Exhibit 10.1
INDEMNIFICATION AGREEMENT
     This Indemnification Agreement, dated as of _______, is made by and between
Furniture Brands International, Inc., a Delaware corporation (the “Company”) and
_______ (the “Indemnitee”), an “agent” (as hereinafter defined) of the Company.
R E C I T A L S
     A. The Company recognizes that competent and experienced persons are
reluctant to serve as directors or officers of corporations unless they are
protected by comprehensive liability insurance or indemnification, or both, due
to increased exposure to litigation costs and risks resulting from their service
to such corporations, and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and officers;
     B. The statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or conflicting, and
therefore fail to provide such directors and officers with adequate, reliable
knowledge of legal risks to which they are exposed or information regarding the
proper course of action to take;
     C. The Company and the Indemnitee recognize that plaintiffs often seek
damages in such large amounts and the costs of litigation may be so enormous
(whether or not the case is meritorious), that the defense and/or settlement of
such litigation is often beyond the personal resources of directors and
officers;
     D. The Company believes that it is unfair for its directors and officers to
assume the risk of huge judgments and other expenses which may occur in cases in
which the director or officer received no personal profit and in cases where the
director or officer was not culpable;
     E. The Company, after reasonable investigation, has determined that the
liability insurance coverage presently available to the Company may be
inadequate to cover all possible exposure for which the Indemnitee should be
protected and/or is unreasonably expensive. The Company believes that the
interests of the Company and its shareholders would best be served by a
combination of such insurance and the indemnification by the Company of the
directors and officers of the Company;
     F. Section 145 of the General Corporation Law of Delaware (“Section 145”),
under which the Company is organized, empowers the Company to indemnify its
officers, directors, employees and agents by agreement and expressly provides
that the indemnification provided by Section 145 is not exclusive;
     G. The Board of Directors has determined that contractual indemnification
as set forth herein is not only reasonable and prudent but necessary to promote
the best interests of the Company and its shareholders;
     H. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company free from undue
concern for claims for damages arising out of or related to such services to the
Company; and
     I. The Indemnitee is willing to serve, or to continue to serve, the
Company, only on the condition that he or she is furnished the indemnity
provided for herein.
A G R E E M E N T
     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties hereto, intending to be legally bound, hereby agree as
follows:
     1. Definitions
     (a) Agent. For purposes of this Agreement, “agent” of the Company means any
person who is or was a director, officer, employee or other agent of the
Company, a subsidiary of the Company or the Company’s Charitable Trust or is or
was a director, officer, employee or agent of a foreign or domestic corporation
which was a predecessor corporation of the Company or a subsidiary of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
     (b) Expenses. For purposes of this Agreement, “expenses” includes all
direct and indirect costs of any type or nature whatsoever (including, without
limitation, all reasonable attorneys’ fees and related disbursements, other
out-of-pocket costs and

 

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reasonable compensation for time spent by the Indemnitee for which he or she is
not otherwise compensated by the Company or any third party, provided that the
rate of compensation and estimated time involved is approved by the Board of
Directors, which approval shall not be unreasonably withheld), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement, Section 145 or otherwise;
provided, however, that expenses shall not include any judgment, fines, ERISA
excise taxes or penalties or amounts paid in settlements.
     (c) Proceedings. For the purpose of this Agreement, “proceeding” means any
threatened, pending, or completed claim, action, suit or other proceeding,
whether civil, criminal, administrative, investigative or any other type
whatsoever.
     (d) Subsidiary. For purposes of this Agreement, “subsidiary” means any
corporation (or other entity or enterprise) of which more than 50% of the
outstanding voting securities (or comparable interests) are owned directly or
indirectly by the Company, by the Company and one or more other subsidiaries, or
by one or more other subsidiaries.
     (e) Miscellaneous. For purposes of this Agreement, any person who acts in
good faith and in a manner he or she reasonably believes to be in the best
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.
     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to
serve as an agent of the Company, at its will (or under separate agreement, if
such agreement now or hereafter exists), in the capacity Indemnitee currently
serves (or in such other positions which he or she agrees to assume) as an agent
of the Company, so long as he or she is duly appointed or elected and qualified
in accordance with the applicable provisions of the Bylaws of the Company, any
subsidiary of the Company, or until such time as he or she tenders his or her
resignation in writing, provided, however, that nothing contained in this
Agreement is intended to create any right to continued employment by Indemnitee
in any capacity.
     3. Indemnity in Third Party Proceedings. The Company shall indemnify the
Indemnitee if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any proceeding (other than a proceeding by or in the
name of the Company to procure judgment in its favor) by reason of the fact that
the Indemnitee is or was an agent of the Company, or by reason of any act or
inaction by him or her in any such capacity, against any and all expenses and
liabilities of any type whatsoever (including, but not limited to, judgments,
settlements, fines and penalties), actually and reasonably incurred by him or
her in connection with the investigation, defense, settlement or appeal of such
proceeding, but only if the Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any proceeding by judgment, order of court, settlement, conviction or on plea of
nolo contendere, or its equivalent, shall not, of itself, create a presumption
that Indemnitee did not act in good faith in a manner which he reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal proceedings, that such person had reasonable cause to
believe that his or her conduct was unlawful.
     4. Indemnity in Derivative Action. The Company shall indemnify the
Indemnitee if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any proceeding by or in the name of the Company to
procure a judgment in its favor by reason of the fact that the Indemnitee is or
was an agent of the Company, or by reason of any act or inaction by him or her
in any such capacity, against all expenses actually and reasonably incurred by
the Indemnitee in connection with the investigation, defense, settlement, or
appeal of such proceeding, but only if the Indemnitee acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification under this subsection
shall be made in respect of any claim, issue or matter as to which the
Indemnitee shall have been finally adjudged to be liable to the Company by a
court of competent jurisdiction unless and only to the extent that the Court of
Chancery or other court in which such proceeding was brought or another court of
competent jurisdiction shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as such
court shall deem proper.
     5. Indemnification of Expenses of Successful Party. Notwithstanding any
other provisions of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any proceeding or in defense
of any claim, issue or matter therein, including the dismissal of an action
without prejudice, the Company shall indemnify the Indemnitee against all
expenses actually and reasonably incurred in connection with the investigation,
defense or appeal of such proceeding.
     6. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines or penalties), but is not entitled, however, to
indemnification for the total amount thereof, the Company shall nevertheless
indemnify the Indemnitee for the portion thereof to which the Indemnitee is
entitled.
     7. Advancement of Expenses. Subject to sections 8(a) and 11(a) below, the
Company shall advance all expenses incurred by the Indemnitee in connection with
the investigation, defense, settlement or appeal of any proceeding to which the

 

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Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company or by reason of any action
taken or not taken by him in such capacity. Indemnitee hereby undertakes to
repay such amounts advanced only if, and to the extent that, it shall ultimately
be finally determined that the Indemnitee is not entitled to be indemnified by
the Company as authorized by this Agreement or otherwise. The advances to be
made hereunder shall be paid by the Company to or on behalf of the Indemnitee
promptly and in any event within thirty (30) days following delivery of a
written request therefor by the Indemnitee to the Company.
     8. Notice and Other Indemnification Procedures.
     (a) Promptly after receipt by the Indemnitee of notice of the commencement
of or the threat of commencement of any proceeding, the Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto may be sought from
the Company under this Agreement, notify the Company of the commencement or
threat of commencement thereof, provided the failure to provide such
notification shall not diminish Indemnitee’s indemnification hereunder, except
to the extent that the Company can demonstrate that it was actually prejudiced
as a result thereof.
     (b) The Indemnitee shall be entitled to indemnification under Section 3
and/or 4 hereof and to receive payment from the Company in accordance with this
Agreement no later than forty-five (45) days after receipt by the Company of the
written request of Indemnitee for such indemnification unless a determination is
made within said forty-five (45) day period (i) by the Board of Directors of the
Company by a majority vote of directors who are not parties to such proceedings
(even though less than a quorum), (ii) by a committee of such directors
designated by majority vote of such directors, even though less than quorum,
(iii) if there are no such directors, or of such directors so direct, by
independent legal counsel in a written opinion, or (iv) by the stockholders of
the Company, that the Indemnitee has not met the relevant standard for
indemnification set forth in Section 3 and 4 hereof. Any independent legal
counsel shall be selected by the Company and approved by the agent.
     (c) Notwithstanding a determination under Section 8(b) above that the
Indemnitee is not entitled to indemnification with respect to any specific
proceeding, the Indemnitee shall have the right to apply to any court of
competent jurisdiction for the purpose of enforcing the Indemnitee’s right to
indemnification pursuant to this Agreement. The burden of proving that the
indemnification or advances are not appropriate shall be on the Company. Neither
the failure of the Company (including its Board of Directors or independent
legal counsel) to have made a determination prior to the commencement of such
action that indemnification or advances are proper in the circumstances because
the Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Company (including its Board of Directors or independent
legal counsel, that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create any presumption that the
Indemnitee has not met the applicable standard of conduct.
     (d) The Company shall indemnify the Indemnitee against all expenses
incurred in connection with any hearing or proceeding under this Section 8
unless a court of competent jurisdiction finds that each of the claims and/or
defenses of the Indemnitee in any such proceeding were frivolous or in bad
faith.
     9. Assumption of Defense. In the event the Company shall be obligated to
pay the expenses of any proceeding against or involving the Indemnitee, the
Company, if appropriate, shall be entitled to assume the defense of such
proceeding, with counsel reasonably acceptable to the Indemnitee, upon the
delivery to the Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by the Indemnitee and the
retention of such counsel by the Company, the Company will not be liable to the
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
the Indemnitee with respect to the same proceeding, provided that (i) the
Indemnitee shall have the right to employ his or her counsel in such proceeding
at the Indemnitee’s expense; and (ii) if (a) the employment of counsel by the
Indemnitee has been previously authorized in writing by the Company, (b) the
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the Indemnitee in the conduct of such defense,
or (c) the Company shall not, in fact, have employed counsel to assume the
defense of such proceeding, the fees and expenses of the Indemnitee’s counsel
shall be at the expense of the Company.
     10. Insurance. The Company may, but is not obligated to, obtain directors’
and officers’ liability insurance (“D&O Insurance”) as may be or become
available in reasonable amounts from established and reputable insurers with
respect to which the Indemnitee is named as an insured. Notwithstanding any
other provision of the Agreement, the Company shall not be obligated to
indemnify the Indemnitee for expenses, judgments, fines or penalties, which have
been paid directly to or on behalf of the Indemnitee by D&O Insurance. If the
Company has D&O Insurance in effect at the time the Company receives from the
Indemnitee any notice of the commencement of a proceeding, the Company shall
give prompt notice of the commencement of such proceeding to the insurer in
accordance with the procedures set forth in the policy. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
to or on behalf of the Indemnitee, all amounts payable as a result of such
proceeding in accordance with the terms of such policy.
     11. Exceptions. Any other provision herein or in the Company’s certificate
of incorporation or bylaws to the contrary notwithstanding, the Company shall
not be obligated pursuant to the terms of this Agreement:
     (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to the
Indemnitee with respect to proceedings or

 

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claims initiated or brought voluntarily by the Indemnitee and not by way of
defense, except with respect to proceedings brought to establish or enforce a
right to indemnification under this Agreement or any other statute or law or
otherwise as required under Section 145, but such indemnification or advancement
of expenses may be provided by the Company in specific cases if the Board of
Directors finds it to be appropriate; or
     (b) Lack of Good Faith. To indemnify the Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by the
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
     (c) Unauthorized Settlements. To indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of a proceeding effected without
the Company’s written consent; or
     (d) Willful Misconduct. To indemnify or advance expenses to the Indemnitee
under this Agreement for any expenses incurred by the Indemnitee with respect to
any proceeding or claim brought by the Company against the Indemnitee for
willful misconduct, unless a court of competent jurisdiction determines that
each of such claims was not made in good faith or was frivolous; or
     (e) Non-compete and Non-disclosure. To indemnify the Indemnitee in
connection with proceedings or claims involving the enforcement of non-compete
and/or non-disclosure agreements or the non-compete and/or non-disclosure
provisions of employment, consulting or similar agreements the Indemnitee may be
a party to with the Company or any subsidiary of the Company; or
     (f) Certain Matters. To indemnify the Indemnitee on account of any
proceeding (i) with respect to remuneration paid to Indemnitee if it is
determined by final judgment or other final adjudication that such remuneration
was in violation of law, (ii) which final judgment is rendered against the
Indemnitee for an accounting of profits made by the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions
of any federal, state or local statute, or (iii) which it is determined by final
judgment or other final adjudication that the Indemnitee’s conduct was knowingly
fraudulent or dishonest or constitutes willful misconduct.
     12. Nonexclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company’s
Certificate of Incorporation or Bylaws, in any court in which a proceeding is
brought, the vote of the Company’s shareholders or disinterested directors,
other agreements or otherwise, both as to action in his or her official capacity
and to action in another capacity while occupying his or her position as an
agent of the Company, and the Indemnitee’s rights hereunder shall continue after
the Indemnitee has ceased acting as an agent of the Company and shall inure to
the benefit of the heirs, executors and administrators of the Indemnitee.
     13. Settlement. The Company shall not settle any proceeding without the
Indemnitee’s written consent unless such settlement solely involves the payment
of money and includes an unconditional release of the Indemnitee from all
liability on any claims that are the subject matter of such claim. Neither the
Company nor Indemnitee will unreasonably withhold consent to any proposed
settlement.
     14. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required and shall do
everything that may reasonably be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights. The Company shall pay or reimburse all expenses
incurred by Indemnitee in connection with such subrogation.
     15. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.
     16. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby,
and (iii) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that
are not themselves invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested by the provision held invalid, illegal
or unenforceable and to give effect to Section 15 hereof.

 

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     17. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions to this Agreement shall be
deemed or shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
     18. Successor and Assigns. The terms of this Agreement shall bind, and
shall inure to the benefit of, the successor and assigns of the parties hereto.
     19. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date, or (iii) if transmitted electronically by a means by
which receipt thereof can be demonstrated. Addresses for notice to either party
are set out on the signature page hereof and may be subsequently modified by
written notice.
     20. Supersedes Prior Agreement. This Agreement supersedes any prior
indemnification agreement between Indemnitee and the Company or its
predecessors.
     21. Service of Process and Venue. For purposes of any claims or proceeding
to enforce this agreement, the Company and the Indemnitee consents to the
jurisdiction and venue of any federal or state court of competent jurisdiction
in the states of Delaware and Missouri, and waives and agrees not to raise any
defense that any such court is an inconvenient forum or any similar claim.
     22. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware. If a court of competent jurisdiction shall make a final
determination that the provisions of the law of any state other than Delaware
govern indemnification by the Company of its officers and directors, then the
indemnification provided under this Agreement shall in all instances be
enforceable to the fullest extent permitted under such law, notwithstanding any
provision of this Agreement to the contrary.
     The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.

            FURNITURE BRANDS INTERNATIONAL, INC.
      By           Name:           Title:        

Indemnitee:

                  By           Name:           Address: