exv10w5






Exhibit 10.5




FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT




          Furniture Brands International, Inc., a Delaware corporation (the “Company”), hereby grants to
the individual named below as the “Participant,” Nonqualified Stock Options to purchase all or any
part of the number of shares of Common Stock of the Company, no par value per share (“Common
Stock”), set forth below. This grant is made on the Grant Date set forth below (the “Grant Date”)
and is being made pursuant to the Furniture Brands International, Inc. 2008 Incentive Plan. The
terms and conditions of the grant are set forth in this Agreement and in the Furniture Brands
International, Inc. 2008 Incentive Plan (the “Plan”).




Grant Date:                     , 20___



Name of Participant:                                         



Participant’s Social Security Number:                                         



Number of Options Granted:                     



Option Price per share:                     




          By signing this cover sheet, you agree to all of the terms and conditions described in this
Agreement and in the Plan, a copy of which is being provided with this Agreement. You acknowledge
that you have carefully reviewed the Plan and agree that the Plan will control in the event any
provision of this Agreement should appear to be inconsistent with the terms of the Plan.




PARTICIPANT:




	 	 	 	 	 
	 	 	 
	[Name]	 	 
	 
	 	 	 	 
	COMPANY:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 







 









 








FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT




	 	 	 
	Grant of Option

	 	This Agreement evidences the grant by the Company on the
Grant Date to the Participant, of an option to purchase, in
whole or in part, on the terms provided herein and in the
Plan, [___] shares (the “Option”) of Common Stock at
[$___] per share (the “Option Price”). Unless earlier
terminated, this Option shall expire on [this date will be
seven years from the grant date] (the “Expiration Date”).
	 
	 	 
	 

	 	It is intended that the Option evidenced by this Agreement
shall not be an incentive stock option as defined in Section
422 of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the “Code”). Except
as otherwise indicated by the context, the term
“Participant,” as used in this Option, shall be deemed to
include any person who acquires the right to exercise this
Option validly under its terms.
	 
	 	 
	Definitions

	 	“Cause,” “Change in Control,” “Disability,” “Fair Market
Value” and “Retirement” shall have the meaning assigned to
such terms in Appendix A to this Agreement.
	 
	 	 
	Vesting

	 	This Option will vest [Insert Vesting Terms].
	 
	 	 
	Exercise of Option

	 	Each election to exercise this Option shall be in writing,
signed by the Participant, and received by the Company at
its principal office, accompanied by this Agreement, and
payment in full of the Option Price. A Participant may pay
the Option Price:
	 
	 	 
	 

	 	(i) in cash or by check, payable to the order of the Company;
	 
	 	 
	 

	 	(ii) if the Common Stock is registered under the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”),
in Common Stock which, if acquired from the Company, has
been held for at least six months including by deemed or
constructive transfers of shares in lieu of actual transfer
and physical delivery of certificates; or
	 
	 	 
	 

	 	(iii) if the Common Stock is registered under the Exchange
Act, payment in full of the Option Price need not accompany
the written notice of exercise provided that the notice of
exercise directs that the certificate or certificates for
the shares of Common Stock for which the Option is exercised
be delivered to a licensed broker acceptable to the Company
as the agent for the individual exercising the Option and,
at the time such certificate or certificates are delivered,
the broker tenders to the Company cash (or cash equivalents
acceptable to the Company) equal to the Option Price for the
shares of Common Stock purchased pursuant to the exercise of
the Option plus the amount (if any) of required withholding
taxes. Executive Officers and Directors of the






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	 	Company will
not be permitted to use the cashless method of exercise
described in this paragraph without the express prior
consent of the Company.
	 
	 	 
	 

	 	The date of exercise shall be the date the written notice
and the Option Price actually are received by the Company or
its designee, regardless of the means of delivery.
	 
	 	 
	 

	 	The right of exercise shall be cumulative so that to the
extent the Option is not exercised in any period to the
maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all shares
underlying the Option which have vested until the earlier of
the Expiration Date or the termination of this Option under
this Agreement or the Plan.
	 
	 	 
	Change in Control

	 	Notwithstanding the vesting set forth above, upon the
occurrence of a Change in Control of the Company, all of the
Shares that (but for the application of this clause) are not
vested at the time of the occurrence of such Change in
Control event shall vest and shall become immediately
exercisable.
	 
	 	 
	Transferability

	 	This Option may not be sold, assigned, transferred, pledged
or otherwise encumbered by the Participant, either
voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime
of the Participant, this Option shall be exercisable only by
the Participant.
	 
	 	 
	Termination of
Employment

	 	(a)  In the event that the Participant’s employment
terminates due to the Participant’s death, Disability or
Retirement, the unvested portion of the Option will
terminate and be forfeited, and the vested portion may be
exercised until the earlier of (i) the third anniversary of
the Participant’s death, Disability or Retirement, and
(ii) the Expiration Date.

	 
	 	 
	 

	 	(b)  In the event that the Company terminates the
Participant’s employment for Cause at any time, this Option
will automatically terminate and all unexercised vested and
unvested shares underlying the Option will be forfeited and
will not be exercisable as of the date of such termination.

	 
	 	 
	 

	 	(c)  If the Participant’s employment with the Company is
terminated for any other reason, this Option will
automatically terminate, any unvested shares underlying the
Option will be forfeited and any vested shares may be
exercised no later than the earlier of (i) the 90 days after
the date of termination of the Participant’s employment, and
(ii) the Expiration Date.

	 
	 	 
	Right of Recapture

	 	If, at any time, within one year after the Participant
exercises the Option (the “Realization Event”), the
Committee (as defined in the Plan) determines in its
discretion that the Company has been materially harmed by
the Participant, whether such harm (a) results in the
Participant’s termination or deemed termination of
employment for






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	 	Cause or (b) results from any activity of the
Participant determined by the Committee to be in competition
with any activity of the Company, or otherwise prejudicial,
contrary or harmful to the interests of the Company
(including, but not limited to, accepting employment with or
serving as a consultant, adviser or in any other capacity to
an entity that is in competition with or acting against the
interests of the Company), then any gain realized by the
Participant from the exercise of the Options pursuant to
this Agreement shall be paid by the Participant to the
Company upon notice from the Company. Such gain shall be
determined as of the date of the Realization Event, without
regard to any subsequent change in the Fair Market Value of
shares of the Company’s Common Stock. To the extent allowed
by applicable law, the Company shall have the right to
offset such gain against any amounts otherwise owed to the
Participant by the Company (whether as wages, vacation pay,
or pursuant to any benefit plan or other compensatory
arrangement).
	 
	 	 
	No Rights as 

Stockholder

	 	The Participant does not have any of the rights of a
stockholder with respect to shares of Common Stock covered
by the Option until shares of Common Stock are issued to him
or her upon exercise of the Option.
	 
	 	 
	Withholding

	 	No shares will be issued pursuant to the exercise of this
Option unless and until the Participant pays to the Company,
or makes provision satisfactory to the Company for payment
of, any federal, state or local withholding taxes required
by law to be withheld in respect of this option.
	 
	 	 
	Retention Rights

	 	This Agreement does not give the Participant the right to be
retained or employed by the Company or any subsidiaries in
any capacity.
	 
	 	 
	Adjustments

	 	In the event of any stock dividend, stock split, combination
or exchange of shares, reorganization, partial or complete
liquidation or other distribution of assets (other than a
normal cash dividend), recapitalization or other change in
the capital structure of the Company, or other corporate
transaction, the number of shares covered by this Option
will be adjusted by the Committee in accordance with the
terms of the Plan.
	 
	 	 
	 

	 	Notwithstanding the foregoing, any adjustment, substitution
or assumption pursuant to this section shall be made in such
a manner as to ensure that the Options will not be subject
to Section 409A of the Code.
	 
	 	 
	Beneficiaries

	 	The Participant may designate one or more beneficiaries to
receive all or part of this Option in case of the
Participant’s death, and the Participant may change or
revoke such designation at any time. In the event of the
Participant’s death, any portion of this Option that is
subject to such a designation will be distributed to such
beneficiary or beneficiaries in accordance with this
Agreement. Any other portion of this Option not designated
by the Participant shall be distributable to the
Participant’s estate. If there is any question as to the
legal right of any






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	 	beneficiary to receive a distribution
hereunder, the Option shares in question may be purchased by
and distributed to the Participant’s estate, in which event
the Company shall have no further liability to anyone with
respect to such Option.
	 
	 	 
	Amendments

	 	This Agreement may be amended in writing by the Company and
the Participant, provided that the Company may amend this
Agreement unilaterally if the amendment does not adversely
affect or impair the rights of the Participant. The Company
shall give notice to the Participant of any such unilateral
amendment either before or promptly after the effective date
of such amendment.
	 
	 	 
	Applicable Law

	 	This Agreement will be interpreted and enforced under the
laws of the State of Delaware, other than any conflicts or
choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the
substantive law of another jurisdiction.
	 
	 	 
	Consent to Electronic
Delivery

	 	The Company may choose to deliver certain statutory
materials relating to the Plan in electronic form. By
accepting this grant the Participant agrees that the Company
may deliver the Plan prospectus and the Company’s annual
report to the Participant in an electronic format. If at any
time the Participant would prefer to receive paper copies of
these documents, the Company would be pleased to provide
copies. Please contact the Plan Administrator to request
paper copies of these documents.
	 
	 	 
	The Plan

	 	The text of the Plan is incorporated in this Agreement by
reference. This Agreement and the Plan constitute the entire
understanding between the Participant and the Company
regarding this grant of Options. Any prior agreements,
commitments or negotiations concerning this grant are
superseded. The Plan will control in the event any provision
of this Agreement should appear to be inconsistent with the
terms of the Plan.





By signing the cover sheet of this Agreement, you agree to all of the terms and conditions
described above and in the Plan.




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Appendix A



1. For the purpose of this Agreement, “Cause” shall mean (a) the Participant’s conviction of any
crime (whether or not involving the Company) constituting a felony in the jurisdiction involved;
(b) the Participant’s conduct related to the Participant’s employment for which either criminal or
civil penalties against the Participant or the Company may be sought; (c) material violation of the
Company’s policies, including the disclosure or misuse of confidential information, or those set
forth in Company manuals or statements of policy; or (d) serious neglect or misconduct in the
performance of the Participant’s duties for the Company or willful or repeated failure or refusal
to perform such duties. Any rights the Company may have in respect of the events giving rise to
Cause shall be in addition to the rights the Company may have under any other agreement with the
Participant or at law or in equity. Any determination of whether the Participant’s employment is
(or is deemed to have been) terminated for Cause shall be made by the Committee in its sole
discretion, which determination shall be final and binding on all parties. If, subsequent to the
Participant’s termination of employment (whether voluntary or involuntary) without Cause, it is
discovered that the Participant’s employment could have been terminated for Cause, the
Participant’s employment shall be deemed to have been terminated for Cause. The Participant’s
termination of employment for Cause shall be effective as of the date of the occurrence of the
event giving rise to Cause, regardless of when the determination of Cause is made.



2. For the purpose of this Agreement, “Change in Control” means the first to occur of any of the
following events:





	 	i.	 	any person (as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including the securities beneficially
owned by such person or any securities acquired directly from the Company or its
affiliates, other than in connection with the acquisition by the Company or its affiliates
of a business) representing 35% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’s then outstanding
securities; or
	 
	 	ii.	 	the majority of the members of the Board is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election; or
	 
	 	iii.	 	the consummation of a merger or consolidation of the Company with any other entity,
other than (a) a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of the
Company, 60% or more of the combined voting power of the voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (b) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person is or becomes
the beneficial owner, directly or indirectly, of securities of the Company (not including
the securities beneficially owned by such person or any securities acquired directly from
the Company or its affiliates, other than in connection with the acquisition by the
Company or its affiliates of a business) representing 50% or more of either the then
outstanding shares




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	 	 	 	of common stock of the Company or the combined voting power of the Company’s then outstanding
securities; or






	 	iv.	 	the stockholders of the Company approve a plan of complete liquidation or dissolution
of the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by the Company
of all or substantially all of the Company’s assets to an entity, 60% or more of the
combined voting power of the voting securities of which is owned by persons in
substantially the same proportions as their ownership of the Company immediately prior to
such sale.





          Notwithstanding the foregoing, no “Change in Control” shall be deemed to have occurred if
there is consummated any transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Company immediately prior to such transaction
or series of transactions continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the Company immediately following such
transaction or series of transactions.








          For purposes of this definition, “beneficial ownership” shall be determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended.



3. For the purpose of this Agreement, “Disability” shall mean the Participant is permanently and
totally disabled and unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of twelve months. The
existence of a Disability shall be determined by the Committee in its sole discretion.



4. For purposes of this Agreement, “Fair Market Value” shall mean the closing price for the shares
of the Company’s common stock, no par value, reported on the New York Stock Exchange for the
relevant date, or if there were no sales on such date, the closing price for the nearest following
date.



5. For the purpose of this Agreement, “Retirement” shall mean the Participant’s termination of
employment on or after attaining age 55 and completing 5 years of service with the Company.





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