Document:

Exhibit 10.3

 

 

 

 

 

	 	 	 
	 	 	June 9, 2011

 

 

Mr. Andrew Prince

Freundlich Supply Company, Inc.

2200 Arthur Kill Road

Staten Island, NY 10309

 

Re:Line Letter for $2,800,000.00
Line of Credit

 

Dear Mr. Prince:

 

Israel Discount Bank of New York (“IDB”)
is pleased to advise you that it is prepared to extend to Freundlich Supply Company, Inc. (the “Borrower”), a corporation,
organized and in good standing under the laws of the State of New York, an uncommitted discretionary demand line of credit (“Line”
or “Credit Facility”) in the maximum principal amount of $2,800,000.00, subject to the following terms
and conditions of this line letter agreement (“Line Letter”) used forth below:

 

Borrower may utilize this Line until April
30, 2012 (the “Expiration Date”); provided, however, that Borrower acknowledges the continuing availability
of this Line is at all times subject to IDB’s sole and absolute discretion, and nothing in this Line Letter, the Note (as
defined below) or any other documents relating to this Line Letter, or the enumeration in this Line Letter or the Note of specific
events of default, conditions and/or covenants shall be construed to qualify, define or otherwise limit IDB's right, power, or
ability, at any time, under applicable law, to (a) cancel this Line without prior notice, (b) demand payment of the entire outstanding
principal amount, accrued interest and other fees and expenses due under this Line and the Note or (c) deny any extension of credit
under this Line. Borrower agrees that Borrower's breach of or default under any enumerated obligations or conditions is not the
only basis for demand to be made or for a request for an extension of credit to be denied, as Borrower's obligation to make payment
shall at all times remain a demand obligation. Notwithstanding anything in this Line Letter to the contrary, this Line Letter does
not create a commitment or obligation to lend by IDB and Borrower acknowledges that IDB has no obligation to lend.

 

Credit
Facility: IDB establishes for the benefit of the Borrower the uncommitted Credit Facility pursuant to which IDB
may, in its sole discretion and pursuant to the Borrower’s requests, make advances under a revolving credit line
(“Revolving Credit Line” as further described below in subparagraph (a) in the aggregate amount of the lesser of:
(i) $2,800,000.00; or (ii) Borrowing Base (“Maximum Credit Amount”). Subject to such availability,
such extensions of credit shall be available under the Line and limited to the following sublimits:

(a)       
Revolving Credit Line. Advances under the Revolving Credit Line shall be evidenced
by IDB’s Demand Grid Promissory Note (the “Note”) in the principal amount of $2,800,000.00 (revolving
principal amount). Any advance under the Line made at the discretion of IDB shall be in an amount not less than $50,000.00.

 

Purpose:The purpose of the Credit Facility
shall be for working capital.

 

Interest andInterest.

Principal

Payments:(a)Rate.
Each advance under the Revolving Credit Line shall bear interest at a rate to be elected by the Borrower at the time of each advance
request equal to a rate of interest established by IDB as its prime rate of interest, as determined by IDB from (the “Prime
Rate”), plus a margin of One Hundred (100) basis points. Any change in the Prime Rate shall take effect on
the date of the change in the Prime Rate.

(b)Interest Payments.
Interest on the unpaid principal balance of the Note from time to time outstanding shall be payable monthly pursuant to the terms
of the Note.

 
Principal.

Prior to the Expiration
Date and further provided that no Event of Default has occurred, the unpaid principal amount due under the Line may be repaid and
reborrowed in accordance with and pursuant to the terms of the Note.

 

All amounts of interest,
principal and other fees and other charges shall be payable no later than the Expiration Date, upon demand by IDB, or upon the
occurrence and continuation of an Event of Default.

 

Borrowing
Base: As noted above, the Maximum Credit Amount for the Credit Facility shall be the lesser of: (i) $2,800,000.00;
or (ii) the Borrowing Base. The Borrowing Base shall mean that amount consisting of (a) 80% of Eligible
Accounts Receivable, plus (b) 40% of Eligible Inventory, (c) minus any reserves required by IDB. The specified
advance rates and reserves required by IDB are subject to change following IDB’s review of the Field Exam.

 

The term “Eligible Accounts Receivables”
as used herein means accounts receivables which are due and payable and not more than 120 days from invoice due date
and therefore excluding contra accounts, related accounts, foreign accounts, poor credit accounts or other accounts which, in the
sole discretion of IDB, do not constitute acceptable collateral.

 

The term “Eligible
Inventory” as used herein means finished goods on premises which are held for sale excluding any which are not currently
saleable and any which, in the sole discretion of IDB, do not constitute acceptable collateral. Eligible Inventory will be capped
at $2,500,000.00.

 

The term “Field Exam”
as used herein generally means the engagement of financial professionals (in-house or external) by the Bank to perform certain
limited procedures with respect to the Borrower’s operations, internal control structure, loan covenant compliance and adherence
to reporting requirements.

Fees and

Charges:
 Fees and charges applicable to the Credit Facility are set forth on Schedule 1. Additionally, other fees may be
applicable to deposit accounts and other financial products and services offered by IDB, which are set forth in separate
account agreements and schedules applicable to such accounts and products, and are subject to change. IDB shall have the
unconditional right and discretion to charge Borrower’s operating and/or deposit account(s) for the payment of any of
IDB’s fees set forth in this Line Letter, including, but not limited to, IDB’s documentation fees.

 

Collateral:The
Credit Facility shall be secured by a perfected first priority security interest in all assets and personal property of the Borrower,
whether now owned or hereafter acquired, pursuant to IDB’s General Security Agreement, duly filed UCC financing statements
and such other and further documentation as IDB determines necessary in its discretion.

 

Guarantees:The
following guarantors (each, a “Guarantor”, collectively, “Guarantors”) shall guarantee the full and prompt
repayment of all loans, extensions of credit and financial accommodations provided under the Credit Facility together with interest
and costs thereon pursuant to IDB’s Guaranty Agreement (the “Guarantee”). In addition, the Line shall be guaranteed
by all subsidiaries hereafter formed or acquired by the Borrower and each such new subsidiary shall execute a Guarantee promptly
after the Bank’s request therefore.

 

	Name	Address
	Precision Aerospace Components, Inc.	
        2200 Arthur Kill Road

        Staten Island, NY 10309.

Covenants and

Conditions:The
Credit Facility is subject to the following financial covenants and conditions:

 

1.Capital Funds.
The Borrower must achieve at 12/31/2011 and maintain thereafter a minimum of $2,200,000.00 in Capital Funds. The
term Capital Funds as used herein shall mean shareholder equity plus subordinated debt, in form satisfactory to IDB, less intangible
assets, investments in other companies, and loans to officers and affiliates.

2.No Losses.
The Borrower agrees that, so long as any obligations under the Credit Facility remain outstanding, the Borrower shall not incur
a net loss on a combined basis in any fiscal year determined for Borrower and its subsidiaries on a consolidated basis.

4.No Change of Name.
The Borrower shall not change its name without the prior written consent of IDB.

5.Insurance.
The Borrower shall maintain hazard insurance, endorsed to name IDB as an additional loss payee, on its inventory and other assets
pledged to the Bank as collateral for the Line with a financially sound and reputable insurance company in such amounts as are
necessary to cover not less than the replacement cost of such inventory and covering such risks as are usually carried by companies
engaged in the same or similar business. So long as no Event of Default has occurred and is continuing under the loan documents
in respect of the Credit Facility, the Borrower shall be entitled to receive the full amount of all insurance proceeds, provided
that said proceeds are used to purchase replacement inventory and such other insured assets of a type and quality satisfactory
to IDB.

6.Compliance; Existence.
The Borrower shall comply with laws and contractual obligations, payment of obligations and preserve its existence.

Conditions

Precedent:Prior
to the Borrower’s initial and each subsequent request for an advance or financial accommodation under the Credit Facility,
it shall have provided to IDB the following:

 

1.A copy of the resolutions
passed by the Borrower’s Board of Directors, certified by its Secretary, as being in full force and effect authorizing the
borrowing described herein, incumbency certificate for Borrower identifying all authorized officers with specimen signatures and
the execution of all documents and agreements required by IDB to evidence and secure the Credit Facilities, which shall include
this Line Letter, Note, General Security Agreements, Guaranty Agreements and such other documents, all in form and substance acceptable
to IDB and its counsel in their sole discretion;

2.A copy of the resolutions
passed by each Guarantor’s Board of Directors or other governing body, as applicable, certified by the Secretary of such
Guarantor as being in full force and effect authorizing the guarantee described herein and the execution of all documents and agreements
required by IDB to evidence and secure the guarantee;

3.Copies of the certificates
of incorporation of the Borrower and each Guarantor, as the case may be;

4.Payment of all fees, expenses and charges invoiced
by IDB;

5.Insurance in amounts
satisfactory to IDB, with IDB named as lender loss payee on such policy;

6.Release of all liens
including those of refinanced lenders, prior to funding;

7.Satisfactory completion
of standard due diligence, including Know Your Customer procedures, searches and reports required by IDB, including the Field Exam
confirming parameters of Borrowing Base, with all costs for the account of the Borrower;

8.Receipt of satisfactory
financial statements and projections for the current fiscal year, which reflect compliance with all covenants of this Line Letter;

9.The Borrower shall
open and maintain its operating deposit accounts with IDB;

10.The absence of any
action, suit, investigation or proceeding pending or threatened in any court of before any arbitrator or governmental authority
that purports (a) to materially and adversely impact the Borrower, its subsidiaries or any Guarantor, or (b) to affect any transaction
contemplated hereby or the ability of the Borrower, its subsidiaries or any Guarantor to perform their respective obligations under
the Credit Facility.

ialFinancial

Information:The Borrower agrees that, so
long as any obligations under the Credit Facility remain outstanding, the Borrower shall furnish to IDB:

 

1.Within 120
days after the end of each of its fiscal years, no later than 4/30, the financial statements of the Guarantor dated
as of the end of the reported fiscal year, which shall be audited by a certified public accountant acceptable to
IDB and be without material exception or qualification. Within 120 days after the end of each of its fiscal years, the financial
statements of the Borrower dated as of the end of the reported fiscal year, which shall be prepared by the management
of the Borrower, and confirmed by the Company’s certified public accountant.

2.Within 60
days of the fiscal quarter ending 3/31, 6/30 and 9/30 the financial statements of the Guarantor dated as of the end
of the reported fiscal quarter. These statements shall be prepared by management and acceptable to IDB;

3.Within 60
days of the fiscal quarter ending 3/31, 6/30 and 9/30 the financial statements of the Borrower dated as of the end
of the reported fiscal quarters. These statements may be prepared by management;

4.Within 25
days from every month end, monthly income statement, balance sheet;

5.Within 25
days from every month end, a monthly Inventory aging detailed by recent sales break-down.

6. Within 25
days from every month end, the monthly open order position.

7.Within 25
days from every month end, the monthly open order position compared against existing inventory on hand.

8.Signed monthly Borrowing
Base Certificates 20 days after the end of the following month in form satisfactory to IDB and an accounts receivable
aging report, including a roll forward of accounts receivable reflecting sales, collections and credits for the prior month and
such other information as IDB may require;

9.Monthly balance sheet
and income statement forecasts for the 12-month fiscal period ending 12/31 shall be submitted no later than 60 days
after fiscal year end;

10.Notice of default,
litigation, proceedings or investigations, and material changes in accounting or financing reporting practices.

 

Examinations:The
Borrower shall allow representatives of IDB to examine any of its books, records and collateral, at any reasonable time. Examinations
will normally take place once a year but may be done more frequently at IDB’s discretion and shall be for the account of
the Borrower.

 

Documentation:The
utilization of the Credit Facility will be subject to the execution and delivery to IDB of such agreements, documents, instruments,
and certificates as may be requested by IDB and its counsel to evidence the Credit Facility, guarantees, security interests and
other matters relating to the Credit Facility in form and substance satisfactory to IDB and its counsel, in their sole discretion.
The loan documents shall contain normal and customary default provisions, as applicable. Reasonable legal fees and costs shall
be for the account of the Borrower.

Negative

Covenants:The
Borrower is prohibited from: (i) incurring additional debt; (ii) granting liens; (iii), entering into agreements for joint ventures,
mergers or sales of all or substantially all of Borrower’s assets; (iv) guaranteeing the indebtedness of other persons or
entities; (v) issuing dividends; (vi) making loans and advances to officers and related entities; (vii) entering into transactions
with affiliates; or (viii) making material changes in the nature of its business.

 

USA Patriot Act:To
comply with applicable law, the Borrower, Guarantors and beneficial owners of the Borrower and Guarantors shall provide IDB with
verifiable information including: name, address, and corporate tax identification number, date of birth and social security number
(if an individual) and other information. This information may be shared with government agencies and regulators as required by
applicable law. The Borrower further confirms and represents that it is in compliance with all applicable terms and conditions
under the USA PATRIOT Act.

General 

Information:The
Borrower shall supply IDB with other such information, reports, and statements as it may reasonably request, and agrees to cooperate
with IDB in order to comply with the terms and conditions of this Line Letter.

Events of 

Default:The
following shall constitute events of default (“Events of Default”) under the Line, entitling IDB to pursue all rights
and remedies available under the loan documents and applicable law:

 

1.Nonpayment of principal
or interest due under the Credit Facility and such nonpayment is not cured within 10 business days from the due date;

2.Nonpayment of fees
or other amounts due under the Credit Facility and such nonpayment is not cured within 10 business days from the due date;

3.Any representation
or warranty providing to have been materially incorrect when made or confirmed;

4.Failure to perform
or observe covenants set forth in the loan documents within 10 business days from such failure;

5.Commencement of a
bankruptcy or insolvency proceeding against the Borrower or Guarantors (and, in cases of an involuntary proceeding only, such action
is not dismissed within 20 days);

6.Actual or asserted
invalidity of any loan document related to the Credit Facility;

7.Change in control or ownership of Borrower; and

8.Any other Events of Default set forth in the Note.

General

Indemnity:Borrower
shall indemnify IDB, its affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including
the reasonable fees, charges and disbursements of any counsel of any Indemnitee), incurred by any Indemnitee or asserted against
any Indemnitee by any third party, Borrower, its affiliates or any Guarantor arising out of, in connection with, or as a result
of the execution and delivery of the loan documents for the Credit Facility or any related agreement or instrument contemplated,
the performance by the parties to the loan documents or their respective obligations under such agreements or the consummation
of the transactions contemplated by such agreements.

Waiver;

Jurisdiction:IT
IS UNDERSTOOD AND AGREED THAT IN THE EVENT OF ANY LITIGATION OR ACTION ARISING OUT OF OR RELATING TO THE CREDIT FACILITY OR THEIR
BANKING RELATIONSHIP, THE UNDERSIGNED PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVE TRIAL BY JURY AND CONSENT TO THE JURISDICTION
OF THE COURTS OF (I) THE STATE OF NEW YORK OR (II) THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK LOCATED
IN THE BOROUGH OF MANHATTAN, NEW YORK. No waiver of any terms or conditions of this Line Letter
or any other loan documents shall be effective unless set forth in writing and executed by the Borrower and officers of IDB.

 

Applicable Law:This
Letter and the terms and conditions contained herein are to be construed according to and governed by the internal laws of the
State of New York.

 

Acceptance: By
signing below, the Borrower and Guarantors agrees to the terms and conditions set forth in this Line Letter, which terms may not
be amended or modified unless in writing executed by the Borrower and IDB. The Guarantors unconditionally and irrevocably waive
notice of any such amendments or modifications. Furthermore, (i) the Guarantors agree and acknowledge that the Guarantees heretofore
executed by Guarantors, and all the terms contained therein, shall remain in full force and effect and (ii) the Borrower hereby
acknowledges that the security agreement(s) heretofore executed by Borrower relating to Bank's security interest in the Collateral
of Borrower is reaffirmed, and all terms contained therein shall remain in full force and effect.

 

Prior Line Letter:This Line Letter
amends replaces and restates that certain Line Letter between Borrower and IDB dated September 22, 2010 in its entirety.

 

Joint and Several:
Each of the undersigned shall be jointly and severally liable hereunder and all provisions shall apply to all of them.

 

Counterparts:This
Note may be executed in several counterparts, each of which shall constitute an original, but all of which taken together shall
constitute one and the same instrument.

 

Please indicate your agreement and acceptance
of the foregoing by signing and returning the enclosed copy of this letter by June 15, 2011. Should you have any questions, please
contact the undersigned at your convenience at (212) 551- 8723.

 

Very truly yours,

 

ISRAEL DISCOUNT BANK OF NEW YORK

 

By: ________________________________________ 

 Name:James M. Morton

 Title:First Vice President

 

 

By: ________________________________________ 

 Name:

 Title:

 

 

 

SIGNATURES TO FOLLOW

 

 

 

 

 

 

 

 

 

 

 

 

 

AGREED AND ACCEPTED:

 

BORROWER:

 

FREUNDLICH SUPPLY COMPANY, INC.

 

By: ____________________________________

Name: Andrew Prince

Title: 

 

 

GUARANTOR:

 

PRECISION AEROSPACE COMPONENTS, INC. 

 

 

By: ____________________________________

Name:

Title:

 

Schedule 1

(Loan Fees1)

 

	Description of Fee, Charge or Premium	Amount
	Administration Fee (administrative costs associated with each amendment, modification and renewal of credit facility)	$1,000.00
	Annual Line Fee	$5,000.00
	Audit Confirmation Fee (administrative costs associated with each responses to auditors, accountants and other professionals)	$50.00
	Closing Fee	$0.00
	Collateral Monitoring Fee (monthly administrative costs associated with IDB’s review of Borrowing Base and pledged accounts)	$500.00
	Field Exam Fee (Initial)	Actual Fees
	Field Exam Fee (Annual) (to be paid directly to field examiner)	Actual Fees
	  Late Payment Premium (imposed after ten days from due date)2	Greater of: (a) 5% of Late Payment Amount; or (b) $200.00
	Documentation Fee (actual fees for IDB’s counsel, or market rate for IDB’s in-house counsel, for services rendered to and costs incurred by IDB in connection with the review and preparation of loan documents and other banking related services)	$1,500.00
	Overadvance Fee (administrative costs associated with each advance exceeding approved Maximum Credit Amount)	$500.00
	Small Item Advances (for each advance under the credit facility that is less than $50,000.00)	$150.00
	Small Item Paydowns (for each principal paydown under the credit facility that is less than $50,000.00)	$150.00

 

 

1
This Schedule of Loan Fees is applicable to the subject Line and supplements all other
schedules of fees and charges, as may be amended and updated by the Bank from time to time, for financial services and products
offered by Bank. The Schedule does not include additional fees that may become due and payable upon a Default or an Event of Default.

 

2
The Late Payment Premium is a separate from and in addition to the payment of any default
rate of interest due under the subject credit facility.ex10_95.htm

Exhibit 10.95

 

PERFORMANCE SHARE AND RESTRICTED STOCK AWARD AGREEMENT

THIS PERFORMANCE SHARE AND RESTRICTED STOCK AWARD AGREEMENT (the “Agreement”) is made and entered into effective as of the _____ day of _______________, 2011 by and between CHROMCRAFT REVINGTON, INC. (the “Company”), a Delaware corporation, and ______________________ (the “Executive”), who is the ________________________ of the Company,

WITNESSETH:

WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) has determined that the Executive should be granted an award opportunity of performance shares under the Company’s 2007 Executive Incentive Plan, as currently or hereafter in effect (the “Plan”), for the performance period beginning on January 1, 2011 and ending on December 31 2011, which shares, if earned, would be converted into shares of restricted common stock of the Company (and/or cash in lieu of any shares of such restricted stock); and

WHEREAS, the Compensation Committee has authorized and approved the award of performance shares contemplated by this Agreement, and the Board of Directors of the Company has authorized and approved the issuance of shares of restricted common stock into which the performance shares may be converted if earned; and

WHEREAS, the Plan, this Agreement and Exhibit A hereto, which exhibit is made a part of this Agreement and is incorporated herein by reference, contain the terms, conditions and restrictions of such performance shares and, if earned, such shares of restricted stock and/or cash payment in lieu of shares of restricted stock.

NOW, THEREFORE, in consideration of the foregoing recitals, the award of performance shares to the Executive, the respective covenants, agreements and obligations contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive hereby agree as follows:

Section 1.       Capitalized Terms.  All capitalized terms used but not otherwise defined in this Agreement or in Exhibit A hereto shall have the same meaning ascribed to such terms in the Plan.

Section 2.       Award of Performance Shares.  Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Executive an Award of performance shares, the number of which shall be determined as set forth in Exhibit A hereto and which shares shall be maintained in book-entry form by the Company under the Plan and be subject to and restricted in accordance
with the Plan and this Agreement (the “Performance Shares”).  If earned, the Performance Shares shall be converted into shares of restricted common stock of the Company (and/or cash in lieu of any shares of such restricted stock) as set forth in Exhibit A hereto.  All shares of restricted common stock, if earned, shall be issued under the Plan and be subject to and restricted in accordance with the Plan and this Agreement (the “Restricted Stock”).  Any cash payment made in lieu of any shares of Restricted Stock shall be subject to and restricted in accordance with the Plan and this Agreement.

 

  

  

  

 

Section 3.       Award Date.  The Award Date for the Award of Performance Shares is March 24, 2011.

Section 4.       Earning of Performance Shares and Vesting of Restricted Stock and Cash.  The Performance Period, Performance Measures, performance targets for each of the Performance Measures, Award Rates, manner of converting the Performance Shares into Restricted Stock (and/or cash in lieu of any shares of Restricted Stock) and vesting schedule relating to the shares of Restricted Stock (and any cash in lieu of any shares of Restricted Stock) are set forth in
Exhibit A hereto.  In order for the Executive to earn any Performance Shares, the Compensation Committee must first make a determination that the Award of Performance Shares (or any portion thereof) has been so earned.  In order for the shares of Restricted Stock (and/or the cash payment in lieu of any such shares) to become vested, the Compensation Committee must first make a determination that such shares and/or cash payment have been so vested.

If any portion of the Award of Performance Shares has been earned, then such shares shall be converted into shares of Restricted Stock (and/or cash in lieu of any or all shares of Restricted Stock), subject to a vesting requirement as set forth in Exhibit A hereto.  The Compensation Committee shall determine, in its sole discretion, the proportion of the Performance Shares converted into shares of Restricted Stock and/or cash in lieu of shares of Restricted Stock and the timing of converting any shares of Restricted Stock into cash.

If the Compensation Committee makes a determination that any portion of the Award of Performance Shares has not been earned, then such shares shall be forfeited and the Executive shall have no right or claim to any Performance Shares and no right or claim to have such shares converted into Restricted Stock (and/or cash in lieu of any such shares).  If shares of Restricted Stock are issued to the Executive (and/or cash in lieu of any such shares is accrued for the benefit of the Executive) but do not subsequently become vested, then such shares and cash payment shall be forfeited and the Executive shall have no right or claim to such shares (and/or the cash payment in lieu of any of such
shares).

Notwithstanding the foregoing or anything to the contrary set forth in the Plan, with respect to Performance Shares and shares of Restricted Stock (and/or the cash payment in lieu of any shares of Restricted Stock) being treated as earned and vested, respectively, Section 11 of this Agreement shall control in the event of (a) a Change in Control, or (b) a termination of the Executive’s employment with the Company for any reason.

Section 5.       Dividend, Voting and Other Rights.  The Performance Shares shall not be issued or outstanding for any corporate purposes and the Executive shall not have any right to (a) receive any dividends or distributions, if any, with respect to the Performance Shares, (b) exercise any voting rights with respect to the Performance Shares, or (c) exercise or possess any other rights and attributes of ownership of common stock of the Company by virtue of the
Award of Performance Shares.  If the Performance Shares are earned and converted into shares of Restricted Stock, such shares of Restricted Stock shall be issued and outstanding for all corporate purposes and the Executive shall be entitled during the vesting period of the Restricted Stock to (x) receive all dividends and distributions, if any, paid with respect to the unvested shares of Restricted Stock, (y) exercise all voting rights with respect to the unvested shares of Restricted Stock, and (z) exercise and possess all other rights and attributes of ownership with respect to the unvested shares of Restricted Stock, except as provided otherwise in the Plan and this Agreement.

 

  

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Section 6.       Certain Agreements of the Executive.  The Executive hereby understands and agrees as follows:

(a)        the Executive is the __________ of the Company;

(b)        none of the Performance Shares and, if issued, none of the shares of Restricted Stock will be registered or qualified by the Company under any federal or state securities laws in reliance upon certain exemptions from registration or qualification under such laws;

(c)        because the shares of Restricted Stock, if issued, will not be registered or qualified under any federal or state securities laws and because the Executive may be deemed to be an affiliate of the Company under the federal securities laws, such shares upon vesting will be subject to restrictions on resale and transfer imposed by applicable federal and state law;

(d)        the Executive is (and his heirs, executors, administrators and representatives are) bound by, and the Performance Shares are and, if issued, the shares of Restricted Stock (and/or the cash payment in lieu of any shares of Restricted Stock) shall be, subject to, the terms, conditions and restrictions set forth in the Plan, this Agreement, the Company’s Certificate of Incorporation and By-Laws and applicable law (all as currently or hereafter in effect);

(e)        there is no obligation of the Company to have any shares of the Company’s common stock (including, but not limited to, the shares of Restricted Stock, if issued) listed, traded or quoted on any securities exchange or on any quotation system or other established trading market;

(f)         no representations, promises or commitments have been made to the Executive relating to (i) the repurchase by the Company of any Performance Shares or, if issued, any shares of Restricted Stock (whether before or after any of such shares may become earned or vested), or (ii) the amount of dividends or distributions, the percentage of profit or the return on investment, if any, that he might expect to receive as a result of the Award of the Performance Shares or, if issued, the ownership of shares of Restricted Stock (whether before or after any of such shares may become earned or vested); and

(g)        the Performance Shares and, if issued, the shares of Restricted Stock shall be held by the Executive for his own account and not for another person and not with a view toward resale, distribution, subdivision or fractionalization of such shares.

Section 7.       Non-transferability.  Except in the event of the Executive’s death and then only in the manner set forth in the Plan, the Performance Shares (a) cannot be sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise disposed of, nor can a lien (other than a lien in favor of the Company), security interest or option be placed thereon, whether by operation of law, whether voluntarily
or involuntarily, or otherwise, (b) are not subject to execution, attachment or similar process or otherwise available to the creditors of the Executive (other than the Company), and (c) cannot be used to satisfy, pay or set-off against any debts or obligations of the Executive to any party other than the Company.  Except in the event of the Executive’s death and then only in the manner set forth in the Plan, the shares of Restricted Stock (x) cannot be sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged or otherwise disposed of, nor can a lien (other than a lien in favor of the Company), security interest or option be placed thereon, whether by operation of law, whether voluntarily or involuntarily, or otherwise, (y) are not subject to execution, attachment or similar process or otherwise available to the creditors of
the Executive (other than the Company), and (z) cannot be used to satisfy, pay or set-off against any debts or obligations of the Executive to the any party other than the Company.  At such time as shares of Restricted Stock, if issued, may become vested, such vested shares may be sold, transferred, bequeathed, gifted or otherwise disposed of in accordance with applicable law and the requirements then in effect of the principal securities exchange or market (or of any quotation system or other established trading market) on which the Company’s shares of common stock are then listed or traded, if any.  Any attempted or purported sale, transfer, bequest, gift, disposition or other act in breach of or contrary to this Section shall be null and void and of no force or effect whatsoever.

 

  

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Section 8.       Issuance of Shares and Accrual of Cash Payment.  Promptly following the execution of this Agreement, the Company shall maintain the Performance Shares only in book-entry form either in the name of or for the benefit of the Executive.  If any Performance Shares are earned and converted into shares of Restricted Stock, the Company shall issue the required number of shares of Restricted Stock either in the name or for the benefit of the
Executive.  Until the time that the shares of Restricted Stock become vested or are forfeited, (a) the Company shall maintain the unvested shares only in book-entry form in the name or for the benefit of the Executive, (b) the Company shall not issue any certificate representing any unvested shares of Restricted Stock in the name or for the benefit of the Executive, (c) the Executive shall not be entitled to hold any unvested shares in “street name,” and (d) such unvested shares shall be outstanding for all corporate purposes.  If any Performance Shares are earned and converted into cash, such cash payment shall be accrued on the books and records of the Company until such time as such payment has vested or been forfeited, and no interest shall be paid on any accrued amount to the Executive.

Upon request by the Executive following the date on which shares of Restricted Stock have become vested, the Company shall release such vested shares to the Executive and shall, in accordance with the instructions of the Executive, either cause such shares to be placed in “street name” with a broker designated by the Executive or issue a stock certificate representing such shares in the name of the Executive with a legend in substantially the following form imprinted thereon:

RESTRICTIONS ON TRANSFER

The securities represented by this Certificate have not been registered or qualified under the Securities Act of 1933, as amended (the “Act”), the laws of the State of Delaware or any other state securities laws and may not be sold, transferred, gifted, pledged or otherwise disposed of in the absence of such registration or qualification or an exemption therefrom under the Act and any applicable state securities laws.

 

  

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Section 9.        Income and Employment Tax Withholding.  All applicable federal, state and local income and employment taxes (and all interest and penalties thereon) that arise or are imposed by virtue of the Award of Performance Shares and the Restricted Stock and/or the cash in lieu of any shares of Restricted Stock (including, but not limited to, the Performance Shares having become earned, the conversion of the Performance Shares into Restricted Stock and/or cash and the shares of Restricted Stock and/or the cash payment having become
vested) shall be the responsibility of and paid by the Executive.  The Company shall have the right to require payment to it from the Executive of the taxes and other charges required by law to be withheld as a result of the Performance Shares having been earned and, if issued, the shares of Restricted Stock and/or the cash payment having become vested.  The Company also is hereby entitled, and the Executive hereby authorizes the Company, to withhold such number of shares of Restricted Stock and/or such amount of the cash payment that the Compensation Committee may determine is appropriate to satisfy any withholding tax liability of the Company.  The value of the shares of Restricted Stock, if issued, that may be withheld shall be based upon the closing price of the Company’s common stock, as quoted by the principal securities exchange or market on
which the Company’s common stock is then traded, on the date the Compensation Committee determines that any withholding tax liability of the Company shall have arisen.  If the Company’s common stock is not listed, traded or quoted on any securities exchange or on any quotation system or other established trading market on such date, then the value of the shares withheld shall be the fair market value of such shares as determined by the Compensation Committee.  The Company understands and agrees that the Executive is entitled to make an election under Section 83(b) of the Internal Revenue Code with respect to the Restricted Stock.

Section 10.     Employment; Certain Conflicts.  Neither this Agreement nor the Award of Performance Shares or, if issued, the shares of Restricted Stock (and/or the cash in lieu of any shares of Restricted Stock) into which the Performance Shares may be converted (a) constitute an agreement, understanding or commitment relating to the continued employment of the Executive by the Company, or (b) affect or alter the present employment relationship between the Company and
the Executive, whether pursuant to an existing written employment agreement between the Company and the Executive if such an employment agreement currently exists (an “Employment Agreement”) or whether as an employee-at-will.  In the event of any conflict between the Plan and this Agreement, then this Agreement shall control; provided, however, that in the event this Agreement is silent with respect to a particular matter relating to the Performance Shares or the Restricted Stock (and the cash in lieu of any shares of Restricted Stock), then the Plan shall control with respect to such matter.  In the event of any conflict between this Agreement and an Employment Agreement with respect to the Award, then this Agreement shall control.

Section 11.     Effect of Change in Control or Termination of Employment.  In the event of a Change in Control of the Company or a Termination of Service of the Executive, all Performance Shares, all shares of Restricted Stock, if issued, and the cash in lieu of any shares of Restricted Stock shall be treated in accordance with Section 3.6 of the Plan, except as expressly set forth below in this Section 11.

 

  

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(a)          Notwithstanding any provision to the contrary set forth in the Plan (including, but not limited to, Section 3.6 thereof) or, if applicable, in an Employment Agreement, in the event of a Change in Control before the Performance Shares shall have been earned or forfeited or, if earned, before the shares of Restricted Stock (and/or the cash payment in lieu of any shares of Restricted Stock) shall have become vested or forfeited, (i) in the case of Performance Shares, all of such shares shall be deemed to be and shall become, immediately prior to the effectiveness of the Change in Control, earned at the “target” award level for the entire
Performance Period and shall immediately thereafter (and prior to the effectiveness of the Change in Control) be converted into shares of common stock of the Company and/or cash (in such proportion as the Compensation Committee may determine in its sole discretion) and not shares of Restricted Stock, which shares of common stock and cash payment shall not be subject to any (A) restrictions other than as provided by applicable law, (B) risk of forfeiture, or (C) Period of Restriction; and (ii) in the case of Restricted Stock (and the cash payment in lieu of any such shares), all of such shares (and the cash payment in lieu of such shares) shall be deemed to be and shall become, immediately prior to the effectiveness of the Change in Control, fully vested and shall no longer be subject to any (A) restrictions other than as provided by applicable law, (B) risk of forfeiture, or (C) Period
of Restriction.  In connection with a Change in Control, any cash payment in lieu of shares of Restricted Stock shall vest as provided above and shall not be subject to proration as provided in Section 3.6 of the Plan.  In the event that the Company’s common stock is not listed, traded or quoted on any securities exchange or on any quotation system or other established trading market immediately prior to the effectiveness of a Change in Control, then the Performance Shares shall be converted into such number of shares of common stock of the Company (and/or cash in lieu thereof) as determined by the Compensation Committee.

(b)         In the event of a Change in Control after the shares of Restricted Stock (and/or the cash payment in lieu of any such shares) shall have become vested, such shares and cash payment shall be retained by and be the property of the Executive and shall not be subject to any (i) restrictions other than as provided by applicable law, (ii) risk of forfeiture, or (iii) Period of Restriction.

(c)         In the event of any Termination of Service of the Executive before the Performance Shares shall have been earned or forfeited, all of such shares shall be earned or forfeited as set forth in Section 3.6 of the Plan; provided, however, that if any Performance Shares are deemed to be earned pursuant to Section 3.6 of the Plan, then the Performance Shares so earned shall be converted into shares of common stock of the Company and/or cash (in such proportion as the Compensation Committee may determine in its sole discretion) and not shares of Restricted Stock, which shares of common stock and cash payment shall not be subject to any (i) restrictions other
than as provided by applicable law, (ii) risk of forfeiture, or (iii) Period of Restriction.

(d)         Notwithstanding any provision to the contrary set forth in the Plan (including, but not limited to, Section 3.6 thereof) or, if applicable, in an Employment Agreement, in the event of a Termination of Service of the Executive due to his death, Disability or Retirement at such time that shares of Restricted Stock have been issued (and/or a cash payment in lieu of any such shares has been accrued) for the benefit of the Executive but such shares and cash payment have not yet vested or been forfeited, such unvested shares and unvested cash payment shall be deemed to be and shall become fully vested immediately on the date that the Termination of Service
occurs and shall no longer be subject to any (i) restrictions other than as provided by applicable law, (ii) risk of forfeiture, or (iii) Period of Restriction.

 

  

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(e)         In the event of a Termination of Service of the Executive due to his resignation (whether with or without good reason) other than by Retirement or the termination by the Company of the Executive’s employment (whether with or without Cause) at such time that shares of Restricted Stock have been issued (and/or a cash payment in lieu of any such shares has been accrued) for the benefit of the Executive but such shares and cash payment have not yet vested or been forfeited, such unvested shares and unvested cash payment shall be treated as set forth in Section 3.6 of the Plan.

(f)          In the event of a Termination of Service of the Executive due to (i) his death, Disability, Retirement, resignation (whether with or without good reason) other than by Retirement or the termination by the Company of his employment without Cause after any shares of Restricted Stock (or the cash payment in lieu of any such shares) shall have become vested but before being transferred or paid to the Executive, such vested shares and vested cash payment shall promptly be transferred or paid to the Executive or his designated representative, and (ii) the termination by the Company of his employment with Cause after any shares of Restricted Stock (or
the cash payment in lieu of any such shares) shall have become vested but before being transferred or paid to the Executive, such vested shares and vested cash payment shall be immediately forfeited, and the Executive shall have no right or claim to such shares and cash payment.  In all cases, the Executive must be employed by the Company on December 31, 2011 and, following expiration of the vesting period, on the date that the Company actually transfers the common stock and pays the cash payment to the Executive in order for the Executive to be eligible to receive such stock and cash payment.

Section 12.     Miscellaneous.

(a)          Binding Effect; Assignment.  This Agreement shall be binding upon and inure to the benefit of the Company and the Executive and their respective heirs, executors, representatives, successors and assigns; provided, however that neither party may assign this Agreement without the prior written consent of the other party hereto except that the Company may, without the consent of the Executive, assign this Agreement in connection with any merger, consolidation, share exchange, combination, sale of stock, sale of assets or other similar transaction involving the Company or any
transaction or series of transactions constituting a Change in Control.  In the event of any such permitted assignment by the Company of this Agreement, all references to the “Company” shall thereafter mean and refer to the successor or assignee of the Company.

(b)         Waiver.  Either party hereto may, by a writing signed by the waiving party, waive the performance by the other party of any of the covenants or agreements to be performed by such other party under this Agreement or any breach of or noncompliance with any provision of this Agreement.  Any waiver by either party hereto shall not operate or be construed as a continuing or subsequent waiver or a waiver of any other or subsequent failure of performance, breach or noncompliance hereunder.  The failure or delay of either party at any time to insist upon the strict
performance of any provision of this Agreement or to enforce its rights or remedies under this Agreement shall not be construed as a waiver or relinquishment of the right to insist upon strict performance of such provision, or to pursue any of its rights or remedies for any breach hereof, at a future time.

 

  

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(c)         Amendment.  This Agreement may be amended, modified or supplemented only by a written agreement executed by both of the parties hereto; provided, however, that in the event of a permitted assignment of this Agreement by the Company contemplated by Section 12(a) hereof by virtue of a successor or assignee of the Company becoming a party to this Agreement, no amendment, modification or additional agreement shall be required.

(d)         Headings.  The headings in this Agreement have been inserted solely for ease of reference and shall not be considered in the interpretation or construction of this Agreement.

(e)         Severability.  In case any one or more of the provisions (or any portion thereof) contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein.

(f)          Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute one and the same agreement.

(g)         Construction.  This Agreement shall be deemed to have been drafted by both parties hereto.  This Agreement shall be construed in accordance with the fair meaning of its provisions and its language shall not be strictly construed against, nor shall ambiguities be resolved against, either party.  This Agreement shall be an Award Agreement for purposes of the Plan and an Employment Agreement.

(h)         Entire Agreement.  This Agreement and the Plan constitute the entire understanding and agreement (and supersede all other prior understandings, commitments, representations and communications), whether oral or written, between the parties hereto relating to the Performance Shares and the Restricted Stock (and any cash in lieu of any shares of Restricted Stock).

(i)          Governing Law.  Because the Company’s headquarters are in Indiana, this Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without reference to any choice of law provisions, principles or rules thereof (whether of the State of Indiana or any other jurisdiction) that would cause the application of any laws of any jurisdiction other than the State of Indiana.

(j)          Recitals; Exhibit.  The first paragraph and the recitals and “Whereas” clauses contained on page 1 of this Agreement, and Exhibit A attached hereto, are expressly incorporated into and made a part of this Agreement.

 

  

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(k)         Review and Consultation.  The Executive hereby understands and agrees that he (i) has read and is familiar with this Agreement and the Plan, (ii) understands the provisions and effects of this Agreement and the Plan, and (iii) has consulted with such of his attorneys, accountants and other advisors as he has deemed advisable prior to executing this Agreement.  THE EXECUTIVE HEREBY FURTHER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT HE HAS NOT RECEIVED ANY ADVICE, COUNSEL OR RECOMMENDATION WITH RESPECT TO THIS AGREEMENT OR THE
PLAN FROM ANY DIRECTOR, OFFICER OR EMPLOYEE OF, OR ANY ATTORNEY OR REPRESENTATIVE FOR, THE COMPANY.

(l)           Certain Approvals Required.  Any amendment, modification or supplement of or any waiver under this Agreement on behalf of the Company may be made and will be effectual only upon the approval thereof by the Compensation Committee.

(m)         Jurisdiction; Venue; Wavier of Trial by Jury.  The Company and the Executive agree that all actions, proceedings, claims and counterclaims arising in connection with this Agreement shall be filed, tried and litigated, at the Company’s sole election, only in the state courts located in the County of Marion, State of Indiana, or the federal courts whose venue includes the County of Marion, State of Indiana, or, at the Company’s sole election, in any other court in which the Company shall initiate legal or equitable proceedings and
which has subject matter jurisdiction over the matter in controversy.  The Executive irrevocably consents to the jurisdiction and venue of such courts and waives any right that he may have to assert the doctrine of “forum non conveniens” or to object to venue or jurisdiction of such courts to the extent any action, proceeding, claim or counterclaim is brought in accordance with this Subsection.  THE EXECUTIVE WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE RIGHT TO A TRIAL BY JURY IN CONNECTION WITH ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM UNDER OR RELATING TO THIS AGREEMENT.

(n)         Effect of this Agreement on Cash Bonus.  This Agreement shall not apply to and shall not affect any annual cash bonus opportunity that may be awarded to the Executive under the Plan for the Performance Period beginning on January 1, 2011 and ending on December 31 2011.  Such cash bonus award opportunity shall be governed by the terms applicable to such award opportunity approved by the Compensation Committee, the applicable award letter and the Plan.

 

 

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IN WITNESS WHEREOF, the Company and the Executive have entered into, executed and delivered this Agreement as of the day and year first above written.

	 	 	 
	 	[Signature of Executive]	 
	 	 	 	 
	 	 	 
	 	CHROMCRAFT REVINGTON, INC.	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	[Signature and Title of Officer]	 

 

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