EXHIBIT 10(f)

 

ETHAN ALLEN INTERIORS INC.

AMENDED AND RESTATED 1992 STOCK OPTION PLAN

(November 13, 2007)

 

1.         Purpose. The purpose of this Ethan Allen Interiors Inc. 1992 Stock
Option Plan (the “Plan) is to increase stockholder value, to advance the
interests of Ethan Allen Interiors Inc. (the “Company”), its subsidiary, Ethan
Allen Global, Inc. (“Ethan Allen”) and its and Ethan Allen’s other subsidiaries
and affiliates (collectively, the “Subsidiaries”), to strengthen the Company’s
ability to attract and retain the services of experienced and knowledgeable
independent directors to enhance the Company’s, and its Subsidiaries’ ability to
attract, retain and motivate employees, and to provide such directors and
employees with an opportunity to acquire an equity interest in the Company.

 

2.

Administration.

2.1       Administration, Generally. Subject to the terms and conditions of the
Plan, the Plan shall be administered by the Compensation Committee of the
Company’s Board of Directors, or by such other committee of the Board as the
Board may determine (the “Committee”).

2.2       Authority. Subject to the terms and conditions of the Plan, the
Committee shall have the authority to (a) manage and control the operation of
the Plan, (b) interpret and construe the provisions of the Plan or the
provisions of any award under the Plan, and prescribe, amend and rescind rules
and regulations relating to the Plan, (c) make awards under the Plan, in such
forms and amounts and subject to such restrictions, limitations and conditions
as it deems appropriate, including, without limitation, awards which are made in
combination with or in tandem with other awards (whether or not
contemporaneously granted), (d) modify the terms of, cancel and reissue, or
repurchase outstanding awards, (e) prescribe the form of, agreement, certificate
or other instrument evidencing any award under the Plan, (f) correct any defect
or omission and reconcile any inconsistency in the Plan or in any award
hereunder, and (g) make all other determinations and take all other actions as
it deems necessary or desirable for the implementation and administration of the
Plan; provided, however, that the Committee shall not have the authority to
decrease the exercise price of outstanding Stock Options or SARs (repricing).
Notwithstanding the foregoing provisions of this subsection 2.2, the Chief
Executive Officer (“CEO”) of the Company shall submit his recommendation for
awards under the Plan to the Committee or, if no such Committee exists, to the
Company’s Board of Directors (the “Board”). The Committee, or the Board, if no
such Committee shall exist, shall duly consider the recommendations of the CEO,
and shall have the authority to accept, modify or reject the CEO’s
recommendation, or to request the CEO to reconsider such recommendation or to
request the CEO to reconsider such recommendation. The determination of the
Committee on matters within its authority shall be conclusive and binding on the
Company and all other persons.

3.         Participation. Subject to the terms and conditions of Section 2 and
the remainder of the Plan, the Committee shall determine and designate from time
to time the

 

 

directors of the Company and employees of the Company and its Subsidiaries who
shall receive awards under the Plan (“Participants”). The granting of awards, if
any, and the size of such awards are purely discretionary, and, no employee or
director shall have any right or privilege to be considered as a Participant,
and no Participant shall have any right or privilege, or be deemed to have an
expectation of being, recommended for an award.

 

4.

Shares Subject to the Plan.

4.1       Number of Shares Reserved. Shares of common stock, $.01 par value, of
the Company (“Common Stock”) shall be available for awards under the Plan. To
the extent provided by resolution of the Board, such shares may be
uncertificated. Subject to adjustments in accordance with subsections 4.2 and
4.3 for events occurring after October 10, 2007, the aggregate number of shares
of Common Stock available for awards under the Plan (including any Stock Options
which are intended to be Incentive Stock Options) shall be equal to 6,487,867.

 

4.2

Reusage of Shares.

(a)       In the event of the exercise or termination (by reason of forfeiture,
expiration, cancellation, surrender or otherwise) of any award under the Plan,
that number of shares of Common Stock that was subject to the award but not
delivered shall again be available for awards under the Plan.

(b)       Notwithstanding the provisions of paragraph (a), the following shares
shall not be available for reissuance under the Plan: (i) shares which are
withheld from any award or payment under the Plan to satisfy tax withholding
obligations (as described in paragraph 8.5(e)); (ii) shares which are
surrendered to fulfill tax obligations (as described in paragraph 8.5(e)); and
(iii) shares which are surrendered in payment of the Option Price (as defined in
subsection 6.1) upon the exercise of a Stock Option.

4.3       Adjustments to Shares Reserved. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, split-up, stock
dividend, stock split, reverse stock split, repurchase, exchange or other
distribution with respect to shares of Common Stock or other change in the
corporate structure or capitalization affecting the Common Stock, the type and
number of shares of stock which are or may be subject to awards under the Plan
and the terms of any outstanding awards (including the price at which shares of
stock may be issued pursuant to an outstanding award) shall be equitably
adjusted by the Committee, in its sole discretion, to preserve the value of
benefits awarded or to be awarded to Participants under the Plan.

4.4       Individual Limits. The maximum number of shares of Common Stock that
may be covered by Options and SARs granted to any one individual during any
fiscal year of the Company shall be 500,000 shares (subject to adjustment in
accordance with subsection 4.3). For Restricted Stock or Stock Unit awards that
are intended to constitute “Performance-Based Compensation” within the meaning
of section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”),
and regulations thereunder,

 

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the maximum number of shares of Common Stock that may be delivered to any one
individual with respect to such awards granted during any fiscal year of the
Company shall be 500,000 shares (subject to adjustment in accordance with
subsection 4.3).

 

5.

Restricted Stock and Stock Units.

5.1       Awards. Subject to the terms and conditions of the Plan, there shall
be designated the Participants to whom shares of Restricted Stock or Stock Units
are to be awarded under the Plan, shall determine the number and terms of the
shares of Restricted Stock to be awarded to each of them and, with respect to an
award of a Stock Unit, the number of shares of Common Stock covered by the Stock
Unit. For purposes of the Plan, “Restricted Stock” is a grant of Common Stock
which Common Stock is subject to a risk of forfeiture or other restrictions that
will lapse upon the achievement of one or more goals relating to completion of
service by the Participant, or achievement of performance or other objectives,
as determined by the Committee. For purposes of the Plan, a “Stock Unit” is a
grant of a right to receive a share of Common Stock in the future upon the
achievement of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as determined by
the Committee.

5.2       Restrictions. Shares of Restricted Stock and Stock Units awarded under
the Plan shall be subject to such conditions, restrictions and contingencies as
the Committee shall determine, including provisions relating to dividend or
dividend equivalent rights.

5.3       Performance-Based Compensation. The Committee may designate an award
of Restricted Stock or a Stock Unit granted to any Participant as
Performance-Based Compensation. To the extent required by section 162(m) of the
Code, any award that is so designated shall be conditioned on the achievement of
one or more performance targets as determined by the Committee. The performance
targets established by the Committee may be with respect to corporate
performance, operating group or sub-group performance, individual company
performance, other group or individual performance, or division performance, and
shall be based on one or more of the Performance Criteria (described in
subsection 5.3). At the time of grant, the Committee shall designate whether an
award of Restricted Stock or an award of a Stock Unit is intended to constitute
Performance-Based Compensation.

5.4       Performance Criteria. For purposes of the Plan, “Performance Criteria”
shall mean performance targets based on one or more of the following criteria:
(a) earnings including operating income, earnings before or after taxes,
earnings before or after interest, depreciation, amortization, or extraordinary
or non-recurring items or book value per share (which may exclude nonrecurring
items) or net earnings; (b) pre-tax income or after-tax income; (c) earnings per
share (basic or diluted); (d) operating profit; (e) revenue, revenue growth or
rate of revenue growth; (f) return on assets (gross or net), return on
investment (including cash flow return on investment), return on capital
(including return on total capital or return on invested capital), or return on
equity; (g) returns on sales or revenues; (h) operating expenses; (i) stock
price appreciation; (j) cash flow (before or after dividends), free cash flow,
cash flow return on investment

 

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(discounted or otherwise), net cash provided by operations, cash flow in excess
of cost of capital or cash flow per share (before or after dividends); (k)
implementation or completion of critical projects or processes; (l) economic
value created; (m) cumulative earnings per share growth; (n) operating margin or
profit margin; (o) stock price or total stockholder return; (p) cost targets,
reductions and savings, productivity and efficiencies; (q) strategic business
criteria, consisting of one or more objectives based on meeting specified market
penetration, geographic business expansion, customer satisfaction, employee
satisfaction, human resources management, supervision of litigation, information
technology, and goals relating to acquisitions, divestitures, joint ventures and
similar transactions, and budget comparisons; (r) personal professional
objectives, including any of the foregoing performance targets, the
implementation of policies and plans, the negotiation of transactions, the
development of long term business goals, formation of joint ventures, research
or development collaborations, and the completion of other corporate
transactions; (s) funds from operations (FFO) or funds available for
distribution (FAD); (t) economic value added (or an equivalent metric); (u)
stock price performance; (v) improvement in or attainment of expense levels or
working capital levels; or (w) any combination of, or a specified increase in,
any of the foregoing. Where applicable, the performance targets may be expressed
in terms of attaining a specified level of the particular criteria or the
attainment of a percentage increase or decrease in the particular criteria, and
may be applied to one or more of the Company, a Subsidiary or a division or
strategic business unit of the Company, or may be applied to the performance of
the Company relative to a market index, a group of other companies or a
combination thereof, all as determined by the Committee. The performance targets
may include a threshold level of performance below which no vesting will occur,
levels of performance at which specified vesting will occurs, and a maximum
level of performance above which full vesting will occur. Each of the foregoing
performance targets shall be determined in accordance with generally accepted
accounting principles and shall be subject to certification by the Committee;
provided that the Committee shall have the authority to exclude the impact of
charges for restructurings, discontinued operations, extraordinary items and
other unusual or non-recurring events and the cumulative effects of tax or
accounting principles and identified in financial statements, notes to financial
statements, management’s discussion and analysis or other SEC filings.

 

6.

Stock Options.

6.1       Awards. Subject to the terms and conditions of the Plan, there shall
be designated the Participants to whom options to purchase shares of Common
Stock (“Stock Options”) are to be awarded under the Plan and shall determine the
number, type and terms of the Stock Options to be awarded to each of them;
provided however, that each Stock Option shall expire on the earlier of the date
provided by the option terms or the date which is 10 years after the date of
grant. The option price per share (the “Option Price”) for any Stock Option
awarded shall not be less than the greater of par value or the Fair Market Value
of a share of Common Stock on the date the Stock Option is awarded. Each Stock
Option awarded under the Plan shall be a “nonqualified stock option” for tax
purposes unless the Stock Option satisfies all of the requirements of section
422 of the Code and the Committee designates such Stock Option as an Incentive
Stock Option.

 

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6.2       Manner of Exercise. A Stock Option may be exercised, in whole or in
part, by giving written notice to the CEO (or his or her designee) prior to the
date on which the Stock Option expires; provided, however, that a Stock Option
may only be exercised with respect to whole shares of Common Stock. Such notice
shall specify the number of shares of Common Stock to be purchased and shall be
accompanied by payment of the Option Price for such shares in such form and
manner as the Committee may from time to time approve.

 

7.

Stock Appreciation Rights.

7.1       Awards. Subject to the terms and conditions of the Plan, there shall
be designated the Participants to whom stock appreciation rights (“SARs”) are to
be awarded under the Plan and shall determine the number and terms of the SARs
to be awarded to each of them; provided, however, that each SAR shall expire on
the earlier of the date provided by the terms of the SAR or the date which is 10
years after the date of grant.

7.2       Payment. Subject to the terms and conditions of the Plan, upon
exercise of an SAR, a Participant shall be entitled to receive that number of
shares of Common Stock having a Fair Market Value (as of the date of exercise)
equal to the product of:

(a)       the number of shares of Common Stock as to which the SAR is exercised;
and

(b)       the excess of the Fair Market Value (as of the date of exercise) of a
share of Common Stock over the exercise price of the SAR;

provided, however, that, in lieu of fractional shares of Common Stock, a
Participant shall be entitled to receive an appropriate cash payment; and
provided further that the Committee, in its sole discretion, may elect to settle
the SAR (or any portion thereof) in cash equal to the Fair Market Value on the
exercise date of any or all of the shares of Common Stock that would otherwise
be issuable upon exercise.

7.3       Manner of Exercise. An SAR may be exercised, in whole or in part, by
giving written notice to the CEO (or his or her designee) prior to the date on
which the SAR expires. Such notice shall specify the number of shares with
respect to which the SAR is exercised. As soon as practicable after receipt of
such notice, the Company shall deliver to the Participant certificates for the
shares of Common Stock or cash, or both, to which the Participant is entitled
pursuant to subsection 7.2.

 

8.

General.

 

8.1

Effective Date. The Plan shall be effective as of March 23, 1993.

8.2       Duration. The Plan shall be unlimited in duration and, in the event of
Plan termination, shall remain in effect as long as any awards under it are
outstanding; provided, however, that no awards may be granted under the Plan on
any date after November 30, 2012.

 

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8.3       Non-transferability of Awards; Other Agreements. Except as otherwise
provided by the Committee, no award made under the Plan may be transferred,
pledged or assigned by the holder thereof (except in the event of the holder’s
death, by will or the laws of descent and distribution) and the Company shall
not be required to recognize any attempted assignment of such rights by any
Participant. During a Participant’s lifetime, awards may be exercised only by
him or by his guardian or legal representative. Awards under the Plan, including
any Stock Options, SARs, Restricted Stock, Stock Units and Common Stock issued
in connection with Stock Options, SARs, Stock Units or otherwise, will also be
subject to any other agreements entered into, from time to time, by the
Participant and the Company.

8.4       Effect of Termination of Employment or Death. In the event that a
Participant ceases to be an employee of the Company as a result of his or her
death any Stock Options or SARs then outstanding may be exercised or shall
expire 120 days thereafter, and therefore may be exercised by such Participant’s
estate within 120 days thereafter, unless otherwise provided in accordance with
the terms of the award. In the event that a Participant, who is an employee,
ceases to be an employee of the Company for any reason, other than death) any
Stock Options or SARs then outstanding may be exercised or shall expire 90 days
thereafter, and therefore may be exercised by such Participant within 90 days
thereafter, unless otherwise provided in accordance with the terms of the award.

 

8.5

Compliance with Applicable Law and Withholding.

(a)       Notwithstanding any other provision of the Plan, the Company shall
have no obligation to issue any shares of Common Stock under the Plan if such
issuance would violate any applicable law or any applicable regulation or
requirement of any securities exchange or similar entity.

(b)       Prior to the issuance of any shares of Common Stock under the Plan,
the Company may require a written statement that the recipient is acquiring the
shares for investment and not for the purpose or with the intention of
distributing the shares and will not dispose of them in violation of the
registration requirements of the Securities Act of 1933.

(c)       With respect to any person who is subject to section 16(a) of the
Exchange Act, the Committee may, at any time, add such conditions and
limitations to any award under the Plan that it deems necessary or desirable to
comply with the requirements of Rule 16b-3.

(d)       If, at any time, the Company, in its sole discretion, determines that
the listing, registration or qualification (or any updating of any such
document) of any award, or the shares of Common Stock issuable pursuant thereto,
is necessary on any securities exchange or under any federal or state securities
or blue sky law, or that the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with, any
award or the issuance of shares of Common Stock pursuant to any award, such
award shall not

 

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be made and the shares of Common Stock shall not be issued or such restrictions
shall not be removed, as the case may be, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company.

(e)       All awards and payments under the Plan which are made to employees of
the Company are subject to withholding of all applicable taxes and the Company
shall have the right to withhold from any such award under the Plan or to
collect as a condition of any payment under the Plan, as applicable, any taxes
required by law to be withheld. To the extent provided by the Committee, a
Participant may elect to have any distribution otherwise required to be made
under the Plan to be withheld or to surrender to the Company shares of Common
Stock already owned by the Participant to fulfill any tax withholding
obligation.

8.6       No Continued Employment. The Plan does not constitute a contract of
employment or continued service, and participation in the Plan will not give any
employee or Participant the right to be retained in the employ of the Company or
the right to continue as a director of the Company or any right or claim to any
benefit under the Plan unless such right or claim has specifically accrued under
the terms of the Plan or the terms of any award under the Plan.

8.7       Treatment as a Stockholder. Any award to a Participant under the Plan
shall not create any rights in such Participant as a stockholder of the Company
until shares of Common Stock are registered in the name of the Participant.

8.8       Amendment and Termination of the Plan. The Board may, at any time and
in any manner, amend, alter, suspend, discontinue, or terminate the Plan or any
award outstanding under the Plan; provided however, that no such amendment,
alteration, suspension, discontinuance or termination shall:

(a)       increase or decrease the number of shares reserved under subsection
4.1 without stockholder approval (other than increases of decreases resulting
from the application of subsection 4.3);

(b)       increase or decrease the individual limits under subsection 4.4 (other
than increases or decreases resulting from the application of subsection 4.3) or
the Performance Criteria set forth in subsection 5.4 without stockholder
approval;

(c)       be made without stockholder approval to the extent such approval is
required by law, agreement or the rules of any exchange or automated quotation
system upon which the Common Stock is listed or quoted;

(d)       alter or impair the rights of Participants with respect to awards
previously made under the Plan without the consent of the holder thereof; or

(e)       make any change that would disqualify the Plan, intended to be so
qualified, from the exemption provided by Rule 16b-3.

 

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8.9       Immediate Acceleration of Incentives. Notwithstanding any provision in
this Plan to the contrary or the normal terms of vesting under any award, all
outstanding Stock Options and SARs will become immediately exercisable, all
Stock Units shall be immediately vested and all outstanding shares of Restricted
Stock will be immediately vested if a Change in Control occurs. For purposes of
this Plan, a “Change in Control” shall have occurred if a Business Combination
(as defined in Article Fifth of the Company’s Certificate of Incorporation)
occurs and is consummated and the disinterested directors of the Company either
do not approve such Business Combination in accordance with Article Fifth, or do
approve such Business Combination and so authorize such immediate exercisability
in connection with such Business Combination.

8.10     Definition of Fair Market Value. Except as otherwise determined by the
Committee, the “Fair Market Value” of a share of Common Stock as of any date
shall be equal to the closing sale price of a share of Common Stock as reported
on The National Association of Securities Dealers’ New York Stock Exchange
Composite Reporting Tape (or if the Common Stock is not traded on the New York
Stock Exchange, the closing sale price on the exchange on which it is traded or
as reported by an applicable automated quotation system) (the “Composite Tape”)
on the applicable date or, if no sales of Common Stock are reported on such
date, the closing sale price of a share of Common Stock on the date the Common
Stock was last reported on the Composite Tape (or such other exchange or
automated quotation system, if applicable).

8.11     Other Agreements. All Options, SARS, Restricted Stock, Stock Units and
shares of Common Stock issued in respect thereof, will be subject to any other
agreements, if any, between the Company and a Participant that is issued awards
hereunder.

 

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