Note 10. Employee Stock Ownership Plan
Chromcraft Revington sponsors the Employee Stock Ownership and Savings Plan (the”Plan”) which consists of the following two components: (i) a leveraged employee stock ownership plan qualified under Section 401(a) of the Internal Revenue Code (the “Code”) which is designed to invest primarily in Company stock (the”ESOP”); and (ii) a qualified cash or deferred arrangement under Code Section 401(k) (the “401(k) Plan”). The Plan covers substantially all employees who have completed six months of service with the Company. The Company matching contribution with respect to participants' pre-tax contributions to the 401(k) Plan for the plan year ending December 31, 2011 is expected to be made to the ESOP.
When the ESOP was established, Chromcraft Revington loaned $20,000 to the ESOP Trust to finance the ESOP's purchase of common stock of the Company. The loan to the ESOP Trust provides for repayment to Chromcraft Revington over a 30-year term at a fixed rate of interest of 5.48% per annum. Chromcraft Revington makes annual contributions to the ESOP Trust equal to the ESOP Trust's repayment obligation under the loan to the ESOP from the Company. The unallocated shares of common stock owned by the ESOP Trust are pledged to the Company as collateral for the Company's loan to the ESOP Trust. As the ESOP loan is repaid, shares are released from collateral and allocated to ESOP accounts of active employees based on the proportion of total debt service paid in the year. Unearned ESOP shares are reported as a reduction of stockholders' equity as reflected in the Consolidated Statement of Stockholders' Equity of the Company. As shares are committed to be released, Chromcraft Revington reports compensation expense equal to the current market price of the shares, and the shares become outstanding for the earnings per share computations. ESOP compensation expense was $154 in 2011 and $162 in 2010.
ESOP shares at December 31, 2011 and 2010 consisted of the following:
| || |
| || |
Allocated ESOP shares
| || ||301,357|| || || ||267,161|| |
Unearned ESOP shares
| || ||1,332,546|| || || ||1,400,213|| |
Total ESOP shares
| || ||1,633,903|| || || ||1,667,374|| |
Unearned ESOP shares, at cost
| ||$||13,325|| || ||$||14,002|| |
Fair value of unearned ESOP shares
| ||$||1,452|| || ||$||2,786|| |
At December 31, 2011, the ESOP Trust owned approximately 26.6% of the issued and outstanding shares of the Company's common stock.