reasonable compensationfor time spent by the Indemnitee for which he or she is not otherwise compensated by the Company orany third party, provided that the rate of compensation and estimated time involved is approved bythe Board of Directors, which approvalshall not be unreasonably withheld), actually and reasonably incurred by the Indemnitee inconnection with either the investigation, defense or appeal of a proceeding or establishing orenforcing 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 oramounts 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 (orcomparable interests) are owned directly or indirectly by the Company, by the Company and one ormore other subsidiaries, or by one or more other subsidiaries.     (e) *Miscellaneous**.*For purposes of this Agreement, any person who acts in good faithand in a manner he or she reasonably believes to be in the best interest of the participants andbeneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed tothe 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 anagent of the Company, at its will (or under separate agreement, if such agreement now or hereafterexists), in the capacity Indemnitee currently serves (or in such other positions which he or sheagrees to assume) as an agent of the Company, so long as he or she is duly appointed or elected andqualified in accordance with the applicable provisions of the Bylaws of the Company, any subsidiaryof 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 tocontinued employment by Indemnitee in any capacity.     3. **Indemnity in Third Party Proceedings****.**The Company shall indemnify the Indemniteeif the Indemnitee is a party to or threatened to be made a party to or otherwise involved in anyproceeding (other than a proceeding by or in the name of the Company to procure judgment in itsfavor) by reason of the fact that the Indemnitee is or was an agent of the Company, or by reason ofany act or inaction by him or her in any such capacity, against any and all expenses andliabilities of any type whatsoever (including, but not limited to, judgments, settlements, finesand penalties), actually and reasonably incurred by him or her in connection with theinvestigation, defense, settlement or appeal of such proceeding, but only if the Indemnitee actedin good faith and in a manner he or she reasonably believed to be in or not opposed to the bestinterests of the Company, and, with respect to any criminal action or proceeding, had no reasonablecause 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 hereasonably believed to be in or not opposed to the best interests of the Company, and with respectto any criminal proceedings, that such person had reasonable cause to believe that his or herconduct was unlawful.     4. **Indemnity in Derivative Action**. The Company shall indemnify the Indemnitee if theIndemnitee is a party to or threatened to be made a party to or otherwise involved in anyproceeding by or in the name of the Company to procure a judgment in its favor by reason of thefact that the Indemnitee is or was an agent of the Company, or by reason of any act or inaction byhim or her in any such capacity, against all expenses actually and reasonably incurred by theIndemnitee 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 bein or not opposed to the best interests of the Company, except that no indemnification under thissubsection shall be made in respect of any claim, issue or matter as to which the Indemnitee shallhave been finally adjudged to be liable to the Company by a court of competent jurisdiction unlessand only to the extent that the Court of Chancery or other court in which such proceeding wasbrought or another court of competent jurisdiction shall determine upon application that, despitethe adjudication of liability but in view of all the circumstances of the case, such person isfairly and reasonably entitled to indemnity for such expenses as such court shall deem proper.     5. **Indemnification of Expenses of Successful Party****.**Notwithstanding any otherprovisions of this Agreement, to the extent that the Indemnitee has been successful on the meritsor 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 Indemniteeagainst all expenses actually and reasonably incurred in connection with the investigation, defenseor appeal of such proceeding.     6. **Partial Indemnification****.**If the Indemnitee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of any expenses or liabilities ofany type whatsoever (including, but not limited to, judgments, fines or penalties), but is notentitled, however, to indemnification for the total amount thereof, the Company shall neverthelessindemnify 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 Companyshall advance all expenses incurred by the Indemnitee in connection with the investigation,defense, settlement or appeal of any proceeding to which the
 

 
Indemnitee is a party or is threatenedto be made a party by reason of the fact that the Indemnitee is or was an agent of the Company orby reason of any action taken or not taken by him in such capacity. Indemnitee hereby undertakesto repay such amounts advancedonly if, and to the extent that, it shall ultimately be finally determined that the Indemniteeis not entitled to be indemnified by the Company as authorized by this Agreement or otherwise. Theadvances to be made hereunder shall be paid by the Company to or on behalf of the Indemniteepromptly and in any event within thirty (30) days following delivery of a written request thereforby 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 ofcommencement of any proceeding, the Indemnitee shall, if the Indemnitee believes thatindemnification with respect thereto may be sought from the Company under this Agreement, notifythe Company of the commencement or threat of commencement thereof, provided the failure to providesuch notification shall not diminish Indemnitee’s indemnification hereunder, except to the extentthat 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 andto 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 indemnificationunless a determination is made within said forty-five (45) day period (i) by the Board of Directorsof the Company by a majority vote of directors who are not parties to such proceedings (even thoughless than a quorum), (ii) by a committee of such directors designated by majority vote of suchdirectors, even though less than quorum, (iii) if there are no such directors, or of such directorsso direct, by independent legal counsel in a written opinion, or (iv) by the stockholders of theCompany, that the Indemnitee has not met the relevant standard for indemnification set forth inSection 3 and 4 hereof. Any independent legal counsel shall be selected by the Company andapproved by the agent.     (c) Notwithstanding a determination under Section 8(b) above that the Indemnitee is notentitled to indemnification with respect to any specific proceeding, the Indemnitee shall have theright to apply to any court of competent jurisdiction for the purpose of enforcing the Indemnitee’sright to indemnification pursuant to this Agreement. The burden of proving that theindemnification or advances are not appropriate shall be on the Company. Neither the failure of theCompany (including its Board of Directors or independent legal counsel) to have made adetermination prior to the commencement of such action that indemnification or advances are properin the circumstances because the Indemnitee has met the applicable standard of conduct, nor anactual 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 theaction or create any presumption that the Indemnitee has not met the applicable standard ofconduct.     (d) The Company shall indemnify the Indemnitee against all expenses incurred in connectionwith any hearing or proceeding under this Section 8 unless a court of competent jurisdiction findsthat each of the claims and/or defenses of the Indemnitee in any such proceeding were frivolous orin bad faith.     9. **Assumption****of Defense****.**In the event the Company shall be obligated to paythe 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 tothe 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 suchcounsel by the Company, the Company will not be liable to the Indemnitee under this Agreement forany 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 suchproceeding at the Indemnitee’s expense; and (ii) if (a) the employment of counsel by the Indemniteehas been previously authorized in writing by the Company, (b) the Indemnitee shall have reasonablyconcluded that there may be a conflict of interest between the Company and the Indemnitee in theconduct of such defense, or (c) the Company shall not, in fact, have employed counsel to assume thedefense of such proceeding, the fees and expenses of the Indemnitee’s counsel shall be at theexpense of the Company.     10. **Insurance****.**The Company may, but is not obligated to, obtain directors’ andofficers’ liability insurance (“D&O Insurance”) as may be or become available in reasonableamounts from established and reputable insurers with respect to which the Indemnitee is named as aninsured. Notwithstanding any other provision of the Agreement, the Company shall not be obligatedto indemnify the Indemnitee for expenses, judgments, fines or penalties, which have been paiddirectly to or on behalf of the Indemnitee by D&O Insurance. If the Company has D&O Insurance ineffect at the time the Company receives from the Indemnitee any notice of the commencement of aproceeding, the Company shall give prompt notice of the commencement of such proceeding to theinsurer in accordance with the procedures set forth in the policy. The Company shall thereaftertake all necessary or desirable action to cause such insurers to pay, to or on behalf of theIndemnitee, all amounts payable as a result of such proceeding in accordance with the terms of suchpolicy.     11. **Exceptions****.**Any other provision herein or in the Company’s certificate ofincorporation or bylaws to the contrary notwithstanding, the Company shall not be obligatedpursuant to the terms of this Agreement:     (a) *Claims Initiated by Indemnitee**.*To indemnify or advance expenses to the Indemniteewith respect to proceedings or
 

 
claims initiated or brought voluntarily by the Indemnitee and not byway of defense, except with respect to proceedings brought to establish or enforce a right toindemnification under this Agreement or any other statute or law or otherwise as required underSection145, but such indemnification or advancement of expenses may be provided by the Company inspecific cases if the Board of Directors finds it to be appropriate; or     (b) *Lack of Good Faith*. To indemnify the Indemnitee for any expenses incurredby the Indemnitee with respect to any proceeding instituted by the Indemnitee to enforce orinterpret this Agreement, if a court of competent jurisdiction determines that each of the materialassertions 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 forany 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 thisAgreement for any expenses incurred by the Indemnitee with respect to any proceeding or claimbrought by the Company against the Indemnitee for willful misconduct, unless a court of competentjurisdiction 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 connectionwith proceedings or claims involving the enforcement of non-compete and/or non-disclosureagreements or the non-compete and/or non-disclosure provisions of employment, consulting or similaragreements 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 anyproceeding (i) with respect to remuneration paid to Indemnitee if it is determined by finaljudgment or other final adjudication that such remuneration was in violation of law, (ii) whichfinal judgment is rendered against the Indemnitee for an accounting of profits made by the purchaseor sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) ofthe Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state orlocal statute, or (iii) which it is determined by final judgment or other final adjudication thatthe Indemnitee’s conduct was knowingly fraudulent or dishonest or constitutes willful misconduct.     12. **Nonexclusivity****.**The provisions for indemnification and advancement of expensesset forth in this Agreement shall not be deemed exclusive of any other rights which theIndemnitee may have under any provision of law, the Company’s Certificate of Incorporation orBylaws, in any court in which a proceeding is brought, the vote of the Company’s shareholders ordisinterested directors, other agreements or otherwise, both as to action in his or her officialcapacity and to action in another capacity while occupying his or her position as an agent of theCompany, and the Indemnitee’s rights hereunder shall continue after the Indemnitee has ceasedacting as an agent of the Company and shall inure to the benefit of the heirs, executors andadministrators of the Indemnitee.     13. **Settlement****.**The Company shall not settle any proceeding without the Indemnitee’swritten consent unless such settlement solely involves the payment of money and includes anunconditional release of the Indemnitee from all liability on any claims that are the subjectmatter of such claim. Neither the Company nor Indemnitee will unreasonably withhold consent to anyproposed settlement.     14. **Subrogation****.**In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, whoshall execute all papers required and shall do everything that may reasonably be necessary tosecure such rights, including the execution of such documents necessary to enable the Companyeffectively to bring suit to enforce such rights. The Company shall pay or reimburse all expensesincurred by Indemnitee in connection with such subrogation.     15. **Interpretation of Agreement****.**It is understood that the parties hereto intendthis Agreement to be interpreted and enforced so as to provide indemnification to the Indemnitee tothe fullest extent now or hereafter permitted by law.     16. **Severability****.**If any provision or provisions of this Agreement shall be held tobe invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality andenforceability of the remaining provisions of the Agreement (including without limitation, allportions of any paragraphs of this Agreement containing any such provision held to beinvalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shallnot in any way be affected or impaired thereby, and (ii) to the fullest extent possible, theprovisions of this Agreement (including, without limitation, all portions of any paragraph of thisAgreement containing any such provision held to be invalid, illegal or unenforceable, that are notthemselves 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, withoutlimitation, all portions of any paragraph of this Agreement containing any such provision held tobe 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.
 

 
     17. **Modification and Waiver****.**No supplement, modification or amendment of thisAgreement shall be binding unless executed in writing by both of the parties hereto. No waiver ofany of the provisions to this Agreement shall be deemed or shallconstitute a waiver of any other provision hereof (whether or not similar) nor shall suchwaiver constitute a continuing waiver.     18. **Successor and Assigns****.**The terms of this Agreement shall bind, and shall inureto the benefit of, the successor and assigns of the parties hereto.     19. **Notice****.**All notices, requests, demands and other communications under thisAgreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receiptedfor by the party addressee, (ii) if mailed by certified or registered mail with postage prepaid, onthe third business day after the mailing date, or (iii) if transmitted electronically by a means bywhich receipt thereof can be demonstrated. Addresses for notice to either party are set out on thesignature page hereof and may be subsequently modified by written notice.     20. **Supersedes Prior Agreement****.**This Agreement supersedes any prior indemnificationagreement between Indemnitee and the Company or its predecessors.     21. **Service of Process and Venue****.**For purposes of any claims or proceeding toenforce this agreement, the Company and the Indemnitee consents to the jurisdiction and venue ofany federal or state court of competent jurisdiction in the states of Delaware and Missouri, andwaives and agrees not to raise any defense that any such court is an inconvenient forum or anysimilar claim.     22. **Governing Law****.**This Agreement shall be governed exclusively by and construedaccording to the laws of the State of Delaware, as applied to contracts between Delaware residentsentered into and to be performed entirely within Delaware. If a court of competent jurisdictionshall make a final determination that the provisions of the law of any state other than Delawaregovern indemnification by the Company of its officers and directors, then the indemnificationprovided under this Agreement shall in all instances be enforceable to the fullest extent permittedunder 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 firstabove written.      FURNITURE BRANDS INTERNATIONAL, INC.