Document:

EXHIBIT 10.26

 Exhibit 10.26 
  
 SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT 
  
 THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made and entered into and, except as
provided in Sections 2(c) and (e) hereof, effective as of February 24, 2005, by and among THE ROWE COMPANIES, a Nevada corporation, ROWE DIVERSIFIED, INC., a Delaware corporation, ROWE FURNITURE WOOD PRODUCTS, INC., a California
corporation, ROWE PROPERTIES, INC., a California corporation, STOREHOUSE, INC., a Georgia corporation, and ROWE FURNITURE, INC., a Virginia corporation (hereinafter referred to collectively as “Borrowers”
and individually as a “Borrower”), the various financial institutions (collectively, “Lenders”) named in the Loan Agreement (as defined below), and FLEET CAPITAL CORPORATION, a Rhode Island corporation, in its capacity as
collateral and administrative agent for itself and Lenders (together with its successors in such capacity, “Agent”). 
  
 Recitals: 
  
 Agent, Lenders and Borrowers are parties to a certain Loan and Security Agreement dated May 15, 2002, as amended by that certain letter amendment dated as
of June 17, 2002, that certain Second Amendment to Loan and Security Agreement dated October 10, 2002, that certain Third Amendment to Loan and Security Agreement dated February 28, 2003, that certain Fourth Amendment to Loan and Security Agreement
dated April 3, 2003, that certain Fifth Amendment to Loan and Security Agreement dated November 30, 2003 and that certain Sixth Amendment to Loan and Security Agreement dated September 23, 2004 (as so amended, the “Loan Agreement”),
pursuant to which Agent and Lenders have made certain revolving credit and term loans and other financial accommodations to Borrowers. 
  
 The parties desire to amend the Loan Agreement as hereinafter set forth. 
  
 NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable consideration, the receipt and sufficiency
of which are hereby severally acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 
  
 1. Definitions. All capitalized terms used in this Amendment, unless otherwise defined herein, shall have the meaning ascribed to such terms
in the Loan Agreement. 
  
 2. Amendments to Loan
Agreement. The Loan Agreement is hereby amended as follows: 
  
 (a) Effective as of the date of this Amendment, by deleting Section 9.1.5 of the Loan Agreement and by substituting in lieu thereof the following: 

 9.1.5. Projections. 
  
 (a) No later than 30 days prior to the end of each Fiscal Year of Borrowers, deliver to Agent and Lenders
the Projections of Borrowers for the forthcoming 3 Fiscal Years, year by year, and for the forthcoming Fiscal Year, month by month. 
  
 (b) On or before the fifth Business Day of each week, Borrowers shall deliver to Agent a written forecast of Borrowers’ cash for the
forthcoming 13-week period, week by week, including a projection of the Borrowing Base and Availability, together with appropriate supporting details and a statement of underlying assumptions, all to be in form and substance satisfactory to Agent.

  
 (b) Effective as of the date of this Amendment, by deleting
Section 9.2.9 of the Loan Agreement and by substituting in lieu thereof the following: 
  
 9.2.9. Capital Expenditures: Make Capital Expenditures (including expenditures by way of capitalized leases but excluding (i) the
effect of any SunTrust Lease Adjustment and (ii) amounts expensed to repair or restore damaged or destroyed Equipment or Real Estate, to the extent of insurance or condemnation proceeds received for application (and actually applied for such purpose
pursuant to Section 7.1.2(ii) hereof)) which in the aggregate, as to all Borrowers and their Subsidiaries, exceed $4,000,000 during Borrowers’ 2002 Fiscal Year, $4,500,000 during Borrowers’ 2003 Fiscal Year, $9,000,000 during
Borrowers’ 2004 Fiscal Year, $2,500,000 during Borrowers’ Fiscal Quarter ending on or about February 28, 2005, $3,500,000 during Borrowers’ two Fiscal Quarters ending on or about May 31, 2005, $4,500,000 during Borrowers’ three
Fiscal Quarters ending on or about August 31, 2005, $5,500,000 during Borrowers’ 2005 Fiscal Year or $7,000,000 during any Fiscal Year of Borrowers thereafter. 
  
 (c) Effective as of November 28, 2004, by deleting Section 9.3.1 of the Loan Agreement and by substituting in lieu thereof
the following: 
  
 9.3.1 Consolidated Fixed
Charge Coverage Ratio. Maintain a Consolidated Fixed Charge Coverage Ratio of not less than the ratio shown below for the period corresponding thereto: 
  

			
	 Period

	 	 Ratio

	The 12 Reporting Periods ending on November 28, 2004	 	1.0 to 1.0
		
	The 12 Reporting Periods ending on or about February 28, 2006 and ending on the last day of each Fiscal Quarter thereafter	 	1.1 to 1.0

 (d) Effective as of the date of this Amendment, by deleting Section 9.3.3 of the Loan Agreement and by
substituting in lieu thereof the following: 
  
 9.3.3 Consolidated Leveraged Ratio. Maintain a Consolidated Leverage Ratio of not more than the ratio set forth below for the period corresponding thereto: 
  

			
	 Period

	 	 Ratio

	 The 4 Fiscal Quarters ending
 June 2,
2002
	 	9.0 to 1.0
		
	The 4 Fiscal Quarters ending
September 1, 2002	 	8.5 to 1.0
		
	The 4 Fiscal Quarters ending
December 1, 2002	 	6.5 to 1.0
		
	The 4 Fiscal Quarters ending
March 2, 2003	 	5.5 to 1.0
		
	The 4 Fiscal Quarters ending
June 1, 2003	 	5.0 to 1.0
		
	The 4 Fiscal Quarters ending
August 31, 2003	 	4.5 to 1.0
		
	The 4 Fiscal Quarters ending
November 30, 2003	 	4.0 to 1.0
		
	The 4 Fiscal Quarters ending
on or about February 29, 2004	 	4.0 to 1.0
		
	The 4 Fiscal Quarters ending
on or about May 31, 2004	 	3.75 to 1.0
		
	The 4 Fiscal Quarters ending
on or about August 31, 2004	 	3.5 to 1.0

			
	The 4 Fiscal Quarters ending
on or about November 30, 2004	 	3 .5 to 1 .0
		
	The 4 Fiscal Quarters ending
on or about February 28, 2005	 	8.25 to 1 .0
		
	The 4 Fiscal Quarters ending
on or about May 31, 2005	 	65.0 to 1.0
		
	The 4 Fiscal Quarters ending
on or about August 31, 2005	 	170 to 1.0
		
	The 4 Fiscal Quarters ending
on or about November 30, 2005	 	7.0 to 1.0
		
	The 4 Fiscal Quarters ending
on or about February 28, 2006 and
ending on the last day of each
Fiscal Quarter thereafter	 	3.5 to 1.0

  
 (e) Effective as of
December 31, 2004, by adding a new Section 9.3.4 to the Loan Agreement in proper numerical sequence which reads as follows: 
  
 9.3.4. Consolidated EBITDA. Achieve Consolidated EBITDA of not less than the amount set forth below for the period corresponding
thereto: 
  

					
	 Period

	  	Consolidated
EBITDA

	 
	1-month period ending
December 31, 2004	  	$	(120,000	)
		
	2-month period ending
January 31, 2005	  	$	(1,562,000	)
		
	3-month period ending
February 28, 2005	  	$	(2,600,000	)
		
	4-month period ending
March 31, 2005	  	$	(2,350,000	)
		
	5-month period ending
April 30, 2005	  	$	(3,300,000	)
		
	6-month period ending
May 31, 2005	  	$	(3,300,000	)

					
	7-month period ending
June 30, 2005	  	$	(2,650,000	)
		
	8-month period ending
July 31, 2005	  	$	(2,150,000	)
		
	9-month period ending
August 31, 2005	  	$	(1,250,000	)
		
	10-month period ending
September 30, 2005	  	$	900,000	 
		
	11-month period ending
October 31, 2005	  	$	2,750,000	 
		
	12-month period ending
November 30, 2005	  	$	5,400,000	 

  
 (f) Effective as of
the date of this Amendment, by deleting the definition of “Applicable Margin” in Appendix A to the Loan Agreement and by substituting in lieu thereof the following: 
  
 Applicable Margin - a percentage equal to 1.0% with respect to Revolver Loans that are Base Rate
Loans, 3.0% with respect to Revolver Loans that are LIBOR Loans, 1.25% with respect to each Term Loan Advance made or outstanding as a Base Rate Loan, 3.25% with respect to each Term Loan Advance made or outstanding as a LIBOR Loan, and 0.5% with
respect to fees payable to Lenders pursuant to Section 2.2.3 of the Agreement, provided that, commencing February 28, 2005, the Applicable Margin shall be increased or (if no Default or Event of Default exists) decreased, based upon the
Consolidated Leverage Ratio, as follows: 

													
	 Applicable Percentage for

	 Level

	  	 Consolidated Leverage
Ratio on a rolling 4
Fiscal Quarter basis

	  	Revolver Loans
Base Rate
Loans

	 	Revolver Loans
LIBOR Loans

	 	Term Loan
Base Rate
Loans

	 	Term Loan
LIBOR
Loans

	 	Unused
Line Fee

	 I
	  	If greater than 3.75 to 1.0	  	1.00%	 	3.00%	 	1.25%	 	3.25%	 	.50%
	 II
	  	If equal to or less than 3.75 to 1.0 but greater than 3.25 to 1.0	  	.75%	 	2.75%	 	1.00%	 	3.00%	 	,375%
	 III
	  	If equal to or less than 3.25 to 1.0 but greater than 2.75 to 1.0	  	.50%	 	2.50%	 	.75%	 	2.75%	 	.375%
	 IV
	  	If equal to or less than 2.75 to 1.0 but greater than 2.25 to 1.0	  	.25%	 	2.25%	 	.50%	 	2.50%	 	.250%
	 V
	  	If equal to or less than 2.25 to 1.0 but greater than 1.75 to 1.0	  	0.0%	 	2.00%	 	.25%	 	2.25%	 	.250%
	 VI
	  	If equal to or less than 1.75 to 1.0	  	0.0%	 	1.75%	 	0.0%	 	2.00%	 	.250%

  
 The Applicable Margin
shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of Borrowers as measured by the Consolidated Leverage Ratio for the immediately preceding 4 Fiscal
Quarters of Borrowers. Except as set forth in the last sentence hereof, any such increase or reduction in the Applicable Margin provided for herein shall be effective 3 Business Days after receipt by Agent of the applicable financial statements and
corresponding Compliance Certificate. If the financial statements and the Compliance Certificate of Borrowers setting forth the Consolidated Fixed Charge Coverage Ratio as of the last day of the Fiscal Quarter in question are not received by Agent
by the date required pursuant to Section 9.1.3 of the Agreement, the Applicable Margin shall be determined as if the Consolidated Leverage Ratio is greater than 3.75 to 1 until such time as such financial statements and Compliance Certificate are
received and any Event of Default resulting from a failure timely to deliver such financial statements or Compliance Certificate is waived in writing by Agent and Lenders; provided, however, that nothing herein shall be deemed to
prevent Agent and Lenders from charging 

 
interest at the Default Rate at any time that an Event of Default exists. For the final Fiscal Quarter of any Fiscal Year of Borrowers, Borrowers may provide
the unaudited financial statements of Borrowers, subject only to year-end adjustments, for the purpose of determining the Applicable Margin; provided, however, that if, upon delivery of the annual audited financial statements required
to be submitted by Borrowers to Agent pursuant to Section 9.1.3(i) of the Agreement, Borrowers have not met the criteria for reduction of the Applicable Margin pursuant to the terms hereinabove for the final Fiscal Quarter of the Fiscal Year of
Borrowers then ended, then (a) such Applicable Margin reduction shall be terminated and, effective on the first day of the month following receipt by Agent of such audited financial statements, the Applicable Margin shall be the Applicable Margin
that would have been in effect if such reduction had been implemented based upon the audited financial statements of Borrowers for the final Fiscal Quarter of the Fiscal Year of Borrowers then ended, and (b) Borrower shall pay to Agent, for the Pro
Rata benefit of the Lenders, on the first day of the month following receipt by Agent of such audited financial statements, an amount equal to the difference between the amount of interest that would have been paid on the principal amount of the
Obligations using the Applicable Margin determined based upon such audited financial statements and the amount of interest actually paid during the period in which the reduction of the Applicable Margin was in effect based upon the unaudited
financial statements for the final Fiscal Quarter of the Fiscal Year of Borrowers then ended. 
  
 (g) Effective as of the date of this Amendment, by deleting the definition of “Inventory Formula Amount” in Appendix A to the Loan Agreement and by substituting in lieu thereof the following: 
  
 Inventory Formula Amount - on any date of
determination thereof, an amount equal to the lesser of (i) the lesser of (a) $22,000,000 or (b) 90% (or such lesser percentage as Agent may in its reasonable credit judgment determine from time to time) of the net liquidation value of Eligible
Inventory (as determined from time to time based upon appraisals conducted by Ozer Valuation Services or such other independent appraisers acceptable to Agent) or (ii) the sum of (a) 16% (or such lesser percentage as Agent may in its reasonable
credit judgment determine from time to time) of the Value of Eligible Inventory on such date consisting of raw materials plus (b) the lesser of (1) $2,000,000 or (2) 45% (or such lesser percentage as Agent may in its reasonable credit judgment
determine from time to time) of the Value of Eligible Inventory on such date consisting of work-in-process plus (c) 71% (or such lesser percentage as Agent may in its reasonable credit judgment determine from time to time) of the Value of Eligible
Inventory on such date consisting of retail and manufactured finished goods. 

 3. Ratification and Re affirmation. Each Borrower hereby ratifies and reaffirms the
Obligations, each of the Loan Documents and all of such Borrower’s covenants, duties, indebtedness and liabilities under the Loan Documents. 
  
 4. Acknowledgments and Stipulations. Each Borrower acknowledges and stipulates that the Loan Agreement and the other Loan Documents
executed by such Borrower are legal, valid and binding obligations of such Borrower that are enforceable against such Borrower in accordance with the terms thereof; all of the Obligations are owing and payable without defense, offset or counterclaim
(and to the extent there exists any such defense, offset or counterclaim on the date hereof, the same is hereby waived by such Borrower); the security interests and liens granted by such Borrower in favor of Agent are duly perfected, first priority
security interests and liens (except as otherwise explicitly provided in the Loan Agreement); and on and as of February 22, 2005, the unpaid principal amount of the Revolver Loans totaled $19,685,388.54 and the unpaid principal amount of the Term
Loan totaled $2,250,000.00. 
  
 5. Representations and
Warranties. Each Borrower represents and warrants to Agent and Lenders, to induce Agent and Lenders to enter into this Amendment, that no Default or Event of Default exists on the date hereof; the execution, delivery and performance of this
Amendment have been duly authorized by all requisite corporate action on the part of such Borrower and this Amendment has been duly executed and delivered by such Borrower; and all of the representations and warranties made by such Borrower in the
Loan Agreement are true and correct on and as of the date hereof. 
  
 6. Reference to Loan Agreement. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” or words of like import snail mean and be a reference to the
Loan Agreement, as amended by this Amendment. 
  
 7. Breach
of Amendment. This Amendment shall be part of the Loan Agreement and a breach of any representation, warranty or covenant herein shall constitute an Event of Default. 
  
 8. Amendment Fee; Expenses of Agent and Lenders. In consideration of Agent’s and Lenders’
willingness to enter into this Amendment, Borrowers jointly and severally agree to pay to Agent, for the Pro Rata benefit of Lenders, an amendment fee in the amount of $43,750 in immediately available funds on the date hereof. Additionally,
Borrowers jointly and severally agree to pay, on demand, all costs and expenses incurred by Agent and Lenders in connection with the preparation, negotiation and execution of this Amendment and any other Loan Documents executed pursuant hereto and
any and all amendments, modifications, and supplements thereto, including, without limitation, the costs and fees of Agent’s and Lenders’ legal counsel and any taxes or expenses associated with or incurred in connection with any instrument
or agreement referred to herein or contemplated hereby. 
  
 9.
Effectiveness; Governing Law. This Amendment shall be effective upon acceptance by Agent and Lenders (notice of which acceptance each Borrower hereby waives), whereupon the same shall be governed by and construed in accordance with the
internal laws of the State of Georgia. 

 10. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. 
  
 11. No Novation, etc.. Except as otherwise expressly provided in this Amendment, nothing herein shall be deemed to amend or modify any provision of the Loan Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and the Loan Agreement as herein modified shall continue in full force and effect. 
  
 12. Counterparts; Telecopied Signatures. This Amendment may be
executed in any number of counterparts and by different parties to this Amendment on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any
signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto. 
  
 13. Further Assurances. Each Borrower agrees to take such further actions as Agent or Lenders shall reasonably request from time to time in
connection herewith to evidence or give effect to the amendments set forth herein or any of the transactions contemplated hereby. 
  
 14. Section Titles. Section titles and references used in this Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto. 
  
 15. Waiver of Jury Trial. To the fullest extent permitted by Applicable Law, the parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or proceeding arising out of or
related to this Amendment. 
  
 [Signatures commence on
following page] 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under seal and
delivered by their respective duly authorized officers on the date first written above. 
  

					
	ATTEST:	  	 	 	 THE ROWE COMPANIES
 (“Borrower”)

			
	 /s/ Garry W. Angle

	  	By:	 	 /s/ Gerald M. Birubach

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birubach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board and President
			
	ATTEST:	  	 	 	 ROWE DIVERSIFIED, INC.
 (“Borrower”)

			
	 /s/ Debbie Jacks

	  	By:	 	 /s/ Gerald M. Birubach

	Debbie Jacks, Secretary	  	 	 	Gerald M. Birubach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board and President
			
	ATTEST:	  	 	 	ROWE FURNITURE WOOD PRODUCTS, INC.
(“Borrower”)
			
	 /s/ Garry W. Angle

	  	By:	 	 /s/ Gerald M. Birubach

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birubach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board and President
			
	ATTEST:	  	 	 	ROWE PROPERTIES, INC.
(“Borrower”)
			
	 /s/ Garry W. Angle

	  	By:	 	 /s/ Gerald M. Birubach

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birubach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board and President

  
 [Signature continued on
following page] 

					
	ATTEST:	  	 	 	 STOREHOUSE, INC.
 (“Borrower”)

			
	 /s/ Garry W. Angle

	  	By:	 	 /s/ Gerald M. Birnbach

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	ATTEST:	  	 	 	 ROWE FURNITURE, INC.
 (“Borrower”)

			
	 /s/ Garry W. Angle

	  	By:	 	 /s/ Gerald M. Birnbach

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	 	  	 	 	LENDERS:
			
	 	  	 	 	FLEET CAPITAL CORPORATION
(“Lender”)
			
	 	  	By:	 	  

			
	 	  	Title:	 	  

			
	 	  	 	 	 THE CIT GROUP/COMMERCIAL SERVICES, INC.
 (“Lender”)

			
	 	  	By:	 	  

			
	 	  	Title:	 	  

			
	 	  	 	 	AGENT:
			
	 	  	 	 	FLEET CAPITAL CORPORATION, as
Agent
(“Agent”)
			
	 	  	By:	 	  

			
	 	  	Title:	 	  

					
	ATTEST:	  	 	 	STOREHOUSE, INC.
(“Borrower”)
			
	  

	  	By:	 	  

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	ATTEST:	  	 	 	ROWE FURNITURE, INC.
(“Borrower”)
			
	  

	  	By:	 	  

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	 	  	 	 	LENDERS:
			
	 	  	 	 	FLEET CAPITAL CORPORATION
(“Lender”)
			
	 	  	By:	 	 /s/ Douglas Cowan

			
	 	  	Title:	 	 Vice President

			
	 	  	 	 	 THE CIT GROUP/COMMERCIAL SERVICES, INC.
 (“Lender”)

			
	 	  	By:	 	  

			
	 	  	Title:	 	  

			
	 	  	 	 	AGENT:
			
	 	  	 	 	FLEET CAPITAL CORPORATION, as
Agent
(“Agent”)
			
	 	  	By:	 	 /s/ Douglas Cowan

			
	 	  	Title:	 	 Vice President

					
	ATTEST:	  	 	 	STOREHOUSE, INC.
(“Borrower”)
			
	  

	  	By:	 	  

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	ATTEST:	  	 	 	ROWE FURNITURE, INC.
(“Borrower”)
			
	  

	  	By:	 	  

	Garry W. Angle, Assistant Secretary	  	 	 	Gerald M. Birnbach,
	[CORPORATE SEAL]	  	 	 	Chairman of the Board
			
	 	  	 	 	LENDERS:
			
	 	  	 	 	FLEET CAPITAL CORPORATION
(“Lender”)
			
	 	  	By:	 	  

			
	 	  	Title:	 	  

			
	 	  	 	 	 THE CIT GROUP/COMMERCIAL SERVICES, INC.
 (“Lender”)

			
	 	  	By:	 	 /s/ Dan Upehunch

			
	 	  	Title:	 	 Vice President

			
	 	  	 	 	AGENT:
			
	 	  	 	 	FLEET CAPITAL CORPORATION, as
Agent
(“Agent”)
			
	 	  	By:	 	  

			
	 	  	Title:Exhibit 10.27

 Exhibit 10.27 
  
 THE ROWE COMPANIES 
  
 2003 STOCK OPTION AND INCENTIVE PLAN 
  
 INCENTIVE STOCK OPTION AGREEMENT 
  
 ISO NO.                      
  
 This option was granted December 1, 2003 by The Rowe Companies (the “Corporation”)
to                      (“Optionee”), in accordance with the following terms and conditions: 
  
 1. Option Grant and Exercise Period. The Corporation has granted to
the Optionee an option (the “Option”) to purchase, pursuant to The Rowe Companies 2003 Stock Option and Incentive Plan (the “Plan”) and this Agreement, an aggregate of
                 (the “Option Shares”) of the common stock of the Corporation, par value $1.00 per share (“Common Stock”), at the price
of $  .         per share (The “Exercise Price”). 
  
 This Option shall be exercisable only during the period (the “Exercise Period”) commencing on [Grant Date] (the “Commencement Date”),
and ending on the earlier of 5:00 p.m., Elliston, Virginia time on                     , the date ten years after the date of grant, such
later time and date being referred to as the “Expiration Date,” or the date specified in Section 5, whichever shall first occur. During the Exercise Period, this Option shall be exercisable at any time. A Copy of the Plan, as currently in
effect is incorporated by reference and is attached to this Agreement. 
  
 2. Method of Exercise of this Option. This Option may be exercised at any time during the Exercise Period by giving written notice to the Corporation specifying the number of Option Shares to be purchased. The notice must be in the
form prescribed by the Committee and directed to the address set forth in Section 11 below. The date of exercise is the date on which such notice is received by the Corporation. Such notice must be accompanied by payment in full of the Exercise
Price for the Option Shares to be purchased upon such exercise. Payment shall be made either (i) in cash, which may be in the form of a check, bank draft or money order payable the Corporation, or (ii) by delivering shares of Common Stock already
owned by the Optionee having a “Market Value” equal to the applicable Exercise Price, or (iii) a combination of cash and such shares; provided, however that the exercise of this Option through the delivery of shares of Common Stock, in
whole or in part, by an Optionee who is, or within the preceding six months was, subject to the provisions of Section 16 of the Securities Exchange Act of 1934, shall only be made or become effective during any period beginning on the third 

  

 ISO - 1 

 
business day following the release of a summary statement of the Corporation’s quarterly or annual sales and earnings and ending on the twelfth business
day following such date. Payment instruments shall be received by the Corporation subject to collection. Promptly after such payment, subject to Section 3 below, the Corporation shall issue and deliver to the Optionee or other person exercising this
Option, a certificate or certificates representing the shares of Common Stock so purchased, registered in the name of the Optionee, (or such other person), or upon request, in the name of the Optionee (or such other person) and in the name of
another jointly with right of survivorship. 
  
 3. Delivery and
Registration of Shares of Common Stock. The Corporation’s obligation to deliver shares of Common Stock hereunder shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the
Optionee or any other person to whom such shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933, as amended, or any other federal, state or
local securities law or regulation. In requesting such representation, it may be provided that such representation requirement shall become inoperative upon a registration of such shares or other action eliminating the necessity of such
representation under the Securities Act of 1933 or other securities law or regulation. The Corporation shall not be required to deliver any shares upon exercise of this Option prior to (i) the admission of such shares to listing on any stock
exchange or system on which the shares of Common Stock may then be listed, and (ii) the completion of such registration or other qualification of such shares under any state or federal law, rule or regulation, as the Committee shall determine to be
necessary or advisable. 
  
 4. Non-transferability of this
Option. This Option may not be assigned, encumbered, or transferred except, in the event of the death of the Optionee, by will or the laws of descent and distribution to the extent provided in Section 5 below. Except as provided herein, this
Option is exercisable during the Optionee’s lifetime only by the Optionee. The provisions of this Option shall be binding upon, inure to the benefit of and be enforceable by the parties hereto, the successors and assigns of the Corporation and
any person to whom this Option is transferred by will or by the laws of descent and distribution. 
  
 5. Termination of Service or Death of the Optionee. Except as provided in the second or third paragraphs of this Section 5 and notwithstanding any
other provision of this Option to the contrary, this Option shall not be exercisable unless the Optionee, at the time he or she exercises this Option, has maintained Continuous Service from the Grant Date to the date of exercise, which exercise date
must be on or prior to the Expiration Date. 
  
 If the Optionee
shall cease to maintain Continuous Service for any reason (including total or partial disability and normal (except as provided below) or early retirement, but excluding death and termination of employment by the Corporation or any 

  

 ISO - 2 

 
Affiliate for cause), the Optionee may, but only within the period of three months immediately succeeding such cessation of Continuous Service and in no
event after the Expiration Date, exercise this Option. Notwithstanding the foregoing, if the Optionee ceases to maintain Continuous Service due to normal retirement (i.e. after attaining the age of 65 years) and the Optionee has served the
Corporation or an Affiliate for at least ten years, then this Option may be exercised during the five year period immediately following cessation of Continuous Service but not later than the Expiration Date. The Optionee recognizes that if this
Option becomes exercisable for the extended period set forth in the preceding sentence, but is not fully exercised within three months after cessation of Continuous Service as an Employee (other than on account of death), this Option shall cease to
qualify as an Incentive Stock Option and shall for tax purposes be treated as Non-Qualified Stock Option. If the Optionee is terminated for cause, all rights under this Option shall expire immediately upon the giving to the Optionee of notice of
such termination. 
  
 In the event of the death of the Optionee
while in Continuous Service of the Corporation or an Affiliate or during the three month or five year period referred to in the immediately preceding paragraph, whichever is applicable, the person to whom the Option has been transferred by will or
by the laws of descent and distribution may, but only to the extent the Optionee was entitled to exercise this Option at any time immediately prior to his or her death, exercise this Option at any time within one year following the death of the
Optionee, but in no event after the Expiration Date. Following the death of the Optionee, the Committee may, as an alternative means of settlement of this Option, elect to pay to the person to whom this Option is transferred by will or by the laws
of descent and distribution, the amount by which the Market Value per share of Common Stock on the date of exercise of this Option shall exceed the Exercise Price, multiplied by the number of Option Shares with respect to which this Option is
properly exercised. Any such settlement of this Option shall be considered an exercise of this Option for all purposes of this Option and of the Plan. 
  
 6. Notice of Sale. The Optionee or any person to whom the Option or the Option Shares shall be transferred by will or by the laws of descent and
distribution promptly shall give notice to the Corporation in the event of the sale or other disposition of Option Shares within the later of (i) two years from the date of grant of this Option or (ii) one year from the date of exercise of any
portion of this Option. Such notice shall specify the number of Option Shares sold or otherwise disposed of and be directed to the address set forth in Section 11 below. 
  
 7. Adjustments for Change in Capitalization of the Corporation. In the event of any change in the outstanding shares
of Common Stock by reason of any reorganization, recapitalization, stock split, stock dividend, or any change in the corporate structure of the Corporation or in the shares of Common Stock, the number and class of shares covered by this Option and
the Exercise Price shall be appropriately adjusted by the Committee, whose determination shall be conclusive. 
  

 ISO - 3 

 8. Effect of Merger. In the event of any merger, consolidation or combination of the Corporation
with or into another corporation (other than a merger, consolidation, or combination in which the Corporation is the continuing corporation and which does not result in the outstanding shares of Common Stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof) pursuant to a plan or agreement the terms of which are binding upon all stockholders of the Corporation (except to the extent that dissenting stockholders may be entitled,
under statutory provisions as contained in the articles of incorporation of the Corporation, to receive the appraised or fair market value of their holdings) the Optionee shall have the right (subject to the provisions of the Plan and the
limitations contained herein), thereafter and during the Exercise Period, to receive upon exercise of this Option an amount equal to the excess of the fair market value on the date of such exercise of the securities, cash or other property, or
combination thereof, receivable upon such merger, consolidation or combination in respect of a share of Common Stock over the Exercise Price, multiplied by the number of Option Shares with respect to which this Option shall have been properly
exercised. Such amount may be payable fully in cash, fully in one or more of the kind or kinds of property payable in such merger, consolidation or combination, or partly in cash and partly in one or more of such kind or kinds of property, all in
the discretion of the Committee. To the extent of the exercise of such right by the Optionee this Option shall not qualify as an Incentive Stock Option but shall be treated for tax purposes as a Non-Qualified Stock Option. 
  
 9. Stockholders’ Rights not Granted by this Option. The Optionee
is not entitled by virtue hereof to any rights of a stockholder of the Corporation or to notice of meetings of stockholders or to notice of any other proceedings of the Corporation. 
  
 10. Withholding Tax. Where the Optionee or another person is entitled to receive Option Shares pursuant to the
exercise of this Option, the Corporation shall have the right to require the Optionee or such other person to pay to the Corporation the amount of any taxes which the Corporation or any of its Affiliates is required to withhold with respect to such
Option Shares, or, in lieu thereof, to retain, or sell without notice, a sufficient number of shares to cover the amount required to be withheld or in lieu of any of the foregoing, to withhold a sufficient sum from the Optionee’s compensation
payable by the Corporation or any Affiliate to satisfy its withholding obligation, as determined in the sole discretion of the Corporation, subject to applicable federal, state and local law. 
  
 11. Notices. All notices hereunder to the Corporation shall be
delivered or mailed to it addressed to the Secretary of The Rowe Companies, 2121 Gardner Street, Elliston, Virginia 24087. Any notices hereunder to the Optionee shall be delivered personally or mailed to the Optionee’s address noted below. Such
addresses for the service of notices may be changed at any time provided written notice of the change is furnished in advance to the Corporation or the Optionee, as the case may be. 
  

 ISO - 4 

 12. Plan and Plan Interpretations as Controlling. This Option and the terms and conditions herein
set forth are subject in all respects to the terms and conditions of the Plan, which are controlling. All determinations and interpretations of the Committee shall be binding and conclusive upon the Optionee or his or her legal representatives with
regard to any question arising under this Agreement or under the Plan. 
  
 13. Optionee Service. Nothing in this Option shall limit the rights of the Corporation or any of its Affiliates to terminate the Optionee’s service as an employee, officer or director or otherwise impose upon the Corporation or
any of its Affiliates any obligation to employ or accept the services of the Optionee. 
  
 14. Disqualification Events. This Option does not set forth all of the events and circumstances that could result in the failure of this Option or any part hereof to qualify as an Incentive Stock Option for tax
purposes or that could result in this Option or any portion hereof to become disqualified as an Incentive Stock Option for tax purposes, in either case resulting in this Option or a portion hereof being deemed a Non-Qualified Stock Option for tax
purposes. 
  
 15. Optionee Acceptance. The Optionee shall
signify his or her acceptance of the terms and conditions of this Option by signing in the space provided below and returning a signed copy of this Agreement to the Corporation as the address set forth in Section 11 above. 
  

 ISO - 5 

 IT WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first
above written. 
  

			
	 THE ROWE COMPANIES

		
	BY:	 	 
	 	 	 Gerald M. Birnabach

	 	 	 Chairman of the Board and President

  

	
	 ATTEST:

	
	  
	 Deborah C. Jacks

  

	
	 ACCEPTED:

	
	 
	 «NAME»

  

	
	 
	
	 
	(Street Address)

  

	
	 
	
	 
	(City, State and Zip Code)

  

	
	 
	
	 
	(Social Security Number)

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