Exhibit 10.1

 

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March 10, 2020

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Dear Derek:

I am very pleased to extend this offer for the position of Chief Financial
Officer and Chief Operating Officer with Flexsteel Industries, Inc. located in
Dubuque, IA.

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This offer of employment is conditioned upon the satisfactory completion  of
certain  requirements, as more fully explained in the following letter. The key
components of our offer are described below.

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BASE SALARY

As an exempt employee, your starting salary will be $420,000 per year. In this
position you will be paid semi-monthly with pay dates being on the 15th and last
day of each month.

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ANNUAL INCENTIVE

You will participate in the Flexsteel Cash Incentive Plan. Annual  cash  awards
under this Plan are based on the Company's success in meeting specific
annual  goals  as  approved  by  the  Compensation Committee of the Board of
Directors.

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Your participation in this Plan will be set at 75% of your base salary at Target
Company Performance or "Funding" (i.e., $315,000 per year). Maximum funding is
200% of Target, or $630,000 per year. Your participation in
the  fiscal  year  2020  cash  incentive  plan  (July  1,  2019  -  June  30,  2020)
will be prorated based on your start date and will be guaranteed at target.

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LONG-TERM INCENTIVE

You will be eligible to participate in Flexsteel's Long Term Incentive Plan
(LTIP). Your participation level in  the  LTIP  will  be  65%  of
base  salary  ($273,000)  and  paid  in shares. The LTIP uses  overlapping
3-Year performance cycles, and awards are based on the Company's success
in   meeting  specific goals  approved by the Compensation Committee of the
Board for the performance period.  You  will  be  eligible to  participate in
the three-year performance period ending June 30, 2022 on a prorated basis based
on your start date.

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SIGN-ON BONUS

You will receive a sign-on bonus of $50,000, grossed up for tax purposes
and  payable during your first week of employment.

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STOCK OPTIONS

In accordance with the 2013 Omnibus Stock Plan and stock ownership requirements,
on your first day of employment you will receive the equivalent of $122,000
issued in the form of stock options with a 3-year vesting schedule. The options
will be determined utilizing the black scholes calculation method.

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RESTRICTED STOCK UNITS (RSU's)

In accordance  with  the  2013  Omnibus  Stock  Plan and stock ownership
requirements, you will be  awarded a number of RSU's equal to $334,000 based
upon the average of the previous 10 trading days closing stock price to the
grant date (your first date of employment). One half of the awarded RSU’s will
vest on July 1, 2020 and the second half will vest on January 1, 2021.

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BENEFITS

Flexsteel  offers  a  comprehensive benefits package that includes, but is not limited to, health  and  welfare,
 retirement and time off     benefits.

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Comprehensive Health and Welfare Benefits

o

Health Insurance: After a one month waiting period,  this Company-sponsored plan
provides medical, prescription, vision and dental coverage to office employees.
This is an 80/20 plan with $500 single and $1,000 family deductibles. The
employee cost per month is currently $98
single, $220 employee plus one, and $257 family,
and is subject to annual review.

o

The company will reimburse you the cost of one-month COBRA cost to ensure
continued coverage through the Flexsteel plan's eligibility period.

·

Company Sponsored 401(k) Plan

o

The plan also matches 100% of the first 5% of gross wages. Based on what you contribute,
total potential employer contribution equals 5%. You will be 100% vested in all contributions
made by yourself and by Flexsteel.

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Short / Long Term Disability

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Life Insurance = $150,000

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Four (4) weeks of vacation annually

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Ten paid holidays annually (9 scheduled holidays + 1 floating holiday)

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RELOCATION

To aid  in your full relocation to the Dubuque, IA area, you will be reimbursed
reasonable and customary closing and realtor costs for the sale of your
Bettendorf, IA home.  In addition, Flexsteel will reimburse you a monthly amount
equal to the lesser of your two mortgages for the shorter of the following:
 until your Bettendorf,  IA home sells or for up to six months after your start
date. Relocation benefits will be grossed up for tax purposes.

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If you leave the company,  for any reason, within 2 years of your original
 start date,  all relocation benefits/expenses (prorated for length of service
within the 2 years) will be immediately  repayable to Flexsteel.

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SEVERANCE

You will be eligible to participate in the Flexsteel Industries, Inc. Severance
Plan for Management Employees.  Per this plan,  upon a qualifying termination
from the company you will be eligible for:

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Payment equal  to twelve months base salary plus an amount equal to the value of
your annual cash incentive at target performance.

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Payment equal to 12 months COBRA premium.

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In addition to your current benefit package,  you will be eligible for:

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Supplemental Health  Insurance:  This is a supplemental policy for officers that
will pay the deductible and out-of-pocket expenses not covered by the regular
 health  insurance,  subject to policy limitations and exclusions.

·

Tax Preparation &  Filing:  The Company will pay your annual income tax
preparation and filing fees.

·

Furniture Purchase Program: As an officer, you are eligible to obtain Flexsteel furniture for personal
use at no cost with the requirement that if/when you remove the furniture from
your home,  you return all proceeds from sale to the Company.

·

Country Club Membership:    The company will pay annual members fees to a
Dubuque area Country Club.

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Your employment will be at-will, meaning that you or Flexsteel  Industries, Inc.
 may modify compensation and benefits,  and may terminate the employment
relationship at any time,  with or without cause,  and with or without notice.

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You will be subject to all applicable employment and other policies of Flexsteel Industries, Inc, as outlined
in the company handbook and elsewhere;  and agree to devote your full business
time, attention and best efforts to the performance of your duties and to the
furtherance of  Flexsteel's  interest  during your employment.

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This offer is contingent upon the following:

(a)

Successful completion of a pre-employment drug screen

(b)

Satisfactory completion of a background check

(c)

Verification of your right to work in the United States,  as demonstrated by
your  completion of the I-9 form upon hire
and your submission of acceptable documentation (as noted on the I-9)
for verifying your identity and work authorization within three days  of starting employment.

(d)

Successful completion of the Confidentiality and Non-Competition Agreement

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By accepting this offer,  you confirm that you are able to accept this job and
carry out the work that it will involve without breaching any legal
 restrictions on your activities, such as restrictions imposed by a current or
former employers. You also confirm that you will inform Flexsteel about any such
restrictions and provide as much information about them as possible, including
any agreements between you and your current
or former employer describing such restrictions on your activities.

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We are eager to have you join our team upon acceptance of
this letter. To confirm your acceptance of this
offer, please sign and return this letter to me by Thursday, March 12, 2019.

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Sincerely,

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     /s/ Stacy Kammes

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Stacy Kammes

VP -  Human Resources

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Agreed to and accepted by:

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 /s/ Derek Schmidt3/10/2020 

Date:

Derek Schmidt

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