Chromcraft Revinton, Inc.
1100 N. Washington Street
P.O. Box 238
Delphi, IN 46923
April 1, 1999
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 25049
Re: Chromcraft Revington, Inc.
SEC File No. 1-13970
Definitive Annual Meeting Proxy Materials
Ladies and Gentlemen:
We are herewith filing, via EDGAR, with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, the definitive proxy
statement and related form of proxy to be used in connection with the 1999
Annual Meeting of Stockholders of Chromcraft Revington, Inc. (the "Company"),
together with the required cover page in the form set forth in Schedule 14A.
Such proxy statement and form of proxy were first mailed to stockholders of the
Company today.
If any member of the staff of the Commission has any questions or comments
concerning this filing, please contact the undersigned.
Very truly yours,
/s/ Frank T. Kane
-------------
Frank T. Kane
Vice President - Finance
Enclosures
cc: Nicholas J. Chulos, Esq.
SCHEDULE 14A INFORMATION STATEMENT
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 Rule 240.14a-11(c) or Rule 240.14a-12
CHROMCRAFT REVINGTON, INC.
--------------------------
(Name of Registrant as Specified in its Charter)
Not Applicable
--------------------------
(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)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
CHROMCRAFT REVINGTON, INC.
1100 N. Washington Street
Delphi, Indiana 46923
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FRIDAY, APRIL 30, 1999
To the Stockholders of
Chromcraft Revington, Inc.:
The annual meeting of stockholders of Chromcraft Revington, Inc. will be
held on Friday, April 30, 1999 at 9:00 a.m., local time, at the Canterbury
Hotel, 123 S. Illinois Street, Indianapolis, Indiana for the following purposes:
1. To elect seven (7) directors;
2. To transact such other business as may properly come before the annual
meeting and any adjournment thereof.
The Board of Directors has fixed the close of business on March 9, 1999 as
the record date for determining stockholders entitled to notice of and to vote
at the annual meeting.
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 so your vote
can be recorded. If you are present at the meeting and desire to do so, you may
revoke your proxy and vote in person.
By Order of the Board of Directors,
Frank T. Kane
Secretary
April 2, 1999
YOUR VOTE IS IMPORTANT
Please complete, date, sign and promptly return your
proxy in the enclosed envelope, whether or not
you plan to attend the meeting in person.
PROXY STATEMENT
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 Friday, April 30, 1999 at 9:00 a.m.,
local time, at the Canterbury Hotel, 123 S. Illinois Street, Indianapolis,
Indiana, and at any and all adjournments of such meeting. This Proxy Statement
and accompanying form of proxy were first mailed to stockholders of the Company
on or about April 2, 1999.
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 soliciting. The Company also will request
brokerage houses, nominees, custodians and fiduciaries to forward soliciting
material to the beneficial owners of stock and will reimburse such institutions
for the cost of forwarding the material.
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 or by executing and delivering to the
Company a proxy bearing a later date.
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 for the election as directors of the seven
persons named as nominees in this Proxy Statement. If for any reason any
director nominee 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. Any other matters that may properly come before the annual
meeting will be acted upon by the persons named as proxies in the accompanying
form of proxy in accordance with their best judgment.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The Company has one class of outstanding capital stock consisting of common
stock. On March 9, 1999, the Company had 10,771,748 shares of common stock
outstanding and entitled to vote. There are no other outstanding securities of
the Company entitled to vote. The close of business on March 9, 1999 has been
fixed as the record date for determining stockholders entitled to notice of and
to vote at the annual meeting and any adjournments thereof.
Each share of common stock is entitled to one vote, exercisable in person
or by proxy. The presence, in person or by proxy, of a majority of the
outstanding shares of common stock is necessary to constitute a quorum. Shares
voting, abstaining or withholding authority to vote on any issue will be counted
as present for purposes of determining a quorum. The election of directors will
be determined by a plurality of the votes cast. Abstentions, broker non-votes,
and instructions on the accompanying proxy card to withhold authority to vote
for one or more of the nominees will result in those nominees receiving fewer
votes. Action on any other matters to come before the meeting must be approved
by an affirmative vote of a majority of the shares present in person or by
proxy.
1
The stockholders listed in the following table are known by management to
own beneficially more than 5% of the outstanding shares of the Company's common
stock on March 9, 1999.
Name and Address Number of Shares Percent of
of Beneficial Owner Beneficially Owned Common Stock
------------------- ------------------ ------------
399 Venture Partners, Inc. 5,695,418 (1) 52.87%
399 Park Avenue
New York, New York 10043
T. Rowe Price Associates, Inc. 1,060,000 (2) 9.84%
100 E. Pratt Street
Baltimore, Maryland 21202
Wood, Struthers & Winthrop 567,300 (3) 5.27%
Management Corporation
140 Broadway
New York, New York 10005
(1) Represents sole dispositive power over all 5,695,418 shares and sole
voting power over 5,244,426 of those shares. 399 Venture Partners,
Inc. is a wholly-owned subsidiary of Citigroup Inc.
(2) Represents sole dispositive power over all 1,060,000 shares and sole
voting power over 40,000 of those shares. These securities are owned
by various individual and institutional investors, including the T.
Rowe Price Small-Cap Value Fund, Inc., which owns 1,000,000 shares,
representing 9.28% of the shares outstanding, for which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment adviser
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.
(3) Represents sole dispositive power over 566,700 shares and sole voting
power over 503,970 of those shares. Wood, Struthers & Winthrop
Management Corporation is a subsidiary of The Equitable Companies
Incorporated.
2
ELECTION OF DIRECTORS
Seven directors are to be elected to hold office for a term of one year and
until their respective successors are elected and qualified. Each of the
nominees is now serving as a director of the Company and was previously elected
by the stockholders. Each of the nominees has signified his willingness to
serve if elected. The Board of Directors recommends a vote "FOR" each of the
nominees. Set forth below are the name and age of each nominee, his principal
occupation for the past five years and his directorships with other companies.
Bruce C. Bruckmann, age 45, has served as Managing Director of Bruckmann,
Rosser, Sherrill & Company, Inc., an investment banking firm, since February,
1995. Prior to joining Bruckmann, Rosser, Sherrill & Company, Inc., he was
employed at Citicorp Venture Capital, Ltd., where he served as Managing Director
from February, 1994 until January, 1995 and as Vice President since 1983. He is
also a director of AmeriSource Distribution Corporation, Cort Business Services
Corporation, Mohawk Industries, Inc., Jitney Jungle Stores of America, Inc.,
Anvil Knitwear, Inc., Town Sports International, Inc., Mediq, Incorporated and
Penhall International Corp. Mr. Bruckmann was first elected as a Director of
the Company in 1994.
David L. Kolb, age 60, has been Chairman of the Board of Directors and
Chief Executive Officer of Mohawk Industries, Inc., a manufacturer of carpeting,
since 1988. From July, 1980 until December, 1988, Mr. Kolb served as President
of Mohawk Carpet Corporation. Mr. Kolb serves as a director of First Union
National Bank of Georgia and Polyfibron Technologies, Inc. Mr. Kolb was first
elected as a Director of the Company in 1992.
Larry P. Kunz, age 64, was President and Chief Operating Officer of Payless
Cashways, Inc. from 1986 until his retirement in 1993. Prior to joining Payless
Cashways, Inc., Mr. Kunz served as President and Chief Executive Officer of Ben
Franklin Stores, Inc. Mr. Kunz serves as a director of Valentine Radford
Communications, Inc. Mr. Kunz was first elected as a Director of the Company in
1992.
H. Martin Michael, age 57, has served as the Executive Vice President of
the Company since its organization in 1992. Mr. Michael has served as the
President of Chromcraft Corporation since July, 1990. Mr. Michael was first
elected as a Director of the Company in 1992.
M. Saleem Muqaddam, age 52, serves as Vice President of Citicorp Venture
Capital, Ltd. and Vice President of 399 Venture Partners, Inc., which owns
52.87% of the Company's outstanding common stock. Mr. Muqaddam serves as a
director of Consolidated Furniture Corporation, Fairwood Corporation, Pamida
Holdings Corporation and Plantronics, Inc. Mr. Muqaddam was first elected as a
Director of the Company in 1992.
Michael E. Thomas, age 57, has served as the President and Chief Executive
Officer of the Company since its organization in 1992. Mr. Thomas was first
elected as a Director of the Company in 1992.
Warren G. Wintrub, age 65, was a Partner in the accounting firm of Coopers
& Lybrand from 1962 until his retirement in 1992. While at Coopers & Lybrand,
he served as a member of the Executive Committee from 1976 through 1988 and as
Chairman of the Retirement Committee from 1979 through 1992. Mr. Wintrub serves
as a director of Corporate Property Associates 10, Inc., Corporate Property
Associates 12, Inc., Carey Institutional Properties, Inc. and Getty Petroleum
Corp. Mr. Wintrub was first elected as a Director of the Company in 1992.
3
COMMON STOCK BENEFICIALLY OWNED BY DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth information on the shares of common stock of
the Company beneficially owned on March 9, 1999 by each director and executive
officer and by all directors and executive officers as a group.
Number of Shares Percent of
Name of Person Beneficially Owned (1) Common Stock
-------------- ---------------------- ------------
Bruce C. Bruckmann 26,000 *
Frank T. Kane 102,149 (2) *
David L. Kolb 16,000 *
Larry P. Kunz 10,000 *
H. Martin Michael 220,825 (3) 2.01%
M. Saleem Muqaddam 10,000 *
Michael E. Thomas 382,616 (4) 3.44%
Warren G. Wintrub 468,992 (5) 4.35%
Directors and Executive
Officers as a Group (8 persons) 1,236,582 10.79%
* Less than 1%
(1) Includes 692,208 shares which officers and directors have the right to
acquire pursuant to stock options exercisable within sixty days of the
date of this Proxy Statement as follows: Bruce C. Bruckmann, 10,000;
Frank T. Kane, 100,758; David L. Kolb, 10,000; Larry P. Kunz, 10,000;
H. Martin Michael, 189,626; M. Saleem Muqaddam, 10,000; Michael E.
Thomas, 361,824; and directors and officers as a group (including the
named persons), 692,208.
(2) Includes 1,191 shares held by a trust under the Chromcraft Revington
Savings Plan.
(3) Includes 31,199 shares held by a trust under the Chromcraft Revington
Savings Plan.
(4) Includes 20,242 shares held by a trust under the Chromcraft Revington
Savings Plan.
(5) Includes 450,992 shares subject to an irrevocable proxy granted by 399
Venture Partners, Inc., the beneficial owner of 52.87% of the
Company's common stock.
Under 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 Securities and Exchange Commission, and the Company is required to
disclose in this Proxy Statement any failure to file timely the required reports
4
by directors, executive officers and 10% stockholders of the Company. During
1998, no director or executive officer was delinquent 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.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held five meetings during 1998. Each
incumbent director attended at least 75% of the aggregate of all meetings of the
Board of Directors and all meetings of committees of the Board of Directors of
which he is a member.
The Company has an Audit Committee and a Compensation Committee as standing
committees of the Board of Directors. There is no nominating committee. The
entire Board of Directors reviews the qualifications of persons to serve on the
Board of Directors and selects the nominees.
Audit Committee. The members of the Audit Committee are Warren G. Wintrub,
Chairman, Bruce C. Bruckmann, David L. Kolb and Larry P. Kunz, all of whom are
outside directors. The Audit Committee provides assistance to the Board of
Directors in matters relating to accounting and financial reporting practices of
the Company, and the quality and integrity of the financial reports of the
Company. The Audit Committee makes recommendations to the Board of Directors as
to the selection and retention of the independent accountants for the Company;
meets with the independent accountants and the Company's financial management to
review the scope of the audit and audit procedures to be utilized and, at the
conclusion of the audit, to review the audit including recommendations of the
independent accountants; reviews with the independent accountants and the
Company's financial management, the adequacy and effectiveness of the accounting
and financial controls of the Company; reviews the financial statements
contained in the annual report to stockholders with management and the
independent accountants with respect to the disclosure and content of the
statements; and provides opportunity for the independent accountants to meet
with members of the Audit Committee without members of management being present.
There was one meeting of the Audit Committee during 1998.
Compensation Committee. The members of the Compensation Committee are
Larry P. Kunz, Chairman, Bruce C. Bruckmann, M. Saleem Muqaddam and Warren G.
Wintrub, all of whom are outside directors. The Compensation Committee reviews
the Company's compensation philosophy and programs and determines the
compensation to be paid to the executive officers of the Company. The
Compensation Committee also reviews and makes recommendations concerning outside
director compensation and administers the Company's 1992 Stock Option Plan, as
amended, and executive incentive plans. During 1998, the Compensation Committee
engaged an independent compensation consultant as an advisor. There were four
meetings of the Compensation Committee during 1998.
5
DIRECTOR COMPENSATION
Directors who are not employees of the Company are paid an annual fee of
$15,000, plus a fee of $1,000 for each Board of Directors meeting attended and a
fee of $500 for each telephonic meeting. For committee meetings not held on the
same day as a Board of Directors meeting, a director receives a fee of $1,000
for each meeting attended and $500 for each telephonic meeting. Directors
serving as committee chairs additionally receive a $2,000 annual cash retainer.
Directors who are employees of the Company are not compensated for service on
the Board of Directors.
EXECUTIVE COMPENSATION
The following table summarizes, for each of the years ended December 31,
1998, 1997 and 1996, the compensation paid by the Company and its subsidiaries
to the chief executive officer and other executive officers of the Company.
Summary Compensation Table
Long Term
Annual Compensation Compensation Awards
--------------------------------- -------------------------
Name and Other Annual Stock Options LTIP All Other
Principal Position Year Salary Bonus Compensation (Shares) Payout (6) Compensation
------------------ ---- --------- --------- ------------ ------------- ---------- ------------
Michael E. Thomas 1998 $ 268,717 $ 238,136 $ 52,543 (1) 18,000 $ 199,008 $ 85,399 (2)
President and Chief 1997 $ 235,417 $ 117,688 $ 52,317 (1) 24,862 $ -0- $ 87,636 (2)
Executive Officer 1996 $ 224,667 $ 279,667 $ 52,733 (1) -0- $ -0- $ 76,570 (2)
H. Martin Michael 1998 $ 204,333 $ -0- $ 25,492 (3) 14,000 $ 29,954 $ 54,603 (4)
Executive Vice 1997 $ 194,500 $ 102,404 $ 28,915 (3) 10,000 $ -0- $ 57,701 (4)
President 1996 $ 186,000 $ 208,058 $ 25,713 (3) -0- $ -0- $ 49,356 (4)
Frank T. Kane 1998 $ 153,667 $ 90,786 $ -0- 14,000 $ 60,696 $ 6,798 (5)
Vice President- 1997 $ 145,833 $ 51,094 $ -0- 8,000 $ -0- $ 7,686 (5)
Finance, Chief 1996 $ 138,833 $ 103,300 $ -0- -0- $ -0- $ 4,686 (5)
Financial Officer
and Secretary
(1) Includes amounts reimbursed to executive for taxes incurred on Company
contributions to a Supplemental Executive Retirement Plan ("SERP") of
$47,748, $47,346 and $49,392 for 1998, 1997 and 1996, respectively.
(2) Company contributions to defined contribution plans of $11,200, $9,600
and $9,000 for 1998, 1997 and 1996, respectively, and Company
contributions pursuant to the Company's SERP and a non-qualified
supplemental retirement plan of $74,199, $78,036 and $67,570 for 1998,
1997 and 1996, respectively.
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(3) Includes amounts reimbursed to executive for taxes incurred on Company
contributions to a SERP of $24,895, $23,837 and $25,057 for 1998, 1997
and 1996, respectively.
(4) Company contributions to defined contribution plans of $13,528,
$13,470 and $12,643 for 1998, 1997 and 1996, respectively, and Company
contributions pursuant to the Company's SERP and a non-qualified
supplemental retirement plan of $41,075, $44,231 and $36,713 for 1998,
1997 and 1996, respectively.
(5) Company contributions to defined contribution plans of $4,384, $4,365
and $2,930 for 1998, 1997 and 1996, respectively, and Company
contributions pursuant to a non-qualified supplemental retirement plan
of $2,414, $3,321 and $1,756 for 1998, 1997 and 1996, respectively.
(6) Awards under the Chromcraft Revington, Inc. Long Term Executive
Incentive Plan payable in two components: 50% in a single lump sum in
cash and 50% in options to acquire shares of the Company's common
stock.
Stock Options
The following tables summarize stock options granted to and exercised by
the executive officers named in the Summary Compensation Table during 1998, and
the value of the options held by such persons at December 31, 1998.
Option Grants in 1998
Potential Realizable
Value at Assumed
Number Percent of Annual Rates of Stock
Of Shares Total Options Price Appreciation
Underlying Granted to for Option Term (1)
Options Employees Exercise Expiration -----------------------
Name Granted in 1998 Price Date 5% 10%
---- ---------- ------------- --------- ---------- --------- ---------
Michael E. Thomas 18,000 31.0% $ 19.7813 5/08/08 $ 223,924 $ 567,471
H. Martin Michael 14,000 24.1% $ 19.7813 5/08/08 $ 174,163 $ 441,366
Frank T. Kane 14,000 24.1% $ 19.7813 5/08/08 $ 174,163 $ 441,366
(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 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 and overall
stock market conditions. There can be no assurance that the amounts
assumed in this table will be achieved.
7
Aggregate Option Exercises in 1998 and Year-End Option Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Shares December 31, 1998 December 31, 1998 (1)
Acquired on Value --------------------------- ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Michael E. Thomas -0- -0- 329,830 30,432 $ 2,750,644 $ 30,446
H. Martin Michael -0- -0- 177,600 19,000 $ 1,457,923 $ 11,719
Frank T. Kane -0- -0- 86,640 18,000 $ 724,888 $ 9,375
(1) Value per share is calculated by subtracting the exercise price from
the closing price of the Company's common stock of $16.56 per share on
December 31, 1998 as reported on the New York Stock Exchange.
Employment Agreements
The Company has entered into employment agreements with each of Michael E.
Thomas and H. Martin Michael which provide, among other items, the employment by
the Company of Messrs. Thomas and Michael through April 23, 2000. Each of the
employment agreements provides for automatic extensions for successive one-year
periods upon expiration of the initial term, or any renewal term, unless the
Company or the executive gives notice of termination at least 180 days before
the termination date. The Company may terminate the employment of either Mr.
Thomas or Mr. Michael with or without cause or in the event of the disability of
either Mr. Thomas or Mr. Michael. If the Company terminates either Mr. Thomas
or Mr. Michael with cause, then the terminated party will be entitled to receive
his monthly base salary for a three-month period following his termination.
If the employment of Mr. Thomas or Mr. Michael is terminated by the Company
without cause, then the Company will be required to pay the terminated party an
amount equal to twice his then-current annual base salary and twice the higher
bonus paid to him during the two preceding years. In the event of termination
due to disability of Mr. Thomas or Mr. Michael, the terminated party will
continue to receive his then-current annual base salary, less any payments
equivalent to those provided by the Company's benefit plans, for a 24-month
period following the termination.
In the event of a change in control of the Company, as defined in the
agreements, Mr. Thomas or Mr. Michael may terminate his employment with the
Company so long as the change in control is coupled with a substantial
alteration of his duties, diminution in salary or benefits or relocation. In
such an event, the Company will be required to pay him, as severance pay in a
lump sum, an amount equal to twice his then-current annual base salary plus
twice the higher bonus paid to him during the two preceding years.
Under their employment agreements, Mr. Thomas and Mr. Michael will receive
base salaries of no less than $170,000 and $132,000, respectively, during each
year that the employment agreements are in effect and will be entitled to
8
participate in the incentive compensation plans and programs generally available
to executives of the Company.
The Company has a Supplemental Executive Retirement Plan ("SERP") for the
benefit of Mr. Thomas and Mr. Michael which provides the executive with a
supplemental payment to him upon retirement under a money purchase retirement
plan. The amount contributed each year under the plan reflects calculations
designed to provide the executives with a retirement income of 60% and 50% to
Mr. Thomas and Mr. Michael, respectively, of average earnings of salary and
bonus for the three years prior to retirement. In addition, the Company
reimburses the executive for taxes incurred on Company contributions to the
SERP.
Messrs. Thomas and Michael and certain other salaried employees participate
in a non-qualified supplemental retirement plan that permits the deferral of
compensation and provides "make up" benefits to salaried employees whose
benefits are reduced under Internal Revenue Service Code restrictions.
In accordance with each of the employment agreements, neither Mr. Thomas
nor Mr. Michael may compete with the Company during his employment by the
Company or during the two-year period following termination of his employment.
The Company maintains life insurance for the benefit of Mr. Thomas and Mr.
Michael in the amount of $1,500,000 and $1,000,000, respectively.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is composed entirely
of outside directors and is responsible for developing and making
recommendations to the Board with respect to the Company's executive
compensation philosophy and policies. The Compensation Committee determines on
an annual basis the compensation to be paid to the executive officers of the
Company and administers the stock option plan. The following report of the
Compensation Committee discusses the Committee's objectives in determining
executive compensation.
The overall objective of the Compensation Committee is to help assure that
executive compensation bears a reasonable relationship to corporate performance,
business strategy and increases in shareholder value. The executive
compensation package relies more heavily on bonuses and longer-term incentive
compensation than base salary in order to motivate performance by executives and
to create a performance-oriented environment. The Compensation Committee uses
its discretion to set executive compensation at levels warranted in its judgment
by external and internal factors and individual performance. The following
objectives 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 annual and long-term
business goals and strategy.
Align executive officer compensation with the success of the Company
such that compensation is based, in substantial part, upon performance
in order to create a performance-oriented environment that rewards
performance.
9
Provide a total comprehensive executive compensation package that
enables the Company to attract and retain key executives.
Integrate compensation programs with both annual and long-term
business objectives.
Regularly, the Compensation Committee reviews comparable company
information in order to establish the general guidelines for executive officer
compensation. In addition, an independent compensation consultant was retained
to review the competitiveness of the executive compensation program in relation
to other comparable companies, including those in the peer group set forth in
the "Stock Performance Graph."
The principal elements of the compensation program for executive officers
are summarized below.
Base Salary
Base salary levels are set to reflect competitive market conditions. The
Compensation Committee, in determining the 1998 base salary increases for Mr.
Thomas and the other executives, considered many factors, including the
executive's responsibilities, duties, performance and experience. In addition,
a salary survey of comparable companies, prepared by a compensation consulting
firm, was reviewed. Accordingly, Mr. Thomas received a 14.1% salary increase
for 1998. While the Compensation Committee reviewed all of these factors in
determining Mr. Thomas' salary, no specific weights were placed on any of these
factors, and the salary increase process was not tied to specific performance
goals.
Short Term Executive Incentive Plan
The Company established, effective January 1, 1998, a Short Term Executive
Incentive Plan ("Short Term Plan") to focus the efforts of its executives on
continued improvement in the profitability of the Company. The Compensation
Committee sets financial operating targets for the Short Term Plan at the
beginning of each year. Target performance levels for Messrs. Thomas and Kane
are based on meeting or exceeding certain levels of earnings per share and
consolidated sales. Mr. Michael's performance target levels are based on
meeting or exceeding certain levels of operating income and sales at Chromcraft
Corporation, a wholly-owned subsidiary of the Company. Awards under the Short
Term Plan are payable in cash.
The Compensation Committee established Mr. Thomas' 1998 bonus rate under the
Short Term Plan at 75% of base salary. In establishing the 1998 bonus, the
Compensation Committee weighted the consolidated sales goal at 25% and the
earnings per share goal at 75%. In February 1999, Mr. Thomas received for 1998
a Short Term Plan bonus of $238,136, which is approximately 88.6% of his 1998
salary. The maximum award opportunity available to Mr. Thomas under the Short
Term Plan was 150% of base salary.
Long Term Executive Incentive Plan
The Company established, effective January 1, 1998, a Long Term Executive
Incentive Plan ("Long Term Plan") to focus the efforts of its executives on
continued long-term improvement in the financial performance of the Company.
Awards under the Long Term Plan are payable 50% in cash and 50% in options to
acquire shares of the Company's common stock. Stock options awarded under the
Long Term Plan are subject to the provisions of the 1992 Stock Option Plan, as
amended, and are valued using the Black-Scholes option pricing model. The
performance measurement period for 1998 was the twelve months ended December 31,
1998. For 1999, the performance measurement period is the twenty-four months
ending December 31, 1999. The year 2000 performance measurement period and all
subsequent performance measurement periods will be the thirty-six month period
ending on each December 31 thereafter. The Compensation Committee sets
10
financial operating targets for the Long Term Plan at the beginning of each
year. Target performance levels for Messrs. Thomas and Kane are based on
meeting or exceeding certain levels of operating income, consolidated sales and
return on equity. Mr. Michael's performance target levels are based on meeting
or exceeding certain levels of operating income and sales at Chromcraft
Corporation.
The Compensation Committee established Mr. Thomas' target performance bonus at
75% of salary. In establishing the financial objectives, the Compensation
Committee weighted the return on equity objective at 25%, the operating income
objective at 50%, and the consolidated sales objective at 25%. In February
1999, Mr. Thomas earned a 1998 Long Term Plan bonus of $199,008, 50% of the
award was paid in cash ($99,504) and 50% in the form of a stock option grant of
16,780 shares valued at $99,504 under the Black-Scholes option pricing model.
The Long Term Plan award represented 74.1% of his 1998 salary. The maximum
award opportunity available to Mr. Thomas under the Long Term Plan was 150% of
base salary.
Stock Option Program
The Company's 1992 Stock Option Plan, as amended, authorizes the Compensation
Committee to award to the Company's executives and key employees options to
purchase shares of the Company's common stock. Mr. Thomas was granted an option
to purchase 18,000 shares in May 1998 based on generally the same factors
considered above in determining base salary. The other executives were granted
options using similar factors. During February 1999, Mr. Thomas was granted an
option to purchase 16,780 shares based entirely on his performance against Long
Term Plan financial objectives.
Members of Compensation Committee
Larry P. Kunz, Chairman
Bruce C. Bruckmann
M. Saleem Muqaddam
Warren G. Wintrub
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STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly change in cumulative
total stockholders return for the Company's common stock with the cumulative
total return of the NYSE Market Value Index and for two peer group indexes.
Because the Company has added several new furniture product categories to its
business through acquisitions, the number of companies in the peer group was
expanded to reflect the Company's broader product lines. The performance of the
new peer group (the "1998 Peer Group") and the former peer group (the "1997 Peer
Group") are included in the graph. The graph assumes $100 in vested on December
31, 1993 and dividends are reinvested.
Comparison of Five Year Cummulative Return Among
Chromcraft Revington, Inc., 1998 Peer Group
Index, 1997 Peer Group Index and New York
Stock Exchange Market Value Index
1997 1998 NYSE
Measurement Chromcraft Peer Group Peer Group Market
Period Revington, Inc. Index Index Index
----------- --------------- ---------- ---------- ------
12/31/93 100.00 100.00 100.00 100.00
FYE 12/31/94 100.00 81.61 77.77 98.06
FYE 12/31/95 121.02 74.22 72.20 127.15
FYE 12/31/96 126.14 76.16 80.95 153.16
FYE 12/31/97 145.45 103.06 106.72 201.50
FYE 12/31/98 150.57 114.69 117.62 239.77
(1) The 1998 Peer Group includes the following companies: Bassett
Furniture Industries, Inc., Flexsteel Industries, Inc., La-Z-Boy
Incorporated, LADD Furniture, Inc., Pulaski Furniture Corporation,
Rowe Furniture Corporation, Shelby Williams Industries, Inc., and
Stanley Furniture Company, Inc.
(2) The 1997 Peer Group includes the following companies: Bassett
Furniture Industries, Inc., La-Z-Boy Incorporated, LADD Furniture,
Inc. and Pulaski Furniture Corporation.
(3) Total return equals stock price changes and reinvestment of dividends.
Calculations were prepared by Media General Financial Services of
Richmond, Virginia.
12
INDEPENDENT AUDITORS
KPMG LLP audited the financial books and records of the Company for the
year ended December 31, 1998. A representative of KPMG LLP will be present at
the annual meeting, will have an opportunity to make a statement, if he desires,
and will be available to respond to appropriate questions.
ANNUAL REPORT
A copy of the Company's 1998 Annual Report to Stockholders, including
audited consolidated financial statements for the year ended December 31, 1998,
is enclosed with this Proxy Statement. The 1998 Annual Report to Stockholders
does not constitute proxy soliciting material.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals for the 2000 Annual Meeting of Stockholders must be
received by the Company at its corporate office no later than November 30, 1999
and must be submitted in accordance with all rules and regulations under the
Securities Exchange Act of 1934.
OTHER MATTERS
The Company knows of no other matters to come before the annual meeting.
If other matters are properly brought before the annual meeting, the persons
named in the enclosed proxy will have discretionary authority to vote such proxy
in accordance with their best judgment on such matters.
By Order of the Board of Directors,
Frank T. Kane
Secretary
April 2, 1999
13
PROXY CHROMCRAFT REVINGTON, INC. PROXY
Annual Meeting of Stockholders - April 30, 1999
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints MICHAEL E. THOMAS and FRANK T. KANE, and each
of them, with power of substitution, as proxies to represent and vote all
shares of common stock of Chromcraft Revington, Inc. which the undersigned
would be entitled to vote at the Annual Meeting of Stockholders to be held on
April 30, 1999, and at any adjournment thereof, with all of the powers the
undersigned would possess if personally present, as follows:
(Continued and to be signed on the reverse side)
A [X] Please mark your votes as in this example.
FOR all nominees WITHHOLD AUTHORITY
listed at right (except to vote for
as marked to the all nominees
contrary below). listed at right Nominees:
1. ELECTION OF Bruce C. Bruckmann
DIRECTION. [ ] [ ] David L. Kolb
Larry P. Kunz
INSTRUCTIONS: To withhold authority to vote for any individual H. Martin Michael
nominee, write that nominee's name in the space provided below. M. Saleem Muqaddam
Michael E. Thomas
_______________________________________________________________ Warren G. Wintrub
2. In their discretion, on such othe matters as may properly come before
the annual meeting.
This proxy will be voted as directed, but if no direction is indicated, this
proxy will be voted FOR the election of directors of all nominees set forth
in Item 1. With respect to any other matters that may properly come before
the meeting, the proxies designated herein intend to vote in accordance with
their best judgment on such matters.
Please mark, date, sign exactly as your name appears hereon and return this
Proxy promptly.
SIGNATURE_____________________________ __________________________ ___________
SIGNATURE IF JOINTLY OWNED DATE:
Note: Joint owners should each sign personally. Trustees and others signing
in a representative capacity should indicate the capacity in which they sign.