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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Chromcraft Revington, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
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CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
CHROMCRAFT REVINGTON, INC.
1100 NORTH WASHINGTON STREET
DELPHI, INDIANA 46923
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD WEDNESDAY MAY 4, 2005
----------------------------
To the Stockholders of Chromcraft Revington, Inc.:
The annual meeting of stockholders of Chromcraft Revington, Inc. (the
"Company") will be held on Wednesday, May 4, 2005 at 9:00 a.m., Indianapolis
time, at the Canterbury Hotel, 123 South Illinois Street, Indianapolis, Indiana,
for the following purposes:
1. To elect five directors of the Company, each for a term expiring at
the 2006 annual meeting of stockholders and until his successor is
duly elected and qualified.
2. To ratify the appointment of KPMG LLP as the independent auditors
for the Company for the year ending December 31, 2005.
3. To transact such other business as may properly come before the
annual meeting of stockholders and any adjournment or postponement
thereof.
The Board of Directors has fixed the close of business on March 7, 2005 as
the record date for determining stockholders entitled to notice of and to vote
at the annual meeting of stockholders.
Whether or not you plan to attend the annual meeting, you are urged to
complete, date and sign the enclosed proxy and return it promptly in the
envelope provided so that your shares are represented and voted at the annual
meeting.
By Order of the Board of Directors,
Frank T. Kane
Vice President-Finance,
Chief Financial Officer
and Secretary
March 31, 2005
CHROMCRAFT REVINGTON, INC.
1100 NORTH WASHINGTON STREET
DELPHI, INDIANA 46923
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PROXY STATEMENT
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GENERAL INFORMATION
This proxy statement is furnished to the stockholders of Chromcraft
Revington, Inc. (the "Company") in connection with the solicitation by the Board
of Directors of the Company of proxies to be voted at the annual meeting of
stockholders of the Company to be held on Wednesday, May 4, 2005 at 9:00 a.m.,
Indianapolis time, at the Canterbury Hotel, 123 South Illinois Street,
Indianapolis, Indiana, and at any and all adjournments or postponements of the
meeting. This proxy statement and accompanying form of proxy were first mailed
to stockholders of the Company on or about March 31, 2005.
The cost of soliciting proxies will be borne by the Company. In addition
to use of the mail, proxies may be solicited personally or by telephone by
directors, officers and certain employees of the Company who will not be
specially compensated for such solicitation. The Company also will request
brokerage firms, nominees, custodians and fiduciaries to forward the proxy
solicitation materials relating to the annual meeting to the beneficial owners
of common stock and will reimburse such institutions for the cost of forwarding
these materials.
Any stockholder giving a proxy has the right to revoke it at any time
before the proxy is exercised. Revocation may be made by written notice
delivered to the Secretary of the Company, by executing and delivering to the
Company a proxy bearing a later date or by attending and voting in person at the
annual meeting.
The shares represented by proxies received by the Company will be voted as
instructed by the stockholders giving the proxies. In the absence of specific
instructions, proxies will be voted as follows:
- FOR the election as directors of the five persons named as nominees
in this proxy statement, each of whom will hold office for a term
expiring at the 2006 annual meeting of stockholders and until his
successor is duly elected and qualified; and
- FOR the approval of the ratification of KPMG LLP as the independent
auditors for the Company for the fiscal year ending December 31,
2005.
If for any reason any director nominee named in this proxy statement
becomes unable or unwilling to serve, the persons named as proxies in the
accompanying form of proxy will have authority to vote for a substitute nominee
should the Board of Directors determine to nominate another person. The
accompanying form of proxy gives discretionary authority to the persons named as
proxies to vote in accordance with the directions of the Board of Directors on
any other matters that may properly come before the annual meeting.
The principal executive office of the Company is located at 1100 North
Washington Street, Delphi, Indiana 46923.
VOTING SECURITIES
The Company has one class of capital stock outstanding consisting of
common stock. The close of business on March 7, 2005 has been fixed as the
record date (the "Record Date") for determining stockholders of the Company
entitled to notice of and to vote at the annual meeting and any adjournments or
postponements thereof. On the Record Date, the Company had 6,003,202 shares of
common stock outstanding and entitled to vote. There are no other outstanding
securities of the Company entitled to vote.
Each share of common stock of the Company is entitled to one vote,
exercisable in person or by proxy. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of common stock is necessary to
constitute a quorum so that business may be conducted at the annual meeting.
Shares voting, abstaining or withholding authority to vote on any matter at the
annual meeting will be counted as present for purposes of determining a quorum.
Assuming a quorum is present at the annual meeting, the election of directors
will be determined by a plurality of the votes cast. The ratification of the
appointment of KPMG LLP and any other matters that may properly come before the
meeting will be approved by the affirmative vote of the holders of at least a
majority of the shares present, in person or by proxy, at the annual meeting.
Instructions on the accompanying proxy to withhold authority to vote for
one or more of the director nominees will result in those nominees receiving
fewer votes. In counting the votes with respect to the ratification of the
appointment of KPMG LLP as the independent auditors for the Company and any
other matters that may properly come before the meeting, abstentions will have
the same effect as votes against the matter. Shares that are the subject of a
broker non-vote will be deemed to be not voted.
Each participant in the Employee Stock Ownership Plan (the "ESOP") of the
Company will receive a form to use to provide voting instructions to LaSalle
Bank N.A., the trustee for the ESOP, for the shares allocated to the
participant's account under the ESOP as of the Record Date. Voting instructions
to the trustee should be completed, dated, signed and returned in the envelope
provided by April 27, 2005. Voting instructions of individual participants will
be kept confidential by the ESOP trustee and will not be disclosed to the
Company.
Unless its fiduciary duties require otherwise, the ESOP trustee will vote
(i) the shares allocated to participants' accounts under the ESOP in accordance
with the instructions received in a timely manner from participants, and (ii)
the shares that have not been allocated to participants' accounts in accordance
with the directions of the Benefit Plans Administrative Committee of the Company
(the "Benefits Committee"). Any shares allocated to a participant's account for
which the ESOP trustee has not received voting instructions in a timely manner
will be voted by the trustee in accordance with the directions of the Benefits
Committee.
Each participant in the Savings Plan of the Company will receive a form to
use to provide voting instructions to T. Rowe Price Trust Company, Inc., the
trustee for the Savings Plan, for the shares credited to the participant's
account under the Savings Plan as of the Record Date. Voting instructions to the
trustee should be completed, dated, signed and returned in the envelope provided
by April 27, 2005. Voting instructions of individual participants will be kept
confidential by the Savings Plan trustee and will not be disclosed to the
Company.
Unless its fiduciary duties require otherwise, the Savings Plan trustee
will vote the shares credited to participants' accounts under the Savings Plan
in accordance with the instructions received in a timely manner from
participants. Any shares credited to a participant's account for which the
Savings Plan
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trustee has not received voting instructions in a timely manner will be voted by
the trustee in accordance with the directions of the Benefits Committee.
ITEM 1 - ELECTION OF DIRECTORS
The first item to be acted upon at the annual meeting of stockholders will
be the election of five directors of the Company, each of whom will serve a term
expiring at the 2006 annual meeting of stockholders and until his successor is
duly elected and qualified.
The Company expects each nominee for election as a director named in this
proxy statement to be able to serve if elected. If any nominee is not able to
serve, proxies will be voted in favor of the remainder of those nominated and
may be voted for substitute nominees selected by the Board of Directors, unless
the Board chooses to reduce the number of directors of the Company. The persons
named on the enclosed proxy intend to vote each proxy, if properly signed and
returned, FOR the election of each of the five director nominees identified in
this proxy statement, unless indicated on the proxy that the stockholder's vote
should be withheld from any or all of the nominees.
Michael E. Thomas, the Company's Chairman, President and Chief Executive
Officer, has decided to retire as a director and officer of the Company
effective immediately following the 2005 annual meeting of stockholders. In
addition, Warren G. Wintrub, who is 71 years old and who has served as a
director of the company since 1992, has decided to retire from the Board of
Directors and all Board committees effective immediately following the 2005
annual meeting of stockholders, which is the expiration of his current term.
The Search Committee of the Board of Directors is currently conducting a
national search for Mr. Thomas' successor. When this process has been completed,
the Board intends to appoint the new Chief Executive Officer to the Board of
Directors and elect him as Chairman of the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR EACH OF
THE NOMINEES NAMED BELOW.
Set forth below are the name and age of each director nominee, his
principal occupation and his directorships with other public companies and
nonprofit organizations. All of the nominees currently are members of the Board
of Directors of the Company.
RONALD H. BUTLER, age 55, was appointed to the Board of Directors in July,
2004. Mr. Butler is a director and the President of Pete & Mac's Pet Resort
Franchise, LLC, a privately-held company that serves as a franchisor of custom
pet boarding, day care and grooming facilities. Previously, Mr. Butler served as
the Chief Executive Officer of Three Dog Bakery, Inc., a manufacturer of pet
foods. Mr. Butler also serves as a director of ARXX Building Products (Ontario,
Canada) and has held senior management positions at various companies, including
PETsMART and Payless Cashways, Inc.
STEPHEN D. HEALY, age 58, has served as the President of Cochrane
Furniture Company, Inc. (a subsidiary of the Company) since October, 1997. He
served as President of Korn Industries, Incorporated (a subsidiary of the
Company) from December, 2000 to July, 2002. From November, 1996 to September,
1997, Mr. Healy served as Executive Vice President of Cochrane Furniture
Company, Inc. He served as the Vice President-Finance of Chromcraft Corporation
(a subsidiary of the Company) from February, 1991 to October, 1996. Mr. Healy
has served as a director of the Company since 2002.
DAVID L. KOLB, age 66, served as the Chairman of the Board of Directors of
Mohawk Industries, Inc., a flooring manufacturer, from 1988 until 2004 and as
Chief Executive Officer from 1988 until 2000.
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From 1980 until 1988, Mr. Kolb served as the President of Mohawk Carpet
Corporation. Mr. Kolb currently serves as a director of Mohawk Industries, Inc.,
Aaron Rents, Inc. and Paxar Corp. Aaron Rents, Inc. is a retailer specializing
in the rental and sale of residential and office furniture, consumer electronics
and home appliances and accessories. Paxar Corp. is a provider of identification
and tracking solutions for retailers and apparel manufacturers. He also is a
trustee of the Schenck School and Oglethorpe University. Mr. Kolb has served as
a director of the Company since 1992.
LARRY P. KUNZ, age 70, served as the President and Chief Operating Officer
of Payless Cashways, Inc., a retailer of building materials and home improvement
products, from 1986 until his retirement in 1993. Mr. Kunz has served as a
director of the Company since 1992.
THEODORE L. MULLETT, age 63, has been a management consultant since 1998.
From 1965 until his retirement in 1998, Mr. Mullett was a certified public
accountant with KPMG LLP and was a partner with that firm from 1973 until 1998.
Mr. Mullett has served as a director of the Company since 2002.
ITEM 2 - RATIFICATION OF THE APPOINTMENT OF
KPMG LLP AS INDEPENDENT AUDITORS
The second item of business to be acted upon at the annual meeting of
stockholders will be the ratification of the appointment of KPMG LLP as the
independent auditors for the Company for the fiscal year ending December 31,
2005. Although ratification by stockholders is not required, the Board of
Directors has determined that, as a matter of proper corporate governance, it is
desirable to ask stockholders to ratify the Audit Committee's appointment of
KPMG LLP as the Company's independent auditors. In the event the appointment of
KPMG LLP is not ratified by the stockholders, the Audit Committee will consider
the appointment of other independent auditors for the fiscal year ending
December 31, 2005. The persons named on the enclosed proxy intend to vote each
proxy, if properly signed and returned, FOR the ratification of KPMG LLP as the
independent auditors for the Company for the fiscal year ending December 31,
2005, unless indicated otherwise on the stockholder's proxy.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING FOR THE RATIFICATION OF THE
APPOINTMENT OF KPMG LLP AS THE INDEPENDENT AUDITORS FOR THE COMPANY.
EXECUTIVE OFFICERS OF THE COMPANY
Mr. Thomas and Mr. Kane are the executive officers of the Company, and
each serves a term of office of one year and until his successor is duly elected
and qualified. Mr. Healy is not an officer of the Company but serves as
President of one of the Company's subsidiaries and is a director of the Company.
Although Mr. Healy is not an officer of the Company, he may be deemed to be an
executive officer under certain rules and regulations of the Securities and
Exchange Commission. Mr. Healy's term of office as President of Cochrane
Furniture Company, Inc. is one year and until his successor is duly elected and
qualified.
MICHAEL E. THOMAS, age 63, has served as the Chairman of the Board since
March 15, 2002 and as the President and Chief Executive Officer of the Company
since its organization in 1992. Mr. Thomas has decided to retire as a director
and officer of the Company immediately following the 2005 annual meeting of
stockholders.
FRANK T. KANE, age 51, has served as the Vice President-Finance, Chief
Financial Officer, Secretary and Treasurer of the Company since its organization
in 1992.
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STEPHEN D. HEALY, age 58, has served as the President of Cochrane
Furniture Company, Inc. (a subsidiary of the Company) since October, 1997. He
served as President of Korn Industries, Incorporated (a subsidiary of the
Company) from December, 2000 until July, 2002. From November, 1996 to September,
1997, Mr. Healy served as Executive Vice President of Cochrane Furniture
Company, Inc. Mr. Healy served as the Vice President-Finance of Chromcraft
Corporation (a subsidiary of the Company) from February, 1991 to October, 1996.
STOCK OWNERSHIP INFORMATION
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the number of shares of common stock of the
Company beneficially owned as of the Record Date by each director and executive
officer of the Company, as well as the number of shares beneficially owned by
all directors and executive officers as a group.
NUMBER OF SHARES PERCENT OF
NAME OF PERSON BENEFICIALLY OWNED (1) COMMON STOCK
-------------- ---------------------- ------------
Ronald H. Butler 10,000 *
Stephen D. Healy 105,416(2) 1.7%
Frank T. Kane 127,264(3) 2.1%
David L. Kolb 26,000 *
Larry P. Kunz 14,000 *
Theodore L. Mullett 15,200 *
Michael E. Thomas 403,760(4) 6.3%
Warren G. Wintrub 28,000 *
Directors and Executive
Officers as a Group 729,640 11.0%
(8 Persons)
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*Represents less than 1% of the outstanding common stock of the Company.
(1) Includes 655,385 shares which directors and executive officers have the
right to acquire pursuant to stock options exercisable within sixty days
of the Record Date as follows: Ronald H. Butler, 10,000; Stephen D. Healy,
104,476; Frank T. Kane, 124,844; David L. Kolb, 10,000; Larry P. Kunz,
10,000; Theodore L. Mullett, 15,000; Michael E. Thomas, 371,065; and
Warren G. Wintrub, 10,000.
(2) Includes 940 shares held for the benefit of Mr. Healy under the Chromcraft
Revington Employee Stock Ownership Plan.
(3) Includes 1,324 shares and 896 shares held for the benefit of Mr. Kane
under the Chromcraft Revington Savings Plan and the Chromcraft Revington
Employee Stock Ownership Plan, respectively.
(4) Includes 30,252 shares and 893 shares held for the benefit of Mr. Thomas
under the Chromcraft Revington Savings Plan and the Chromcraft Revington
Employee Stock Ownership Plan, respectively.
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OWNERS OF MORE THAN FIVE PERCENT OF COMMON STOCK
The stockholders listed in the following table are known by management to
beneficially own more than 5% of the outstanding shares of the Company's common
stock as of the Record Date.
NAME AND ADDRESS NUMBER OF SHARES PERCENT OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED COMMON STOCK
------------------- ------------------ ------------
Chromcraft Revington Employee 1,990,000 33.2%
Stock Ownership Plan Trust (1)
1100 North Washington Street
Delphi, Indiana 46923
FMR Corp. (2) 957,300 16.0%
82 Devonshire Street
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc. (3) 650,000 10.8%
100 East Pratt Street
Baltimore, Maryland 21202
Royce & Associates, LLC (4) 474,900 7.9%
1414 Avenue of the Americas
New York, New York 10019
Michael E. Thomas (5) 403,760 6.3%
1100 North Washington Street
Delphi, Indiana 46923
--------------
(1) Unless its fiduciary duties require otherwise, the trustee of the ESOP
trust will vote (i) the shares allocated to participants' accounts under
the ESOP in accordance with the instructions received in a timely manner
from participants, and (ii) the shares that have not been allocated to
participants' accounts in accordance with the directions of the Benefits
Committee. Any shares allocated to a participant's account for which the
trustee has not received voting instructions in a timely manner will be
voted by the trustee in accordance with the directions of the Benefits
Committee. The Benefits Committee consists of Michael E. Thomas, Chairman,
President and Chief Executive Officer of the Company, and Frank T. Kane,
Vice President-Finance, Chief Financial Officer, Secretary and Treasurer
of the Company. The members of the Benefits Committee are appointed by the
Board of Directors. The Board intends to appoint a successor to Mr. Thomas
on the Benefits Committee upon Mr. Thomas' retirement from the Company
immediately following the 2005 annual meeting of stockholders.
(2) Based solely on information provided by FMR Corp. in a Schedule 13G filed
with the Securities and Exchange Commission on May 10, 2002. Included as
reporting persons in the Schedule 13G are FMR Corp., Edward C. Johnson 3d,
Chairman of FMR Corp., and Abigail P. Johnson, a director of FMR Corp. The
reporting persons have sole power to dispose of 957,300 shares. Fidelity
Management & Research Company, a wholly-owned subsidiary of FMR Corp.,
also is reported as a beneficial owner of the 957,300 shares.
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(3) Based solely on information provided by T. Rowe Price Associates,
Inc. ("Price Associates") in a Schedule 13G filed with the
Securities and Exchange Commission on February 14, 2005. These
securities are owned by T. Rowe Price Small-Cap Value Fund, Inc.,
which owns 650,000 shares, representing 10.8% of the outstanding
shares of common stock, and which Price Associates serves as
investment advisor with power to direct investments and/or sole
power to vote the securities. For purposes of the reporting
requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities.
However, Price Associates expressly disclaims that it is, in fact,
the beneficial owner of such securities.
(4) Based solely on information provided by Royce & Associates, LLC in a
Schedule 13G filed with the Securities and Exchange Commission on
January 24, 2005. Royce & Associates, LLC is the only reporting
person identified in the Schedule 13G and it has sole power to
dispose of 474,900 shares.
(5) Includes 371,065 shares which Mr. Thomas has the right to acquire
pursuant to stock options, 30,252 shares held for the benefit of Mr.
Thomas under the Chromcraft Revington Savings Plan and 893 shares
held for the benefit of Mr. Thomas under the Chromcraft Revington
Employee Stock Ownership Plan. Of the total shares reported, Mr.
Thomas has sole voting power over all of the shares listed and no
dispositive power over the 30,252 shares held for his benefit under
the Chromcraft Revington Savings Plan and the 893 shares held for
his benefit under the Chromcraft Revington Employee Stock Ownership
Plan.
CHANGE IN CONTROL
In 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 Company common stock, comprising approximately 59% of the Company's
issued and outstanding shares of common stock on that date, to the Company and
the Chromcraft Revington Employee Stock Ownership Plan Trust (the "ESOP Trust"),
which forms a part of the ESOP. With respect to the 5,695,418 shares of the
Company's common stock sold by Court Square, 3,695,418 shares were repurchased
by the Company (the "Company Stock Transaction") and 2,000,000 shares were
purchased by the ESOP Trust (the "ESOP Stock Transaction" and together with the
Company Stock Transaction, the "Transaction").
The funds required to pay the total consideration and certain related
expenses of the Transaction were obtained using available cash and bank
borrowings of approximately $45,000,000. Under a term loan and security
agreement (the "ESOP Loan Agreement"), the Company loaned $20,000,000 to the
ESOP Trust to finance the ESOP Stock Transaction. Under the ESOP Loan Agreement,
the ESOP Trust will repay such loan to the Company over a 30-year term at a
fixed rate of interest of 5.48% per annum.
Under the ESOP Loan Agreement, the ESOP Trust pledges shares of the
Company's common stock owned by it (the "Pledged Shares") to the Company as
security for repayment of its obligations thereunder. Under a Pledge and
Security Agreement between the Company and National City Bank, as agent for a
syndicate of banks, the Company pledged the Pledged Shares to the banks.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the federal securities laws, the Company's directors and executive
officers, and any persons beneficially owning more than 10% of the Company's
common stock, are required to report their initial ownership of the Company's
common stock and any subsequent changes in that ownership to the Securities and
Exchange Commission. Specific due dates for these reports have been established
by the
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Securities and Exchange Commission, and the Company is required to disclose in
this proxy statement any failure to file timely the required reports by
directors, executive officers and 10% stockholders of the Company. During 2004,
no director or executive officer was late in filing the required reports with
the Securities and Exchange Commission. In making this disclosure, the Company
has relied solely upon written representations of directors and executive
officers of the Company and copies of reports that those persons have filed with
the Securities and Exchange Commission and provided to the Company.
CERTAIN STOCK REPURCHASES BY THE COMPANY
The Company did not repurchase any shares of its common stock in 2004.
CORPORATE GOVERNANCE AND BOARD MATTERS
INDEPENDENCE AND GOVERNANCE
The Board of Directors has determined that each of the directors standing
for re-election at the 2005 annual meeting, with the exception of Mr. Healy, has
no material relationship with the Company that would interfere with the exercise
of his independent judgment and, accordingly, is independent under the Company's
director independence standards. Mr. Healy is not independent because he serves
as the President of Cochrane Furniture Company, Inc., a subsidiary of the
Company. The Company's director independence standards are the same as the
director independence criteria adopted by the American Stock Exchange as set
forth in Section 121 of the Exchange's Company Guide.
The Board of Directors has adopted a Code of Ethics applicable to its
chief executive officer and senior financial managers, a Code of Business
Conduct and Ethics applicable to its directors, officers and employees and a set
of Corporate Governance Guidelines. Copies of these items are available, without
charge, upon request in writing to Mr. Frank T. Kane, Corporate Secretary,
Chromcraft Revington, Inc., at 1100 North Washington Street, Delphi, Indiana
46923, or by telephone at (765) 564-3500.
BOARD COMMITTEES
The Board of Directors has three standing committees: the Audit Committee,
the Compensation Committee and the Nominating and Corporate Governance
Committee. All members of each of the Committees are non-management directors
who are independent under the criteria adopted by the American Stock Exchange.
Audit Committee. The members of the Audit Committee are Messrs. Mullett
(Chairman), Butler, Kolb, Kunz and Wintrub. Mr. Wintrub will retire as a member
of the Board of Directors and as a member of the Audit Committee when his term
expires at the 2005 Annual Meeting of Stockholders. The Audit Committee held
four meetings in 2004. As specified in its charter, the Audit Committee's
primary objectives are to assist the Board of Directors in its oversight of (i)
the integrity of the financial statements of the Company, (ii) the
qualifications and independence of the Company's independent auditors, (iii) the
performance of the Company's internal audit function, and (iv) the Company's
compliance with applicable legal and regulatory requirements. The Audit
Committee's charter was attached to the Company's proxy statement relating to
the 2004 annual meeting of stockholders and is available upon written request to
the Secretary of the Company.
In addition, among other responsibilities, the Audit Committee appoints,
oversees the performance of and approves the fees of the Company's independent
auditors; reviews and discusses with management and the independent auditors the
Company's annual audited and quarterly financial statements; reviews with
management and the independent auditors the adequacy and effectiveness of the
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Company's internal controls; discusses with management the Company's major
financial risk exposures; assures that the Company maintains an internal audit
function; reviews and recommends any changes to the Company's Code of Ethics
applicable to its chief executive officer and senior financial managers;
annually reviews the Audit Committee's charter and evaluates the Committee's
performance; and prepares the Audit Committee report for inclusion in the
Company's annual meeting proxy statement.
The report of the Audit Committee is included in this proxy statement on
page 20.
Mr. Wintrub serves on the Company's Audit Committee as well as the audit
committees of four other public companies or entities. The Company's Board of
Directors determined that Mr. Wintrub's service on these audit committees would
not impair his ability to serve effectively on the Company's Audit Committee.
Compensation Committee. The members of the Compensation Committee are
Messrs. Kolb (Chairman), Butler, Kunz, Mullett and Wintrub. Mr. Wintrub will
retire as a member of the Board of Directors and as a member of the Compensation
Committee when his term expires at the 2005 Annual Meeting of Stockholders. The
Compensation Committee held five meetings in 2004. As specified in its charter,
the Compensation Committee's primary objective is to assist the Board of
Directors in fulfilling its responsibilities relating to the compensation of the
executive officers of the Company. The Compensation Committee's charter was
attached to the Company's proxy statement relating to the 2004 annual meeting of
stockholders and is available upon written request to the Secretary of the
Company.
In addition, among other responsibilities, the Compensation Committee
determines the compensation of the Company's chief executive officer and other
executive officers; reviews and approves the Company's goals and objectives
relevant to compensation of the chief executive officer; develops the
philosophies, policies and practices relating to compensation and benefits for
executive management of the Company and its subsidiaries; administers the
Company's stock option plans for key employees and directors; administers the
Company's short term and long term executive incentive plans; reviews and makes
recommendations to the Board of Directors regarding any employment agreements
for executive management of the Company and its subsidiaries; reviews and makes
recommendations to the Board of Directors regarding director compensation;
approves a succession plan developed by management for the Company's chief
executive officer and other executive officers; annually reviews the
Compensation Committee's charter and evaluates the Committee's performance; and
prepares the Compensation Committee report for inclusion in the Company's annual
meeting proxy statement.
The report of the Compensation Committee is included in this proxy
statement beginning on page 18.
Nominating and Corporate Governance Committee. The members of the
Nominating and Corporate Governance Committee are Messrs. Kunz (Chairman),
Butler, Kolb, Mullett and Wintrub. Mr. Wintrub will retire as a member of the
Board of Directors and as a member of the Nominating and Corporate Governance
Committee when his term expires at the 2005 Annual Meeting of Stockholders. The
Nominating and Corporate Governance Committee met two times in 2004. As
specified in its charter, the primary objectives of the Nominating and Corporate
Governance Committee are to assist the Board of Directors by (i) identifying
individuals who are qualified to serve as directors of the Company, (ii)
recommending to the Board the director nominees for election at each annual
meeting of stockholders, (iii) recommending to the Board any matters relating to
the structure, authority and membership of the Board's committees, (iv)
developing and recommending to the Board a set of Corporate Governance
Guidelines applicable to the Company, and (v) overseeing the evaluation of the
Board of Directors. The Nominating and Corporate Governance Committee's charter
was attached to the Company's proxy
9
statement relating to the 2004 annual meeting of stockholders and is available
upon written request to the Secretary of the Company.
In addition, among other responsibilities, the Nominating and Corporate
Governance Committee reviews possible candidates for election to the Company's
Board of Directors; develops a set of qualifications that the Committee will
consider when evaluating potential director nominees; reviews and recommends to
the Board of Directors any changes in the Company's Code of Business Conduct and
Ethics for its directors, officers and employees and its Corporate Governance
Guidelines; oversees the evaluations of executive management of the Company; and
annually reviews the Nominating and Corporate Governance Committee's charter and
evaluates the committee's performance.
Search Committee. The Board of Directors formed a Search Committee in
December, 2004 for the purpose of assisting the Board of Directors to identify
appropriate candidates to serve as the new Chairman and Chief Executive Officer
of the Company. Mr. Thomas, the Company's current Chairman, President and Chief
Executive Officer, will retire immediately following the 2005 annual meeting of
stockholders. The Search Committee has engaged a search firm to assist it in
conducting its search for a new Chairman and Chief Executive Officer. The final
candidate will be selected by the Board of Directors.
The members of the Search Committee consist of Messrs. Butler, Kolb, Kunz,
Mullett and Wintrub. Mr. Wintrub will retire as a member of the Board of
Directors and as a member of the Search Committee when his term expires at the
2005 Annual Meeting of Stockholders. Messrs. Kolb and Kunz serve as co-chairs of
this committee. The Search Committee met once in 2004.
Strategy Committee. The Board of Directors formed a Strategy Committee in
2005 for the purpose of assisting senior management with overall corporate
strategy of the Company. Mr. Butler is the sole member and chair of this
committee.
BOARD MEETINGS
The Board of Directors held eight meetings during 2004. Each director
attended at least 75% of the aggregate of the total number of meetings of the
Board of Directors and of all Board committees of which he is a member.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid an annual retainer
of $20,000, plus a fee of $1,500 for each Board of Directors and committee
meeting attended in person and a fee of $750 for each telephonic meeting of the
Board and committee in which he participates. In addition, the chair of the
Audit Committee receives an annual retainer of $4,500, the chairs of the
Compensation Committee and the Nominating and Corporate Governance Committee
each receive an annual retainer of $3,000, the co-chairs of the Search Committee
each receive an annual retainer of $2,000 and the chair of the Strategy
Committee receives an annual retainer of $4,000. Directors who are employees of
the Company do not receive director or committee fees for their service on the
Board of Directors.
Directors who are not employees of the Company are eligible to participate
in the Directors' Stock Option Plan of the Company. Under this plan, each
director who is not an employee of the Company receives an option to purchase
2,500 shares of common stock on the day following each annual meeting of
stockholders. Any new director who is elected or appointed for the first time to
the Board of Directors receives an initial option to purchase 10,000 shares of
common stock. All stock options granted under this plan vest immediately at the
time of the grant, have an exercise price equal to the fair market
10
value of the underlying shares on the date of the grant and are exercisable for
ten years following the date of each grant.
In 2004, Messrs. Kolb, Kunz, Mullett and Wintrub each received an option
to purchase 2,500 shares of common stock, and Mr. Butler received his initial
option to purchase 10,000 shares of common stock, under the Directors' Stock
Option Plan.
EXECUTIVE SESSIONS OF THE BOARD OF DIRECTORS AND PRESIDING DIRECTOR
Executive sessions of the Board of Directors are those at which only
directors who are not also employees of the Company are present. There were
three executive sessions of the Board of Directors in 2004. Any non-management
director can request that an executive session of the Board be scheduled.
The presiding director is the director who presides over an executive
session of the Board of Directors. The Board of Directors has not designated a
specific director to serve as the presiding director at all executive sessions
of the Board. Instead, the independent directors rotate the presiding director
position among themselves, and a rotation occurs after a director has presided
over an executive session.
CONSIDERATION OF DIRECTOR CANDIDATES
Role of the Nominating and Corporate Governance Committee. The Nominating
and Corporate Governance Committee will consider candidates for Board membership
suggested by the Committee's members, by other members of the Board of Directors
and by stockholders. For existing directors to be nominated for re-election at
an annual meeting, the Nominating and Corporate Governance Committee will
consider the director's performance on the Board, his attendance record at Board
and committee meetings, the needs of the Company and the ability of the director
to continue to satisfy the established director qualifications set forth in the
Company's Corporate Governance Guidelines.
With respect to new members of the Board, the Nominating and Corporate
Governance Committee will consider the needs of the Company and whether the
director satisfies the Committee's established director qualifications. When the
Committee determines a need exists, the Committee will recommend new directors
to replace directors who do not seek re-election, to fill vacancies or to add
members to the Board of Directors in the event the size of the Board is
increased. Once the Committee has identified a prospective director nominee and
has conducted an initial evaluation of the candidate, the Committee will
interview the candidate. If the Committee believes the candidate would be an
appropriate addition to the Board of Directors, it will recommend to the full
Board of Directors that the individual be nominated for election at an annual
meeting of stockholders or be elected to fill a vacancy on the Board. The Board
of Directors determines the director nominees after considering the
recommendation of the Nominating and Corporate Governance Committee.
Suggestions by Stockholders. The Nominating and Corporate Governance
Committee will consider suggestions by stockholders of individuals to serve on
the Board of Directors when it makes its recommendations to the full Board of
Directors of persons to be nominated as directors. Director candidates suggested
by a stockholder will be considered by the Nominating and Corporate Governance
Committee in a manner similar to the way that candidates suggested by a
Committee member or by a member of the Board of Directors are considered. Any
stockholder desiring to make a suggestion to the Nominating and Corporate
Governance Committee of a director nominee should submit to the Committee the
candidate's name and address; a statement of the candidate's business
experience; an identification of other boards of directors and board committees
on which the candidate serves; a statement indicating any relationship between
the candidate and the Company itself, any customer, supplier or competitor of
the Company or the stockholder making the suggestion; a statement that the
candidate would be willing to
11
serve if nominated and elected; an evaluation of the candidate in light of the
Committee's established director qualifications; and any other information
requested by the Committee. These suggestions should be made in writing and
received no later than October 31, 2005 by:
Chair, Nominating and Corporate Governance Committee
Chromcraft Revington, Inc.
1100 North Washington Street
Delphi, Indiana 46923
Stockholders also can nominate individuals for election as directors at
any annual meeting of stockholders in addition to making suggestions to the
Nominating and Corporate Governance Committee as provided above. To make such a
nomination, a stockholder must comply with the procedures set forth in the
Company's By-Laws. Those procedures are contained in Article IX of the By-Laws
and are summarized under the heading "STOCKHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS" on page 22 of this proxy statement.
Qualifications of Directors. When evaluating a prospective director
nominee, the Nominating and Corporate Governance Committee will consider, among
other qualifications, the prospective nominee's:
- level of integrity;
- ability to make sound decisions and to exercise appropriate business
judgment;
- overall business experience;
- knowledge of the Company's industry;
- ability to devote sufficient time and attention to the performance
of his duties as a director;
- independence from the Company and its customers, suppliers and
competitors;
- potential contribution to the range of talent, skill and expertise
needed or appropriate for the Board of Directors;
- ability to represent the interests of the Company's stockholders;
and
- background or experience in financial, accounting or compensation
matters.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders or other interested parties who desire to communicate with
the full Board of Directors, the non-management directors or an individual
director may write to:
Chair, Nominating and Corporate Governance Committee
Chromcraft Revington, Inc.
1100 North Washington Street
Delphi, Indiana 46923
A letter from a stockholder should state the stockholder's name and, if
the stockholder's shares are held in street name, evidence of the stockholder's
ownership of Company common stock. Depending on the subject matter of the
letter, the Chairman will:
- forward the letter to the appropriate director;
- request an officer of the Company to handle the inquiry directly
such as, for example, where the letter contains a request for
routine information about the Company or stock transfer matters or
is primarily commercial in nature; or
- not forward the letter to any director if it relates to an improper
or irrelevant topic.
12
At each Board meeting, the Chairman will present a summary of all letters
received since the last Board meeting that were not forwarded to all directors
and will make those letters available to any director.
ATTENDANCE AT ANNUAL MEETINGS
The Board of Directors has adopted a policy that it expects all Board
members to attend the Company's annual meeting of stockholders. All directors
attended the Company's 2004 annual meeting.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes the annual and long term compensation paid
by the Company to the executive officers of the Company for the years ended
December 31, 2004, 2003 and 2002.
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- -------------------
SHARES
OTHER UNDERLYING LTIP
NAME AND PRINCIPAL BONUS ANNUAL STOCK AWARD ALL OTHER
POSITION YEAR SALARY (1) COMPENSATION OPTIONS (2) COMPENSATION
---------------------- ---- --------- --------- --------------- ---------- ---------- ---------------
Michael E. Thomas 2004 $ 418,000 $ 38,099 $ 136,326(3) 26,464 $ 179,883 $ 246,652(4)
Chairman, President 2003 406,667 99,555 47,610(3) 46,567 244,000 97,411(4)
and Chief Executive 2002 387,500 456,435 55,590(3) 175,000 471,254 60,028(4)
Officer of the Company
Frank T. Kane 2004 $ 218,333 $ 13,267 $ -0- 7,260 $ 50,112 $ 21,199(5)
Vice President- 2003 209,167 34,137 -0- 12,946 66,933 16,475(5)
Finance, Chief 2002 202,000 158,623 -0- 100,000 131,018 505(5)
Financial Officer,
Secretary and
Treasurer of the
Company
Stephen D. Healy 2004 $ 223,000 $ -0- $ -0- -0- $ -0- $ 19,877(6)
President of 2003 215,000 -0- -0- -0- -0- 10,034(6)
Cochrane 2002 207,500 20,483 -0- 100,000 -0- 2,000(6)
Furniture Company,
Inc. (a wholly-owned
subsidiary of the
Company)
----------
(1) The amounts included in this column were earned under the Chromcraft
Revington Short Term Executive Incentive Plan (the "Short Term Incentive
Plan") for the years indicated.
13
(2) The awards under the Chromcraft Revington Long Term Executive Incentive
Plan (the "Long Term Incentive Plan") were paid in two components: 50% in
a single lump sum cash amount and 50% in options to acquire shares of the
Company's common stock. The cash and stock option components of the awards
for 2004, 2003 and 2002 were paid or granted in 2005, 2004 and 2003,
respectively.
(3) Includes amounts reimbursed to Mr. Thomas for taxes incurred on Company
contributions to the Thomas SERP (as defined below) of $109,280, $37,705
and $43,406 for 2004, 2003 and 2002, respectively.
(4) Includes Company contributions to tax qualified retirement plans of
$8,200, $10,034 and $500 for 2004, 2003 and 2002, respectively, Company
contributions pursuant to the Thomas SERP (as defined below) and payments
for retirement benefits reduced under Internal Revenue Code restrictions
of $238,452, $87,378 and $59,528 for 2004, 2003 and 2002, respectively.
(5) Represents Company contributions to tax qualified retirement plans of
$8,200, $9,985 and $505 for 2004, 2003 and 2002, respectively, and
payments for retirement benefits reduced under Internal Revenue Code
restrictions of $12,999, $6,490 and -0- for 2004, 2003 and 2002,
respectively.
(6) Represents Company contributions to tax qualified retirement plans of
$8,200, $10,034 and $2,000 for 2004, 2003 and 2002, respectively, and
payments for retirement benefits reduced under Internal Revenue Code
restrictions of $11,677, -0- and -0- for 2004, 2003 and 2002,
respectively.
Under applicable U.S. federal income tax laws, the Company generally
cannot take a tax deduction for certain compensation paid to the individuals
named in the Summary Compensation Table in excess of $1 million. However,
certain performance-based compensation is fully deductible by the Company if
certain requirements, including stockholder approval, are met. The Short Term
Incentive Plan and the Long Term Incentive Plan were approved by the Company's
stockholders in 2002.
STOCK OPTION GRANTS IN 2004
The following table summarizes certain information concerning stock
options granted in 2004 to the persons named in the Summary Compensation Table,
and the value of the options held by such persons at December 31, 2004. The
exercise price of the stock options equaled the average of the high and low
selling prices of the Company's common stock, as reported by the New York Stock
Exchange on the date of grant. (At the time of the stock option grants made in
2004, the Company's common stock was traded on the New York Stock Exchange. The
Company's common stock began trading on the American Stock Exchange on June 8,
2004.)
14
PERCENT OF POTENTIAL REALIZABLE VALUE
NUMBER OF TOTAL AT ASSUMED ANNUAL RATES OF
SHARES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM (1)
OPTIONS EMPLOYEES EXERCISE EXPIRATION ----------------------------
NAME GRANTED IN 2004 PRICE DATE 5% 10%
----------------- ---------- ---------- -------- ---------- ------------ -------------
Michael E. Thomas 26,464 66.7% $ 13.82 03/01/14 $ 230,005 $ 582,882
Frank T. Kane 7,260 18.3% $ 13.82 03/01/14 $ 63,099 $ 159,905
Stephen D. Healy - - - - - -
----------
(1) These dollar amounts represent a hypothetical increase in the price of the
common stock, less the exercise price, from the date of option grant until
the expiration date of the option at the rate of 5% and 10% per annum
compounded. The actual value, if any, of stock options is dependent on the
future performance of the Company's common stock. There can be no
assurance that the amounts assumed in these columns will be achieved or
that higher amounts will not be achieved.
AGGREGATED OPTION EXERCISES IN 2004 AND YEAR END OPTION VALUES
The following table summarizes certain information concerning stock
options exercised in 2004 by the persons named in the Summary Compensation
Table, and the value of the options held by such persons at December 31, 2004.
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 2004 DECEMBER 31, 2004 (1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------- -------- -------- ----------- ------------- ----------- -------------
Michael E. Thomas - $ - 295,026 58,334 $ 283,067 $ 105,585
Frank T. Kane - $ - 99,912 60,000 $ 93,330 $ 108,600
Stephen D. Healy - $ - 84,476 60,000 $ 121,760 $ 108,600
----------
(1) Value per share is calculated by subtracting the exercise price from the
closing price of the Company's common stock of $12.30 per share on
December 31, 2004, as reported on the American Stock Exchange.
EMPLOYMENT AGREEMENTS
Michael E. Thomas. The Company and Mr. Thomas are parties to an employment
agreement, as amended, which provides, among other items, for the employment by
the Company of Mr. Thomas as the Company's Chairman of the Board, President and
Chief Executive Officer through April 23, 2005. The employment agreement
provides for automatic one-year extensions, unless the Company or Mr. Thomas
gives notice of termination at least 180 days before the termination date. The
Company may terminate the employment of Mr. Thomas with or without cause (as
defined in the employment agreement) or in the event of the disability of Mr.
Thomas. If the Company terminates the employment of Mr. Thomas with cause, then
he is entitled to receive his monthly base salary for a three-month period
following his
15
termination. If the Company terminates the employment of Mr. Thomas without
cause, then he is entitled to receive an amount equal to twice the sum of his
then-current annual base salary plus the higher bonus earned by him under the
Short Term Incentive Plan in the two fiscal years prior to termination. In the
event of termination due to disability, Mr. Thomas will continue to receive his
then-current annual base salary, less any payments equivalent to those provided
by the Company's benefit plans and by any government sponsored program, for a
24-month period following the termination.
If Mr. Thomas terminates his employment following a change in control of
the Company (as defined in his employment agreement) and, in addition, a
reduction in his duties, a diminution in his salary or benefits or a relocation
of his principal place of employment occurs, then the Company will be required
to pay him, as severance pay, a lump sum amount equal to twice the sum of his
then-current annual base salary plus the higher bonus earned by him under the
Short Term Incentive Plan in the two fiscal years prior to the change in
control.
Under his employment agreement, Mr. Thomas receives a base salary of not
less than $400,000 during each year that the employment agreement is in effect
and is entitled to participate in the incentive compensation plans and programs
generally available to executives of the Company. The Company also pays the
premiums on insurance covering Mr. Thomas' life having a total face amount of
$1.5 million.
In addition, Mr. Thomas may not compete against the Company during his
employment by the Company and during the two-year period following termination
of his employment.
Mr. Thomas has given his notice of termination of the employment
agreement, which means the agreement will terminate on April 23, 2005. Mr.
Thomas will retire as the Chairman of the Board, President and Chief Executive
Officer of the Company effective immediately following the 2005 annual meeting
of stockholders.
Frank T. Kane. The Company also has entered into an employment agreement
with Frank T. Kane which provides, among other items, for the employment by the
Company of Mr. Kane as the Company's Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer through March 15, 2006. The employment
agreement provides for automatic extensions for successive one-year periods upon
expiration of the initial term, or any renewal term, unless the Company or Mr.
Kane gives notice of termination at least 180 days before the termination date.
The Company may terminate the employment of Mr. Kane with or without cause (as
defined in the employment agreement) or in the event of the disability of Mr.
Kane. Mr. Kane may terminate his employment with or without good reason (as
defined in the employment agreement). If the Company terminates Mr. Kane's
employment with cause or if Mr. Kane terminates his employment without good
reason, then the Company is required to pay him, in a lump sum, his monthly base
salary for a three-month period following his termination. If the Company
terminates Mr. Kane's employment without cause or if Mr. Kane terminates his
employment with good reason, then the Company is required to pay him in 24 equal
monthly installments an amount equal to twice the sum of his then-current annual
base salary and the higher cash bonus under the Short Term Incentive Plan (up to
the target award rate) paid to him in the two fiscal years preceding
termination. In the event of termination due to disability, Mr. Kane will
receive his then-current annual base salary earned through the date of
termination.
If Mr. Kane terminates his employment following a change in control of the
Company (as defined in the employment agreement) and, in addition, a reduction
in his duties, a diminution in his salary or benefits or a relocation of his
principal place of employment occurs, then the Company will be required to pay
him, as severance pay, a lump sum amount equal to twice the sum of his
then-current annual base salary and the higher cash bonus under the Short Term
Incentive Plan (up to the target award rate) paid to him in the two fiscal years
preceding termination.
16
Under his employment agreement, Mr. Kane receives a base salary of not
less than $205,000 during each year that the employment agreement is in effect
and will be entitled to participate in the incentive compensation plans and
programs generally available to executives of the Company.
Under his employment agreement, Mr. Kane may not compete against the
Company during his employment by the Company and during the two-year period
following termination of his employment. However, if the Company elects not to
extend the term of Mr. Kane's employment agreement, then Mr. Kane may not
compete against the Company for a one-year period following termination of his
employment.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Effective as of March 31, 1992, the Company established pursuant to Mr.
Thomas' employment agreement a supplemental executive retirement plan for the
purpose of providing supplemental retirement benefits to Mr. Thomas upon his
retirement from the Company (the "Thomas SERP"). The manner by which payments of
the Thomas SERP were to be made was specified in a supplemental retirement
benefits agreement dated August 21, 1992, as amended, between the Company and
Mr. Thomas. The supplemental retirement benefits agreement provides that the
Thomas SERP is implemented through a whole life insurance policy as to which the
Company will pay up to 15 annual premium payments through 2007; provided,
however, that the Company is not obligated to pay the premiums on the insurance
policy upon the termination of Mr. Thomas' employment.
On March 3, 2004, the Company and Mr. Thomas entered into a supplement to
the employment agreement and the supplemental retirement benefits agreement.
Among other items, the supplement (i) clarifies the calculation, timing and
funding of the Thomas SERP, and (ii) amends certain provisions of Mr. Thomas'
employment agreement and supplemental retirement benefits agreement.
The Thomas SERP currently provides that Mr. Thomas will receive lifetime
retirement income from the Company equal to 60% of the average of his salary
plus any bonus earned under the Short Term Incentive Plan during Mr. Thomas'
final three calendar years of employment with the Company, but reduced by
offsets of the annuitized amount of the account balances attributable to Company
contributions (and investment earnings thereon) under certain employee benefit
plans and insurance policies as well as the annualized benefit payable under a
defined benefit plan of a predecessor company. The Thomas SERP is payable upon
any termination of Mr. Thomas' employment (except a termination with cause) or
upon his retirement before or after he attains age 65.
The supplement also provides that Mr. Thomas will receive a minimum annual
retirement benefit from the Company equal to $400,000 per year, reduced by the
offsets described above, regardless of the amounts of his salary and any bonuses
paid under the Short Term Incentive Plan during his final three calendar years
of employment and regardless of whether Mr. Thomas retires before or after age
65. Based upon the formula contained in the supplement, which governs the amount
of the Thomas SERP, the annual benefit payable under the Thomas SERP (but
excluding the applicable offsets) upon Mr. Thomas' retirement from the Company
in 2005 would equal the minimum annual retirement benefit of $400,000.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of five non-employee directors:
Messrs. Butler, Kolb, Kunz, Mullett and Wintrub. No member of the Compensation
Committee is or was formerly an officer or employee of the Company or any of its
subsidiaries. No executive officer of the Company serves as a member of the
board of directors or compensation committee of any entity that has one or
17
more executive officers of that entity serving as a member of the Board of
Directors or Compensation Committee of the Company.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the report set forth below on
executive compensation for the year ended December 31, 2004. The functions of
the Compensation Committee are described above under the heading "CORPORATE
GOVERNANCE AND BOARD MATTERS."
An objective of the Compensation Committee is to help assure that
executive compensation bears a reasonable relationship to corporate performance,
business strategy and increases in stockholder value. The following principles
currently serve as guidelines for compensation recommendations and decisions of
the Compensation Committee:
- Reward executives through appropriate incentive compensation and
ownership in the Company for achievement of short term and long term
business goals and strategies.
- Align executive officer compensation with the success of the Company
such that compensation is based, in part, upon performance in order
to create an environment that rewards performance.
- Provide a total executive compensation package that enables the
Company to attract and retain appropriate executives.
The Compensation Committee periodically reviews information relating to
comparable companies in order to establish general guidelines for executive
officer compensation. In addition, the Compensation Committee has retained an
independent compensation consultant to review the competitiveness of the
executive compensation program in relation to other comparable companies,
including those in the peer group set forth under the heading "STOCK PERFORMANCE
GRAPH."
The principal elements of the compensation program for executive officers,
including Mr. Thomas, the Chief Executive Officer of the Company, are summarized
below.
BASE SALARY
Base salary levels are set based upon the requirements of the executive's
employment agreement with the Company, competitive market conditions and the
executive's job performance. In determining the 2004 base salary increases for
Mr. Thomas and the other executive officers of the Company, the Compensation
Committee considered several factors, including the executive's
responsibilities, duties, performance and experience, as well as base salaries
for executives holding similar positions at comparable companies, but no
specific weights were placed on any of these factors.
For 2004, Mr. Thomas received a base salary of $418,000, representing a
2.8% increase in his base salary from 2003. Under his employment agreement with
the Company, Mr. Thomas is to receive a base salary of not less than $400,000
per year.
SHORT TERM INCENTIVE PLAN
The Company maintains the Short Term Incentive Plan to focus the efforts
of its executive officers on the short term performance of the Company. Each
year, the Compensation Committee sets
18
performance standards that must be satisfied for an award to be made under the
Short Term Incentive Plan and corresponding award rates. Awards under the Short
Term Incentive Plan are payable in cash. For 2004, the performance factors for
Mr. Thomas were based on the Company's (i) sales, (ii) cash flow, and (iii) net
earnings.
In 2004, Mr. Thomas earned an award of $38,099 under the Short Term
Incentive Plan.
LONG TERM INCENTIVE PLAN
The Company maintains the Long Term Incentive Plan to focus the efforts of
its executive officers on the long term performance of the Company. Each year,
the Compensation Committee sets performance standards that must be satisfied for
an award to be made under the Long Term Incentive Plan and corresponding award
rates. For the three-year performance period ended December 31, 2004,
performance factors for Mr. Thomas were based on the Company's (i) sales, (ii)
cash flow, (iii) net earnings, (iv) return on equity compared to the average
return on equity for the Company's peer group and (v) reduction in bank debt.
Awards under the Long Term Incentive Plan are paid 50% in a single lump sum cash
amount and 50% in options to acquire shares of the Company's common stock. Stock
options awarded under the Long Term Incentive Plan are subject to the provisions
of the 1992 Stock Option Plan.
Mr. Thomas earned a Long Term Incentive Plan award of $179,883
attributable to the 2002-2004 performance period, with 50% of the award paid in
a cash sum of $89,941 and 50% paid in the form of a stock option grant of 17,705
shares of the Company's common stock valued under the Black-Scholes option
pricing model.
MEMBERS OF THE COMPENSATION COMMITTEE
David L. Kolb, Chairman
Ronald H. Butler
Larry P. Kunz
Theodore L. Mullett
Warren G. Wintrub
INDEPENDENT AUDITORS
GENERAL
KPMG LLP audited the financial statements of the Company for the year
ended December 31, 2004 and has been appointed by the Audit Committee of the
Board of Directors to audit the financial statements of the Company for the year
ending December 31, 2005. A representative of KPMG LLP will be present at the
annual meeting, will have an opportunity to make a statement, if he or she
desires, and will be available to respond to appropriate questions.
FEES TO INDEPENDENT AUDITORS
The following table sets forth the fees billed or to be billed by KPMG LLP
to the Company for services performed in connection with the years ended
December 31, 2004 and 2003.
19
2004 2003
--------- ---------
Audit fees (1) $ 221,300 $ 201,250
Audit-related fees (2) 18,000 16,500
Tax fees -0- -0-
All other fees (3) 161,076 51,906
--------- ---------
Total $ 400,376 $ 269,656
========= =========
(1) Audit fees represented fees for professional services rendered in
connection with the audit of the Company's financial statements for the
years ended December 31, 2004 and 2003 and the review of the Company's
financial statements included in its Quarterly Reports on Form 10-Q filed
in 2004 and 2003.
(2) Audit-related fees represented fees for professional services rendered in
connection with audits of the Company's employee benefit plans.
(3) All other fees consisted of non-audit services primarily related to
compliance with Section 404 of the Sarbanes-Oxley Act of 2002.
KPMG LLP is permitted to provide only services to the Company that have
been pre-approved by the Audit Committee.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has furnished the report set forth below on the
Company's audited financial statements for the year ended December 31, 2004. The
functions of the Audit Committee are described above under the heading
"CORPORATE GOVERNANCE AND BOARD MATTERS."
The Audit Committee reviewed and discussed with management and the
independent auditors the Company's audited financial statements as of and for
the year ended December 31, 2004. Management has the primary responsibility for
the Company's financial statements and the reporting process, including the
Company's system of internal controls. The Company's independent auditors, KPMG
LLP, audited the Company's financial statements as of and for the year ended
December 31, 2004 and expressed an opinion that the financial statements present
fairly, in all material respects, the consolidated financial position, results
of operations and cash flows of the Company and its subsidiaries as of and for
such year in conformity with accounting principles generally accepted in the
United States of America.
The Audit Committee discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61.
Additionally, the Committee has received from the independent auditors the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 and has discussed with the independent auditors their
independence. The Committee relies on the information and representations
provided to it by management and the independent auditors.
Based on these reviews and discussions, the Audit Committee recommended to
the Board of Directors, and the Board has approved, that the audited financial
statements of the Company be included in the Company's Annual Report on Form
10-K for the year ended December 31, 2004 filed with the Securities and Exchange
Commission.
MEMBERS OF THE AUDIT COMMITTEE
Theodore L. Mullett, Chairman
Ronald H. Butler
David L. Kolb
Larry P. Kunz
Warren G. Wintrub
20
STOCK PERFORMANCE GRAPH
The graph set forth below compares the five-year cumulative total
stockholder return of the Company's common stock with the cumulative total
stockholder return of (i) the Russell 2000(R) Index, (ii) the NYSE Market Index
and (iii) an industry peer group index compiled by the Company that consists of
several companies. The graph assumes $100 was invested on January 1, 2000 in the
Company's common stock, the NYSE Market Index, the Russell 2000(R) Index and the
peer group index and assumes the reinvestment of dividends, if any.
The Company has determined to use the Russell 2000(R) Index rather than
the NYSE Market Index for its stock performance graph because shares of the
Company's common stock are no longer traded on the New York Stock Exchange.
[STOCK PERFORMANCE GRAPH]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
--------------------------- FISCAL YEAR ENDING ----------------------------
COMPANY/INDEX/MARKET 12/31/1999 12/29/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004
Chromcraft Revington Inc 100.00 95.24 102.67 124.29 108.00 117.14
Customer Selected Stock List 100.00 91.00 113.31 123.68 128.86 120.86
NYSE Market Index 100.00 102.38 93.26 76.18 98.69 111.45
Russell 2000 Index 100.00 95.68 96.66 75.80 110.19 129.47
The Customer Selected Stock List is made up of the following securities:
BASSETT FURNITURE IND
FLEXSTEEL INDUSTRIES INC
KIMBALL INTERNAT B
LA-Z-BOY INCORPORATED
ROW COMPANIES THE
STANLEY FURNITURE INC
The peer group includes the following companies: Bassett Furniture Industries,
Inc., Flexsteel Industries, Inc., Kimball International, Inc., La-Z-Boy
Incorporated, Rowe Furniture Corporation and Stanley Furniture Company, Inc.
Bush Industries, Inc., a member of the peer group prior to 2004, is now a
private company and has been excluded from the peer group. Calculations for this
graph were prepared by CoreData, Inc. of Richmond, Virginia.
21
ANNUAL REPORT AND PROXY STATEMENT
A copy of the Company's 2004 annual report to stockholders, including the
audited consolidated financial statements as of and for the year ended December
31, 2004, is enclosed with this proxy statement. The 2004 annual report to
stockholders does not constitute proxy soliciting material.
In an effort to reduce printing costs and postage fees, the Company has
adopted a practice whereby stockholders who have the same address and last name
and who do not participate in electronic delivery of proxy materials will
receive only one copy of this proxy statement and the 2004 annual report unless
one or more of these stockholders notifies the Company that they wish to receive
individual copies of these materials. The Company will deliver promptly upon
written or oral request a separate copy of this proxy statement and its 2004
annual report to any stockholder at a shared address to which a single copy of
those materials was sent.
If a stockholder shares an address with another stockholder and received
only one copy of this proxy statement and the annual report this year but would
like to receive a separate copy of these materials in the future, or if a
stockholder received multiple copies of this proxy statement and the 2004 annual
report but would like to receive a single copy of the Company's proxy statement
and annual report in the future, please contact the Company.
Stockholders may contact the Company by mail at 1100 North Washington
Street, Delphi, Indiana 46923 or by telephone at (765) 564-3500. In either case,
you should direct your communication to Mr. Frank T. Kane, Corporate Secretary
of the Company.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
In addition to the notice requirements described below, stockholder
proposals desired to be considered for inclusion in the Company's proxy
soliciting materials relating to the 2006 annual meeting of stockholders must be
received by the Company at its principal executive office no later than
December 1, 2005 and must be submitted in accordance with all rules and
regulations under the Securities Exchange Act of 1934.
Stockholders desiring to make a director nomination or a proposal for any
business or matter at any annual or special meeting of stockholders of the
Company must comply with the notice procedures provided in the Company's
By-Laws. Those procedures are summarized below. A complete copy of the Company's
By-Laws was filed as an exhibit to the Company's Form 10-Q for the quarter ended
October 2, 2004 and is available on the Internet website of the Securities and
Exchange Commission at http://www.sec.gov.
Nominations for the election as directors and proposals for any business
or matter to be presented at any annual or special meeting of stockholders may
be made by any stockholder of record of the Company entitled to vote in the
election of directors or on the business or matter to be presented, as the case
may be, or by the Board of Directors of the Company. In order for a stockholder
to make any such nomination or proposal, the stockholder must give notice
thereof in writing by certified first class United States mail, return receipt
requested, or by receipted overnight delivery to the Corporate Secretary of the
Company. Such notice must be received by the Company not later than the
following date: (i) with respect to any annual meeting of stockholders, not less
than 120 days or more than 180 days prior to the first anniversary of the date
of the notice for the previous year's annual meeting of stockholders, or (ii)
with respect to any special meeting of stockholders, not more than 15 days
following the date of the notice for such special meeting. No notice of any kind
under this procedure is required for any
22
nominations for the election as directors or any proposals for any business or
matter made by the Board of Directors of the Company.
Each such notice given by a stockholder with respect to nominations for
the election of directors must set forth as to each nominee: (i) the name, age,
address and telephone number of the nominee, (ii) the principal occupation or
employment of the nominee, (iii) the number of shares of stock of the Company
beneficially owned by the nominee, and (iv) any arrangement pursuant to which
the nomination is made or the nominee will serve or may be elected. The
stockholder making such nominations must also promptly provide any other
information relating to his nominees as may be reasonably requested by the
Company.
Each such notice given by a stockholder with respect to proposals for any
business or other matter to be presented at any meeting of stockholders must set
forth as to each matter: (i) a brief description of the business or matter
desired to be presented at the meeting and the reasons for conducting such
business at the meeting, (ii) the name and address, as they appear on the
Company's list of stockholders for the meeting, of the stockholder making such
proposal, (iii) the class and number of shares of stock of the Company
beneficially owned by the stockholder, and (iv) any material interest of the
stockholder in such proposal. The stockholder making such proposal must also
promptly provide any other information relating to his proposal as may be
reasonably requested by the Company.
If any nomination or proposal is not made in accordance with the
requirements of this notice procedure, the chairman of the annual or special
meeting of stockholders at which such nomination or proposal is sought to be
presented may determine that the nomination or proposal was not made in
accordance with the notice procedure and, in such event, he may declare to the
meeting that the defective nomination or proposal is out of order and will be
disregarded and not presented for a vote of the stockholders. This notice
procedure does not require the Company to hold any meeting of stockholders for
the purpose of considering any nomination or proposal made by any stockholder.
DISCRETIONARY VOTING AND OTHER MATTERS
As of the date of this proxy statement, the Board of Directors knows of no
matters other than the two items of business identified in the attached Notice
of Annual Meeting of Stockholders to come before the annual meeting. If other
matters properly come before the annual meeting, the persons named in the
enclosed proxy will have authority to vote pursuant to such proxy at the annual
meeting in accordance with the directions of the Company's Board of Directors.
The information under the headings "Compensation Committee Report on
Executive Compensation" and "Report of the Audit Committee" does not constitute
soliciting material and is not filed or incorporated by reference into any other
Company filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934.
By Order of the Board of Directors,
Frank T. Kane
Vice President-Finance,
Chief Financial Officer,
and Secretary
March 31, 2005
23
CHROMCRAFT REVINGTON, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE AT THE 2005
ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints STEPHEN D. HEALY and FRANK T. KANE,
and each of them singly, as proxies, each having the power to appoint his
substitute, to represent and to vote all shares of common stock of Chromcraft
Revington, Inc. (the "Company") that the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held on May 4, 2005, and at any adjournment
or postponement thereof, with all of the powers the undersigned would possess if
personally present, as follows:
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
ANNUAL MEETING OF STOCKHOLDERS OF
CHROMCRAFT REVINGTON, INC.
MAY 4, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
-- Please detach along perforated line and mail in the envelope provided. --
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [x]
1. ELECTION OF DIRECTORS. To elect as directors the FOR AGAINST ABSTAIN
nominees named below to hold office until the 2006 2. RATIFICATION OF APPOINTMENT OF KPMG LLP. [ ] [ ] [ ]
annual meeting of stockholders and until their Ratification of the appointment of KPMG LLP
respective successors are duly elected and qualified. as the independent auditors for the Company
NOMINEES: for the year ending December 31, 2005.
[ ] FOR ALL NOMINEES ( ) Ronald H. Butler
( ) Stephen D. Healy 3. OTHER MATTERS. In their discretion, on such other matters as may
[ ] WITHHOLD AUTHORITY ( ) David L. Kolb properly come before the annual meeting of stockholders and any
FOR ALL NOMINEES ( ) Larry P. Kunz adjournment or postponement thereof.
( ) Theodore L. Mullett
[ ] FOR ALL EXCEPT THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO DIRECTION IS GIVEN,
(See instruction below) THIS PROXY WILL BE VOTED FOR THE ELECTION AS DIRECTORS OF ALL NOMINEES
NAMED ABOVE AND FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS
THE INDEPENDENT AUDITORS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER
31, 2005. WITH RESPECT TO ANY OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE ANNUAL MEETING OF STOCKHOLDERS, THE PROXIES NAMED HEREIN WILL HAVE
THE AUTHORITY TO VOTE ON SUCH MATTERS AND INTEND TO VOTE IN ACCORDANCE
WITH THE DIRECTIONS OF THE COMPANY'S BOARD OF DIRECTORS.
INSTRUCTION: To withhold authority to vote for any
individual nominee(s), mark "FOR ALL EXCEPT" and fill
in the circle next to each nominee you wish to
withhold, as shown here: ( )
To change the address on your account, please check
the box at right and indicate your new address in the
address space above. Please note that changes to the
registered name(s) on the account may not be submitted
via this method. [ ]
Signature of Stockholder Date: Signature of Stockholder Date:
NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a
corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.