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                                                                   Exhibit 10.21

                                 LFI RETIREMENT
                            BENEFIT RESTORATION PLAN


                                    SECTION 1
                                ADOPTION OF PLAN

            1.1 Adoption and History. Lifestyle Furnishings International Ltd.
("LFI") hereby adopts the LFI Retirement Benefit Restoration Plan ("Plan"),
effective August 5, 1996 ("Effective Date"). The Plan was adopted by LFI in
connection with the sale by Masco Corporation of certain of its businesses on
the Effective Date to LFI's parent, Furnishings International, Inc. ("FII"). The
Plan is intended to have substantially identical provisions and coverage to the
Masco Corporation Retirement Benefit Restoration Plan ("Masco Plan") and
succeeds to the Masco Plan by assuming liability for all benefits accrued under
the Masco Plan prior to the Effective Date by those persons who were employed on
the Effective Date in Masco's businesses sold to FII, and by continuing to
provide for such benefits accrued through the Effective Date as well as
additional benefits which may be accrued under this Plan on and after the
Effective Date.

            1.2 Purpose. The sole purpose of the Plan is to provide to a select
group of management or highly compensated employees benefits that would be
provided to such employees who terminate employment or retire after the
Effective Date under certain retirement plans of LFI which plans are set forth
in Appendix "A" hereto and are qualified plans under Section 401(a) of the
Internal Revenue Code of 1986, as amended ("Code") (the "Qualified Plans"), but
for the benefit limitations of the Code, in order to encourage the continued
employment and diligent service of such employees with LFI following the
Effective Date. Accordingly (by way of example and not limitation), in no event
shall the provisions of the Plan be construed to benefit any employee whose
termination of employment occurred prior to the Effective Date.

            1.3 Construction. The Plan shall be construed in accordance with
North Carolina law, except where preempted by federal law. It is intended that
the Plan shall be unfunded and maintained by LFI primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, so that the Plan is exempt from the requirements of Parts
2, 3 and 4 of the Employee Retirement Income Security Act of 1974, as amended
(ERISA). All provisions of the Plan shall be interpreted in accordance with such
intentions.


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                                    SECTION 2
                                    COVERAGE

            2.1 Covered Employees. The coverage of the Plan shall be limited to
highly-compensated or management employees of LFI and of the parent and
subsidiaries of LFI who participate in the Qualified Plans which are listed in
Appendix "A" and who (a) receive from LFI or the parent or subsidiary of LFI
which is the employer of such person compensation otherwise eligible for
coverage under the terms of such Qualified Plan for any calendar year which
compensation exceeds $150,000 or such other adjusted limit as provided by
Section 401(a)(17) of the Code, or (b) whose benefits or contributions under the
Qualified Plans are reduced due to the application of Section 415 of the Code.

            2.2 Commencement and Cessation of Coverage. An employee shall be
covered under the Plan commencing on the later of (a) the Effective Date or (b)
the earlier of the date that his plan-eligible compensation described in Section
2.1 first exceeds the annual limitation amount described in Section 2.1 or the
date his benefits or contributions under the Qualified Plans are first reduced
by the application of Code Section 415. An employee covered under the provisions
of the Masco Plan immediately prior to the Effective Date shall be covered under
the Plan commencing on the Effective Date whether or not he satisfies the
requirements of these Sections 2.1 and 2.2 to the extent of his accrued benefit
as of the Effective Date under the Masco Plan, and such an employee's service
for the purposes of this Plan shall be deemed to include periods of employment
and levels of compensation accrued prior to the Effective Date under the
provisions of the Masco Plan unless his termination from coverage under the
Masco Plan was by reason of retirement or early retirement under the provisions
of any of the Qualified Plans listed in Appendix "A" to the Masco Plan. An
employee shall cease to be covered by the Plan on his date of termination of
employment from LFI, its parent and its subsidiaries. If prior to such
termination an employee ceases to qualify for coverage under the Plan due to
some other event (by way of examples and not as limitation, a decrease in
Plan-eligible compensation or the commencement of employment with a LFI
subsidiary which has no Qualified Plan or has discontinued its Qualified Plan),
his coverage under the Plan shall cease as of the time such disqualifying event
occurs and only the benefits accrued hereunder (including without limitation the
portion, if any, of such accrued benefit that was assumed from the Masco Plan)
up to such time shall be payable from this Plan.


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                                    SECTION 3
                                    BENEFITS

            3.1 Amount. Subject to Section 3.3 hereof, a covered employee shall
be entitled to either or both, as applicable, the supplemental retirement
benefits described below:

                  (a) An annual amount equal to the benefit which would have
            been payable to the employee under any defined benefit (pension)
            Qualified Plan in which he is a participant ("Qualified Pension
            Plan") but for any benefit limitations imposed by the Code on the
            computation of such benefit, reduced (but not below zero) by

                  (b) any benefits which the employee is eligible to receive,
            prior to the giving effect to any qualified domestic relations
            order, under any such Qualified Pension Plan,

each benefit being expressed for this purpose in the normal form of payment
under said Qualified Pension Plan, plus

                  (c) A single lump sum payment equal to the sum of amounts
            which would have been contributed to the account of the employee as
            a company contribution with respect to periods after December 31,
            1993 under any defined contribution (profit sharing) Qualified Plan
            in which he is a participant (but in no case including any amounts,
            however characterized, which the employee or the company may have
            contributed to any such plan pursuant to the provisions of Section
            401(k) or 401 (m) of the Code) ("Qualified Profit Sharing Plan") but
            for any benefit limitations imposed by the Code on the contribution
            amount, plus

                  (d) investment adjustments applied to the contribution amounts
            of Section 3.1 (c) which adjustments shall be applied to such
            accounts (i) utilizing the same provisions for calculating the
            effect of investment earnings (or losses) as prevail under the terms
            of any such Qualified Profit Sharing Plan and (ii) utilizing the
            amount of investment earnings (or loss) as is experienced in a given
            year in the LFI Master Profit Sharing Trust (or, applicable, its
            predecessor Masco Trust) or other investment vehicle in which the
            assets of any such Qualified Profit Sharing Plan are invested (and
            in no case applying any adjustments for forfeitures of any kind)
            reduced (but not below zero) by

                  (e) the covered employee's account balance attributable to
            company profit sharing contributions made with respect to periods
            after December


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            31, 1993 which the employee is eligible to receive, prior to the
            giving effect to any qualified domestic relations order, under any
            such Qualified Profit Sharing Plan,

provided, however, that any lump sum payment made pursuant to this Plan shall
have no adjustment the purpose of which is to make such payment equivalent after
the effect of any taxes which may have to be paid by the employee because such
lump sum payments from this Plan are taxable when received as ordinary income
and may not be eligible for rollover or other tax-advantaged treatment under the
Code; and provided, further, that the amounts attributable to any Qualified
Pension Plan and Qualified Profit Sharing Plan for the purposes of the offsets
described in the foregoing subsections 3.1 (b) and 3.1 (e) shall be deemed to
include similar sums which any covered employee shall be entitled to receive
under the provisions of any qualified pension or profit sharing plan to which
contributions were made at any time by Masco.

            3.2 Timing and Form of Payments. (a) Retirement benefit payments
hereunder which are supplemental to a Qualified Pension Plan shall be made at
the same time as benefit payments are made from the Qualified Pension Plan and
shall be payable (i) for an employee who is unmarried at the time payments
commence, in the form of a single life annuity, or (ii) for any employee who is
married when payments commence, in the form of a 50% joint and survivor annuity
with the employee's spouse, unless, in either case, the employee validly elects
another form of payment for benefits under the Qualified Pension Plan, in which
case the supplemental retirement benefit hereunder shall be paid in the same
form as benefits are paid under the Qualified Pension Plan, computed using the
same formulas and actuarial factors as set forth for the determination of
optional forms of benefits under such plan; for purposes of this Section 3.2(a),
an employee's marital status and spouse shall be determined in accordance with
the Qualified Pension Plan.

            (b) Retirement benefit payments hereunder which are supplemental to
a Qualified Profit Sharing Plan shall be payable in a lump sum and shall be made
at the time and to the same person as the lump sum payment is made from the
Qualified Profit Sharing Plan.

            3.3 Forfeitability. Payment of benefits under the Plan shall be
conditioned upon receipt of benefit payments from the respective Qualified Plans
and shall be vested in the same manner and to the same extent as benefits under
such Qualified Plans.

            3.4 No Payment During Employment. Notwithstanding the foregoing, no
periodic payments computed under paragraphs (a) and (b) of Section 3.1 of this
Plan shall be made during such time as any person both receives payments from
any Qualified Plan and is employed by LFI or any affiliated company, and no lump
sum payment computed under paragraphs (c), (d) and (e) of Section 3.1 of this
Plan shall be made until after the covered employee's termination of employment.



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                                    SECTION 4
                                COST OF BENEFITS

            4.1 Current Expense. The entire cost of providing benefits under the
Plan, including the costs of the Plan Administrator, shall be paid by LFI out of
its current operating budget, and LFI's obligations under the Plan shall be an
unfunded and unsecured promise to pay. LFI shall not be obligated under any
circumstances to separately fund its obligations under the Plan.

            4.2 Option to Fund Informally. Notwithstanding Section 4.1, LFI may,
at its sole option, or by agreement, informally fund its obligations under the
Plan in whole or in part, provided, however, in no event shall such informal
funding be construed to create any trust fund, escrow account or other security
for an employee with respect to the payment of benefits under the Plan, other
than as permitted under Internal Revenue Service and Department of Labor rules
and regulations for unfunded supplemental retirement plans. Furthermore, if LFI
decides to informally fund the Plan, in whole or in part, by procuring, as
owner, life insurance for its own benefit on the lives of employees, the form of
such insurance and the amounts thereof shall be the sole decision of LFI, and in
no event shall an employee have any incidents of ownership in any such policies
of insurance.

            4.3 Physical Examinations. If a physical examination is required for
LFI to obtain insurance for covered employees under Section 4.2, each employee
agrees to undergo such physical examinations as may be required by the insurance
carrier. Such physical examinations shall be conducted by a physician approved
by LFI, at the expense of LFI.

            4.4 No Employee Contributions or Loans. No loans or hardship
distributions or contributions by employees are permitted or required under the
Plan.


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                                    SECTION 5
                                 ADMINISTRATION

            5.1 Plan Administrator and Named Fiduciary. The Plan Administrator
and Named Fiduciary of the Plan for purposes of ERISA shall be LFI whose
business address is P.O. Box 7599, High Point, NC 27264, and whose telephone
number is 910/476-4777. LFI shall have the right to change the Plan
Administrator and Named Fiduciary of the Plan at any time, and to change the
address and telephone number of the same. LFI shall give each covered employee
written notice of any such change in the Plan Administrator and Named Fiduciary,
or in the address or telephone number of the same.

            5.2 Claims Procedure. The Plan Administrator has the power to
interpret all provisions of the Plan and make final determinations concerning
the meaning of the Plan and the right of any person to benefits under the Plan.

            Each covered employee, or other person claiming through the
employee, must file a written claim for benefits with the Plan Administrator as
a prerequisite to the payment of benefits under the Plan. Any denial by the Plan
Administrator of a claim for benefits under the Plan by an employee or other
person (collectively referred to as "claimant") shall be stated in writing by
the Plan Administrator and delivered or mailed to the claimant within 90 days
after receipt of the claim, unless special circumstances require an extension of
time for processing the claim. If such an extension of time is required, written
notice of the extension shall be furnished to the claimant prior to the
termination of the initial 90-day period. In no event shall such extension
exceed a period of 90 days from the end of the initial period.

            Any notice of denial shall set forth the specific reasons for the
denial, specific reference to pertinent provisions of the Plan upon which the
denial is based, a description of any additional material or information
necessary for the claimant to perfect his claim, with an explanation of why such
material or information is necessary, and any explanation of claim review
procedures under the Plan, written to the best of the Plan Administrator's
ability in a manner that may be understood without legal or actuarial counsel.

            A claimant whose claim for benefits has been wholly or partially
denied by the Plan Administrator may request, within 90 days following the date
of such denial, in a writing addressed to the Plan Administrator, a review of
such denial. The claimant shall be entitled to submit such issues or comments in
writing or otherwise, as he shall consider relevant to a determination of his
claim, and may include a request for a hearing in person before the Plan
Administrator. Prior to submitting his request, the claimant


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shall be entitled to review such documents as the Plan Administrator shall agree
are pertinent to his claim. The claimant may, at all stages of review, be
represented by counsel, legal or otherwise, of his choice, provided that the
fees and expenses of such counsel shall be borne by the claimant.

            All requests for review shall be promptly resolved. The Plan
Administrator's decision with respect to any such review shall be set forth in
writing and shall be mailed to the claimant not later than 60 days following
receipt by the Plan Administrator of the claimant's request unless special
circumstances, such as the need to hold a hearing, require an extension of time
for processing, in which case the Plan Administrator's decision shall be so
mailed not later than 120 days after receipt of such request.

            5.3 Arbitration. Exhaustion of the claim and claim review procedures
of Section 5.2 is prerequisite to any further consideration of a claim. In the
event that any claim remains fully or partially unresolved after exhaustion of
the claim and claim review procedures of Section 5.2, any remaining dispute
shall, within 30 days of the date of the Plan Administrator's final decision on
review, be submitted to arbitration, which shall be the sole and exclusive
remedy. The arbitration decision shall be final and binding on the Plan, LFI,
the claimant, and any other party involved. All claims shall be arbitrated in
High Point, North Carolina. The arbitrator shall be chosen in accordance with
the Voluntary Labor Arbitration Rules of the American Arbitration Association
then in effect, and the expense of the arbitration shall be shared equally by
LFI and the claimant. Any claim shall be deemed waived unless presented within
the time limits specified in Section 5.2 and this Section 5.3. The arbitrator
shall not have jurisdiction or authority to change, add to or subtract from any
of the provisions of the Plan. The arbitrator's sole authority shall be to
interpret or apply the provisions of the Plan. Because arbitration is the
exclusive remedy with respect to any claim hereunder, neither LFI, the claimant
nor any other party has the right to resort to any federal, state or local court
or administrative agency concerning any claim, and the decision of the
arbitrator shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court or before any administrative
agency with respect to any dispute which is arbitrable as herein set forth. The
arbitration provisions hereof shall, with respect to any claim, survive the
termination of the Plan.


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                                    SECTION 6
                     LIMITATION OF COVERED EMPLOYEE'S RIGHTS

            6.1 No Contract of Employment. The Plan shall not be deemed to
create a contract of employment between LFI, its parent or any LFI subsidiary
and any covered employee and shall create no right in any covered employee to
continue in the employ of LFI, its parent or any of its subsidiaries for any
specific period of time, or to create any other rights in any covered employee
or obligations on the part of LFI or its parent, except as are set forth
explicitly herein or in a written employment contract. In consideration of his
coverage hereunder each covered employee shall be deemed to have agreed that LFI
or its parent has the right to terminate him at any time, with or without cause,
and nothing in the Plan shall restrict the right of any covered employee to
terminate his employment.

            6.2 Unsecured Creditor. The rights of any employee or any person
claiming through the employee under the Plan shall be solely those of an
unsecured general creditor of LFI. Any employee, or any person claiming through
the employee, shall only have the right to receive from LFI those payments as
specified herein. Each covered employee agrees that he or any person claiming
through him shall have no rights or interests in any asset of LFI, including any
insurance policies or contracts which LFI may possess to informally fund the
Plan.

            6.3 No Trust. No asset used or acquired by LFI in connection with
the liabilities it has assumed under the Plan shall be deemed to be held under
any trust for the benefit of any employee, nor shall any such asset be
considered security for the performance of the obligations of LFI, but shall be,
and remain, a general unpledged and unrestricted asset of LFI, except as may be
provided by separate agreement and as permitted under Internal Revenue Service
and Department of Labor rules and regulations for unfunded supplemental
retirement plans.


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                                    SECTION 7
                            AMENDMENT OR TERMINATION

            7.1 Right to Amend or Terminate Plan. LFI reserves the right to
amend the Plan in any manner deemed appropriate by LFI's Board of Directors, and
LFI reserves the right to terminate the Plan for any reason and at any time in
whole or part by action of the Board of Directors.

            7.2 Limitations. Notwithstanding Section 7.1, no such amendment or
termination shall reduce or otherwise affect the benefits (including those
benefits assumed by this Plan which were accrued pursuant to the Masco Plan
prior to the Effective Date) payable to or on behalf of any covered employee
that have accrued prior to such amendment or termination without the written
consent of the employee (or beneficiary, if applicable). In addition, the
complete or partial termination of this Plan, should it occur or be deemed by
facts and circumstances to have occurred, shall have the same effect on the
vesting of benefits accrued to date under this Plan as in the case of a complete
or partial termination of a Qualified Plan.

            7.3 Payment of Benefits Upon Termination. Upon termination or
partial termination of the Plan LFI may elect the method by which benefits
accrued through the date of such termination or partial termination shall be
provided. Such election may include the payment of the present value of all such
accrued benefits directly to covered employees (or beneficiaries, if applicable)
or any other method of payment or funding which LFI may, in its sole discretion,
determine.


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                                    SECTION 8
                            MISCELLANEOUS PROVISIONS

            8.1 Independence of Benefits. Except as otherwise provided herein or
pursuant to the terms of any separate agreement with an employee, the benefits
payable under the Plan shall be independent of, and in addition to, any other
benefits or compensation, whether by salary, or bonus or otherwise, payable
under any employment agreements that now exist or may hereafter exist from time
to time between LFI and any employee. The Plan does not involve a reduction in
salary or foregoing of an increase in future salary by any employee, nor does
the Plan in any way affect or reduce the existing and future compensation and
other benefits of any employee.

            8.2 Nonalienation of Benefits. Except insofar as this provision may
be contrary to applicable law (such as an order of divorce or separation), no
sale, transfer, alienation, assignment, pledge, collateralization, or attachment
of any benefits under the Plan shall be valid or recognized by LFI.

            8.3 Payments for the Benefit of Employee. In the event that LFI
shall find that any person to whom a benefit is payable under the Plan is unable
to care for his affairs because of illness or accident, is otherwise mentally or
physically incompetent, or is unable to give a valid receipt, LFI may cause the
payments becoming due to such person to be paid to another individual for such
person's benefit, without responsibility on the part of LFI to follow
application of such payment. Any such payment shall be a payment on account of
such person and shall operate as a complete discharge of LFI from all liability
under the Plan.

            8.4 Use of Words. Wherever any words are used in the Plan in the
masculine gender, they shall be construed as though they also were used in the
feminine gender in all cases where they would so apply, and wherever any words
are used in the Plan in the singular forms they shall be construed as though
they also were used in the plural form in all cases where they would so apply,
and vice versa.

            8.5 Headings. Headings of Sections herein are inserted for
convenience of reference. They constitute no part of the Plan and are not to be
considered in the construction of the Plan.

            8.6 Savings Clause. If any provisions of the Plan shall be for any
reason invalid or unenforceable, the remaining provisions nevertheless shall be
carried into effect.


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                                    SECTION 9
                                   DEFINITIONS

            Terms capitalized in the text of this Plan shall have the meanings
referred to below, unless the context requires otherwise. Terms not defined
herein shall be construed in reference to the same or similar terms as used in
the applicable Qualified Plan.

            9.1   Code.  See Section 1.2.
            9.2   Effective Date.  See Section 1.1.
            9.3   ERISA.  See Section 1.3.
            9.4   Plan.  See Section 1.1.
            9.5   LFI.  See Section 1.1.


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                                   SECTION 10
                                    EXECUTION

            IT WITNESS WHEREOF, Lifestyle Furnishings Intemational Ltd. has
caused the Plan to be executed on August 5, 1996.



                                       Lifestyle Furnishings International Ltd.


                                       By: _____________________________________


                                       Its: Vice President
                                            -------------------


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                                                                     APPENDIX A

                            LFI RETIREMENT PLANS LIST



DEFINED BENEFIT PLANS                   DEFINED CONTRIBUTION PLANS

Berkline Associates Pension Plan
LFI Employees' Pension Plan             LFI Future Service Profit Sharing Plan
LFI Salaried                            LFI Master Defined
Employees' Pension Plan                 Contribution Plan



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