar year in which the termination of the Plan occurs. The Award shall be
calculated based, in the case of each Key Executive, on the ratio that the
number of days during the calendar year in which the Plan was in existence bears
to the three hundred sixty-five (365).
ARTICLE IV
Miscellaneous
4.1 Amendment or Termination. The Board or the Committee may, at any
time, without the approval of the stockholders of the Company (except as
otherwise required by applicable law, rule or regulations or listing
requirements of any National Securities Exchange on which are listed any of the
Company's equity securities including, without limitation, any shareholder
approval requirement of Rule 16b-3 or any successor safe harbor rule promulgated
under the Exchange Act), alter, amend, modify, suspend or terminate the Plan,
but may not, without the consent of a Key Executive to whom an Award has been
made, make any alteration which would adversely affect an Award previously
granted under the Plan.
4.2 Conflict with Employment Agreement. To the extent any provision of
the Plan conflicts with any provision of a written employment or other agreement
between a Key Executive and the Company or any Subsidiary, the provisions of the
employment agreement shall control.
4.3 Employment Rights. The Plan does not constitute a contract of
employment and participation in the Plan will not give a Key Executive the right
to be rehired or retained in the employ of the Company or any Subsidiary, nor
will participation in the Plan give any Key Executive any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
4.4 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
7 <PAGE>
<PAGE>
4.5 Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.
4.6 Action by the Board or Committee. Any action required of or
permitted by the Board or Committee under this Plan shall be by resolution of
the Board or by a person or persons authorized by resolution of the Board or
Committee.
4.7 Controlling Laws. Except to the extent superseded by laws of the
United States, the laws of Indiana shall be controlling in all matters relating
to the Plan.
4.8 Mistake of Fact. Any mistake of fact or misstatement of fact shall
be corrected when it becomes known and proper adjustment made by reason thereof.
4.9 Severability. In the event any provision of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provision had never been contained in the
Plan.
4.10 Effect of Headings. The descriptive headings of the Articles and
Sections of the Plan are inserted for convenience of reference and
identification only and do not constitute a part of the Plan for purposes of
interpretation.
4.11 Non-transferability. No Award payment shall be transferable, except
by the Key Executive's will or the applicable laws of descent and distribution.
During the Key Executive's lifetime, his Award shall be payable only to the Key
Executive or his guardian or attorney-in-fact. The payment and any rights and
privileges pertaining thereto shall not be transferred, assigned, pledged or
hypothecated by him in any way, whether by operation of law or otherwise and
shall not be subject to execution, attachment or similar process.
4.12 No Liability. No member of the Board or the Committee or any officer
or Key Executive of the Company or Subsidiary shall be personally liable for any
action, omission or determination made in good faith in connection with the
Plan. The Company shall indemnify and hold harmless the members of the
Committee, the Board and the officers and Key Executives of the Company and its
Subsidiaries, and each of them, from and against any and all loss which results
from liability to which any of them may be subjected by reason of any act or
conduct (except willful misconduct or gross negligence) in their official
capacities in connection with the administration of the Plan, including all
expenses reasonably incurred in their defense, in case the Company fails to
provide such defense. By participating in the Plan, each Key Executive agrees
to release and hold harmless each of the Company, the Subsidiaries (and their
respective directors, officers and employees), the Board and the Committee, from
and against any tax or other liability, including without limitation, interest
and penalties, incurred by the Key Executive in connection with his
participation in the Plan.
8 <PAGE>
<PAGE>
4.13 Funding. All amounts payable under the Plan will be paid by the
Company from its general assets. The Company is not required to segregate on
its books or otherwise establish any funding procedure for any amount to be used
for the payment of benefits under the Plan. The Company may, however, in its
sole discretion, set funds aside in investments to meet its anticipated
obligations under the Plan. Any such action or set-aside amount may not be
deemed to create a trust of any kind between the Company and any Key Executive
or beneficiary or to constitute the funding of any Plan benefits. Consequently,
any person entitled to a payment under the Plan will have no rights against the
assets of the Company greater than the rights of any other unsecured creditor of
the Company.
9 <PAGE>
<PAGE>
EXHIBIT (10.55)
CHROMCRAFT REVINGTON, INC.
LONG TERM EXECUTIVE INCENTIVE PLAN
ARTICLE I
Introduction
1.1 Objective. The Long Term Executive Incentive Plan of Chromcraft
Revington, Inc. is designed to focus the efforts of the Key Executives of the
Company and its Subsidiaries on continued, long term improvement in the
profitability of the Company and its Subsidiaries with the objective of
providing an adequate return to shareholders on their investment in the Company.
The Plan provides for the payment of long term incentive compensation in the
form of current and deferred cash compensation and options to acquire shares of
the Company's common voting stock.
1.2 Administration of the Plan. The Plan shall be administered by the
Committee. The Committee shall, subject to the limitations contained in the
Plan, have the discretion to determine the Performance Factors and Award Rates
and to establish the Performance Standards under the Plan. The Committee shall
also (i) adopt such rules and regulations as are appropriate for the proper
administration of the Plan, and (ii) make such determinations and take such
actions in connection with the Plan as it deems necessary, provided that the
Committee may take action only upon the vote of a majority of its members.
The Committee may, in its sole discretion, make such adjustments to Awards,
Award Rates and Performance Standards or Factors and such other terms and
conditions of the Plan that the Committee determines to be necessary and
reasonable to prevent the loss by Key Executives of the value of Awards granted
under the Plan on account of events which affect the value of the Awards but
which, in the judgment of the Committee, are outside the control of the Key
Executives.
While the Committee may appoint individuals to act on its behalf in the
administration of the Plan, it shall have the sole, final and conclusive
authority to administer, construe and interpret the Plan. The Committee's
determinations and interpretations shall be final and binding on all persons,
including the Company, its shareholders and persons having any interest in
Awards. Any notice or document required to be given to or filed with the
Committee will be properly given or filed if delivered or mailed, by certified
mail, postage prepaid, to the Committee at 1100 N. Washington Street, Delphi,
Indiana, 46923-0238.
Definitions
1.3 Definitions. Whenever the initial letter of the following words or
phrases is capitalized in the Plan, including any Supplements, they shall have
the respective meanings set forth below unless otherwise defined herein:
(a) "Award" means the cash compensation component and the stock
option component awarded to a Key Executive pursuant to the Plan.
<PAGE>
<PAGE>
(b) "Award Rates" means the amount of cash and the value of stock
options, expressed as a percentage which ranges from zero percent
(0.0%) to one hundred fifty percent (150%) of Base Salary for a
calendar year, as determined by the Committee, applicable to a Key
Executive for the Performance Period which ends with such calendar
year.
(c) "Base Salary" means the regular base salary actually paid by the
Company or a Subsidiary to an employee while such employee is a Key
Executive during a specified period, exclusive of additional forms of
compensation such as bonuses, payments under the Plan, other
incentive payments, automobile allowances, tax gross ups and other
fringe benefits. Base Salary shall be calculated without regard to
deductions pursuant to (i) Section 401(k) salary deferral
contributions under the Chromcraft Revington Savings Plan and the
Cochrane Furniture 401(k) Profit Sharing Plan; (ii) Section 125
salary deferral contributions under the Chromcraft Revington Earnings
Reduction Plan, the Silver Furniture Co., Inc. Employee Benefit Plan
and the Cochrane Furniture Company Flexible Benefits Plan; and (iii)
salary deferral contributions under the SERP or the Silver SERP.
(d) "Board" means the Board of Directors of the Company.
(e) A "Change in Control of the Company" as used herein shall be
deemed to have occurred when (i) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), other than 399
Venture Partners, Inc., shall be the beneficial owners, directly or
indirectly, of voting equity securities of the Company representing
more than twenty-five percent (25%) of the Company's then issued and
outstanding voting equity securities; (ii) any merger, consolidation
or combination of the Company occurs unless the Company is the
surviving entity, with no change in the Company's executive officers
or a majority of its directors; (iii) any sale or other disposition
of all or substantially all of the assets of the Company occurs; or
(iv) during any two (2) year period, a majority of the members of the
Board of Directors of the Company shall be changed by filling
vacancies or newly created directorships unless such change in the
membership is approved by a majority of the directors then in office.
(f) "Company" means, unless otherwise stated, Chromcraft Revington,
Inc., a corporation organized and existing under the laws of the
State of Delaware, or any successor (by merger, consolidation,
purchase or otherwise) to such corporation which shall have assumed
the obligations of such corporation under the Plan and the
Subsidiaries of the Company.
(g) "Committee" means the Compensation Committee of the Board.
(h) "EBIT" means the earnings before net interest charges and taxes
of the Company (on a consolidated basis) or Subsidiary (on an
individual basis), as may be applicable, for a specified period as
reflected on the Company's or Subsidiary's financial statements for
such period.
2 <PAGE>
<PAGE>
(i) "Effective Date" means January 1, 1998, which is the original
effective date of the Plan.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Financial Plan" means that portion of the financial plans of
the Company and each of its Subsidiaries which relates to a specified
period, as presented to and approved by the Board. It is noted that
the Company's Financial Plan is presented, and will be used under the
Plan, on a consolidated basis which takes into account the Financial
Plans of the Subsidiaries; and, the Financial Plan for each
Subsidiary is presented, and will be used under the Plan, solely with
respect to such Subsidiary.
(l) "For Cause" means:
(i) the willful and continued failure of a Key Executive to
perform his required duties as an officer or employee of
the Company or any Subsidiary;
(ii) any action by a Key Executive which involves willful
misfeasance or gross negligence;
(iii) the requirement of or direction by a federal or state
regulatory agency, which has jurisdiction over the Company
or any Subsidiary, to terminate the employment of the Key
Executive;
(iv) the conviction of the Key Executive for the commission of
any criminal offense which involves dishonesty or breach
of trust;
(v) any intentional breach by the Key Executive of a material
term, condition or covenant of any agreement between the
Key Executive and the Company or any Subsidiary; or
(vi) any breach by the Key Executive of a provision of his
employment agreement with the Company or Subsidiary which
requires the forfeiture of his benefits hereunder or under
the Option Plan.
(m) "Key Executive" means those executive employees of the Company
and Subsidiaries who are designated by the Committee as Key
Executives.
(n) "Option Plan" means the 1992 Chromcraft Revington, Inc. Stock
Option Plan, as amended.
(o) "Peer Group" means the Company and the corporations in the
furniture industry determined by the Committee from time to time to
constitute the members of the Peer Group.
3 <PAGE>
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(p) "Performance Factors" means the financial performance factors
with respect to the Company and the Subsidiaries as determined by the
Committee for each Performance Period.
(q) "Performance Period" shall mean the following periods:
(i) The 1998 Performance Period shall be the 1998 calendar
year;
(ii) The 1999 Performance Period shall be the twenty-four (24)
consecutive month period ending December 31, 1999; and
(iii) The 2000 Performance Period and all subsequent Performance
Periods shall be, respectively, the thirty-six (36)
consecutive month period ending December 31, 2000 and each
thirty-six (36) consecutive month period ending on each
December 31 thereafter.
(r) "Performance Standard(s)" means the threshold, target and
maximum financial performance levels with respect to the Company and
the Subsidiaries as determined by the Committee for each Performance
Period.
(s) "Permanent and Total Disability" means any disability that would
qualify as permanent and total disability under the long term
disability plan sponsored by the Company.
(t) "Plan" means the long term executive incentive plan contained in
this instrument and any subsequent amendment to this instrument,
which shall have been adopted by the Board or Committee as provided
in Section 4.1, known as the Chromcraft Revington, Inc. Long Term
Executive Incentive Plan.
(u) "ROE" means return on equity, calculated by taking a
corporation's net earnings for a twelve month period divided by the
average of beginning and ending shareholders' equity as reflected on
the financial statements of the corporation for such period. For a
Performance Period, ROE is the average of the fiscal year ROE
percentages during the applicable period.
(v) "Sales" means the net sales of the Company or Subsidiary, as may
be applicable, for a specified period as reflected on the Company's
or Subsidiary's financial statements for such period.
(w) "SERP" means the Chromcraft Revington, Inc. Supplemental
Executive Retirement Plan and any amendments thereto.
(x) "Silver SERP" means the nonqualified deferred compensation plan
and any amendments thereto sponsored by Silver Furniture Co., Inc.
(y) "Subsidiary or Subsidiaries" mean Chromcraft Corporation
("Chromcraft"), Peters-Revington Corporation ("Peters-Revington"),
4 <PAGE>
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Cochrane Furniture Company, Inc. ("Cochrane"), Silver Furniture Co.,
Inc. ("Silver") and such other subsidiary corporations of the Company
which are designated by the Board or Committee.
ARTICLE II
Eligibility and Participation
Participation in the Plan is limited to Key Executives. Committee members
shall not be eligible to receive Awards under the Plan while serving as
Committee members. A Key Executive will become covered by the Plan effective as
of the Effective Date or the later to occur of the following dates:
(a) The Key Executive's date of hire; or
(b) The date on which an employee of the Company or Subsidiary is
appointed to a position which causes him to become a Key Executive.
A Key Executive who becomes covered by the Plan after the commencement of a
Performance Period but who would otherwise be entitled to an Award for such
Performance Period shall be entitled, subject to the other provisions of the
Plan, to a pro rata portion of any Award based on the ratio that the number of
calendar days in the Performance Period he was actively employed as a Key
Executive bears to the number of days in the Performance Period.
ARTICLE III
Calculation of Awards
3.1 Components of Calculation of Awards. For each Performance Period,
the Committee shall establish the following components for calculating Awards
with respect to the Company and the Subsidiaries:
(a) Performance Factors for the Company and Subsidiaries.
(b) The relative weight accorded each Performance Factor.
(c) The target, threshold and maximum Award Rates for each Key
Executive expressed as a percentage of Base Salary for a specified
period.
(d) The Performance Standards which reflect the threshold, target
and maximum levels of the Company's consolidated or Subsidiary's
individual Performance Factors which must be satisfied for an Award
payment to be made.
3.2 Communication of Award Opportunity Level and Awards. The Award
Rates, Performance Factors (and their respective weightings), Performance
Standards of the Award and any requirements, or other criteria thereunder shall
be communicated by the Committee in writing to Key Executives.
5 <PAGE>
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3.3 Form of Payment of Awards. Subject to the limitations contained in
Sections 3.9 and 3.10, all Awards shall be made to eligible Key Executives in
the following two (2) components:
(a) Subject to the Key Executive's right to defer the receipt of the
payment as provided in Section 3.7, fifty percent (50%) in a single
lump sum in cash.
(b) Fifty percent (50%) in options to acquire shares of the
Company's common voting stock, as provided in Section 3.8.
3.4 Time of Payment of Awards. Subject to the Key Executive's right to
defer the receipt of a cash Award payment as provided in Section 3.7, the cash
to be paid and stock options to be granted with respect to an Award shall be
paid and granted, respectively, not later than ninety (90) days after the end of
the Performance Period to which the Award relates.
3.5 Withholding of Taxes. Each Key Executive shall be solely responsible
for, and the Company will withhold from any amounts payable under the Plan, all
applicable federal, state, city and local income taxes and the Key Executive's
share of applicable employment taxes.
3.6 Limitation on Awards. The aggregate dollar amount of Award payments
under the Plan for any calendar year shall not exceed five percent (5%) of the
Company's consolidated EBIT for the calendar year prior to the year in which the
Award payments are scheduled to be made. In the event Award payments for any
year would exceed five percent (5%) of the Company's consolidated EBIT, the
dollar amount of each Award shall be reduced based on the ratio that the total
dollar amount of each Key Executive's Award for the year bears to the total
dollar amount of all Key Executives' Awards for such year. Provided further, if
the Company's consolidated EBIT is below the Performance Standard threshold
level for the Performance Period, then Awards to Subsidiary Key Executives will
be limited to seventy-five percent (75%) of each Key Executive's earned Award.
3.7 Deferred Payment of Cash Awards. Subject to the limitations
contained in Sections 3.9 and 3.10, a Key Executive who is also covered by the
SERP or Silver SERP may elect that the cash component of any Award payment to
which he is entitled under the Plan be deferred under the SERP or Silver SERP.
All deferrals of the cash component of Awards shall be governed by and subject
to all of the applicable provisions of the SERP and Silver SERP. To the extent
any provision of the Plan conflicts with any provision of the SERP or Silver
SERP, the applicable provisions of the SERP or Silver SERP shall control. In
order for cash Awards to be deferred under the SERP or Silver SERP, the Key
Executive must execute and deliver (i) an agreement which contains such terms
and conditions as the committee responsible for administering the SERP or Silver
SERP shall prescribe, and (ii) such documents, certificates and other writings
as may be required by the Committee or the committee which administers the SERP
or Silver SERP.
3.8 Payment of Awards in Form of Stock Options. Except as otherwise
provided in this Section 3.8, all options which are the subject of Awards under
6 <PAGE>
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the Plan shall be granted, governed and subject to all of the provisions of the
Option Plan as in effect from time to time and any successor thereto. All
Awards of stock options granted under the Plan shall be made as follows:
(a) Each year, after the total dollar amount of all Awards with
respect to the Performance Period just ended have been calculated,
the Company shall calculate the number of options to be granted under
Section 3.3 utilizing the Black-Scholes model based on the same
assumptions as were used in valuing options granted under the Option
Plan as described in the Company's Form 10-K which will be filed with
the Securities and Exchange Commission for the prior year period.
(b) Subject to the dollar amount limits on the fair market value of
"incentive stock options" ("ISOs") imposed by the Option Plan and
Section 422 of the Internal Revenue Code of 1986, as amended, all
options which are the subject of Awards shall be designated by the
committee which administers the Option Plan as ISOs.
(c) All options which are the subject of Awards shall have a term of
ten (10) years from the date on which they are granted and shall be
exercisable immediately.
(d) In order for options which are the subject of Awards to be
validly granted hereunder, such options shall have been awarded by
the committee which administers the Option Plan and the Key Executive
must execute and deliver (i) an agreement which contains such terms
and conditions as the committee which administers the Option Plan
shall prescribe, and (ii) such documents, certificates and other
writings as may be required by the Committee or the committee which
administers the Option Plan.
3.9 Payment on Termination of Employment. If a Key Executive terminates
employment before the last day of a Performance Period, he will not be entitled
to any Award under the Plan for such Performance Period unless one (1) or more
of the following circumstances apply:
(a) The Key Executive dies while actively employed.
(b) The Key Executive's termination is on account of Permanent and
Total Disability.
(c) Within thirty (30) days after his termination of employment, the
Key Executive commences or recommences employment with the Company or
a Subsidiary.
(d) The Key Executive's employment is terminated by the Company or
Subsidiary for reasons other than For Cause.
7 <PAGE>
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(e) The Key Executive retires on or after attaining age sixty-five
(65).
(f) The Key Executive's employment is terminated for any reason
except For Cause within one (1) year of a Change in Control of the
Company.
If the Key Executive's termination of employment is on account of one or
more of the circumstances described in subsections (a) through (e), he will be
entitled only to a pro rata portion of the cash component of any Award, as
described in Section 3.3(a), to which he would otherwise be entitled for the
Performance Period. The Award shall be calculated based on the ratio that the
number of days during the Performance Period in which he was actually employed
bears to the total number of days in such Performance Period. Provided,
further, if the Key Executive's termination of employment is on account of a
Change in Control of the Company, as described in subsection (f), he will also
be entitled to a pro rata portion of any Award, as described in Section 3.3(b),
payable solely in cash, based on the ratio specified in the preceding sentence.
3.10 Payment on Termination of Plan. Notwithstanding any other provision
of the Plan, if the Plan is terminated effective as of a date other than last
day of a Performance Period, all Key Executives shall be entitled only to a pro
rata portion of the cash component of any Award, as described in Section 3.3(a),
for the Performance Period in which the termination of the Plan occurs. The
Award shall be calculated based, in the case of each Key Executive, on the ratio
that the number of days during the Performance Period in which the Plan was in
existence bears to the total number of days in such Performance Period.
ARTICLE IV
Miscellaneous
4.1 Amendment or Termination. The Board or the Committee may, at any
time, without the approval of the stockholders of the Company (except as
otherwise required by applicable law, rule or regulations or listing
requirements of any National Securities Exchange on which are listed any of the
Company's equity securities including, without limitation, any shareholder
approval requirement of Rule 1 6b-3 or any successor safe harbor rule
promulgated under the Exchange Act), alter, amend, modify, suspend or terminate
the Plan, but may not, without the consent of a Key Executive to whom an Award
has been made, make any alteration which would adversely affect an Award
previously granted under the Plan.
4.2 Conflict with Employment Agreement. To the extent any provision of
the Plan conflicts with any provision of a written employment or other agreement
between a Key Executive and the Company or any Subsidiary, the provisions of the
employment agreement shall control.
4.3 Employment Rights. The Plan does not constitute a contract of
employment and participation in the Plan will not give a Key Executive the right
to be rehired or retained in the employ of the Company or any Subsidiary, nor
will participation in the Plan give any Key Executive any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
8 <PAGE>
<PAGE>
4.4 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
4.5 Gender and Number. Where the context admits, words in the masculine
gender shall include the feminine gender, the plural shall include the singular
and the singular shall include the plural.
4.6 Action by the Board or Committee. Any action required of or
permitted by the Board or Committee under this Plan shall be by resolution of
the Board or by a person or persons authorized by resolution of the Board or
Committee.
4.7 Controlling Laws. Except to the extent superseded by laws of the
United States, the laws of Indiana shall be controlling in all matters relating
to the Plan.
4.8 Mistake of Fact. Any mistake of fact or misstatement of fact shall
be corrected when it becomes known and proper adjustment made by reason thereof.
4.9 Severability. In the event any provision of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provision had never been contained in the
Plan.
4.10 Effect of Headings. The descriptive headings of the Articles and
Sections of the Plan are inserted for convenience of reference and
identification only and do not constitute a part of the Plan for purposes of
interpretation.
4.11 Non-transferability. No Award payment shall be transferable, except
by the Key Executive's will or the applicable laws of descent and distribution.
During the Key Executive's lifetime, his Award shall be payable only to the Key
Executive or his guardian or attorney-in-fact. The payment and any rights and
privileges pertaining thereto shall not be transferred, assigned, pledged or
hypothecated by him in any way, whether by operation of law or otherwise and
shall not be subject to execution, attachment or similar process.
4.12 No Liability. No member of the Board or the Committee or any officer
or Key Executive of the Company or Subsidiary shall be personally liable for any
action, omission or determination made in good faith in connection with the
Plan. The Company shall indemnify and hold harmless the members of the
Committee, the Board and the officers and Key Executives of the Company and its
Subsidiaries, and each of them, from and against any and all loss which results
from liability to which any of them may be subjected by reason of any act or
conduct (except willful misconduct or gross negligence) in their official
capacities in connection with the administration of the Plan, including all
expenses reasonably incurred in their defense, in case the Company fails to
provide such defense. By participating in the Plan, each Key Executive agrees
to release and hold harmless each of the Company, the Subsidiaries (and their
respective directors, officers and employees), the Board and the Committee,
from and against any tax or other liability, including without limitation,
interest and penalties, incurred by the Key Executive in connection with his
participation in the Plan.
9 <PAGE>
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4.13 Funding. All amounts payable under the Plan will be paid by the
Company from its general assets. The Company is not required to segregate on
its books or otherwise establish any funding procedure for any amount to be used
for the payment of benefits under the Plan. The Company may, however, in its
sole discretion, set funds aside in investments to meet its anticipated
obligations under the Plan. Any such action or set-aside amount may not be
deemed to create a trust of any kind between the Company and any Key Executive
or beneficiary or to constitute the funding of any Plan benefits. Consequently,
any person entitled to a payment under the Plan will have no rights against the
assets of the Company greater than the rights of any other unsecured creditor of
the Company.
10 <PAGE>
<PAGE>
EXHIBIT (10.6)
CHROMCRAFT REVINGTON
DIRECTORS DEFERRED COMPENSATION PLAN
Effective Date: January 1, 1999
<PAGE>
<PAGE>
CHROMCRAFT REVINGTON
DIRECTORS DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
ARTICLE PAGE
- - ------- ----
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Committee . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Company Stock . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 Director . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 Individual Account . . . . . . . . . . . . . . . . . . . . 1
1.10 Participant . . . . . . . . . . . . . . . . . . . . . . . . 1
1.11 Participation Agreement . . . . . . . . . . . . . . . . . . 1
1.12 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.13 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . 2
III. PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Participation and Deferrals . . . . . . . . . . . . . . . . 2
3.3 Participation Agreement . . . . . . . . . . . . . . . . . . 2
IV. BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Establishment of Individual Accounts . . . . . . . . . . . 3
4.2 Conversion of Deferrals . . . . . . . . . . . . . . . . . . 3
4.3 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.4 Changes in Stock . . . . . . . . . . . . . . . . . . . . . 4
4.5 Unsecured Contractual Rights . . . . . . . . . . . . . . . 4
V. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5.1 Time of Payment of Benefits . . . . . . . . . . . . . . . . 4
5.2 Method of Payment of Benefits . . . . . . . . . . . . . . . 4
5.3 Benefit Payment Elections . . . . . . . . . . . . . . . . . 5
5.4 Death of a Participant and Beneficiary Designations . . . . 5
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VI. PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . 6
6.1 Administration of Plan . . . . . . . . . . . . . . . . . . 6
6.2 Powers and Responsibilities of the Committee . . . . . . . 6
6.3 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 7
6.4 Claims Procedure . . . . . . . . . . . . . . . . . . . . . 7
VII. AMENDMENT AND TERMINATION . . . . . . . . . . . . . . . . . . . . 8
VIII. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 9
8.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 9
8.2 Headings and Gender . . . . . . . . . . . . . . . . . . . . 9
8.3 Participant's Rights; Acquittance . . . . . . . . . . . . . 9
8.4 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . 9
8.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 9
8.6 Enlargement of Employment Rights . . . . . . . . . . . . . 9
8.7 Limitations on Liability . . . . . . . . . . . . . . . . . 9
8.8 Incapacity of Participant or Beneficiary . . . . . . . . . 9
8.9 Corporate Successors . . . . . . . . . . . . . . . . . . . 10
8.10 Evidence . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.11 Action by the Company . . . . . . . . . . . . . . . . . . . 10
8.12 Severability . . . . . . . . . . . . . . . . . . . . . . . 10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
<PAGE>
ARTICLE I
DEFINITIONS
Whenever the initial letter of the following words or phrases is
capitalized herein, those words and phrases shall have the meanings stated below
unless a different meaning is plainly required by the context:
1.1 "Affiliate" means the Company and any other corporation or trade or
business whose employees are treated as being employed by the Company under Code
Sections 414(b), 414(c), 414(m) or 414(o).
1.2 "Board" means the Company's Board of Directors.
1.3 "Code" means the Internal Revenue Code of 1986, as amended.
1.4 "Committee" means the committee appointed by the Board to administer
the Plan.
1.5 "Company" means Chromcraft Revington, Inc.
1.6 "Company Stock" means Chromcraft Revington common voting stock.
1.7 "Director" means any duly elected and serving member or former member
of the Board who is not also an employee of the Company or an Affiliate at any
time during the current Plan Year or the Plan Year immediately preceding his
participation in the Plan.
1.8 "Fees" means all fees payable to a Participant for a Plan Year for
services rendered to the Company as a Director with respect to such Plan Year,
including fees for attendance at regularly scheduled Board meetings, special
meetings called from time to time and any and all meetings of committees of the
Board.
1.9 "Individual Account" means the individual bookkeeping account
maintained for each Participant in accordance with Section 4.1.
1.10 "Participant" means a non-employee Director who becomes a Participant
pursuant to Article II of the Plan.
1.11 "Participation Agreement" means the written agreement between the
Participant and the Company pursuant to which the Participant elects to defer
receipt of Fees, designate a beneficiary, and elect a form and the time of
distribution of his benefits under the Plan.
1.12 "Plan" means this Chromcraft Revington Directors Deferred
Compensation Plan.
1.13 "Plan Year" means the 12 month period beginning each January 1 and
ending each December 31.
<PAGE>
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ARTICLE II
INTRODUCTION
2.1 Purpose. The purpose of this Plan is to permit Directors of the
Company to defer the receipt and resulting taxation of the Fees to be received
from the Company for services as a Director. All benefits payable under this
Plan shall be paid solely out of the general assets of the Company.
2.2 Effective Date. The effective date of the Plan is January 1, 1999.
ARTICLE III
PARTICIPATION
3.1 Eligibility. Each Director shall be eligible to participate in the
Plan on or after the later of (i) the date he becomes a Director or (ii) June 1,
1998.
3.2 Participation and Deferrals. A Director shall become a Participant
by electing, on a Participation Agreement, to defer the receipt of all or any
portion of the Fees he would otherwise receive with respect to a Plan Year as a
Director. A Participant who becomes an employee of the Company or an Affiliate
will cease to be eligible to have Fees, that are payable on or after such event,
deferred under the Plan.
3.3 Participation Agreement. As a condition to the Company's and the
Committee's obligation to withhold and credit deferred Fees for a Participant
under the Plan, the Participant must execute a Participation Agreement on such
forms and at such times as shall be prescribed by the Committee.
(a) Timing of Execution and Delivery of Participation Agreement.
Except as provided below, a Participation Agreement must be executed
by the Participant and the Committee prior to the first day of the
Plan Year to which the Fees specified in the Participation Agreement
relate. For example, to defer Fees attributable to the 1999 Plan
Year, a Participation Agreement must be executed on or prior to
December 31, 1998.
(b) Directors Elected Mid-Year. Notwithstanding subsection (a), a
non-employee who is elected or appointed to fill a vacancy on the
Board and who was not a Director on the preceding December 31st may,
by completing a Participation Agreement, elect to defer Fees for the
2 <PAGE>
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balance of the Plan Year and succeeding Plan Years. In order to
defer Fees under this subsection (b), the newly elected or appointed
Director must, within thirty (30) days after such election or
appointment, execute and deliver a Participation Agreement to the
Committee, which will be effective for Fees payable on or after the
first day of the month that follows such thirty (30) day period.
(c) Modification of Participant Deferral Election. During each
December, a Participant and the Committee may execute and deliver an
amended Participation Agreement which increases, decreases, commences
or terminates the deferral of the Participant's Fees payable after
the 31st day of that December.
ARTICLE IV
BENEFITS
4.1 Establishment of Individual Accounts. The Committee will establish
and maintain an Individual Account for each Participant. Fees that are deferred
by a Participant under Sections 3.2 and 3.3 shall be converted into hypothetical
or "phantom" shares of Company Stock (on the basis provided in Section 4.2) and
credited to the Participant's Individual Account. The conversion and credit
will be made on the last day of the calendar quarter in which the Fees would
have been paid but for such deferral. All phantom shares of Common Stock
allocated to the Participant's Individual Account pursuant to this Section 4.1,
Section 4.3 or Section 4.4 which are paid to the Participant or his designated
beneficiary during a Plan Year pursuant to Article V shall be converted to cash
(in the manner provided in this Section 4.2) and debited from his Individual
Account as of the time actually paid.
4.2 Conversion of Deferrals. Fees deferred under the Plan will be
converted into full and fractional phantom shares of Company Stock based on the
per share closing price of Company Stock on the New York Stock Exchange on the
trading date nearest the last day of the calendar quarter in which such Fees
would have, but for such deferral, been paid to the Participant. The conversion
will be made as if the deferred Fees were being used to purchase shares of
Company Stock on the date specified in the preceding sentence.
4.3 Dividends. As of the last day of the calendar quarter in which cash
or stock dividends on phantom shares of Company Stock allocated to the
Participant's Individual Account would have been paid had such shares been
actual shares of Company Stock, the Participant's Individual Account shall be
credited with such dividends in the form of phantom shares of Company Stock.
Stock dividends shall be converted to phantom shares of Company Stock on a
share-by-share basis. Cash dividends shall be converted into phantom shares of
Company Stock on the basis provided in Section 4.2 using the closing price of
Company Stock on the trading date nearest the last day of the calendar quarter
in which the actual cash or stock dividends on Company Stock were paid.
3 <PAGE>
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4.4 Changes in Stock. In the event of any change in Company Stock
through stock dividends, split-ups, recapitalizations, reclassifications,
conversions or otherwise, or in the event that other stock shall be converted
into or substituted for the present Company Stock as the result of any merger,
consolidation, reorganization or similar transaction, then the Committee shall
make appropriate adjustment in the aggregate number, price and kind of phantom
shares of Company Stock held in each Individual Account.
4.5 Unsecured Contractual Rights. The Plan at all times shall be
unfunded and shall constitute a mere promise by the Company to make benefit
payments in the future. No provision of the Plan shall impose or be deemed to
impose any obligation upon the Company, other than an unsecured contractual
obligation to make a cash payment to Participants and their beneficiaries in
accordance with the terms of the Plan. Benefits payable under the Plan shall be
paid directly by the Company from its general assets. The Company shall not be
required to segregate any funds or other assets for the payment of benefits
under the Plan. Notwithstanding any other provision of this Plan, neither a
Participant nor his designated beneficiary shall have any preferred claim on, or
any beneficial ownership interest in, any assets of the Company or any Affiliate
prior to the time benefits are distributed as provided in Article V.
ARTICLE V
DISTRIBUTIONS
5.1 Time of Payment of Benefits. Phantom shares of Company Stock
credited to a Participant's Individual Account shall be converted to cash (based
on the procedures described in Section 4.2) and shall be distributed or shall
commence to be distributed to or for the benefit of a Participant (or his
designated beneficiary) on the earlier of (i) the Participant's death or (ii)
the date the Participant ceases to be a Director or, if later, the date
effectively elected by the Participant in his Participation Agreement. A
Participant may amend his Participation Agreement at any time to defer the
distribution to a date later than the date previously elected. Provided,
however, any such amendment must be executed at least six months prior to the
date previously elected. In no event, however, may distributions commence later
than the date the Director attains age 70.
5.2 Method of Payment of Benefits. The balance of a Participant's
Individual Account shall be distributed in cash in a single lump sum payment or
in substantially equal annual installments over a period of not less than three
nor more than twelve years, or in a combination of those two methods, as elected
by a Participant in accordance with the provisions of Section 5.3. All shares
of phantom Company Stock which are converted into cash under this Article V
shall be converted based on the provisions of Section 4.2.
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5.3 Benefit Payment Elections.
(a) In order to be effective, a Participant's election of the time
and the method in which his benefits shall be distributed (including
benefits which become payable as a result of the Participant's death
as set forth in Section 5.4) must be made by delivering a
Participation Agreement or an amended Participation Agreement to the
Committee not later than 60 days prior to the beginning of the Plan
Year in which the Participant has elected to begin receiving his
benefits. If the Participant does not elect a time or method of
distribution under Section 5.2, or such election is not timely or
properly made under this Section 5.3, the Company shall pay the
entire benefit at the time and in the method effectively elected in
the most recent Participation Agreement or, if no such effective
Participation Agreement exists, in the form of a single lump sum
within 60 days after the date the Participant first becomes eligible
for the distribution under Section 5.1.
(b) In the event a Participant properly elects and is eligible to
receive his Individual Account in the form of installments, the
Participant must specify in his written election the number of years
over which the installments are to be distributed.
(c) In the event a Participant properly elects and is eligible to
receive his Individual Account in a combination of a lump sum and
installments, the Participant must specify in his written election
the percentage of the account which will be distributed in a single
lump sum and the percentage of the account which will be distributed
in installments, including the number of years over which such
installments shall be distributed.
(d) In the case of all installment distributions, only that portion
of the Participant's Individual Account which is scheduled to be
distributed in the form of installments shall be converted to cash.
The balance of such Individual Account shall remain "invested" in
phantom shares of Company Stock until the date on which such shares
are scheduled to be distributed.
5.4 Death of a Participant and Beneficiary Designation.
(a) Form and Time of Payment. In the event of a Participant's death
prior to the time his benefits under the Plan commence to be
distributed, the balance in his Individual Account shall be paid to
his designated beneficiary in the form elected by the Participant in
his most recently filed Participation Agreement. Such distribution
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shall be made or commence to be made within 60 days of the date of
the Participant's death. If the Participant has not made an election
as to the form in which his benefit under the Plan is to be
distributed, or if his election was not timely filed with the
Committee or is not in proper form, such benefit shall be paid to the
Participant's designated beneficiary in a single lump sum. If the
Participant dies after distribution of his benefits under the Plan
has commenced, his remaining benefit, if any, shall be distributed in
the same form(s) and at the same time(s) as such benefit was being
distributed prior to his death, or in a single lump sum, if
effectively elected by the Participant in his most recently filed
Participation Agreement.
(b) Designation of Beneficiaries. The Participant may designate a
primary and contingent beneficiary or beneficiaries on forms provided
by the Committee, which for this purpose may include the
Participation Agreement. Such designation may be changed at any time
for any reason by the Participant. If the Participant fails to
designate a beneficiary, or if such designation shall for any reason
be illegal or ineffective, or if the designated beneficiary(ies)
shall not survive the Participant, his benefits under the Plan shall
be paid to his estate.
ARTICLE VI
PLAN ADMINISTRATION
6.1 Administration by the Committee. The Committee shall be responsible
for administering the Plan. Except as the Company shall otherwise expressly
determine, the Committee shall be charged with the full power and the
responsibility for administering the Plan in all its details.
6.2 Powers and Responsibilities of the Committee.
(a) The Committee shall have all powers necessary to administer the
Plan, including the power to construe and interpret the Plan docu-
ments; to decide all questions relating to an individual's eligibil-
ity to participate in the Plan; to determine the amount, manner and
timing of any distribution of benefits under the Plan; to resolve any
claim for benefits in accordance with Section 6.4, and to appoint or
employ advisors, including legal counsel, to render advice with
respect to any of the Committee's responsibilities under the Plan.
Any construction, interpretation, or application of the Plan by the
Committee shall be final, conclusive and binding on all persons.
6 <PAGE>
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(b) Records and Reports. The Committee shall be responsible for
maintaining sufficient records to determine each Participant's
eligibility to participate in the Plan, and the Fees of each
Participant for purposes of determining the amount of contributions
that may be made by or on behalf of the Participant under the Plan.
(c) Rules and Decisions. The Committee may adopt such rules as it
deems necessary, desirable or appropriate in the administration
of the Plan. All rules and decisions of the Committee shall be
applied uniformly and consistently to all Participants in
similar circumstances. When making a determination or
calculation, the Committee shall be entitled to rely upon
information furnished by a Participant or beneficiary, the
Company or the Company's legal counsel.
(d) Application and Forms for Benefits. The Committee may require a
Participant or beneficiary to complete and file with it an
application for a benefit, and to furnish all pertinent
information requested by it. The Committee may rely upon all
such information so furnished to it, including the Participant's
or beneficiary's current mailing address.
6.3 Liabilities. The Committee members shall be indemnified and held
harmless by the Company with respect to any actual or alleged breach of
responsibilities performed or to be performed hereunder.
6.4 Claims Procedure.
(a) Filing a Claim. Any Participant or beneficiary under the Plan
may file a written claim for a Plan benefit with the Committee or
with a person named by the Committee to receive claims under the
Plan.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by any
Participant or beneficiary under the Plan ("claimant"), the claimant
shall be given a written notification containing specific reasons for
the denial or limitation of his benefit. The written notification
shall contain specific reference to the pertinent Plan provisions on
which the denial or limitation of his benefit is based. In addition,
it shall contain a description of any other material or information
necessary for the claimant to perfect a claim, and an explanation of
why such material or information is necessary. The notification
shall further provide appropriate information as to the steps to be
taken if the claimant wishes to submit his claim for review. This
written notification shall be given to a claimant within 90 days
after receipt of his claim by the Committee unless special
circumstances require an extension of time for processing the claim.
7 <PAGE>
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If such an extension of time for processing is required, written
notice of the extension shall be furnished to the claimant prior to
the termination of said 90-day period, and such notice shall indicate
the special circumstances which make the postponement appropriate.
(c) Right of Review. In the event of a denial or limitation of his
benefit, the claimant or his duly authorized representative shall be
permitted to review pertinent documents and to submit to the
Committee issues and comments in writing. In addition, the claimant
or his duly authorized representative may make a written request for
a full and fair review of his claim and its denial by the Committee;
provided, however, that such written request must be received by the
Committee (or its delegate to receive such requests) within 60 days
after receipt by the claimant of written notification of the denial
or limitation of the claim. The 60-day requirement may be waived by
the Committee in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the
Committee within 60 days after the receipt of the request for review,
provided that where special circumstances require an extension of
time for processing the decision, it may be postponed on written
notice to the claimant (prior to the expiration of the initial 60-day
period) for an additional 60 days after the receipt of such request
for review. Any decision by the Committee shall be furnished to the
claimant in writing and shall set forth the specific reasons for the
decision and the specific Plan provisions on which the decision is
based.
(e) Court Action. No Participant or beneficiary shall have the
right to seek judicial review of a denial of benefits, or to bring
any action in any court to enforce a claim for benefits prior to
filing a claim for benefits or exhausting his rights to review under
this Section 6.4.
ARTICLE VII
AMENDMENT AND TERMINATION
The Board may amend, suspend or terminate the Plan, in whole or in part,
without the consent of the Committee, Participants, beneficiaries or any other
person, except that no amendment, suspension or termination shall retroactively
impair or otherwise adversely affect (without written consent) the rights of a
Participant or beneficiary which have accrued prior to the date of such action,
as determined by the Committee in its sole discretion. It is noted, however,
that the Participant's benefits under the Plan constitute mere unsecured claims
on the general assets of the Company.
8 <PAGE>
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ARTICLE VIII
GENERAL PROVISIONS
8.1 Governing Law. The Plan shall be construed, regulated and
administered according to the laws of the State of Indiana, except in those
areas preempted by the laws of the United States of America in which case such
laws will control.
8.2 Headings and Gender. The headings and subheadings in the Plan have
been inserted for convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary construction the
masculine shall include the feminine and the singular the plural, and vice
versa.
8.3 Participant's Rights; Acquittance. No Participant shall acquire any
right to be retained as a Director by virtue of the Plan, nor, upon his
dismissal, or upon his voluntary termination as a Director shall he have any
right or interest in or to any Plan assets other than as specifically provided
herein.
8.4 Spendthrift Clause. No benefit or interest available hereunder will
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Participant or the Participant's designated beneficiary, either voluntarily or
involuntarily.
8.5 Counterparts. This Plan may be executed in any number of
counterparts, each of which shall constitute but one and the same instrument and
may be sufficiently evidenced by any one counterpart.
8.6 No Enlargement of Rights. Nothing contained in the Plan shall be
construed as a contract of employment between the Company and any person, nor
shall the Plan be deemed to give any person the right to be retained in the
employ or as a Director or limit the right of the Company to employ or discharge
any person with or without cause.
8.7 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, neither the Company, the Committee nor any individual
acting as an employee or agent of the Company shall be liable to any
Participant, Director or beneficiary for any claim, loss, liability or expense
incurred in connection with the Plan, except when the same shall have been
judicially determined to be due to the gross negligence or willful misconduct of
such person.
8.8 Incapacity of Participant or Beneficiary. If any person entitled to
receive a distribution under the Plan is physically or mentally incapable of
personally receiving and giving a valid receipt for any payment due (unless
prior claim therefor shall have been made by a duly qualified guardian or other
legal representative), then, unless and until claim therefor shall have been
made by a duly appointed guardian or other legal representative of such person,
9 <PAGE>
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the Committee may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a payment for the
account of such person and a complete discharge of any liability of the Company
and the Plan.
8.9 Corporate Successors. The Plan shall not be automatically terminated
by a transfer or sale of assets of the Company or by the merger or consolidation
of the Company into or with any other corporation or other entity
("Transaction"), but the Plan shall be continued after the Transaction only if
and to the extent that the transferee, purchaser or successor entity agrees to
continue the Plan.
8.10 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
8.11 Action by the Company. Any action required of or permitted by the
Company under the Plan shall be by resolution of its Board, or by resolution of
a committee of the Board or by a person or persons authorized by resolution of
the Board or a committee.
8.12 Severability. In the event any provisions of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provisions had never been contained in
the Plan.
10 <PAGE>
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EXHIBIT (10.7)
CHROMCRAFT REVINGTON, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated Effective as of December 3, 1998)
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CHROMCRAFT REVINGTON, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
TABLE OF CONTENTS
ARTICLE PAGE
- - ------- ----
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Board . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Committee . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Deferral Account . . . . . . . . . . . . . . . . . . . . . 1
1.7 Disability . . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 Discretionary Contribution Account . . . . . . . . . . . . 1
1.9 Effective Date . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Employee . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Employer . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Employer Contribution Account . . . . . . . . . . . . . . . 2
1.13 Executive Incentive Plan Savings Account . . . . . . . . . 2
1.14 Matching Contribution Account . . . . . . . . . . . . . . . 2
1.15 Participant . . . . . . . . . . . . . . . . . . . . . . . . 2
1.16 Participant Salary Deferral Contributions . . . . . . . . . 2
1.17 Participation Agreement . . . . . . . . . . . . . . . . . . 2
1.18 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.19 Plan Year . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.20 Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.21 Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . . 3
III. CONTRIBUTIONS AND ALLOCATIONS . . . . . . . . . . . . . . . . . . 3
3.1 Participant Salary Deferral Contributions . . . . . . . . . 3
3.2 Participation Agreement . . . . . . . . . . . . . . . . . . 3
3.3 Supplemental Benefits . . . . . . . . . . . . . . . . . . . 4
3.4 Allocation of Contributions and Adjustments . . . . . . . . 5
3.5 Allocation of Forfeitures . . . . . . . . . . . . . . . . . 6
i <PAGE>
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IV. INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 7
4.1 Investments . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Unsecured Contractual Rights . . . . . . . . . . . . . . . 7
V. DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Time of Payment of Benefits . . . . . . . . . . . . . . . . 7
5.2 Method of Payment of Benefits . . . . . . . . . . . . . . . 7
5.3 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Death of the Participant and Beneficiary Designation . . . 8
5.5 Advance Payments to Participants . . . . . . . . . . . . . 9
VI. PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Administration by the Committee . . . . . . . . . . . . . . 10
6.2 Powers and Responsibilities of the Committee . . . . . . . 10
6.3 Liabilities . . . . . . . . . . . . . . . . . . . . . . . . 11
6.4 Claims Procedure . . . . . . . . . . . . . . . . . . . . . 11
6.5 Income and Employment Tax Withholding . . . . . . . . . . . 12
VII. AMENDMENT AND TERMINATION OF THE PLAN . . . . . . . . . . . . . . 12
7.1 Amendment of the Plan . . . . . . . . . . . . . . . . . . . 12
7.2 Termination of the Plan . . . . . . . . . . . . . . . . . . 12
VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 12
8.2 Headings and Gender . . . . . . . . . . . . . . . . . . . . 12
8.3 Participant's Rights; Acquittance . . . . . . . . . . . . . 12
8.4 Spendthrift Clause . . . . . . . . . . . . . . . . . . . . 13
8.5 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 13
8.6 No Enlargement of Employment Rights . . . . . . . . . . . . 13
8.7 Limitations on Liability . . . . . . . . . . . . . . . . . 13
8.8 Incapacity for Participant or Beneficiary . . . . . . . . . 13
8.9 Corporate Successors . . . . . . . . . . . . . . . . . . . 13
8.10 Evidence . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.11 Action by Employers . . . . . . . . . . . . . . . . . . . . 13
8.12 Severability . . . . . . . . . . . . . . . . . . . . . . . 14
IX. EXECUTIVE PLAN ACCOUNTS . . . . . . . . . . . . . . . . . . . . . 14
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ii <PAGE>
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INTRODUCTION
The purpose of this Plan is to permit a select group of management or
highly compensated Employees to elect to defer compensation from the Employers
without regard to the limitations imposed by the Code on the benefits which may
accrue to those Employees under the Employers' tax-qualified retirement plans
and to provide supplemental retirement benefits to help recompense the Employees
for benefits lost due to the imposition of Code limitations on tax-qualified
retirement benefits. It is the intention of the Employers that the Plan shall
constitute an unfunded arrangement maintained for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees for federal income tax purposes and for purposes of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
ARTICLE I
DEFINITIONS
Whenever the initial letter of a word or phrase is capitalized herein, the
following words and phrases shall have the meanings stated below unless a
different meaning is plainly required by the context:
1.1 "Board" means the Board of Directors of the Company.
1.2 "Code" means the Internal Revenue Code, as amended.
1.3 "Committee" means the Administrative Committee described in Section
6.1 of the Plan.
1.4 "Company" means Chromcraft Revington, Inc.
1.5 "Compensation" means the Participant's base salary and short term and
long term bonuses from his Employer for a calendar year, including any salary
reduction Employer contributions made on behalf of the Participant under this
Plan or under a plan which qualifies under Section 401(k) of the Code and/or
Section 125 of the Code. Compensation taken into account under the Plan shall
not be limited as provided in Section 401(a)(17) of the Code.
1.6 "Deferral Account" means the individual bookkeeping account
maintained for each Participant in accordance with Section 3.4(a) of the Plan.
1.7 "Disabled" or "Disability" means a disability as determined for
purposes of the Chromcraft Revington Savings Plan.
1.8 "Discretionary Contribution Account" means the individual bookkeeping
account maintained for each Participant in accordance with Section 3.4(d) of the
Plan.
1 <PAGE>
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1.9 "Effective Date" means December 3, 1998.
1.10 "Employee" means any individual who is employed by an Employer.
1.11 "Employer" means the Company and any other entity the Company allows
to adopt and become a co-sponsor of the Plan.
1.12 "Employer Contribution Account" means the individual bookkeeping
account maintained for each Participant in accordance with Section 3.4(c) of the
Plan.
1.13 "Executive Incentive Plan Savings Account" means the individual
bookkeeping account maintained for affected Participants as described in Article
IX of the Plan.
1.14 "Matching Contribution Account" means the individual bookkeeping
account maintained for each Participant in accordance with Section 3.4(b) of the
plan.
1.15 "Participant" means a salaried executive Employee of an Employer who
becomes a Participant pursuant to the provisions of Article II of the Plan.
1.16 "Participant Salary Deferral Contributions" means contributions made
to the Plan pursuant to Section 3.1 by an Employer, at the election of the
Participant, in lieu of Compensation, under a Participation Agreement between
the Participant and an Employer. Although the term "contribution" is used for
ease of reference, credits to Participants' individual accounts under the Plan
are merely credits to a bookkeeping account.
1.17 "Participation Agreement" means a written agreement between the
Participant and an Employer pursuant to which the Participant elects to make
Participant Salary Deferral Contributions, designates his beneficiary(ies),
elects a form of distribution and elects the time at which his benefit will be
distributed under the Plan.
1.18 "Plan" means the deferred compensation plan embodied herein, as
amended from time to time, known as the Chromcraft Revington, Inc. Supplemental
Executive Retirement Plan.
1.19 "Plan Year" means the 12-month period beginning each January 1 and
ending on the following December 31.
1.20 "Trust" means a so-called "rabbi trust" evidenced by a trust
agreement between the Company and the Trustee.
1.21 "Trustee" means the independent financial institution designated in
the Trust from time to time to hold assets to be used to provide benefits under
the Plan.
2 <PAGE>
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ARTICLE II
ELIGIBILITY AND PARTICIPATION
A member of a select group of management or highly compensated Employees is
eligible to become a Participant in the Plan provided the Employee is designated
as a Participant by the Committee in writing. A designated Employee will become
a Participant as of the later of the Effective Date or the date specified by the
Committee. A Participant may be removed as an active Participant by the
Committee effective as of any date, so that he will not be entitled to make
deferrals or receive benefit accruals under Article III on or after that date.
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
3.1 Participant Salary Deferral Contributions.
(a) Salary Deferral Elections. Subject to the terms and limitations
of this Article III, an Employer shall reduce a Participant's
Compensation and make a Salary Deferral Contribution on behalf of
each Participant with respect to whom a Participation Agreement is in
effect. The Participation Agreement shall specify the percentage
(or dollar amount) of the Participant's (i) base salary and/or (ii)
short term or long term incentive bonus as is mutually agreed upon
between the Participant and the Committee. Such percentage (or
dollar amount) shall remain in effect thereafter until another
percentage (or dollar amount) is agreed upon by the Participant and
the Committee in accordance with the provisions of Section 3.2 or
until the Committee notifies the Participant that the Participant is
no longer eligible to make contributions under this Section 3.1.
(b) Limit on Contributions. The maximum amount of a Participant's
Compensation that may be subject to Participant Salary Deferral
Contributions for a Plan Year shall be (i) 50 percent of the
Participant's base salary and (ii) 100 percent of the Participant's
bonuses.
3.2 Participation Agreement.
(a) Requirement for Participation Agreement. As a condition to an
Employer's and the Committee's obligation to credit Participant
Salary Deferral Contributions for the benefit of a Participant
pursuant to Section 3.1, the Participant must execute one or more
Participation Agreements with the Committee (on such forms as shall
be prescribed by the Committee) in which it is agreed that the
Participant's Employer will withhold payment of a portion of the
3 <PAGE>
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Participant's Compensation and shall credit such amount withheld to
the Participant's Deferral Account at the times set forth in the
Plan.
(b) Timing of Execution and Delivery of Participation Agreement. A
Participation Agreement to defer the receipt of base salary must be
executed by the Participant and the Committee prior to the beginning
of the Plan Year for which the base salary is to be paid. A
Participation Agreement to defer the receipt of a bonus must be
executed by the Participant and the Committee on or prior to the last
day of the Plan Year preceding the Plan Year in which the bonus is to
be paid. For example, to defer all or a portion of a 1999 bonus
payable in 2000, the Participation Agreement would have to be
executed on or before December 31, 1999.
(c) Modification of Participant Salary Deferral Contributions. A
Participant and the Committee may execute and deliver an amended
Participation Agreement which decreases or terminates Participant
Salary Deferral Contributions if the Committee, in its sole
discretion, determines that the Participant has suffered an
unforeseeable emergency which results in a severe financial hardship
as defined in Section 5.5 of the Plan. Such change shall apply to
the portion of the Plan Year remaining after the Committee's
determination that the Participant has suffered a severe financial
hardship.
3.3 Supplemental Benefits.
(a) Matching Contributions. An Employer shall make a contribution
each Plan Year for each Participant in its employ during that year in
an amount equal to the amount of matching contributions that, but for
the limitation of Code Section 401(m), could have been made for the
Participant under any tax-qualified defined contribution plan
maintained by the Employer for a plan year that ends with or within
that Plan Year.
(b) Employer Contributions. An Employer shall make a contribution
each Plan Year for each Participant in its employ during that year in
an amount equal to the amount that, but for the limitations of Code
Section 401(a)(17) or 415, could have been made for or allocated to
the Participant under any tax-qualified defined contribution plan
maintained by the Employer for a plan year that ends with or within
that Plan Year. A contribution will only be made pursuant to this
subsection (b) for "profit sharing" or "money purchase pension"
contributions that are limited under the Employers' defined
contribution plans.
4 <PAGE>
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(c) Discretionary Contributions. An Employer may make a
contribution each Plan Year for any Participant in its employ during
that year in any amount it determines in its sole discretion.
3.4 Allocation of Contributions and Adjustments.
(a) Deferral Account. The Committee shall establish and maintain a
Deferral Account in the name of each Participant, to which the
Committee shall credit all amounts to be allocated to each
Participant pursuant to Section 3.1 and 3.2 and from which the
Committee shall debit all amounts paid to the Participant or his
designated beneficiary pursuant to Article V.
(b) Matching Contribution Account. The Committee shall also
establish and maintain a Matching Contribution Account in the name of
each Participant, to which the Committee shall credit all amounts to
be credited to the Participant pursuant to Section 3.3(a) and from
which the Committee shall debit all amounts paid to the Participant
or his designated beneficiary pursuant to Article V.
(c) Employer Contribution Account. The Committee shall also
establish and maintain an Employer Contribution Account in the name
of each Participant, to which the Committee shall credit all amounts
to be credited to the Participant pursuant to Section 3.3(b) and from
which the Committee shall debit all amounts paid to the Participant
or his designated beneficiary pursuant to Article V.
(d) Discretionary Contribution Account. The Committee shall also
establish and maintain a Discretionary Contribution Account in the
name of each Participant, to which the Committee shall credit all
amounts to be credited to the Participant pursuant to Section 3.3(c)
and from which the Committee shall debit all amounts paid to the
Participant or his designated beneficiary pursuant to Article V.
(e) Accounting. As of the last day of each calendar quarter (and as
of any other date selected by the Committee) the Participants'
accounts shall be adjusted as follows:
(i) First, by charging a Participant's Deferral, Matching
Contribution, Employer Contribution, Discretionary
Contribution and/or Executive Incentive Plan Savings
Accounts with any payments made to or on behalf of that
Participant or his designated beneficiary since the last
accounting.
5 <PAGE>
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(ii) Second, by crediting the balances in all the Participants'
accounts with the earnings credit amount determined as of
that date. The earnings credit amount shall be based upon
the net earnings of the Trust for period since the last
accounting and shall be determined as if all accounts
under the Plan were invested under the Trust and earned a
rate of return equal to the rate earned by the Trust that
period. If there are no investments under the Trust for
that period, the earnings credit shall be based upon
hypothetical investments designated by the Company from
time to time and shall be determined as if all accounts
under the Plan were invested in those hypothetical
investments during that period.
(iii) Third, by crediting each Participant's Deferral Account
with any Participant Salary Deferral Contributions that
are to be credited to his Deferral Account as of that
date.
(iv) Fourth, by crediting each Participant's Matching
Contribution Account with any matching contributions that
are to be credited to his Matching Contribution Account as
of that date.
(v) Fifth, by crediting each Participant's Employer
Contribution Account with any Employer contributions that
are to be credited to his Employer Contribution Account
under Section 3.3(b) as of that date.
(vi) Finally, by crediting each Participant's Discretionary
Contribution Account with any Employer contributions that
are to be credited to his Discretionary Contribution
Account under Section 3.3(c) as of that date.
(f) Crediting of Contributions. Participant Salary Deferral
Contributions and any Employer matching, prescribed or discretionary
contributions shall be credited to Participants' accounts as of the
day in which those contributions are contributed to the Trust.
3.5 Allocation of Forfeitures. The amount, if any, of a Participant's
Matching Contribution Account, Employer Contribution Account or Discretionary
Contribution Account forfeited pursuant to Section 5.3 of the Plan shall be used
to reduce the Employers' contributions payable under the Plan for that Plan Year
or, if there are no Employer Contributions payable for the Plan Year in which a
forfeiture occurs, the forfeiture shall revert to the Employers.
6 <PAGE>
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ARTICLE IV
INVESTMENT OF CONTRIBUTIONS
4.1 Investments. All contributions under the Plan shall be credited to
each Participant's Deferral Account, Matching Contribution Account, Employer
Contribution Account or Discretionary Contribution Account as provided in
Section 3.4. At the discretion of the Board, all or any portion of such
contributions may be contributed to the Trust. No provision of the Plan shall
impose or be deemed to impose any obligation upon the Employers, other than an
unsecured contractual obligation to make a cash payment to Participants and
their beneficiaries in accordance with the terms of the Plan. Benefits payable
under the Plan shall be paid directly by the Employers from their general assets
to the extent not paid from the Trust.
4.2 Unsecured Contractual Rights. The Plan at all times shall be
unfunded and shall constitute a mere promise by the Employers to make benefit
payments in the future. Notwithstanding any other provision of this Plan,
neither a Participant nor his designated beneficiary shall have any preferred
claim on, or any beneficial ownership interest in, any assets of the Employers
prior to the time benefits are paid as provided in Article V, including any
Compensation deferred by the Participant. All rights created under this Plan
shall be mere unsecured contractual rights of the Participant against the
Employers.
ARTICLE V
DISTRIBUTIONS
5.1 Time of Payment of Benefits. All non-forfeitable amounts credited to
a Participant's Deferral, Matching Contribution, Employer Contribution and
Discretionary Contribution Accounts shall be or shall commence to be distributed
to or for the benefit of a Participant (or his designated beneficiary) as soon
as practicable after the date the Participant terminates employment with all the
Employers.
5.2 Method of Payment of Benefits. The non-forfeitable balance of a
Participant's Deferral, Matching Contribution, Employer Contribution and
Discretionary Contribution Accounts shall be distributed in cash or kind, as
determined by the Committee, in a single lump sum or, after June 1, 1998, in
annual installments over a period of not less than three nor more than twelve
years, or in a combination of those two methods, as elected by the Participant
in accordance with the following:
(a) In order to be effective, a Participant's election of the time
and the method in which his benefits shall be distributed (including
benefits which become payable as a result of the Participant's death
as set forth in Section 5.4) must be made by delivering a
Participation Agreement or an amended Participation Agreement to the
Committee not later than 60 days prior to the beginning of the Plan
Year in which the Participant has elected to begin receiving his
benefits. If the Participant does not elect a time or method of
distribution, or such election is not timely or properly made under
7 <PAGE>
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this Section 5.3, the Employers shall pay the entire benefit at the
time and in the method effectively elected in the most recent
Participation Agreement or, if no such effective Participation
Agreement exists, in the form of a single lump sum within 60 days
after the date the Participant first becomes eligible for the
distribution under Section 5.1.
(b) In the event a Participant properly elects and is eligible to
receive his Plan benefit in the form of installments, the Participant
must specify in his written election the number of years over which
the installments are to be distributed.
(c) In the event a Participant properly elects and is eligible to
receive his Plan benefit in a combination of a lump sum and
installments, the Participant must specify in his written election
the percentage of the account which will be distributed in a single
lump sum and the percentage of the benefit which will be distributed
in installments, including the number of years over which such
installments shall be distributed.
5.3 Forfeitures. In the event a Participant terminates employment with
the Employers for any reason other than retirement on or after attaining age 55,
Disability or death, such Participant shall become entitled only to the vested
portion of his accounts, payable according to the provisions of Article V of the
Plan. A Participant's Deferral Account shall at all times be 100 percent
vested. A Participant's vested and non-forfeitable interest in his Matching
Contribution and Employer Contribution Accounts shall be determined in
accordance with the vesting schedule under the tax-qualified plan to which those
contributions relate. A Participant's vested and non-forfeitable interest in
his Discretionary Contribution Account shall be determined in accordance with a
schedule set by the Participant's Employer from time to time. In the event of a
termination of employment as described in this Section 5.3 at a time when a
Participant's vested interest in his accounts is less than 100 percent, then
that portion of the Participant's accounts that is not vested shall be forfeited
and be used to reduce Employer contributions or revert to the Employers as
provided in Section 3.5.
5.4 Death of the Participant and Beneficiary Designation.
(a) Form and Time of Payment. In the event of a Participant's death
prior to the time his benefits under the Plan commence to be
distributed, the balance in his Deferral, Matching Contribution and
Employer Contribution Accounts shall be paid to his designated
beneficiary in a single lump sum. Such distribution shall be made
within 90 days of the date of the Participant's death. If the
Participant dies after distribution of his benefits under the Plan
has commenced, his remaining benefit, if any, shall be distributed in
8 <PAGE>
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the same form(s) and at the same time(s) as such benefit was being
distributed prior to his death, or in a single lump sum, if
effectively elected by the Participant in his most recently filed
Participation Agreement.
(b) Designation of Beneficiaries. The Participant may designate a
primary and contingent beneficiary or beneficiaries on forms provided
by the Committee, which for this purpose may include the
Participation Agreement. Such designation may be changed at any time
for any reason by the Participant. If the Participant fails to
designate a beneficiary, or if such designation shall for any reason
be illegal or ineffective, or if the designated beneficiary(ies)
shall not survive the Participant, his benefits under the Plan shall
be paid: (i) to his surviving spouse; (ii) if there is no surviving
spouse, to the duly appointed and qualified executor or other
personal representative of the Participant to be distributed in
accordance with the Participant's will or applicable intestacy law;
or (iii) in the event that there shall be no such representative duly
appointed and qualified within 45 days after the date of death of the
Participant, then to such persons as, at the date of his death, who
would be entitled to share in the distribution of the Participant's
estate under the provisions of the applicable statutes then in force
governing the descent of intestate property, in the proportions
specified in such statute. The Committee may determine the identity
of the distributees, and in so doing may act and rely upon any
information it may deem reliable upon reasonable inquiry, and upon
any affidavit, certificate or other document believed by it to be
genuine, and upon any evidence believed by it to be sufficient.
5.5 Advance Payments to Participants. The Committee may make payment to
a Participant in advance of the date such payment is due pursuant to Section 5.1
(an "Advance Payment"), to the extent (i) funds of the Employers are available
for such purpose; (ii) the Committee determines that the Participant has
suffered an unforeseeable emergency which has caused a need for an Advance
Payment; and (iii) the waiver by the Committee of the election to defer
Compensation under Article III is insufficient, as determined by the Committee
in its discretion, to satisfy such hardship. For the purposes of this Section
5.5, an unforeseeable emergency is a severe financial hardship to a Participant
resulting from a sudden and unexpected illness or accident of the Participant or
of a dependent of the Participant (as defined in Code Section 152(a)), loss of
the Participant's property due to casualty, or other similar extraordinary and
unforeseen circumstances arising as a result of events beyond the control of the
Participant. The circumstances that will constitute an unforeseeable emergency
will depend upon the facts of each case; however, the Committee shall not grant
any waiver of a Participant's deferral election or make an Advance Payment to
the extent that his hardship may be relieved (i) through reimbursement or
compensation by insurance or otherwise; (ii) by liquidation of the Participant's
assets, to the extent liquidation of such assets would not itself cause severe
financial hardship; or (iii) by cessation of salary reduction contributions
under any "401(k)" plan. An unforeseeable emergency shall not include the need
9 <PAGE>
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to send the Participant's child to college or the desire to purchase a home.
An Advance Payment made under this Section 5.5 shall be made only to the extent
reasonably needed to satisfy the emergency need.
ARTICLE VI
PLAN ADMINISTRATION
6.1 Administration by the Committee. The Committee shall be responsible
for administering the Plan. Except as the Company shall otherwise expressly
determine, the Committee shall be charged with the full power and the
responsibility for administering the Plan in all its details.
6.2 Powers and Responsibilities of the Committee.
(a) The Committee shall have all powers necessary to administer the
Plan, including the power to construe and interpret the Plan
documents; to decide all questions relating to an individual's
eligibility to participate in the Plan; to require information from a
Participant or beneficiary; to determine whether a Participant has
actually terminated employment; to determine the amount, manner and
timing of any distribution of benefits or withdrawal under the Plan;
to resolve any claim for benefits in accordance with Section 6.4, and
to appoint or employ advisors, including legal counsel, to render
advice with respect to any of the Committee's responsibilities under
the Plan. Any construction, interpretation, or application of the
Plan by the Committee shall be final, conclusive and binding. All
actions by the Committee shall be taken pursuant to uniform standards
applied to all persons similarly situated.
(b) Records and Reports. The Committee shall be responsible for
maintaining sufficient records to determine each Participant's
eligibility to participate in the Plan, and the Compensation of each
Participant for purposes of determining the amount of contributions
that may be made by or on behalf of the Participant under the Plan.
(c) Rules and Decisions. The Committee may adopt such rules as it
deems necessary, desirable or appropriate in the administration of
the Plan. All rules and decisions of the Committee shall be applied
uniformly and consistently to all Participants in similar
circumstances. When making a determination or calculation, the
Committee shall be entitled to rely upon information furnished by a
Participant or beneficiary, the Employers or the legal counsel of an
Employer.
(d) Application and Forms for Benefits. The Committee may require a
Participant or beneficiary to complete and file with it an
10 <PAGE>
<PAGE>
application for a benefit, and to furnish all pertinent information
requested by it. The Committee may rely upon all such information so
furnished to it, including the Participant's or beneficiary's current
mailing address.
6.3 Liabilities. The Committee shall be indemnified and held harmless by
the Employers with respect to any actual or alleged breach of responsibilities
performed or to be performed hereunder.
6.4 Claims Procedure.
(a) Filing a Claim. Any Participant or Beneficiary under the Plan
may file a written claim for a Plan benefit with the Committee or
with a person named by the Committee to receive claims under the
Plan.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by any
Participant or beneficiary under the Plan ("claimant"), the claimant
shall be given a written notification containing specific reasons for
the denial or limitation of his benefit. The written notification
shall contain specific reference to the pertinent Plan provisions on
which the denial or limitation of his benefit is based. In addition,
it shall contain a description of any other material or information
necessary for the claimant to perfect a claim, and an explanation of
why such material or information is necessary. The notification
shall further provide appropriate information as to the steps to be
taken if the claimant wishes to submit his claim for review. This
written notification shall be given to a claimant within 90 days
after receipt of his claim by the Committee unless special
circumstances require an extension of time for processing the claim.
If such an extension of time for processing is required, written
notice of the extension shall be furnished to the claimant prior to
the termination of said 90-day period, and such notice shall indicate
the special circumstances which make the postponement appropriate.
(c) Right of Review. In the event of a denial or limitation of his
benefit, the claimant or his duly authorized representative shall be
permitted to review pertinent documents and to submit to the
Committee issues and comments in writing. In addition, the claimant
or his duly authorized representative may make a written request for
a full and fair review of his claim and its denial by the Committee;
provided, however, that such written request must be received by the
Committee (or its delegate to receive such requests) within 60 days
after receipt by the claimant of written notification of the denial
or limitation of the claim. The 60-day requirement may be waived by
the Committee in appropriate cases.
11 <PAGE>
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(d) Decision on Review. A decision shall be rendered by the
Committee within 60 days after the receipt of the request for review,
provided that where special circumstances require an extension of
time for processing the decision, it may be postponed on written
notice to the claimant (prior to the expiration of the initial 60-day
period) for an additional 60 days after the receipt of such request
for review. Any decision by the Committee shall be furnished to the
claimant in writing and shall set forth the specific reasons for the
decision and the specific Plan provisions on which the decision is
based.
(e) Court Action. No Participant or beneficiary shall have the
right to seek judicial review of a denial of benefits, or to bring
any action in any court to enforce a claim for benefits prior to
filing a claim for benefits or exhausting his rights to review under
this Section 6.4.
6.5 Income and Employment Tax Withholding. The Employers shall be
responsible for withholding, and the Participant shall agree to such
withholdings in his Participation Agreement from the Participant's Compensation
or from the distribution of his benefit under the Plan of all applicable
federal, state, city and local taxes.
ARTICLE VII
AMENDMENT AND TERMINATION OF THE PLAN
7.1 Amendment of the Plan. The Company shall have the right at any time
to modify, alter or amend the Plan in whole or in part.
7.2 Termination of the Plan. The Company reserves the right at any time
to terminate the Plan or to reduce or cease benefit accruals at any time.
ARTICLE VIII
MISCELLANEOUS
8.1 Governing Law. The Plan shall be construed, regulated and
administered according to the laws of the State of Indiana, except in those
areas preempted by the laws of the United States of America in which case such
laws will control.
8.2 Headings and Gender. The headings and subheadings in the Plan have
been inserted for convenience of reference only and shall not affect the
construction of the provisions hereof. In any necessary construction the
masculine shall include the feminine and the singular the plural, and vice
versa.
8.3 Participant's Rights; Acquittance. No Participant shall acquire any
right to be retained in an Employer's employ by virtue of the Plan, nor, upon
his dismissal or upon his voluntary termination of employment, shall he have
any right or interest in or to any Plan assets other than as specifically
provided herein.
12 <PAGE>
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8.4 Spendthrift Clause. No benefit or interest available hereunder will
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors of the
Participant or the Participant's designated beneficiary, either voluntarily or
involuntarily.
8.5 Counterparts. This Plan may be executed in any number of
counterparts, each of which shall constitute but one and the same instrument and
may be sufficiently evidenced by any one counterpart.
8.6 No Enlargement of Employment Rights. Nothing contained in the Plan
shall be construed as a contract of employment between an Employer and any
person, nor shall the Plan be deemed to give any person the right to be retained
in the employ of an Employer or limit the right of an Employer to employ or
discharge any person with or without cause, or to discipline any Employee.
8.7 Limitations on Liability. Notwithstanding any of the preceding
provisions of the Plan, none of the Employers, the Committee and each individual
acting as an employee or agent of any of them shall be liable to any
Participant, Employee or beneficiary for any claim, loss, liability or expense
incurred in connection with the Plan, except when the same shall have been
judicially determined to be due to the gross negligence or willful misconduct of
such person.
8.8 Incapacity of Participant or Beneficiary. If any person entitled to
receive a distribution under the Plan is physically or mentally incapable of
personally receiving and giving a valid receipt for any payment due (unless
prior claim therefor shall have been made by a duly qualified guardian or other
legal representative), then, unless and until claim therefor shall have been
made by a duly appointed guardian or other legal representative of such person,
the Committee may provide for such payment or any part thereof to be made to any
other person or institution then contributing toward or providing for the care
and maintenance of such person. Any such payment shall be a payment for the
account of such person and a complete discharge of any liability of the
Employers and the Plan.
8.9 Corporate Successors. The Plan shall not be automatically
terminated by a transfer or sale of assets of the Company or by the merger or
consolidation of the Company into or with any other corporation or other entity
("Transaction"), but the Plan shall be continued after the Transaction only if
and to the extent that the transferee, purchaser or successor entity agrees to
continue the Plan.
8.10 Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person relying
thereon considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
8.11 Action by Employer. Any action required of or permitted by an
Employer under the Plan shall be by resolution of its Board of Directors or, for
13 <PAGE>
<PAGE>
the Company, by resolution of the Board or the Committee or by a person or
persons authorized by resolution of the Board or the Committee.
8.12 Severability. In the event any provisions of the Plan shall be held
to be illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
endorsed as if such illegal or invalid provisions had never been contained in
the Plan.
ARTICLE IX
EXECUTIVE PLAN ACCOUNTS
Effective as of June 1, 1998, the Company merged the Chromcraft Revington
Executive Retirement Plan (the "Executive Retirement Plan") into this Plan. As
a result, the account maintained for each participant under the Executive
Retirement Plan shall be transferred to this Plan. The Company stock "held" in
each such account shall be "sold" as of June 1, converted to a dollar amount,
and then credited to the applicable individual's Executive Incentive Plan
Savings Account under this Plan. The earnings credit to be made pursuant to
Section 3.4(e) shall reflect the credit as of the June 1, 1998 date.
Thereafter, the accrued benefit transferred from the Executive Retirement Plan
to the Executive Incentive Plan Savings Account shall be held, distributed and
otherwise treated as all other accrued benefits reflected in the Executive
Incentive Plan Savings Account.
14 <PAGE>
<PAGE>
EXHIBIT (21.1)
SUBSIDIARIES OF THE REGISTRANT
The Registrant owns all of the issued and outstanding shares of capital stock of
each of the following corporations:
Chromcraft Corporation, a Delaware corporation
Peters-Revington Corporation, a Delaware corporation
Silver Furniture Co., Inc., a Tennessee corporation
Silver Furniture Manufacturing Co., Inc., a Tennessee corporation (a)
Cochrane Furniture Company, Inc., a North Carolina corporation
(a) A 100% owned subsidiary of Silver Furniture Co., Inc.
<PAGE>
<PAGE>
EXHIBIT (23.1)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Chromcraft Revington, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-8 (No. 33-48728) of Chromcraft Revington, Inc. of our report dated February 1,
1999, relating to the consolidated balance sheets of Chromcraft Revington, Inc.
and subsidiaries as of December 31, 1998 and 1997, the related consolidated
statements of earnings, stockholders' equity, and cash flows and the consol-
idated financial statement schedule for each of the years in the three-year
period ended December 31, 1998, which report appears in the December 31, 1998
annual report on Form 10-K of Chromcraft Revington, Inc.
KPMG LLP
Indianapolis, Indiana
March 26, 1999
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 26, 1999 Bruce C. Bruckmann, Director
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 15, 1999 David L. Kolb, Director
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 13, 1999 Larry P. Kunz, Director
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 13, 1999 H. Martin Michael, Director
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 26, 1999 M. Saleem Muqaddam, Director
<PAGE>
<PAGE>
EXHIBIT (24.1)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below
constitutes and appoints FRANK T. KANE and MICHAEL E. THOMAS, or either of them,
his true and lawful attorneys-in-fact and agents, with full power of substitu-
tion and resubstitution, for him and in his name, place and stead, in any and
all capacities to sign the Chromcraft Revington, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and any and all amendments thereto,
to be filed with the Securities and Exchange Commission pursuant to the require-
ments of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
granting unto each of said attorneys-in-fact and agents, full power and autho-
rity to do and perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that each of
said attorneys-in-fact and agents, or his substitute, may lawfully do or cause
to be done by virtue hereof.
Dated: March 13, 1999 Warren G. Wintrub, Director
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 28,095
<ALLOWANCES> 1,211
<INVENTORY> 38,130
<CURRENT-ASSETS> 69,727
<PP&E> 72,689
<DEPRECIATION> 35,595
<TOTAL-ASSETS> 129,645
<CURRENT-LIABILITIES> 19,902
<BONDS> 0
0
0
<COMMON> 108
<OTHER-SE> 97,009
<TOTAL-LIABILITY-AND-EQUITY> 129,645
<SALES> 236,744
<TOTAL-REVENUES> 236,744
<CGS> 176,988
<TOTAL-COSTS> 208,952
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 739
<INCOME-PRETAX> 27,053
<INCOME-TAX> 10,794
<INCOME-CONTINUING> 16,259
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,259
<EPS-PRIMARY> 1.46<F1>
<EPS-DILUTED> 1.41<F1>
<FN>
<F1>The financial data schedule for the year ended December 31, 1997 has not
been restated to reflect the two-for-one stock split effective June 10, 1998.
</FN>
</TABLE>
