UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)*
Chromcraft Revington, Inc.
--------------------------
(Name of Issuer)
Common Stock
------------
(Title of Class of Securities)
171117-10-4
-----------
(CUSIP Number)
Nicholas J. Chulos, Esq.
Krieg DeVault LLP
One Indiana Square, Suite 2800
Indianapolis, Indiana 46204
(317) 238-6224
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
February 27, 2003
-----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check
the following box. [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP NO. 171117-10-4
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Michael E. Thomas
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF 7 SOLE VOTING POWER
400,231 (1)
SHARES
-------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
-0-
OWNED BY
-------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
369,979 (1)
REPORTING
-------------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
-0-
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
400,231 (1)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS)
[ ]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.3% (2)
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
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(1) Includes (i) 99,750 shares held directly by Mr. Thomas, (ii) 270,229 shares
which Mr. Thomas has the right to acquire within 60 days upon exercise of stock
options granted to him under the Stock Option Plan for key employees of
Chromcraft Revington, Inc., and (iii) 30,252 shares held for the benefit of Mr.
Thomas under the Chromcraft Revington Savings Plan. Mr. Thomas has sole voting
and dispositive power over all shares of common stock beneficially owned by him,
other than 30,252 shares held for his benefit under the Chromcraft Revington
Savings Plan as to which Mr. Thomas has sole voting, but no dispositive, power.
(2)Based upon 6,038,550 shares of common stock, par value $.01 per share, of
Chromcraft Revington, Inc. outstanding as of the close of business on February
21, 2003 and computed in accordance with Rule 13d-3(d)(1).
Item 1. Security and Issuer
----------------------------
This Schedule 13D relates to the common stock, par value $.01 per share, of
Chromcraft Revington, Inc. (the "Issuer"). The Issuer's principal executive
office is located at 1100 North Washington Street, Delphi, Indiana 46923.
Item 2. Identity and Background
--------------------------------
(a) The name of the person filing this Schedule 13D is Michael E. Thomas.
(b)-(c) Mr. Thomas' present occupation is the Chairman, President and Chief
Executive Officer of the Issuer which, through its operating subsidiaries,
designs, manufactures and sells residential and commercial furniture. Mr. Thomas
also serves as a director of the Issuer. The business address of Mr. Thomas and
the Issuer is 1100 North Washington Street, Delphi, Indiana 46923.
(d) Mr. Thomas has not, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) Mr. Thomas has not, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
(f) Mr. Thomas is a citizen of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration
----------------------------------------------------------
Not applicable. Mr. Thomas has not purchased any additional shares of
common stock of the Issuer that resulted in him acquiring beneficial ownership
of more than 5% of the outstanding shares of common stock of the Issuer.
On March 15, 2002, Court Square Capital Limited ("Court Square"), a
Delaware corporation and an affiliate of Citigroup Inc., completed its sale of
5,695,418 shares of common stock of the Issuer, comprising approximately 59% of
the Issuer's outstanding shares of common stock on that date, to the Issuer and
the Chromcraft Revington Employee Stock Ownership Plan Trust. With respect to
the 5,695,418 shares of the Issuer's common stock sold by Court Square,
3,695,418 shares were repurchased by the Issuer, which resulted in a decrease in
the number of outstanding shares of common stock of the Issuer and an increase
in the percentage ownership of the outstanding shares of common stock of the
Issuer held by Mr. Thomas.
Item 4. Purpose of Transaction
-------------------------------
Mr. Thomas has not purchased any additional shares of common stock of
the Issuer that resulted in him acquiring beneficial ownership of more than 5%
of the outstanding shares of common stock of the Issuer. All of the shares of
common stock beneficially owned by Mr. Thomas have been acquired for investment
purposes.
Mr. Thomas currently serves as a director of the Issuer. In his
capacity as a director, he will participate in, and have the opportunity to vote
on, matters that are presented to the Board of Directors of the Issuer,
including, without limitation, any extraordinary corporate transactions and
material changes to the Issuer's capitalization, dividend policy, business or
corporate structure. Additionally, Mr. Thomas currently serves as the Chairman
of the Board, President and Chief Executive Officer of the Issuer and, in his
capacities as such, supervises the overall operations of the Issuer and is
responsible for assuring that all directions of the Board of Directors are
carried into effect.
Mr. Thomas may acquire additional securities of the Issuer, or dispose
of all or any portion of his securities, in open market or privately negotiated
transactions or otherwise. Any open market or privately negotiated purchases or
sales may be made at any time without prior notice. Pursuant to the Issuer's
stock option plan for key employees, Mr. Thomas may be granted additional
options to purchase shares of common stock of the Issuer and options previously
granted to Mr. Thomas may vest in the future.
Mr. Thomas has no present plans or proposals in his capacity as a
stockholder of the Issuer that relate to or that would result in any
transaction, event or action specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer
---------------------------------------------
(a)-(b) Mr. Thomas beneficially owns in the aggregate 400,231 shares of the
common stock, representing approximately 6.3% of the outstanding shares of
common stock of the Issuer (based upon 6,038,550 shares of common stock of the
Issuer outstanding
2
as of the close of business on February 21, 2003). Mr. Thomas has sole voting
and dispositive power over all shares of common stock beneficially owned by him,
other than 30,252 shares held for his benefit under the Chromcraft Revington
Savings Plan as to which Mr. Thomas has sole voting, but no dispositive, power.
The number of shares beneficially owned by Mr. Thomas includes 270,229
shares which Mr. Thomas has the right to acquire within 60 days upon exercise of
stock options granted to him under the Issuer's stock option plan for key
employees (included in such shares is an option to acquire 58,333 shares that
will vest on March 15, 2003). Mr. Thomas holds options to acquire an additional
116,667 shares of common stock of the Issuer, but such options have not vested
and are not presently exercisable.
(c) Mr. Thomas has effected the following transactions involving the common
stock of the Issuer in the past 60 days:
(i) On February 12, 2003, Mr. Thomas exercised an option to
purchase 49,500 shares of common stock.
(ii) On February 12, 2003, Mr. Thomas sold 24,200 shares of
common stock.
(iii) On February 13, 2003, Mr. Thomas sold 25,300 shares of common
stock.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
------------------------------------------------------------------------------
There are no contracts, arrangements, understandings or relationships
between Mr. Thomas and any other person with respect to any shares of common
stock of the Issuer, other than as provided in the stock option agreements
between Mr. Thomas and the Issuer.
Item 7. Material to be Filed as Exhibits
-----------------------------------------
(a) Form of stock option agreement between Mr. Thomas and the Issuer
relating to incentive stock options.
(b) Form of amendment to stock option agreement between Mr. Thomas and the
Issuer relating to incentive stock options.
(c) Two forms of stock option agreement between Mr. Thomas and the Issuer
relating to non-qualified stock options.
(d) Form of amendment to stock option agreement between Mr. Thomas and the
Issuer relating to non-qualified stock options.
(e) Chromcraft Revington, Inc. 1992 Stock Option Plan.
* * * *
3
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: February 27, 2003
/s/ Michael E. Thomas
-----------------------------------
Michael E. Thomas
CHROMCRAFT REVINGTON, INC.
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
AGREEMENT, dated as of the ______ day of ______________, by and between
Chromcraft Revington, Inc., a Delaware corporation (the "Company"), and
______________, an employee of the Company ("Holder").
W I T N E S S E T H:
1. Grant of Option. Pursuant to the provisions of the Chromcraft
Revington, Inc. 1992 Stock Option Plan (the "Plan"), the Company hereby grants
to Holder, subject to the terms and conditions of the Plan and the terms and
conditions set forth herein, an option to purchase from the Company all or any
part of an aggregate of _____________ shares of Common Stock, $.01 par value, of
the Company ("Shares"), which option to purchase ____________ Shares shall vest
on __________________, at an exercise price of $___________ per Share; provided,
however, that all options granted hereunder shall vest immediately on the day
and date on which occurs a Change of Control (as hereinafter defined). As used
herein, a "Change of Control" shall mean and shall be deemed to have occurred
only in such circumstances as when both (i) the economic interest of Citicorp
Investments Inc. ("CII") and its affiliates in the common equity securities of
the Company shall represent less than 20% of the total of such common equity
securities then issued and outstanding, and (ii) any "person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) shall be the beneficial owner, directly or indirectly, of common equity
securities of the Company representing more than 50% of the Company's then
issued and outstanding common equity securities.
These options are intended by the parties hereto to be, and shall be treated as,
"incentive stock options" (as that term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code")).
2. Terms and Conditions. The options evidenced hereby are subject to
the following terms and conditions:
(a) Expiration Date. Subject to subsection (2)(d) below, all
of the options granted hereby shall expire on ___________________.
(b) Exercise of Option. The options granted hereby may be
exercised, to the extent exercisable by their terms, and subject to vesting as
set forth in section (1), in whole or from time to time in part at any time
before their expiration. Any exercise shall be accompanied by a written notice
to the Company specifying the number of Shares as to which the option is being
exercised. Notation of any partial exercise shall be made by the Company on
Schedule 1 hereto.
(c) Payment of Purchase Price Upon Exercise. At the time of
any exercise, the purchase price of the Shares as to which an option (or
options) shall be exercised shall be paid (1) in cash, by a certified or bank
check or by a combination of cash and certified or bank
check, or (ii) with the consent of the Compensation Committee, and if permitted
by the restrictions in the Company's financing agreements, in Shares (other than
statutory stock option stock as to which the applicable holding period as
provided in Section 424(c)(3) of the Code has not yet been met), valued at Fair
Market Value on the date of such exercise, by either having such Shares withheld
upon such exercise or by delivering Shares already owned by the Holder. For
purposes of this subsection 2(c), Fair Market Value shall mean, on any given
date, the mean between the highest and lowest prices of actual sales of Shares
on the principal national securities exchange on which the Shares are listed, or
if not so listed, as reported on the National Market System of NASDAQ, on such
date or, if Shares were not traded on such date, on the last preceding day on
which Shares were traded.
(d) Termination of Employment. If any of the following events
occurs before the expiration of the period determined as provided in subsection
(2)(a) above, all vested options granted hereunder shall expire upon the
earliest of:
(i) The day three months from the date on which the
Holder's employment with the Company and/or any Subsidiary
terminates for any reason other than the Holder's disability
within the meaning of the Code or death or as specified in
(iii) below;
(ii) The day one year from the date on which the
Holder's employment with the Company and/or any Subsidiary
terminates due to the Holder's disability within the meaning
of Section 422(c)(6), or death; or
(iii) The day upon which there is a finding by the
Board of Directors of the Company, after full consideration of
the facts presented on behalf of both the Company and the
Holder, that the Holder has breached his employment contract
with the Company or any Subsidiary, or has engaged in any act
detrimental to the interests of the Company or any Subsidiary,
including without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of
his employment or service, or has disclosed trade secrets or
confidential information of the Company or any Subsidiary.
All unvested options shall be cancelled immediately upon termination for any
reason of Holder's employment with the Company and/or any Subsidiary.
(e) Non-transferability. This Agreement and the options
granted hereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of Holder, options granted
hereunder shall be exercisable only by Holder. Upon a Holder's death, any
options which were exercisable by such Holder may be exercised by his executor,
administrator or any other person he designated to exercise his options;
provided, that such person's right to exercise such options shall terminate one
year after such Holder's death.
2
(f) Adjustments. In the event of any change in the Shares by
reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of Shares, or any rights
offering to purchase Shares at a price substantially below fair market value, or
any similar change affecting the Shares, then in any such event the number and
kind of Shares subject to this Agreement and the purchase price per Share shall
be appropriately adjusted consistent with such change in such manner as the
Company may deem equitable to prevent substantial dilution or enlargement of the
rights granted to Holder hereunder, provided, that no adjustment shall be made
which operates to reduce the purchase price of any Shares for which options may
be exercised hereunder below the fair market value of such Shares (determined as
of the date hereof). Any adjustment so made shall be final and binding upon
Holder.
(g) Withholding. It shall be a condition to the obligation of
the Company to issue or transfer Shares upon exercise of any option that the
Holder pay to the Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying its liability to withhold federal,
state or local income or other taxes incurred by reason of the exercise of such
option or the transfer of Shares thereupon. If the amount requested is not paid,
the Company may refuse to issue or transfer Shares upon exercise of such option.
At the election of the Holder, but only with the consent of the Compensation
Committee of the Board of Directors, and only if permitted by the restrictions
in the Company's financing agreements, the Company shall have the right to
retain upon exercise, or the right to repurchase from Shares already held by the
Holder, the number of Shares of Common Stock whose Fair Market Value equals the
amount to be withheld in satisfaction of the applicable withholding taxes or to
make loans on the terms set forth in Article XI(A)(v) of the Plan to pay the
applicable withholding taxes. For purposes of this subsection 2(g), "Fair Market
Value" shall have the meaning set forth in subsection 2(c), above.
(h) No Rights as Stockholder. Holder shall have no rights as a
stockholder with respect to any Shares subject to this Agreement before the date
of issuance to him of a certificate or certificates for such Shares.
(i) No Right to Continued Employment. This Agreement shall not
confer upon Holder any right with respect to continuance of employment by the
Company or any Subsidiary, nor shall it interfere in any way with the right of
his employer to terminate his employment at any time.
(j) Compliance With Law and Regulations. This Agreement and
the obligation of the Company to sell and deliver Shares hereunder shall be
subject to all applicable Federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for Shares
unless it is satisfied that such issuance is in compliance with all applicable
laws, regulations, rules and statutes under Federal and state law, and the
requirements of any exchange on which the Shares may then be listed. The Company
shall not accept any note in payment of the purchase price to the extent the
amount or terms of the note shall not be in
3
compliance with all applicable Federal and state laws, rules and regulations and
such approvals by any government or regulatory agency as may be required.
3. Investment Representation. The Holder represents (i) that the Shares
acquired by him upon exercise are being acquired for investment and not with a
view to the sale or distribution thereof and (ii) that Holder has made an
investigation into the affairs of the Company and has received the information
necessary to make an informed decision with respect to Holder's acquisition of
the options granted hereunder.
4. Holder Bound by Plan. Holder hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof.
5. Notices. Any notice hereunder to the Company shall be addressed to:
Chromcraft Revington, Inc.
1100 North Washington Street
Delphi, Indiana 46923
Attn: Chief Executive Officer
and any notice hereunder to Holder shall be addressed to:
------------------
------------------
------------------
subject to the right of either party to designate at any time hereafter in
writing some other address.
6. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and Holder has executed this Agreement,
as of the day and year first above written.
CHROMCRAFT REVINGTON, INC.
By:
---------------------------------
HOLDER
---------------------------------
4
AMENDMENT
TO
CHROMCRAFT REVINGTON, INC.
INCENTIVE STOCK OPTION AGREEMENT
--------------------------------
THIS AMENDMENT, dated as of this _____day of _______________, is
between Chromcraft Revington, Inc., a Delaware corporation (the "Company"), and
________________, an employee of __________________, a wholly-owned subsidiary
of the Company ("Holder"),
WITNESSETH:
WHEREAS, Holder was granted a stock option under the Company's 1992
Stock Option Plan (the "Plan") pursuant to an Incentive Stock Option Agreement
dated as of the _____day of ________________, (the "Option Agreement"); and
WHEREAS, the Company declared a two-for-one split of the Company's
common stock to stockholders of record on May 27, 1998; and
WHEREAS, the Plan and the Option Agreement each provide in the event of
a stock split for an adjustment in the number of shares and the purchase price
per share in outstanding option agreements; and
WHEREAS, Citicorp Investments, Inc. changed its name to 399 Venture
Partners, Inc.;
NOW, THEREFORE, the Company and Holder amend the Option Agreement as
follows:
1. Paragraph 1 of the Option Agreement entitled "Grant of Option" is
hereby amended to adjust the number of shares and the purchase price per share
to reflect the two-for-one stock split and to change the name of Citicorp
Investments, Inc., and as amended shall read as follows:
"1. Grant of Option. Pursuant to the provisions of the
Chromcraft Revington, Inc. 1992 Stock Option Plan (the "Plan"), the
Company hereby grants to Holder, subject to the terms and conditions of
the Plan and the terms and conditions set forth herein, an option to
purchase from the Company all or any part of an aggregate of
_____________ shares of Common Stock, $.01 par value, of the Company
("Shares"), which option to purchase ____________ Shares shall vest on
__________________, at an exercise price of $___________ per Share;
provided, however, that all options granted hereunder shall vest
immediately on the day and date on which occurs a Change of Control (as
hereinafter defined). As used herein, a "Change of Control" shall mean
and shall be deemed to have occurred only in such circumstances as when
both (i) the economic interest of 399 Venture Partners, Inc. and its
affiliates in the common equity securities of the Company shall
represent less than 20% of the total of such common equity
securities then issued and outstanding, and (ii) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended) shall be the beneficial owner, directly or
indirectly, of common equity securities of the Company representing
more than 50% of the Company's then issued and outstanding common
equity securities.
These options are intended by the parties hereto to be, and
shall be treated as, "incentive stock options" (as that term is defined
in Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"))."
2. Except for the amendments herein provided, all terms, conditions and
provisions of the Option Agreement are hereby ratified and affirmed, and shall
continue in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by its duly authorized officer and Holder has executed this Amendment,
as of the day and year first above written.
CHROMCRAFT REVINGTON, INC.
By:
---------------------------------
HOLDER
---------------------------------
2
CHROMCRAFT REVINGTON, INC.
NON-ISO STOCK OPTION AGREEMENT
------------------------------
AGREEMENT, dated as of the ______ day of ________________, by and
between Chromcraft Revington, Inc., a Delaware corporation (the "Company"), and
______________, an employee of the Company ("Holder").
W I T N E S S E T H:
1. Grant of Option. Pursuant to the provisions of the Chromcraft
Revington, Inc. 1992 Stock Option Plan (the "Plan"), the Company hereby grants
to Holder, subject to the terms and conditions of the Plan and the terms and
conditions set forth herein, options to purchase from the Company all or any
part of an aggregate of ____________ shares of Common Stock, $.01 par value, of
the Company ("Shares"), which options shall vest as follows:
------------------------------------------
------------------------------------------
------------------------------------------
all at an exercise price of $_______ per Share; provided, however, that all
options granted hereunder shall vest immediately on the day and date on which
occurs a Change of Control (as hereinafter defined). As used herein, a "Change
of Control" shall mean and shall be deemed to have occurred only in such
circumstances as when both (i) the economic interest of Citicorp Investments
Inc. ("CII") and its affiliates in the common equity securities of the Company
shall represent less than 20% of the total of such common equity securities then
issued and outstanding, and (ii) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) shall be
the beneficial owner, directly or indirectly, of common equity securities of the
Company representing more than 50% of the Company's then issued and outstanding
common equity securities.
These options are not intended by the parties hereto to be, and they shall not
be treated as, "incentive stock options" (as that term is defined in Section 422
of the Internal Revenue Code of 1986, as amended (the "Code")).
2. Terms and Conditions. The options evidenced hereby are subject to
the following terms and conditions:
(a) Expiration Date. Subject to subsection (2)(d) below, all
of the options granted hereby shall expire on ___________________.
(b) Exercise of Option. The options granted hereby may be
exercised, to the extent exercisable by their terms, and subject to vesting as
set forth in section (1), in whole or from time to time in part at any time
before their expiration. Any exercise shall be accompanied by a written notice
to the Company specifying the number of Shares as to which the option is being
exercised. Notation of any partial exercise shall be made by the Company on
Schedule 1 hereto.
(c) Payment of Purchase Price Upon Exercise. At the time of
any exercise, the purchase price of the Shares as to which an option (or
options) shall be exercised shall be paid (i) in cash, by a certified or bank
check or by a combination of cash and certified or bank check, or (ii) with the
consent of the Compensation Committee, and if permitted by the restrictions in
the Company's financing agreements, in Shares (other than statutory stock option
stock as to which the applicable holding period as provided in Section 424(c)(3)
of the Code has not yet been met), valued at Fair Market Value on the date of
such exercise, by either having such Shares withheld upon such exercise or by
delivering Shares already owned by the Holder. For purposes of this subsection
2(c), Fair Market Value shall mean, on any given date, the mean between the
highest and lowest prices of actual sales of Shares on the principal national
securities exchange on which the Shares are listed, or if not so listed, as
reported on the National Market System of NASDAQ, on such date or, if Shares
were not traded on such date, on the last preceding day on which Shares were
traded.
(d) Termination of Employment. If any of the following events
occurs before the expiration of the period determined as provided in subsection
(2)(a) above, all vested options granted hereunder shall expire upon the
earliest of:
(i) The day three months from the date on which the
Holder's employment with the Company and/or any Subsidiary
terminates for any reason other than the Holder's disability
within the meaning of the Code or death or as specified in
(iii) below;
(ii) The day one year from the date on which the
Holder's employment with the Company and/or any Subsidiary
terminates due to the Holder's disability within the meaning
of Section 422(c)(6), or death; or
(iii) The day upon which there is a finding by the
Board of Directors of the Company, after full consideration of
the facts presented on behalf of both the Company and the
Holder, that the Holder has breached his employment contract
with the Company or any Subsidiary, or has engaged in any act
detrimental to the interests of the Company or any Subsidiary,
including without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of
his employment or service, or has disclosed trade secrets or
confidential information of the Company or any Subsidiary.
All unvested options shall be cancelled immediately upon termination for any
reason of Holder's employment with the Company and/or any Subsidiary.
(e) Non-transferability. This Agreement and the options
granted hereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the
2
lifetime of Holder, options granted hereunder shall be exercisable only by
Holder. Upon a Holder's death, any options which were exercisable by such Holder
may be exercised by his executor, administrator or any other person he
designated to exercise his options; provided, that such person's right to
exercise such options shall terminate one year after such Holder's death.
(f) Adjustments. In the event of any change in the Shares by
reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of Shares, or any rights
offering to purchase Shares at a price substantially below fair market value, or
any similar change affecting the Shares, then in any such event the number and
kind of Shares subject to this Agreement and the purchase price per Share shall
be appropriately adjusted consistent with such change in such manner as the
Company may deem equitable to prevent substantial dilution or enlargement of the
rights granted to Holder hereunder. Any adjustment so made shall be final and
binding upon Holder.
(g) Withholding. It shall be a condition to the obligation of
the Company to issue or transfer Shares upon exercise of any option that the
Holder pay to the Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying its liability to withhold federal,
state or local income or other taxes incurred by reason of the exercise of such
option or the transfer of Shares thereupon. If the amount requested is not paid,
the Company may refuse to issue or transfer Shares upon exercise of such option.
At the election of the Holder, but only with the consent of the Compensation
Committee of the Board of Directors, and only if permitted by the restrictions
in the Company's financing agreements, the Company shall have the right to
retain upon exercise, or the right to repurchase from Shares already held by the
Holder, the number of Shares of Common Stock whose Fair Market Value equals the
amount to be withheld in satisfaction of the applicable withholding taxes or to
make loans on the terms set forth in Article XI(A)(v) of the Plan to pay the
applicable withholding taxes. For purposes of this subsection 2(g), "Fair Market
Value" shall have the meaning set forth in subsection 2(c), above.
(h) No Rights as Stockholder. Holder shall have no rights as a
stockholder with respect to any Shares subject to this Agreement before the date
of issuance to him of a certificate or certificates for such Shares.
(i) No Right to Continued Employment. This Agreement shall not
confer upon Holder any right with respect to continuance of employment by the
Company or any Subsidiary, nor shall it interfere in any way with the right of
his employer to terminate his employment at any time.
(j) Compliance With Law and Regulations. This Agreement and
the obligation of the Company to sell and deliver Shares hereunder shall be
subject to all applicable Federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for Shares
unless it is satisfied that such issuance is in compliance with all applicable
laws, regulations, rules and statutes under Federal and state law, and the
requirements of any exchange on which the Shares may then be listed. The Company
shall not accept any note in
3
payment of the purchase price to the extent the amount or terms of the note
shall not be in compliance with all applicable Federal and state laws, rules and
regulations and such approvals by any government or regulatory agency as may be
required.
3. Investment Representation. The Holder represents (i) that the Shares
acquired by him upon exercise are being acquired for investment and not with a
view to the sale or distribution thereof and (ii) that Holder has made an
investigation into the affairs of the Company and has received the information
necessary to make an informed decision with respect to Holder's acquisition of
the options granted hereunder.
4. Holder Bound by Plan. Holder hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof.
5. Notices. Any notice hereunder to the Company shall be addressed to:
Chromcraft Revington, Inc.
1100 North Washington Street
Delphi, Indiana 46923
Attn: Chief Executive Officer
and any notice hereunder to Holder shall be addressed to:
--------------------
--------------------
--------------------
subject to the right of either party to designate at any time hereafter in
writing some other address.
6. Counterparts. This Agreement may be executed in one or more
counterparts each of which shall constitute one and the same instrument.
4
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and Holder has executed this Agreement,
as of the day and year first above written.
CHROMCRAFT REVINGTON, INC.
By:
------------------------------------------
HOLDER
---------------------------------------------
5
AMENDMENT
TO
CHROMCRAFT REVINGTON, INC.
NON-ISO STOCK OPTION AGREEMENT
------------------------------
THIS AMENDMENT, dated as of this _____day of _______________, is
between Chromcraft Revington, Inc., a Delaware corporation (the "Company"), and
_________________________, an employee of _________________________, a
wholly-owned subsidiary of the Company ("Holder"),
WITNESSETH:
WHEREAS, Holder was granted a stock option under the Company's 1992
Stock Option Plan (the "Plan") pursuant to a Non-ISO Stock Option Agreement
dated as of the _____day of ________________, (the "Option Agreement"); and
WHEREAS, the Company declared a two-for-one split of the Company's
common stock to stockholders of record on May 27, 1998; and
WHEREAS, the Plan and the Option Agreement each provide in the event of
a stock split for an adjustment in the number of shares and the purchase price
per share in outstanding option agreements; and
WHEREAS, Citicorp Investments, Inc. changed its name to 399 Venture
Partners, Inc.;
NOW, THEREFORE, the Company and Holder amend the Option Agreement as
follows:
1. Paragraph 1 of the Option Agreement entitled "Grant of Option" is
hereby amended to adjust the number of shares and the purchase price per share
to reflect the two-for-one stock split and to change the name of Citicorp
Investments, Inc., and as amended shall read as follows:
"1. Grant of Option. Pursuant to the provisions of the
Chromcraft Revington, Inc. 1992 Stock Option Plan (the "Plan"), the
Company hereby grants to Holder, subject to the terms and conditions of
the Plan and the terms and conditions set forth herein, options to
purchase from the Company all or any part of an aggregate of
____________ shares of Common Stock, $.01 par value, of the Company
("Shares"), which options shall vest as follows:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
all at an exercise price of $_______ per Share; provided, however, that
all options granted hereunder shall vest immediately on the day and
date on which occurs a Change of Control (as hereinafter defined). As
used herein, a "Change of Control" shall mean and shall be deemed to
have occurred only in such circumstances as when both (i) the economic
interest of 399 Venture Partners, Inc. and its affiliates in the common
equity securities of the Company shall represent less than 20% of the
total of such common equity securities then issued and outstanding, and
(ii) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended) shall be the
beneficial owner, directly or indirectly, of common equity securities
of the Company representing more than 50% of the Company's then issued
and outstanding common equity securities.
These options are not intended by the parties hereto to be,
and they shall not be treated as, "incentive stock options" (as that
term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"))."
2. Except for the amendments herein provided, all terms, conditions and
provisions of the Option Agreement are hereby ratified and affirmed, and shall
continue in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by its duly authorized officer and Holder has executed this Amendment,
as of the day and year first above written.
CHROMCRAFT REVINGTON, INC.
By:
-------------------------------------
HOLDER
---------------------------------------
2
CHROMCRAFT REVINGTON, INC.
1992 STOCK OPTION PLAN
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
-----------------------------------------
THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT ( "Agreement") is made
and executed as of the _____ day of ______________, between Chromcraft
Revington, Inc., a Delaware corporation ( "Company"), and _________________, an
Employee of the Company ("Participant");
WITNESSETH:
WHEREAS, the Board of Directors of the Company has adopted the
Chromcraft Revington, Inc. 1992 Stock Option Plan ("Plan") to provide an
established plan to attract and retain persons of ability as officers and key
employees and to motivate officers and key employees to exert their best efforts
on behalf of the Company and its Affiliates through the grant of Options; and
WHEREAS, the Compensation Committee of the Company's Board of Directors
("Committee") has determined that it would be to the advantage and in the best
interests of the Company and its shareholders to award the Option provided for
herein to the Participant as an inducement to remain in the service of the
Company or its Affiliates and as an incentive for increased efforts during such
service, and has advised the Company thereof and instructed the undersigned
officer to award the Option to the Participant;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Participant agree as follows:
1. Grant of Option. Subject to the provisions of this Agreement and the
Plan, the Company hereby awards to the Participant the right and option
("Option") to purchase all or any part of an aggregate of
________________________ (____________) Shares, such Option to be Nonqualified
Stock Options. All provisions of the Plan, including the terms defined therein,
are incorporated herein and are expressly made a part of this Agreement by
reference. The Participant hereby acknowledges that he has received a copy of
the Plan. The Grant Date of the Option is __________________.
2. Exercise Price.
(a) Exercise Price. The per share Exercise Price for the
Shares represented by the Option will be ________________ Dollars
($_________).
(b) Payment Of Exercise Price. The Exercise Price for the
Shares represented by the Option will be paid in cash by the
Participant at the time the Option is exercised; provided, however,
with the approval of the Committee and to the extent not prohibited by
applicable law, the Participant may exercise part or all of the Option
by tendering whole Shares owned by the Participant, or by a combination
of such whole Shares and
cash, which have a Fair Market Value equal to the Exercise Price. The
exercise of the Option will be subject to such rules and procedures as
may be adopted from time to time by the Committee.
3. Issuance of Shares. The Participant will have none of the rights of
a shareholder with respect to Shares acquired as a result of his exercise of an
Option until they are issued to him. The Company will not be required to issue
or deliver any certificate(s) or Shares purchased upon exercise of the Option or
any portion thereof prior to the (i) completion of any registration or other
qualification of such Shares which the Company deems necessary or advisable
under any federal or state law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
and (ii) obtaining of any approval or other clearance from any federal or state
governmental agency or body, which the Company determines to be necessary or
advisable. The Company will have no obligation to obtain the fulfillment of the
conditions specified in the preceding sentence.
4. Exercise of Option.
(a) Vesting Requirements. The Option may not be exercised
after the expiration of ten (10) years from the date of this Agreement.
Subject to the provisions of Sections 4 and 6, the Option Shares will
vest and be exercisable by the Participant in accordance with the
following schedule:
Date of Vesting Percent of Option Shares Vested
--------------- -------------------------------
Notwithstanding the foregoing, the Option will also vest and be
exercisable upon the Participant's death or Disability, as such term is
defined in the Plan. In addition, the Option will vest and be
exercisable upon a Change in Control of the Company, the Participant's
Termination of Service for Good Reason or the termination of the
Participant without Cause, as those terms are defined in the Plan.
(b) Limitations on Exercise. The Option may be exercised
during the lifetime of the Participant only by the Participant or his
guardian or attorney-in-fact in the event the Participant becomes
disabled. In the case of the Participant's death, the Option may be
exercised by the Participant's personal representative.
(c) Legal Requirements. Notwithstanding any other provision of
this Agreement, the Option may not be exercised in whole or in part if
the issuance of the Shares (or the payment of cash) upon such exercise
would constitute a violation of any applicable federal or state
securities law or other applicable laws, rules or regulations. As a
condition to the exercise of the Option, the Company may require the
person exercising
2
the Option to make any representation or warranty to the Company that
may be required by any applicable law or regulation.
(d) Code Section 162(m) Limitations of Exercise. The Option
may not be exercised in whole or in part if the exercise would result
in compensation to the Participant which is not deductible by the
Company due to the application of Code Section 162(m).
5. Nontransferability. The Option is not assignable or transferable by
the Participant except by will or by the laws of descent and distribution. The
Option cannot be pledged or hypothecated in any way, nor can it be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge or other disposition of the Option in violation of this provision or the
levy of execution, attachment or similar process upon the Option will be null
and void and without effect and will cause the Option to be terminated.
Notwithstanding the foregoing provisions of this Section 5, the Participant may
transfer all or any part of the Option to an Eligible Transferee to the extent
and subject to the limitations provided in the Plan.
6. Termination of Option.
(a) In General. If the Participant incurs a Termination of
Service due to death, Disability, for Good Reason or without Cause, or
remains employed by the Company through ________________, all rights to
exercise this Option will terminate on the expiration of the Option
Period.
(b) Termination for Other Reasons. If the Participant incurs a
Termination of Service for any reason other than Good Reason, without
Cause, death or Disability all rights to exercise his Option will
terminate on the date of the Participant's Termination of Service.
7. Forfeiture Due to Violation of Agreement. If the Participant incurs
a Termination of Service under circumstances where his Option remains unvested
and/or unexercised for any reason and thereafter violates any non-competition,
non-solicitation or non-disclosure provisions of his employment agreement with
the Company, all of such unvested and/or unexercised Option shall be forfeited.
8. Participant's Representations. The Participant represents to the
Company that (i) the terms and arrangements relating to the grant of the Option
and the Shares to which it relates, and the offer thereof, have been arrived at
or made through direct communication with the Company or person acting in its
behalf and the Participant; (ii) he has received a balance sheet and income
statement of the Company and as a key employee of the Company or an Affiliate
(A) is thoroughly familiar with the Company's business affairs and financial
condition and (B) has been provided with or has access to such information (and
has such knowledge and experience in financial and business matters that he is
capable of utilizing such information) as is necessary to evaluate the risks,
and make an informed investment decision with respect to, the
3
Option and the Shares to which it relates; (iii) he has sufficient financial
resources so that he is able to bear the economic risks of his investment in
such Shares; and (iv) the Option is being acquired in good faith for investment
purposes and not with a view to, or for sale in connection with, any
distribution thereof.
9. Indemnity. The Participant hereby agrees to indemnify and hold
harmless the Company (and its directors, officers and employees) and the
Committee, against and from any and all losses, claims, damages, liabilities and
expenses based upon or arising out of the incorrectness or alleged incorrectness
of any representation made by him to the Company or any failure on his part of
to perform any agreements contained herein. The Participant further agrees to
release and hold harmless the Company (and its directors, officers and
employees) against any liability, including without limitation, taxes, interest
and penalties incurred by the Participant in connection with his participation
in the Plan.
10. Continued Employment. Nothing in this Agreement or in the Plan
confers upon the Participant any right to continue in the employ of the Company
or any Affiliate or will interfere with or restrict in any way the rights of the
Company and its Affiliates, subject to the terms of any employment agreement
between the Company or any Affiliate and the Participant, to discharge the
Participant at any time for any reason whatsoever with or without Cause.
11. Financial Information and Tax Withholding.
(a) Delivery of Financial Statements. The Company hereby
undertakes to deliver to the Participant, at such time as they become
available and so long as this Agreement is in effect, a balance sheet
and income statement of the Company with respect to any fiscal year of
the Company ending on or after the date hereof.
(b) Collection of Withholding Taxes. The Company will have the
right to require payment to it from the Participant of the amount of
tax or other charge required by law, or required to be withheld as a
result of his exercise of the Option. The Committee, in its discretion
and subject to such rules as it may adopt, may permit the Participant
to satisfy, in whole or in part, any withholding tax obligation which
may arise in connection with the exercise of the Option by having the
Company retain Shares which would otherwise be issued in connection
with the exercise of the Option or accept delivery from the Participant
of Shares which have a Fair Market Value equal to the amount required
to be withheld, determined as of the date of the delivery of such
Shares, equal to the amount of the withholding tax to be satisfied by
that retention or delivery.
12. Company Obligation to Purchase Shares. At the Participant's
election, the Company will purchase all or a portion of the Shares acquired by
the Participant pursuant to the exercise of an Option; provided, however, the
Company will not purchase Shares that have been so acquired within six (6)
months of the exercise.
4
13. Conditions Precedent. In no event will the Company be obligated to
issue Shares pursuant to the exercise of the Option until it is satisfied that
all conditions precedent to the issuance of such Shares, as provided in the
Plan, have been performed and completed.
14. Changes in Stock. In the event of any change in the Shares, as
described in Section 4.5 of the Plan, the Committee will make appropriate
adjustment or substitution in the number, kind and price of Shares under this
Agreement, all as provided in the Plan. Such adjustment or substitution in the
number, kind and price of Shares under this Agreement will be automatic and no
formal amendment will be required to be made to this Agreement to effect the
adjustment or substitution, provided the Participant is provided with adequate
notice of such adjustment or substitution. The Committee's determination in this
respect will be final, conclusive and binding on all parties.
15. Effect of Headings. The descriptive headings of the Sections of
this Agreement are inserted for convenience and identification only and do not
constitute a part of this Agreement for purposes of interpretation.
16. Governing Law. Except to the extent preempted by the federal laws
of the United States of America, this Agreement will be construed in accordance
with and governed by the laws of the State of Delaware without giving effect to
any choice or conflict of law provisions, principles or rules (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
any laws of any jurisdiction other than the State of Delaware.
17. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which will be deemed an original, but all of which
collectively will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company, by its officer thereunder duly
authorized, and the Participant, have caused this Nonqualified Stock Option
Award Agreement to be executed on the day and year first above written and
effective as of the Grant Date specified above.
CHROMCRAFT REVINGTON, INC.
By:
-----------------------------------
PARTICIPANT
--------------------------------------
5
CHROMCRAFT REVINGTON, INC.
1992 STOCK OPTION PLAN
(As Amended and Restated Through March 15, 2002)
SECTION 1
PURPOSE AND DURATION
--------------------
1.1. Amendment and Restatement of the Plan. Chromcraft Revington, Inc.,
a Delaware corporation, hereby amends and restates the Chromcraft Revington,
Inc. 1992 Stock Option Plan, as set forth in this document. The Plan permits the
grant of Nonqualified Stock Options and Incentive Stock Options.
1.2. Purpose of the Plan. The purpose of the Plan is to provide an
established plan to attract and retain persons of ability as key employees and
to motivate key employees to exert their best efforts on behalf of the Company
and its Affiliates through the grant of Options to purchase Shares; provided,
however, that no Options will be granted to Directors hereunder on or after
March 15, 2002.
SECTION 2
DEFINITIONS
-----------
For purposes of the Plan, the following words and phrases will have the
following meanings unless a different meaning is plainly required by the
context:
2.1. "1934 Act" means the Securities Exchange Act of 1934, as amended.
Reference to a specific Section of the 1934 Act or regulation thereunder will
include such section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future legislation or regulation
amending, supplementing, or superseding such Section or regulation.
2.2. "Affiliate" means any corporation or any other entity (including,
but not limited to, partnerships, limited liability companies, joint ventures
and Subsidiaries) controlling, controlled by or under common control with the
Company.
2.3. "Award Agreement" means the written agreement which sets forth the
terms and provisions applicable to each Option granted under the Plan.
2.4. "Beneficiary" means the person or persons designated by a
Participant to receive the benefits under the Plan, if any, which become payable
as a result of the Participant's death.
2.5. "Board" or "Board of Directors" means the Board of Directors of
the Company serving at the time that the Plan is approved by the shareholders of
the Company or thereafter.
2.6. "Cashless Exercise" means, if there is a public market for the
Shares, the payment of the Exercise Price of Options, (a) through a "same day
sale" commitment from the Participant and an NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the Shares so
purchased in order to pay the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such stock to forward the Exercise Price
directly to the Company, or (b) through a "margin" commitment from the
Participant and an NASD Dealer whereby the Participant irrevocably elects to
exercise the Option and to pledge the Shares so purchased to the NASD Dealer in
a margin account as security for a loan from the NASD Dealer in the amount of
the Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt
of such Shares to forward the Exercise Price directly to the Company.
2.7. "Cause" means, for purposes of determining whether and when a
Participant has incurred a Termination of Service for Cause, "Cause" as defined
in the Participant's employment agreement. If the Participant does not have an
employment agreement, "Cause" means,
(a) Any insubordination to, or disobedience of the directions of
the Board of Directors or, in the case of a Participant who is
not the Chief Executive Officer of the Company, any
insubordination to, or disobedience of the directions of the
Chief Executive Officer of the Company; or
(b) Any conviction of, or the entering of any plea of guilty or
nolo contendere by, the Participant for any felony; or
(c) Any act of the Participant of dishonesty, fraud, theft,
misappropriation or embezzlement upon or against the Company
or any customer of the Company; or
(d) Any misappropriation, usurping or taking by the Participant of
any corporate opportunity of the Company; or
(e) Any medical diagnosis of the Participant of alcoholism or
unlawful drug, chemical or substance abuse or addiction to the
extent that such alcoholism, abuse or addiction adversely
affects the ability of the Participant to perform his duties
and responsibilities hereunder or adversely affects the
Company or its business, operations or affairs, with the
Participant hereby agreeing to make himself promptly available
to a medical doctor selected by and paid for by the Company
for such diagnosis and consenting to provide the results of
such diagnosis to the Company promptly; or
(f) Any material noncompliance by the Participant with any
employee handbooks, rules, policies or procedures of the
Company in effect from time to time; or
(g) Any breach by the Participant of any provision of his
employment agreement, if any.
2
2.8. "Change in Control" will have the meaning given to such term in
Section 9.2.
2.9. "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific Section of the Code or regulation thereunder will
include such Section or regulation, any valid regulation promulgated under such
Section, and any comparable provision of any future law, legislation, or
regulation amending, supplementing, or superseding such Section or regulation.
2.10. "Committee" means the Compensation Committee of the Board, or
such other committee appointed by the Board pursuant to Section 3.1 to
administer the Plan, serving on the date the Plan is approved by the
shareholders of the Company or thereafter.
2.11. "Company" means Chromcraft Revington, Inc., a Delaware
corporation, and any successor thereto which assumes the obligations of such
corporation under the Plan.
2.12. "Director" means any individual who is a member of the Board of
Directors of the Company.
2.13. "Disability" means an illness or physical or mental disability or
incapacity of the Participant to such an extent that the Participant cannot
adequately perform his duties and responsibilities (as reasonably determined by
the Company) for a period of at least ninety (90) consecutive days; provided,
however, that any medical diagnosis of the Participant of alcoholism or drug,
chemical or substance abuse or addiction will not be included in the definition
of "Disability." A Disability must be evidenced by signed, written opinions of
at least two (2) independent, qualified medical doctors selected by the Board of
Directors and paid for by the Company.
2.14. "Effective Date" means March 23, 1992, which is the date as of
which the Board of Directors and the shareholders of the Company approved the
Plan.
2.15. "Employee" means an officer or key employee of the Company or an
Affiliate, whether employed on the date the Plan is approved by the shareholders
of the Company or become employed subsequent to such approval.
2.16. "Exercise Price" means the price at which a Share may be
purchased by a Participant pursuant to the exercise of an Option.
2.17. "Fair Market Value" means, on any given date, the mean between
the highest and lowest prices of actual sales of Shares on the principal
national securities exchange on which the Shares are listed, or if not so
listed, as reported on the New York Stock Exchange, on such date or, if the
Shares were not traded on such date, on the last preceding day on which Shares
were traded. With respect to Options granted on or before the effective date of
the Company's Registration Statement on Form S-1 (Registration Number 33-45902),
Fair Market Value of the Shares with respect to which such Options are or
subsequently will become exercisable,
3
determined as of the date on which such Options were granted means the initial
public offering price per share set forth in such Registration Statement.
2.18. "Good Reason" means "Good Reason" as defined in the Participant's
employment agreement, if any. If the Participant does not have an employment
agreement with the Company, this definition will have no effect.
2.19. "Grant Date" means, with respect to any Award granted under the
Plan, the date on which the Award was granted by the Committee, regardless if
the Award Agreement to which the Award relates is executed subsequent to such
date.
2.20. "Incentive Stock Option" means an Option granted under the Plan
to purchase Shares which is designated as an Incentive Stock Option and is
intended to meet the requirements of Code Section 422.
2.21. "NASD Dealer" means a broker-dealer who is a member of the
National Association of Securities Dealers, Inc.
2.22. "Nonqualified Stock Option" means an Option granted under the
Plan to purchase Shares which is not an Incentive Stock Option.
2.23. "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.24. "Option Period" means the period during which an Option will be
exercisable in accordance with the applicable Award Agreement and Section 6.
2.25. "Participant" means an Employee to whom an Award has been
granted.
2.26. "Plan" means the Chromcraft Revington, Inc. 1992 Stock Option
Plan, as set forth in this instrument and as amended from time to time.
2.27. "Retirement" means the date a Participant attains age sixty-five
(65), or such other date as specified by the Committee in the Award Agreement.
2.28. "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, and
any future rule or regulation amending, supplementing or superseding such rule.
2.29. "Section 16 Person" means a person subject to potential liability
under Section 16(b) of the 1934 Act with respect to transactions which involve
equity securities of the Company.
2.30. "Shares" means the whole shares of issued and outstanding regular
voting common stock, par value $.01 per share, of the Company, whether presently
or hereafter issued and outstanding, and any other stock or securities resulting
from adjustment thereof as provided
4
in Section 4.5 or the stock of any successor to the Company which is so
designated for the purposes of the Plan.
2.31. "Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain. A Subsidiary includes any
Subsidiary of the Company as of the Effective Date and each corporation that
becomes a Subsidiary of the Company after the Effective Date.
2.32. "Termination of Service" means the occurrence of any act or event
or any failure to act whether pursuant to an employment agreement or otherwise
that actually or effectively causes or results in a Participant ceasing, for
whatever reason, to be an Employee, including, but not limited to, death,
Disability, Retirement, termination by the Company or an Affiliate of the
Participant's employment with the Company or an Affiliate (whether with or
without Cause) and voluntary resignation or termination by the Participant of
his or her employment with the Company or an Affiliate (whether with or without
Good Reason). A Termination of Service also will occur with respect to an
Employee who is employed by an Affiliate if the Affiliate ceases to be an
Affiliate of the Company and the Participant will not immediately thereafter
become an Employee of the Company or another Affiliate. For purposes of the
Plan, transfers or changes of employment of a Participant between the Company
and an Affiliate (or between Affiliates) will not be deemed a Termination of
Service.
SECTION 3
ADMINISTRATION
--------------
3.1. The Committee. The Plan will be administered by the Committee. The
decision or action of a majority of the actual number of members of the
Committee will constitute the decision or action of the Committee. The Committee
will consist of not less than three (3) Directors. The members of the Committee
will be appointed from time to time by, and will serve at the pleasure of, the
Board of Directors. It is intended that the Committee be comprised solely of
Directors who both are (a) "non-employee directors" under Rule 16b-3, and (b)
"outside directors" as described in Code Section 162(m)(3)(C)(ii). Failure of
the Committee to be so comprised will not result in the cancellation,
termination, expiration, or lapse of any Award.
3.2. Authority of the Committee. Except as limited by law or by the
Articles of Incorporation or By-Laws of the Company, and subject to the
provisions of the Plan, the Committee will have full power and discretion to
select Employees who will participate in the Plan; determine the sizes and types
of Awards; determine the terms and conditions of Awards in a manner consistent
with the Plan; construe and interpret the Plan, all Award Agreements and any
other agreements or instruments entered into under the Plan; establish, amend or
waive rules and regulations for the Plan's administration; and amend the terms
and conditions of any outstanding Award and applicable Award Agreement to the
extent such terms and conditions are
5
within the discretion of the Committee as provided in the Plan. Further, the
Committee will make all other determinations which may be necessary or advisable
for the administration of the Plan. Each Award will be evidenced by a written
Award Agreement between the Company and the Participant and will contain such
terms and conditions established by the Committee consistent with the provisions
of the Plan. Any notice or document required to be given to or filed with the
Committee will be properly given or filed if hand delivered (and a delivery
receipt is received) or mailed by certified mail, return receipt requested,
postage paid, to the Committee at 1100 North Washington Street, Delphi, Indiana
46923-0238.
3.3. Delegation by the Committee. The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its authority and powers under the Plan to one or more Directors or officers
of the Company; provided, however, that the Committee may not delegate its
authority and powers (a) with respect to grants to Section 16 Persons, or (b) in
any way which would jeopardize the Plan's qualification under Code Section
162(m) or Rule 16b-3.
3.4. Decisions Binding. All determinations and decisions made by the
Committee, the Board and any delegate of the Committee pursuant to Section 3.3
will be final, conclusive and binding on all persons, including the Company and
Participants. No such determinations will be subject to de novo review if
challenged in court.
SECTION 4
SHARES SUBJECT TO THE PLAN
--------------------------
4.1. Number of Shares. Subject to adjustment as provided in Section
4.5, the maximum number of Shares cumulatively available for issuance under the
Plan will not exceed One Million Eight Hundred Thousand (1,800,000) Shares less
the total number of Shares previously issued under the Plan. Shares issued under
the Plan may be either authorized but unissued Shares, treasury Shares or
reacquired Shares (including Shares purchased in the open market), or any
combination thereof, as the Committee may from time to time determine in its
sole discretion.
Shares covered by an Award that are forfeited or that remain
unpurchased or undistributed upon termination or expiration of any such Award
may be made the subject of further Awards to the same or other Participants. If
the exercise price of any Option is satisfied by tendering Shares (by either
actual delivery or attestation), only the number of Shares actually issued, net
of the Shares tendered, will be deemed issued for purposes of determining the
number of Shares available for grants under the Plan.
4.2. Release of Shares. Subject to the limitations set forth in the
Plan, the Committee will have full authority to determine the number of Shares
available for Options, and in its sole discretion may include (without
limitation) as available for distribution any Shares that have ceased to be
subject to an Option; any Shares subject to an Option that have been forfeited;
any Shares under an Option that otherwise terminates without the issuance of
Shares being made to a
6
Participant; any Shares received by the Company in connection with the exercise
of an Option, including the satisfaction of any tax liability or tax withholding
obligation; or any Shares repurchased by the Company in the open market or
otherwise, having an aggregate repurchase price no greater than the amount of
cash proceeds received by the Company from the exercise of Options granted
hereunder. Any Shares that are available immediately prior to the termination of
the Plan, or any Shares returned to the Company for any reason subsequent to the
termination of the Plan, may be transferred to a successor plan.
4.3. Restrictions on Shares. Shares issued on the exercise of an Option
will be subject to the terms and conditions specified herein and to such other
terms, conditions and restrictions as the Committee in its sole discretion may
determine or provide in the Option Agreement. The Company will not be required
to issue or deliver any certificates for Shares, cash or other property prior to
(a) the listing of such Shares on any stock exchange (or other public market) on
which the Shares may then be listed (or regularly traded), and (b) the
completion of any registration or qualification of such shares under federal,
state, local or other law, or any ruling or regulation of any government body
which the Committee determines to be necessary or advisable. The Company may
cause any certificate for Shares to be delivered hereunder to be properly marked
with a legend or other notation reflecting the limitations on transfer of such
Shares as provided in the Plan or as the Committee may otherwise require.
Participants, or any other persons entitled to benefits under the Plan, must
furnish to the Committee such documents, evidence, data or other information as
the Committee considers necessary or desirable for the purpose of administering
the Plan. The benefits under the Plan for each Participant, and each other
person who is entitled to benefits hereunder, are to be provided on the
condition that he furnish full, true and complete data, evidence, or other
information, and that he will promptly sign any document reasonably related to
the administration of the Plan requested by the Committee. No fractional Shares
will be issued under the Plan; rather, fractional shares will be aggregated and
then rounded to the next lower whole Share.
4.4. Shareholder Rights. No person will have any rights of a
shareholder (including, but not limited to, voting and dividend rights) as to
Shares subject to an Option until, after proper exercise or vesting of the
Option or other action as may be required by the Committee in its sole
discretion, such Shares will have been recorded on the Company's official
shareholder records (or the records of its transfer agents or registrars) as
having been issued and transferred to the Participant. Upon exercise of the
Option or any portion thereof, the Company will have a reasonable period in
which to issue and transfer the Shares to the Participant, and the Participant
will not be treated as a shareholder for any purpose whatsoever prior to such
issuance and transfer. No payment or adjustment will be made for cash dividends
or other rights for which the record date is prior to the date such Shares are
recorded as issued and transferred in the Company' official shareholder records
(or the records of its transfer agents or registrars), except as provided herein
or in an Option Agreement.
4.5. Changes in Stock.
4.5.1. Substitution of Stock and Assumption of Plan. In the
event of any change in the Shares by virtue of any stock dividends,
stock splits, recapitalizations, or reclassifications or any
7
acquisition, merger, consolidation, share exchange, tender offer, or
other combination involving the Company that does not constitute a
Change in Control but that results in the acquisition of a Subsidiary
by the Company, or in the event that other stock will be substituted
for the Shares as the result of any merger, consolidation, share
exchange, or reorganization or any similar transaction which
constitutes a Change in Control of the Company, the Committee will
correspondingly adjust (a) the number, kind, and class of Shares which
may be delivered under the Plan, (b) the number, kind, class, and price
of Shares subject to outstanding Options (except for mergers or other
combinations in which the Company is the surviving entity), and (c) the
numerical limits of Sections 4.1 and 6.1 all in such manner as the
Committee in its sole discretion determines to be advisable or
appropriate to prevent the dilution or diminution of such Options;
provided, however, in no event will the One Hundred Thousand Dollars
($100,000) limit on ISOs contained in Section 6.1 be affected by an
adjustment under this Section 4.5.1. The Committee's determination in
this respect will be final and conclusive.
4.5.2. Conversion of Shares. In the event of a Change in
Control of the Company pursuant to which another person or entity
acquires control of the Company (such other person or entity being the
"Successor"), the kind of shares of stock which will be subject to the
Plan and to each outstanding Option will, automatically by virtue of
such Change in Control, be converted into and replaced by securities of
the Successor having full voting, dividend, distribution, preference,
and liquidation rights, and the number of shares subject to an Option,
the calculation of an Option's value, and the purchase price per share
upon exercise of the Option will be correspondingly adjusted so that,
by virtue of such Change in Control of the Company, each Participant
will have the right to purchase (a) that number of shares of stock of
the Successor which have a Fair Market Value, as of the date of such
Change in Control of the Company, equal to the Fair Market Value, as of
the date of such Change in Control of the Company, of the Shares of the
Company theretofore subject to each Option, and (b) for a purchase
price per share which, when multiplied by the number of shares of stock
of the Successor subject to each Option, will equal the aggregate
exercise price at which the Participant could have acquired all of the
Shares of the Company previously optioned to the Participant.
SECTION 5
ELIGIBILITY
-----------
5.1. Eligibility. Except as herein provided, the individuals who will
be eligible to participate in the Plan and be granted Options will be those
individuals who are Employees of the Company or any Affiliate. The Committee
may, from time to time and in its sole discretion, select Employees to be
granted Options and will determine the terms and conditions with respect
thereto. In making any such selection and in determining the form of the Option,
the Committee may give consideration to the functions and responsibilities of
the Employee's contributions to the Company or its Affiliates, the value of the
Employee's services (past, present, and future) to the Company or its
Affiliates, and such other factors deemed relevant by the Committee in its sole
8
discretion. Committee members will not be eligible to participate in the Plan
while serving as Committee members. An Employee will become a Participant in the
Plan as of the date specified by the Committee. A Participant can be removed as
an active Participant by the Committee effective as of any date.
5.2. No Contract of Employment. Neither the Plan nor any Option
Agreement executed under the Plan will constitute a contract of employment
between a Participant and the Company or an Affiliate, and participation in the
Plan will not give a Participant the right to be rehired by or retained in the
employment of the Company or an Affiliate.
SECTION 6
STOCK OPTIONS
-------------
6.1. Grant of Options. Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Options to any
Employee in such amounts as the Committee, in its sole discretion, may
determine. The Committee may grant Incentive Stock Options, Nonqualified Stock
Options or any combination thereof. Subject to the terms and provisions of the
Plan, the Committee, in its sole discretion, will determine the number of Shares
subject to each Option; provided, however, that no Participant may be granted
Incentive Stock Options under the Plan which would result in Shares with an
aggregate Fair Market Value (measured on the Grant Date(s)) of more than One
Hundred Thousand Dollars ($100,000) first becoming exercisable in any one
calendar year.
6.2. Option Agreement. Each Option will be evidenced by an Option
Agreement that will specify the Exercise Price, the number of Shares to which
the Option relates, the Option Period, any conditions to exercise of the Option,
and such other terms and conditions as the Committee, in its sole discretion,
determines. The Option Agreement also will specify whether the Option is
intended to be an Incentive Stock Option or a Nonqualified Stock Option. All
grants of Options intended to constitute Incentive Stock Options will be made in
accordance, and all Option Agreements pursuant to which Incentive Stock Options
are granted will comply, with the requirements of Code Section 422.
6.3. Exercise Price. Subject to the provisions of this Section 6.3, the
Exercise Price for each Option will be determined by the Committee in
its sole discretion.
6.3.1. Nonqualified Stock Options. In the case of a
Nonqualified Stock Option, the per Share Exercise Price will be
determined by the Committee.
6.3.2. Incentive Stock Options. In the case of an Incentive
Stock Option, the Exercise Price will not be less than one hundred
percent (100%) of the Fair Market Value of the Shares to which the
Incentive Stock Option relates determined as of the Grant Date;
provided, however, that if, on the Grant Date, the Participant
(together with persons whose stock ownership is attributed to the
Participant pursuant to Code Section 424(d)) owns securities possessing
more than ten percent (10%) of the total combined voting power of all
9
classes of stock of the Company or any of its Subsidiaries, the
Exercise Price will not be less than one hundred ten percent (110%) of
the Fair Market Value of the Shares to which the Incentive Stock Option
relates determined as of the Grant Date.
6.3.3. Substitute Options. Notwithstanding the provisions of
Sections 6.3.1 and 6.3.2, in the event the Company or an Affiliate
consummates a transaction described in Code Section 424(a) (e.g., the
acquisition of property or stock from an unrelated corporation),
individuals who become Employees on account of such transaction may be
granted Options in substitution for options granted by such former
employer or recipient of services. If such substitute Options are
granted, the Committee, in its sole discretion and consistent with Code
Section 424(a), may determine that such substitute Options will have an
exercise price of less than one hundred percent (100%) of the Fair
Market Value of the Shares to which the Options relate determined as of
the applicable Grant Dates. In carrying out the provisions of this
Section 6.3.3, the Committee will apply the principles contained in
Section 4.5.
6.4. Duration of Options. Subject to the terms and provisions of
Sections 7 and 9, the Option Period with respect to each Option will commence
and expire at such times as the Committee provides in the Option Agreement,
provided that:
(a) Incentive and Nonqualified Stock Options will not be
exercisable later than the tenth anniversary of their
respective Grant Dates;
(b) Incentive Stock Options granted to an Employee who possesses
more than ten percent (10%) of the total combined voting power
of all classes of Shares of the Company, taking into account
the attribution rules of Code Section 422(d), will not be
exercisable later than the fifth anniversary of their Grant
Date(s); and
(c) Subject to the limits of this Section 6, the Committee may, in
its sole discretion, after an Option is granted, extend the
maximum term of the Option.
6.5. Exercisability of Options. Subject to the provisions of Section 9
and this Section 6, all Options granted under the Plan will be exercisable at
such times, under such terms and subject to such restrictions and conditions as
the Committee determines in its sole discretion and specifies in the Option
Agreements to which such Options relate. Notwithstanding the preceding sentence,
an Option may not be exercised in whole or in part if the exercise would result
in compensation to the Participant which is not deductible by the Company due to
the application of Code Section 162(m). After an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the
Option.
6.6. Method of Exercise. Subject to the provisions of this Section 6
and the applicable Option Agreement, a Participant may exercise an Option, in
whole or in part, at any time during the Option Period to which the Option
relates by giving written notice to the Company of exercise on a form provided
by the Committee (if available). Such notice will specify the number of Shares
subject to the Option to be purchased and will be accompanied by
10
payment in full of the total Exercise Price by cash or check or such other form
of payment as the Company may accept. If permitted by the Committee or the
applicable Option Agreement, payment in full or in part may also be made by:
(a) Delivering Shares already owned by the Participant for more
than six (6) months and having a total Fair Market Value on
the date of such delivery equal to the total Exercise Price;
(b) The delivery of cash by a broker-dealer as a Cashless
Exercise;
(c) The certification of ownership of Shares owned by the
Participant to the satisfaction of the Committee for later
delivery to the Company as specified by the Committee; or
(d) Any combination of the foregoing.
No Shares will be issued until full payment therefor has been made. A
Participant will have all of the rights of a shareholder of the Company holding
the class of Shares subject to such Option (including, if applicable, the right
to vote the shares and the right to receive dividends) when the Participant has
given written notice of exercise, has paid the total Exercise Price, and such
Shares have been recorded on the Company's official shareholder records (or the
records of its transfer agents or registrars) as having been issued and
transferred to the Participant.
6.7. Restrictions on Share Transferability. In addition to the
restrictions imposed by Section 11.7, the Committee may impose such restrictions
on any Shares acquired pursuant to the exercise of an Option as it may deem
advisable or appropriate in its sole discretion, including, but not limited to,
restrictions related to applicable Federal and state securities laws and the
requirements of any national securities exchange or market on which Shares are
then listed or regularly traded.
6.8. Termination by Reason of Death, Disability, or Retirement. Unless
otherwise provided in the Option Agreement or determined by the Committee in its
sole discretion, if a Participant incurs a Termination of Service due to death,
Disability or Retirement, any unexpired and unexercised Options held by the
Participant will thereafter be fully exercisable until the expiration of the
Option Period.
6.9. Other Termination. Unless otherwise provided in the Option
Agreement or determined by the Committee in its sole discretion, if a
Participant incurs a Termination of Service that is involuntary on the part of
the Participant (but is not due to death or Disability or is not with Cause) or
is voluntary on the part of the Participant for Good Reason (but is not due to
Retirement), any Options held by the Participant will terminate, except that
such Options, to the extent then exercisable at the time of such Termination of
Service, may be exercised until the expiration of the shorter of the following
two (2) periods: (a) the thirty (30) consecutive day period commencing on the
date of such Termination of Service, or (b) the date on which the Option Period
expires. If a Participant incurs a Termination of Service which is with Cause,
11
or the Participant voluntarily terminates without Good Reason, all of his
Options will terminate immediately as of the date of such Termination of
Service.
6.10. Special Provision for Incentive Stock Options. Notwithstanding
any other provision of the Plan to the contrary, an Incentive Stock Option will
not be exercisable (a) more than three (3) months after the Participant's
Termination of Service for any reason other than Disability, or (b) more than
one (1) year after the Participant's Termination of Service by reason of
Disability.
SECTION 7
AMENDMENT, TERMINATION, AND DURATION
------------------------------------
7.1. Amendment, Suspension, or Termination. The Board may supplement,
amend, alter or discontinue the Plan in its sole discretion at any time and from
time to time, but no supplement, amendment, alteration or discontinuation will
be made which would impair the rights of a Participant under an Option that has
been granted without the Participant's consent, except that any supplement,
amendment, alteration or discontinuation may be made to (a) avoid a material
charge or expense to the Company or an Affiliate, (b) cause the Plan to comply
with applicable law, or (c) permit the Company or an Affiliate to claim a tax
deduction under applicable law. In addition, subject to the provisions of this
Section 7.1, the Board of Directors, in its sole discretion at any time and from
time to time, may supplement, amend, alter or discontinue the Plan without the
approval of the Company's shareholders (a) to the extent such approval is not
required by applicable law or the terms of a written agreement, and (b) so long
as any such amendment or alteration does not increase the number of Shares
subject to the Plan (other than pursuant to Section 4.5) or increase the maximum
number of Options the Committee may Option to an individual Participant under
the Plan. The Committee may supplement, amend, alter or discontinue the terms of
any Option theretofore granted, prospectively or retroactively, on the same
conditions and limitations (and exceptions to limitations) as apply to the Board
under the foregoing provisions of this Section 7.1, and further subject to any
approval or limitations the Board may impose.
7.2. Duration of The Plan and Shareholder Approval. The Plan is
effective on the Effective Date and, subject to Section 7.1 (regarding the
Board's right to supplement, amend, alter, or discontinue the Plan), will remain
in effect thereafter; provided, however, that the provisions of the Plan are
contingent upon the Plan being approved by the shareholders of the Company
within twelve (12) months from the date of the adoption of the Plan by the
Company's Board of Directors; and provided further, however, that no Incentive
Stock Option may be granted under the Plan after the tenth anniversary of the
Effective Date.
12
SECTION 8
TAX WITHHOLDING
---------------
8.1. Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to the payment or exercise of an Option, the Company will have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy all Federal, state and local income
and employment taxes required to be withheld with respect to the payment or
exercise of such Option.
8.2. Withholding Arrangements. The Committee, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may permit
a Participant to satisfy such tax withholding obligation, in whole or in part,
by (a) electing to have the Company withhold otherwise deliverable Shares
(except in the case of exercises of Incentive Stock Options), (b) delivering to
the Company Shares then owned by the Participant having a Fair Market Value
equal to the amount required to be withheld, or (c) borrowing an amount from the
Company equal to the amount required to be withheld; provided, however, that any
shares delivered to the Company satisfy the ownership requirements specified in
Section 6.6(a). The amount of the withholding requirement will be deemed to
include any amount that the Committee agrees may be withheld at the time any
such election is made, not to exceed, in the case of income tax withholding, the
amount determined, based upon minimum statutory requirements, by using the
maximum federal, state, or local marginal income tax rates applicable to the
Participant with respect to the Option on the date that the amount of income tax
to be withheld is determined. The Fair Market Value of the Shares to be withheld
or delivered will be determined as of the date that the taxes are required to be
withheld.
SECTION 9
CHANGE IN CONTROL
-----------------
9.1. Change in Control. Notwithstanding any other provision of the Plan
to the contrary, in the event of a Change in Control of the Company, all Options
granted under the Plan that are outstanding and that are not then exercisable
will, unless otherwise provided for in the Option Agreements applicable thereto,
become immediately exercisable, as of the first date the Change in Control has
been deemed to have occurred.
9.2. Definition. For purposes of Section 9.1, a "Change in Control"
means a transaction or series of related transactions pursuant to which (i) a
majority of the outstanding shares of common stock of the Company, on a fully
diluted basis, are owned by any Person (as hereinafter defined) or group of
Persons who, as of March 15, 2002, own (together with their affiliates) an
aggregate of less than fifty percent (50%) of the outstanding shares of common
stock of the Company on a fully diluted basis; (ii) the Company consolidates
with, merges into or with or effects any plan of share exchange with any
unaffiliated or unrelated entity and, after giving effect to such consolidation,
merger or share exchange, a majority of the outstanding shares of common stock
of the Company, on a fully diluted basis, are owned by any Person or
13
group of Persons who, as of March 15, 2002, own (together with their affiliates)
an aggregate of less than fifty percent (50%) of the outstanding shares of
common stock of the Company on a fully diluted basis; (iii) the Company disposes
of all or substantially all of its assets; or (iv) the Company is liquidated or
dissolved or adopts a plan of liquidation or dissolution.
For purposes of the definition of "Change in Control," (v) a Person or
group of Persons does not include the Chromcraft Revington, Inc. Employee Stock
Ownership Plan Trust which forms a part of the Chromcraft Revington, Inc.
Employee Stock Ownership Plan (the "ESOP"), or any other employee benefit plan,
subsidiary or Affiliate of the Company, and (vi) the outstanding shares of
common stock of the Company, on a fully diluted basis, include all shares owned
by the ESOP, whether allocated or unallocated to the accounts of participants,
thereunder.
For purposes of the definition of "Change in Control," the term
"Person" means any natural person, proprietorship, partnership, corporation,
limited liability company, organization, firm, business, joint venture,
association, trust or other entity and any government agency, body or authority.
SECTION 10
LEGAL CONSTRUCTION
------------------
10.1. Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also will include the feminine, the
plural will include the singular, and the singular will include the plural.
10.2. Severability. In the event any provision of the Plan is held
illegal or invalid for any reason, the illegality or invalidity will not affect
the remaining parts of the Plan, and the Plan will be construed and enforced as
if the illegal or invalid provision had never been included herein.
10.3. Requirements of Law. The grant of Options and the issuance of
Shares will be subject to all applicable statutes, laws, rules and regulations
and to such approvals and requirements as may be required from time to time by
any governmental authorities or any securities exchange or market on which the
Shares are then listed or traded.
10.4. Governing Law. Except to the extent preempted by the Federal laws
of the United States of America, the Plan and all Option Agreements will be
construed in accordance with and governed by the laws of the State of Indiana
without giving effect to any choice or conflict of law provisions, principles or
rules (whether of the State of Indiana or any other jurisdiction) that would
cause the application of any laws of any jurisdiction other than the State of
Indiana.
10.5. Headings. The descriptive headings and sections of the Plan are
provided herein for convenience of reference only and will not serve as a basis
for interpretation or construction.
14
10.6. Mistake of Fact. Any mistake of fact or misstatement of facts
will be corrected when it becomes known by a proper adjustment to an Option or
Option Agreement.
10.7. 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.
SECTION 11
MISCELLANEOUS
-------------
11.1. No Effect on Employment or Service. Neither the Plan nor the
grant of any Options or the execution of any Option Agreement will confer on any
Participant any right to continued employment by the Company or will interfere
with or limit in any way the right of the Company to terminate any Participant's
employment or service at any time, with or without Cause. Employment with the
Company and its Affiliates is on an at-will basis only, unless otherwise
provided by a written employment agreement, if any, between the Participant and
the Company or an Affiliate, as the case may be. If there is any conflict
between the provisions of the Plan and an employment agreement between a
Participant and the Company, the provisions of this Plan will control,
including, but not limited to, the vesting and nonforfeiture of any Options.
11.2. No Company Obligation. Unless required by applicable law, the
Company, an Affiliate, the Board of Directors and the Committee will not have
any duty or obligation to affirmatively disclose material information to a
record or beneficial holder of Shares or an Option, and such holder will have no
right to be advised of any material information regarding the Company or any
Affiliate at any time prior to, upon, or in connection with the receipt,
exercise, or distribution of an Option. In addition, the Company, an Affiliate,
the Board of Directors, the Committee, and any attorneys, accountants, advisors
or agents for any of the foregoing will not provide any advice, counsel or
recommendation to any Participant with respect to, without limitation, any
Option, any exercise of an Option or any tax consequences relating to an Option.
11.3. Participation. No Employee will have the right to be selected to
receive an Option or, having been selected, to be selected to receive a future
Option. Participation in the Plan will not give any Participant any right or
claim to any benefit under the Plan, unless such right or claim has specifically
accrued under the terms of the Plan.
11.4. Liability; Indemnification; and Release. No member of the Board,
the Committee or any officer or employee of the Company or any Affiliate will be
personally liable for any action, failure to act, decision, or determination
made in good faith in connection with the Plan. By participating in the Plan,
each Participant agrees to release and hold harmless the Company and its
Affiliates (and their respective directors, officers, and employees) and the
Committee from and against any tax liability, including, but not limited to,
interest and penalties, incurred by the Participant in connection with his
receipt of Options and the exercise thereof.
15
Each person who is or has been a member of the Committee or the Board will be
indemnified and held harmless by the Company against and from (a) any loss,
cost, liability or expense (including, but not limited to, attorneys' fees) that
may be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit or proceeding to which he may be a party
or in which he may be involved by reason of any action taken or failure to act
under the Plan or any Option Agreement, and (b) any and all amounts paid by him
in settlement thereof, with the Company's prior written approval or paid by him
in satisfaction of any judgment in any such claim, action, suit or proceeding
against him; provided, however, that he will give the Company an opportunity, at
the Company's expense, to handle and defend such claim, action, suit or
proceeding before he undertakes to handle and defend the same on his own behalf.
The foregoing right of indemnification will not be exclusive of any other rights
of indemnification to which such persons may be entitled under the Company's
Articles of Incorporation or By-Laws, by contract, as a matter of law or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
11.5. Successors. All obligations of the Company under the Plan, with
respect to Options granted hereunder, will be binding on any successor to the
Company, whether or not the existence of such successor is the result of a
Change in Control of the Company.
The Company will not, and will not permit its Affiliates to, recommend,
facilitate or agree or consent to a transaction or series of transactions which
would result in a Change in Control of the Company unless and until the person
or persons or entity or entities acquiring control of the Company as a result of
such Change in Control agree(s) to be bound by the terms of the Plan insofar as
it pertains to Options theretofore granted and agrees to assume and perform the
obligations of the Company and its Successor (as defined in subsection 4.5.2)
hereunder.
11.6. Beneficiary Designations. Any Participant may designate, on such
forms as may be provided by the Committee for such purpose, a Beneficiary to
whom any vested but unpaid Option will be paid in the event of the Participant's
death. Each such designation will revoke all prior designations by the
Participant and will be effective only if given in a form and manner acceptable
to the Committee. In the absence of any such designation, any vested benefits
remaining unpaid at the Participant's death will be paid to the Participant's
estate and, subject to the terms of the Plan and of the applicable Option
Agreement, any unexercised vested Option may be exercised by the administrator
or executor of the Participant's estate.
11.7. Nontransferability of Options. Except as provided in Sections
11.7.1 and 11.7.2, no Option can be sold, transferred, assigned, margined,
encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise
disposed of, whether by operation of law, whether voluntarily or involuntarily
or otherwise, other than by will or by the laws of descent and distribution. In
addition, no Option will be subject to execution, attachment or similar process.
Any attempted or purported transfer of an Option in contravention of the Plan or
an Option Agreement will be null and void ab initio and of no force or effect
whatsoever. All rights with respect to an Option granted to a Participant will
be exercisable during his lifetime only by the Participant.
16
11.7.1. Limited Transfers of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may, in its sole
discretion, permit the transfer of Nonqualified Stock Options by a
Participant to (a) the Participant's spouse, any children or lineal
descendants of the Participant or the Participant's spouse or the
spouse(s) of any such children or lineal descendants ("Immediate Family
Members"), (b) a trust or trusts for the exclusive benefit of Immediate
Family Members, or (c) a partnership or limited liability company in
which the Participant and/or the Immediate Family Members are the only
equity owners, (collectively, "Eligible Transferees"); provided,
however, that, in the event the Committee permits the transferability
of Nonqualified Stock Options granted to the Participant, the Committee
may subsequently, in its sole discretion, amend, modify, revoke or
restrict, without the prior consent, authorization or agreement of the
Eligible Transferee, the ability of the Participant to transfer
Nonqualified Stock Options that have not been already transferred to an
Eligible Transferee. An Option that is transferred to an Immediate
Family Member will not be transferable by such Immediate Family Member,
except for any transfer by such Immediate Family Member's will or by
the laws of descent and distribution upon the death of such Immediate
Family Member. Incentive Stock Options will not be transferable
pursuant to this Section 11.7.
11.7.2. Exercise by Eligible Transferees. In the event the
Committee, in its sole discretion, permits the transfer of Nonqualified
Stock Options by a Participant to an Eligible Transferee under Section
11.7.1, the Options transferred to the Eligible Transferee must be
exercised by such Eligible Transferee and, in the event of the death of
such Eligible Transferee, by such Eligible Transferee's executor or
administrator only in the same manner, to the same extent and under the
same circumstances (including, but not limited to, the time period
within which the Options must be exercised) as the Participant could
have exercised such Options. The Participant, or in the event of his
death, the Participant's estate, will remain liable for all federal,
state, local and other taxes applicable upon the exercise of a
Nonqualified Stock Option by an Eligible Transferee.
11.8. No Rights as Shareholder. No Participant (or any Beneficiary)
will have any of the rights or privileges of a shareholder of the Company with
respect to any Shares issuable pursuant to an Option (or the exercise thereof),
unless and until certificates representing such Shares have been recorded on the
Company's official shareholder records (or the records of its transfer agents or
registrars) as having been issued and transferred to the Participant (or his or
her Beneficiary).
11.9. Mitigation of Excise Tax. Subject to any other agreement
providing for the Company's indemnification of the tax liability described
herein, if any payment or right accruing to a Participant under the Plan
(without the application of this Section 11.9), either alone or together with
other payments or rights accruing to the Participant from the Company or an
Affiliate ("Total Payments"), would constitute a "parachute payment', as defined
in Code Section 280G and regulations thereunder, such payment or right will be
reduced to the largest amount or greatest right that will result in no portion
of the amount payable or right accruing under the Plan being subject to an
excise tax under Code Section 4999 or being disallowed as a
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deduction under Code Section 280G. The determination of whether any reduction in
the rights or payments under the Plan is to apply will be made by the Committee
in good faith after consultation with the Participant, and such determination
will be conclusive and binding on the Participant. The Participant will
cooperate in good faith with the Committee in making such determination and
providing the necessary information for this purpose.
11.10. Funding. Shares to be distributed under the Plan will be issued
directly by the Company from its authorized but unissued Shares or acquired by
the Company on the open market, or a combination thereof. Neither the Company
nor any of its Affiliates will be 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 or any of its Affiliates may,
however, in its sole discretion, set funds aside in investments to meet any
anticipated obligations under the Plan. Any such action or set-aside will not be
deemed to create a trust of any kind between the Company or any of its
Affiliates and any Participant or other person entitled to benefits under the
Plan or to constitute the funding of any Plan benefits. Consequently, any person
entitled to a payment under the Plan will have no rights greater than the rights
of any other unsecured general creditor of the Company or its Affiliates.
11.11. Use of Proceeds. The proceeds received by the Company from the
sale of Shares pursuant to the Plan will be used for general corporate purposes.
CHROMCRAFT REVINGTON, INC.
DATED: _________________
By: _________________________________
ATTEST:
By: ____________________________________
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